Nifty, Sensex Headed Higher if Today’s Low Holds – Monday closing report-The Total Investment & Insurance Solutions

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05 November 2018

The major indices of the Indian stock markets were range-bound on Monday and closed with small losses over Friday’s close. On the NSE, there were 870 advances, 887 declines and 318 unchanged. The trends of the major indices in the course Monday’s trading are given in the table below:

Negative Asian markets and profit booking checked the upmove of equity indices on Monday. Except for IT (information technology), selling pressure was witnessed in almost all the counters led by the oil and gas stocks. Consumer durables, banking and finance stocks also traded lower.  The investor sentiments were also weighed down ahead of the release of the key macro-economic data (PMI service data) and a declining rupee. The domestic currency was trading 59 paise lower, at 73.03 to a US dollar, from its Friday close of 72.44. In addition, the benchmark Brent crude was below the $73 a barrel.

The US on Monday unleashed its "toughest ever" sanctions against Iran, a move that has already sparked mass protests in the oil-rich nation. US President Donald Trump's administration reinstated all sanctions removed under the 2015 nuclear deal, targeting both Iran and states that trade with it, reports the BBC. More than 700 individuals, entities, vessels and aircraft were now on the sanctions list, including major banks, oil exporters and shipping companies. 

The Trump administration has granted exemptions to eight countries to continue importing Iranian oil, without naming them. They are reported to include US allies India, Italy, Japan and South Korea. Iranian President Hassan Rouhani has vowed to sell his country's oil and break the sanctions. Iran's military has said that it would hold air defence drills on Monday and Tuesday to prove the country's capabilities. Before travelling to a campaign rally for the US midterm elections, President Trump said Iran was already struggling under his administration's policies.

Banking and financial services major HSBC and Reliance Industries Ltd on Sunday said that they have executed a first-of-its-kind blockchain trade finance transaction, validating the commercial and operational viability of blockchain as an alternative to conventional exchanges for paper-based documentation. Reliance Industries shares closed at Rs1,092.00, up 1.59% on the NSE.

The coming week is truncated on account of festivities in India, but (dotted with an) important series of events within and outside the country. Trading at stock exchanges won't take place on November 7th and 8th on account of Diwali, other than the brief traditional Muhurat Trading on Diwali day.

Silicon Valley-based online education platform, Udacity announced its collaboration with Pune-based KPIT Technologies to upskill and also, build its engineering talent ecosystem for autonomous technology in India, including self-driving cars and autonomous flight. KPIT Technologies shares closed at Rs217.00, up 3.43% on the NSE.

The Steel Authority of India Ltd (SAIL) reported a standalone profit after tax of Rs553.69 crore for the second quarter of 2018-19. The company had posted a net loss of Rs539.06 crore in the July-September period of the previous financial year.  "The numbers indicate a fast recovery in the company's profitability, operational performance and a collective effort towards driving the full advantage of modernisation and expansion," the company said in a statement. The company's turnover during the period under review rose 23% to Rs16,541 crore. SAIL shares closed at Rs66.30, down 4.67% on the NSE.

State Bank of India (SBI) reported Q2FY19 standalone results with net interest income (NII) at Rs20,905.69 crore (Rs18,585.90 crore), up 12.5% year-on-year. Net profit was at Rs944.87 crore (Rs1,581.55 crore), down 40.3% year-on-year. Provisions were at Rs10,184.50 crore (Rs16,715.20 crore). Gross non-performing assets (GNPA) were at 9.95% (9.83%) and Net non-performing assets (NNPA) were at 4.84% (5.43%). SBI shares closed at Rs295.30, up 3.45% on the BSE.

Indraprastha Gas reported Q2FY19 results with revenues at Rs1,568.73 crore (Rs1,231.35 crore), up 27.4% year-on-year. Profit after tax was at Rs187.23 crore (Rs168.87 crore), up 10.90% year-on-year.  Earnings per share were at Rs2.68 (Rs2.41). Indraprastha Gas shares closed at Rs284.25, up 0.85% on the NSE.

Natco Pharma reported Q2FY19 consolidated results with revenues at Rs543.50 crore (Rs426.70 crore), up 27.40% year-on-year. Net profit was at Rs182.50 crore (Rs84.80 crore), up 115.20% year-on-year. Earnings per share were at Rs9.89 (Rs4.82). Natco Pharma shares closed at Rs757.00, down 2.29% on the NSE.

Exide Industries reported Q2FY19 results with revenues at Rs2,720.35 crore (Rs2,58.37 crore), up 15.30% year-on-year. Net profit was at Rs268.41 crore (Rs135.52 crore), up 98.81% year-on-year. Earnings per share were Rs3.16 (Rs1.60). Interim dividend of Rs1.60 per share was declared. Exide Industries shares closed at Rs250.90, down 1.05% on the NSE.

The top gainers and top losers of the major indices are given in the table below:

The closing values of the major Asian indices are given in the table below: The Total Investment & Insurance Solutions

 

Major Indices (The Total Investment & Insurance Solutions)

Excessive competition can lead to stress in particular sector: Jaitley -The Total Investment & Insurance Solutions

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05 November 2018

Competition (The Total Investment & Insurance Solutions)

Finance Minister Arun Jaitley on Monday acknowledged the need for healthy competition in the markets even as he warned against excessive competition, which he said could lead to financial stress in the whole sector.

Speaking at an event organised by the Competition Commission of India (CCI), he said the competition regulator was created to ensure effective competition so that consumer interest could be protected.

"However, excessive competition at times can result in pricing of a nature that the (concerned) sector of the economy itself feels stressed, because everybody then tends to follow the leader," Jaitley said.

He said that such challenges were likely to increase with the expansion in the country's economy and markets.

"At our present growth rates, our expansion is going to be exponential and therefore the size of the industry of the services sector will increase and the role of each regulator, while exercising self restraint, will also expand."

One of the sectors, which has actually been hit by high competition among the market players is the telecom sector, where the entry of Reliance Jio with unprecedented low tariffs hit the existing players.

The Minister, talking on the need for proper regulations to auction public resources took a dig at the much controversial 2G spectrum auction which was based on the first-come-first-serve policy.

"If you recollect the spectrum case, one of the issues was that whoever comes first satisfying the LoI (Letter of Intent), which was issued to them, will be the preferred party. So, not only did they sprint first to go to the seventh or eight floor, but when the rivals came the lifts stopped working.

"There were obstructionists standing in the car park to prevent people."

Further, speaking on the need for multiple players in the market, Jaitley said that multiple players in the market ensure larger consumer interest.The Total Investment & Insurance Solutions

Plastic exports up 31% in H1, above 70% growth in shipments to China, Vietnam -The Total Investment & Insurance Solutions

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05 November 2018

 

India's plastics exports (The Total Investment & Insurance Solutions)

India's plastics exports grew 31.6% on year at $4.59 billion in the first half of the fiscal compared with $3.48 billion a year ago.

The growth in India’s plastics export has been primarily boosted by higher shipment of plastic raw materials, plastic sheet, film, plates, and packaging materials, according to Plastics Export Promotion Council.

Further, exports to China, Vietnam and Mexico witnessed high growth rates ranging between 70-140% in the April-September period.

“China, United States and United Arab Emirates continue to be top-3 destinations for India’s plastics products. These three countries accounted for 27.5% of India’s plastics product exports, by value in the first half,” said Ravish B Kamath, chairman, Plastics Export Promotion Council.

 India exported plastics to 205 countries in the period with French Guiana, Guam, Kiribati Republic, Lesotho, Marshall Island, Mayotte, Monaco, Nauru Republic and United States Virgin Islands being the latest destinations.

India is currently ranked among the top five consumers of polymers in the world and has 30,000 plus plastic processing units employing over four million people across the country The Total Investment & Insurance Solutions

Blackstone & Brookfield Interested In IL&FS Headquarters. One offer is for Rs950 crore -The Total Investment & Insurance Solutions

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05 November 2018

 

IL&FS (The Total Investment & Insurance Solutions)

The prominent corporate headquarters of Infrastructure Leasing & Financial Services (IL&FS) one of the earliest to come up in the bustling financial district of Bandra-Kurla in Mumbai, is on the block. Selling its headquarters is one of minor options for cash-strapped IL&FS to raise funds, which has a debt of Rs100,000 crore.

The circular IL&FS headquarters has attracted the interest of two bidders at least – private equity firm Blackstone group of the US and Canada-based Brookfield Asset Management, one of the largest global real estate investment firms. Both Blackstone and Brookfield are two of the largest foreign players in the real estate business in India. It appears that Blackstone is willing to pay Rs950 crore for the building. Sometime ago, when Hari Shankaran was the managing director, IL&FS was demanding Rs1,200 crore for the property.

The reason why IL&FS has demanded a much higher price is because all the buildings in the Bandra-Kurla area now enjoy a higher floor space index –FSI, the measure of how much floor space that can be constructed. However, this extra FSI is only on paper. Due to proximity to the airport, it is unlikely that buildings in BKC area will be able to utilise the increased FSI and go much higher.

The sale of IL&FS headquarters would be the first publicly visible action marking the dismantling of a maddeningly complex and highly leveraged IL&FS group. The group, comprising as many as 347 subsidiaries and associate companies, has emerged as the new template of mis-governance of public funds under the garb of public-private partnership and the personal enrichment of the senior officials, many of whom were drawn from the ranks of the Indian Administrative Service (IAS).

Brookfield has been aggressive acquirer of marquee assets. In April this year, it bought Equinox Business Parks, a prime commercial property also at BKC, for Rs2,400 crore from Essar group. The 10-acre business park comprises four towers, with a leasable office space of about 1.25 million sq ft. Earlier in 2016, Brookfield bought 4.5 million sq ft commercial properties from the Hiranandanis in Powai area of Mumbai and 17 million sq ft of Unitech Corporate Parks in 2014.

Blackstone is also quite active in India. According to reports, Embassy Office Parks, a joint venture between Blackstone and Embassy group, is looking to float the public issue of its real estate investment trust (REIT) early next year. Embassy Office Parks holds a portfolio of 33 million square feet across Mumbai, Pune, Bengaluru and Noida. About 24 million sqft of this portfolio is completed and out of this around 95% is leased out.

Annual rental income of the portfolio is over Rs2,000 crore. Blackstone Real Estate has committed to $5.3 billion across 31 investments in India. Of this, $3.9 billion is in office assets; it has invested in more than 100 million sqft of office space, says a report from Business Standard.

IL&FS has rented out several floors of its headquarters. It advertises itself to prospective clients as one of the biggest commercial buildings in BKC and is the most noticeable upon entering G Block, 300 metres away from BKC food court. Standing 10 floors high, it has a floorplate measuring 40,000 square feet.The Total Investment & Insurance Solutions

Global Markets Waver On Worries Over US-China Trade Dispute-The Total Investment & Insurance Solutions

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05 November 2018

financial markets (The Total Investment & Insurance Solutions)

Global stock markets were mixed on Monday as investors watched developments in the U.S-China trade war and the upcoming U.S. midterm elections.

KEEPING SCORE: Britain's FTSE 100 rose 0.4 percent to 7,125 while the CAC 40 in France gained 0.2 percent to 5,112. Germany's DAX rose 0.2 percent to 11,540. Wall Street was positioned for a mixed open, with Dow futures down 0.3 percent and S&P 500 futures up 0.2 percent.

ASIA'S DAY: Japan's Nikkei 225 index fell 1.6 percent at 21,898.99 and South Korea's Kospi dropped 0.9 percent to 2,076.92. Hong Kong's Hang Seng index slipped 2.1 percent to 25,934.39. The Shanghai Composite index shed 0.4 percent to 2,665.43. The S&P ASX/200 in Australia fell 0.5 percent to 5,818.10. Shares fell in Taiwan, Singapore and Thailand but rose in the Philippines.

U.S.-CHINA TRADE: Chinese President Xi Jinping Xi promised Monday to reduce costs for importers and raise consumer spending power at a high-profile trade fair in Shanghai. But Xi did not address an escalating dispute over Beijing's technology policy. Global markets had risen Friday after Chinese officials and President Donald Trump said a phone conversation between the two leaders had gone well. But fears resurfaced that the bullish talk might have been aimed at scoring political points just ahead of U.S. midterm elections.

ANALYST'S TAKE: "Investors are far too wary of an empty promise, but ultimately, they will need to decide how much of President Trump's olive branch to China was a ploy to boost equity markets ahead of the U.S. midterm elections on Tuesday and how much of it is a bona fide attempt to reach an agreement," Stephen Innes of OANDA said in a commentary.

BREXIT DEAL: The office of British Prime Minister Theresa May has dismissed reports the country is close to reaching a divorce agreement with the European Union. In particular, Downing Street said a Sunday Times report, which claimed the two sides had agreed on future customs arrangements at the Ireland-Northern Ireland border, was "speculation." Officials have said negotiators are on the brink of a deal, which could be reached this month.

ENERGY: Oil prices fell as the U.S. defended waivers given to eight unidentified nations, which will be able to continue importing Iranian oil after the re-imposition of sanctions. Benchmark U.S. crude dropped 15 cents to $62.99 per barrel in electronic trading on the New York Mercantile Exchange. It lost 55 cents to $63.14 a barrel in New York on Friday. Brent crude, used to price international oils, was up 7 cents at $72.90 per barrel. The contract shed 6 cents to $72.83 a barrel in London.

CURRENCIES: The dollar rose to 113.27 yen from 113.19 yen. The euro slipped to $1.1369 from $1.1387.The Total Investment & Insurance Solutions