Oct 05

RBI 4th Bi-Monthly Monetary Policy 2016-17

montearyThe Monetary Policy Committee of RBI made its first policy statement yesterday. On the basis of an assessment of the current and evolving macroeconomic situation at its meeting today, the Monetary Policy Committee (MPC) decided to reduce the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points from 6.5 per cent to 6.25 per cent with immediate effect.
Overall the Committee sounded neutral on the macroeconomic and monetary conditions and very accommodative, as it expected the domestic momentum to get somewhat offset by the global slowdown.
The Committee said, “The momentum of growth is expected to quicken with a normal monsoon raising agricultural growth and rural demand, as well as by the stimulus to the urban consumption spending from the pay commission’s award. The accommodative stance of monetary policy and comfortable liquidity conditions should support a revival of credit to the productive sectors. The continuing sluggishness in world trade and smaller terms of trade gains than in the past point, however, to further slackening of external demand going forward. Accordingly, the projection of growth of real gross value added (GVA) for 2016-17 is retained at 7.6 per cent, with risks evenly balanced around it.”
In this context it is pertinent to note that the rating agency CRISIL in its latest report has observed material improvement in the credit quality of Indian companies during 1HFY17. As per the rating agency, for the first time in the last 10 semi-annual periods, the number of debt upgrades outnumbered the number of debt downgrades. The ratio for 1HFY17 stood at 1.2 compared with 0.8 2HFY16.
The report highlights that there were 646 upgrades to 553 downgrades in the first half. Upgrades were concentrated in the domestic consumption-linked sectors such as auto ancillaries and packaging, and in the exports-linked pharmaceutical sector. On other hand, downgrades were mainly in the investment-linked sectors such as construction, industrial machinery, real estate and metals. Financial (capital structure, debt protection and liquidity) and business (demand, profitability and working capital cycle) reasons contributed equally to rating actions.
CRISIL forecasts the overall ratio to stay above 1 in the near term led by an expected rural leg-up to private consumption following a near-normal monsoon. However, the agency warns that the debt downgrades in value terms are expected to be more in the second half because of continuing pressure on the investment-linked sectors.
In view of the rating agency the investment cycle is yet to pick up, there hasn’t been a material deleveraging in corporate balance sheets, and weak assets continue to mount in banking. The focus therefore has to be on the sustainability of this improvement in credit ratio.
                                                                                                                                                                                                                                             SourceAdroit Financial

Sep 26

Daily Market Commentary : 23rd SEP 2016

Snapping a two-session long gaining spree, the Indian equity market closed on Friday with investors’ opting for profit taking in select blue chip counter. A weak opening in the European counter added pressure to the domestic market. Today’s major decline was led by the banking, utilites, telecom, power, auto and IT stocks, while realty, oil & gas, energy and metal were among the gainers. Nifty closed with a loss of 36 points at 8,832, while BSE Sensex ended with a loss of 105 points at 28,668.

On the global front, Asian stocks closed mixed. Japan’s Nikkei closed marginally down. China’s Shanghai Composite and Hong Kong’s Hang Seng ended marginally lower by 0.3%.

In Europe, the FTSE 100 was marginally down 0.15%. The CAC 40 and DAX are trading in red.

Axis Bank Ltd dropped 6% on the NSE. The stock, which is down for a second straight session, is the worst performer on Sensex, Nifty and the Nifty Bank indices.

Brigade Enterprises zoomed 2.5% after the company signed a MoU with Nestaway. Through this collaboration, Brigade Group will offer rental assistance to all of its existing customers including over 10,000 apartments in different stages of construction that are currently in the process of being readied for handover.

Morepen Laboratories climbed 5.4% after the company initiated talks with Ajay Piramal Group to sell its OTC (over-the-counter) business of market leading brands such as Burnol as it plans to monetise some of its mainstream brands when larger rivals look to expand their consumer product portfolio, as per media reports.

Suzlon Energy inched up 0.32% after the company announced that it has been awarded orders for a combined capacity of 111.30 MW between August to September 2016.

GTL Infrastructure jumped 8.2% after lenders to the company accepted its proposal to convert some part of the debt into equity under the strategic debt restructuring (SDR) scheme,as per media reports.

Bharat Financial Inclusion rallied 4.2% after the company informed BSE that the meeting of the Capital Raising Committee of the Board will be held on September 27, 2016 to consider and approve the issue price for the Equity Shares proposed to be issued pursuant to the Offer in accordance with Chapter VIII and other applicable provisions of the SEBI Regulations and Section 42 of the Companies Act, 2013, as amended, read with Rule 14 of the Companies (Prospectus and Allotment of Securities) Rules, 2014, as amended.

Vedanta gained 1.1% after the company signed the concession agreement for a Rs.11.45 bn redevelopment project of the Mormugao port in Goa.

Adlabs Entertainment hit 20% upper circuit on the back of higher trading volumes.

The rupee was trading flat by one paise at 66.66 per US dollar.

Out of 1,373 stocks traded on the NSE, 822 declined and 501 advanced today.

Top 5 Nifty Gainers: Reliance Ind. (1.95%), Coal India (0.88%), Dr Reddy’s Lab (0.78%), Tata Steel (0.61%) and TCS (0.50%)

Top 5 Nifty Losers: ICICI Bank (-2.54%), Bharti Airtel (-2.24%), M&M (-1.58%), Adani Ports & Sez (-1.42%) and ITC Ltd (-1.30%)

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Sep 19

Daily Market Commentary : 16th SEP 2016

The Indian stock market carried on with its northward journey and rallied for the third straight session tracking a positive trend seen in Asian markets after weak US data reduced the already low chance of an interest rate hike by the Federal Reserve at next week’s meeting. The domestic market came off their intra-day highs as investors booked profits at higher levels amid weak European cues. The Nifty50 gave up its gains of the day slipping below the 8,800 mark. Nifty closed with a gain of 37 points at 8,780, while BSE Sensex ended with a gain of 186 points at 28,599.

On the global front, Asian stocks closed on a mixed note. The Nikkei 225 ended higher by 0.69%. Markets in China, Hong Kong, Taiwan, South Korea and Malaysia were closed for the Mid-Autumn festival.

European stocks were trading lower on Friday. The FTSE 100 was trading marginally lower. DAX and the CAC 40 were trading down by 0.5% each.

Polyplex Corporation soared 2.8% after the company completed acquisition of its entire equity stake in its step down subsidiary Peninsula Beverages and Foods.

Suzlon Energy advanced 1%. Suzlon Group, one of the leading renewable energy solutions providers in the world, today announced its maiden order win from Oil India Ltd (OIL) for 52.50 MW project capacity.

United Breweries inched up 1% to Rs.828 on the BSE. Around 18.5 lakh shares were traded in a single block at Rs. 822 on the BSE.

Punjab National Bank slipped 0.61% on the BSE. The bank has informed BSE that consequent to receipt of capital funds to the tune of Rs.2112 crore from the Government of India on September 14, 2016, the Bank has issued and allotted 16,43,70,768 equity shares of face value of Rs.2 each at a premium of Rs.126.49 i.e. at a price of Rs.128.49 per equity share on a preferential basis.

Hero MotoCorp climbed 2%. Hero FinCorp has raised Rs 1,000 crore from ChrysCapital, Credit Suisse, and the group promoters to expand finance to retail and corporate customers.

ONGC Ltd gained 1.4%. ONGC signed agreements with Russia’s national oil company Rosneft PJSC to acquire an additional 11% stake in its unit, JSC Vankorneft, which has a licence to produce hydrocarbons from the Vankor field in Siberia.

Den Networks zoomed 7.8%. The company informed BSE that a meeting of the Board of Directors of the Company will be held on September 20, 2016, inter alias, to discuss and approve the proposal for Preferential Issue of Equity Shares.

Reliance Defence and Engineering Ltd surged over 2% after media reports said that the company can participate in Rs.3 Lakh crore worth Indian Navy projects after the Defence Acquisition Council cleared its capacity assessment.

The rupee was trading  up four paise at 66.98 per US dollar.

Out of 1,356 stocks traded on the NSE, 714 declined and 596 advanced today.

Top 5 Nifty Gainers: Maruti Suzuki (2.25%), Axis Bank (2.11%), ITC Ltd (2.08%), Hero Motocorp (2.06%) and Adani Portz and Sez (1.98%)

Top 5 Nifty Losers: BHEL (-2.40%), Tata Steel (-2.14%), Tata Motors (-1.50%), Asian Paints (-1.23%) and ICICI Bank (-1.15%)

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