Global Markets Calm Ahead Of Jackson Hole Meeting-The Total Investment & Insurance Solutions

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23 August  2017

South korea stock markets (The Total Investment & Insurance Solutions)

Global stock markets edged lower Wednesday as investors treaded carefully ahead of an annual gathering of central bankers. The Total Investment & Insurance Solutions

KEEPING SCORE: In Europe, the FTSE 100 index of leading British shares was down 0.1 percent at 7,374 while Germany's DAX fell 0.3 percent to 12,192. The CAC 40 in France was 0.2 percent lower at 5,122. U.S. stocks were poised for a soft opening with Dow futures and the broader S&P 500 futures down 0.3 percent.

CENTRAL BANKERS: Federal Reserve Chair Janet Yellen and European Central Bank President Mario Draghi are among the central bankers due to speak at the symposium in Jackson Hole, Wyoming, this week. With little market-moving news on the calendar, investors will be keen on their speeches scheduled on Friday. The Federal Reserve is raising interest rates and is preparing to pare back the $4.5 trillion it holds on its balance sheet, and investors are wondering when the European Central Bank will follow suit.

ANALYST TAKE: "It's been a slow start to trading on Wednesday, much in keeping with the rest of the week so far, as traders wait in anticipation of the Jackson Hole Symposium which takes place over the next few days," said Craig Erlam, senior market analyst at OANDA. The Total Investment & Insurance Solutions

EUROPE ECONOMY: A closely watched survey from financial information company IHS Markit indicated that the economic recovery across the 19-country eurozone remained solid. Its main purchasing managers index, a broad gauge of economic activity, rose slightly to 55.8 in August from 55.7 in the previous month, better than expectations for a modest decline. The index is pointing to a second successive quarter of quarterly growth of 0.6 percent. Though the euro rallied after the figures, trading 0.3 percent higher at $1.1787, most market participants think Draghi will be cautious in his remarks Friday. The Total Investment & Insurance Solutions

ASIA'S DAY: Asian stock markets eked out small gains. Japan's Nikkei 225 gained 0.3 percent to 19,434.64 and South Korea's Kospi added 0.1 percent to 2,366.40. But the Shanghai Composite Index edged down 0.1 percent to 3,287.70. Hong Kong's Hang Seng index was closed due to a typhoon.

OIL: Benchmark U.S. crude lost 2 cents to $47.67 per barrel in electronic trading on the New York Mercantile Exchange while Brent crude, the international standard, slipped 35 cents to $51.53 per barrel in London.The Total Investment & Insurance Solutions 

Nifty, Sensex May Go Up if Previous Friday’s Low Holds – Monday closing report-The Total Investment & Insurance Solutions

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21 August  2017

I had mentioned in Friday’s closing report that Nifty, Sensex might head higher. But the major indices of the Indian stock markets suffered a further correction on Monday and closed with losses over Friday’s close. The trends of the major indices in the course of Monday’s trading are given in the table below: The Total Investment & Insurance Solutions

 

Major Indices (The Total Investment & Insurance Solutions)

Negative global cues pulled the key Indian equity indices -- the NSE Nifty 50 and the BSE Sensex -- lower during mid-afternoon trade. According to market observers, subdued global benchmark indices coupled with foreign fund outflows eroded investors' risk-taking appetite. Selling pressure was witnessed in IT (information technology), healthcare and automobile stocks. On the NSE, there were 409 advances, 1,024 declines and 41 unchanged. Indian indices erased all the morning gains, as Asian and European indices turned negative in trade. 

Global cues and direction of foreign funds' flows are expected to affect the movement of key equity indices during the upcoming week, market observers opined. With earnings season almost over, markets would now focus on global risks and political developments from the US, valuations, domestic flows and stock- or sector-specific developments, observed analysts. Apart from global cues, the direction of foreign fund flows is expected to influence the trajectory of the equity indices. The Total Investment & Insurance Solutions

Banking operations across the country will be affected on Tuesday with around 10 lakh bankers going on strike pressing various demands. TCS iON, a business unit of IT major Tata Consultancy Services (TCS), on Monday announced its partnership with the Institute of Company Secretaries of India (ICSI) to help foster digital learning opportunities for students. Ruia brothers-led Essar Oil on Monday announced the closure of the company's sale, including its Vadinar refinery, to Russian state-run Rosneft-led consortium for $12.9 billion. The deal includes acquisition of Essar Oil's (EOL) 20 million tonne Vadinar refinery in Gujarat and its retail outlets, as well as the Vadinar Port at an additional $2 billion. The first deal involves the sale of 49.13% stake in Essar Oil to Petrol Complex, a subsidiary of Rosneft, while the second envisages the sale of remaining 49% to Kesani Enterprises, owned by a consortium led by Trafigura and United Capital Partners. The remaining 1.74% stake continues to be held by retail shareholders. Essar Shipping shares closed at Rs28.90, up 12.89% on the BSE.

Budget passenger carrier IndiGo alleged that "in the last few days, there have been misinformed media reports suggesting that IndiGo is cancelling 85 daily flights," the airline said in a statement. IndiGo was reacting to media reports that claimed that the carrier has cancelled over 80 daily flights and grounded 13 of its new A-320neo aircraft due to engine-related issues. The airlines said it had been regularly updating investors and the press about issues related with their aircraft engines. The shares of the company (Interglobe Aviation) closed at Rs1,268.65, down 0.13% on the BSE. The Total Investment & Insurance Solutions

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

 

Top Gainer (The Total Investment & Insurance Solutions)

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

Asian Indices (The Total Investment & Insurance Solutions)

Banking operations to hit on Aug 22 due to nationwide strike-The Total Investment & Insurance Solutions

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21 August  2017

Banking operations across the country will be affected on Tuesday with around 10 lakh bankers going on strike pressing various demands. The Total Investment & Insurance Solutions

"All India State Bank Officers' Federation and All India State Bank of India Staff Federation, being part of UFBU (United Forum of Bank Unions), will also participate in the strike. It is likely that our Bank would also be impacted by the said strike," the State Bank of India (SBI) had said earlier in a regulatory filing in the BSE. The Total Investment & Insurance Solutions

The strike call was given by the UFBU - an umbrella body of nine unions in the Indian banking sector. The UFBU is protesting against reforms in the banking sector and other issues.

According to union leaders, around 10 lakh bankers working in around 132,000 branches will be on strike on Tuesday.The Total Investment & Insurance Solutions

Daunting task for Infosys Board finding new CEO: Jefferies-The Total Investment & Insurance Solutions

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21 August  2017

The embattled Board of software major Infosys faces a daunting task in finding a suitable Chief Executive Officer (CEO) to succeed technocrat Vishal Sikka who resigned on August 18, US-based global investment bank Jefferies LLC has said.

"Given the acrimonious exit (of Sikka), the near-term challenge for the Infosys Board would be to find the right candidate for the CEO post and alleviate issues with the company's founder (Narayan Murthy)," Jefferies Indian arm said in a statement here.

As the company's strategic direction was not in question, the securities firm said the IT major would sustain business momentum. The Total Investment & Insurance Solutions

"Interim challenges will also involve business continuity, especially with large clients, and preventing attrition in senior management and sales," said Jefferies India equity analyst Vaibhav Dhasmana in the statement. The Total Investment & Insurance Solutions

As finding closure to the "founder issues" and maintaining business traction, especially in large accounts, would not be easy, Dhasmana said that, over the long-term, the Board had to create mechanisms to shield the management from external noise as had been the case with Sikka.

Though Sikka resigned citing personal attacks, the Board blamed comments from one of the founders (Murthy) as reason for his exit. The Total Investment & Insurance Solutions

With the company hinting at a strong second quarter (July-September) and reiterating its annual guidance for fiscal 2017-18, the management is expected to meet its top 100 clients in the next few weeks. The Total Investment & Insurance Solutions

The outsourcing firm appointed Chief Operating Officer U.B. Pravin Rao as the interim CEO until a new CEO is found by March 31, 2018, and elevated Sikka as Executive Vice-Chairman to ease the transition. The Total Investment & Insurance Solutions

"In the backdrop of industry changes and slowing growth across the sector, the time taken for resolution of these, especially the new CEO appointment, will be key, added Dhasmana.

Calling for more active investor engagement by the Board, the analyst said its commentary in Friday's conference call with investors was hardly decisive, reflecting Sikka's sudden exit.

"We are encouraged by the Board's endorsement of the strategy with the founders, suggesting little friction," added the statement. The Total Investment & Insurance Solutions

In a related development, the company's stock of Rs 5 face value, on Monday declined to Rs 893.85 after opening at Rs 929 on the BSE in pre-noon trading even after it had announced on Saturday the decision to buy back 11.3 crore shares at Rs 1,150 each via tender offer soon.

The offer price at Rs 1,150 per share is Rs 226.90 more than Rs 923.10 per share closing price on Friday when it plunged 9.6 per cent after Sikka's resignation spooked investors.The Total Investment & Insurance Solutions

McDonald's ends franchise pact with Connaught Plaza Restaurants-The Total Investment & Insurance Solutions

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21 August  2017

McDonalds India announced it had terminated its franchise agreement with Vikram Bakshi's Connaught Plaza Restaurants. The 169 restaurants operated by the latter will have to stop using the McDonlad's brand name within 15 days. The Total Investment & Insurance Solutions

Connaught Plaza Restaurants Pvt Ltd (CPRL) runs McDonald's outlets in northern and eastern India. McDonald's India it was on the lookout for a new partner.

"Today we have issued the CPRL board a notice of termination of the franchise agreements for 169 McDonald's restaurants operated by CPRL in North and East India. This includes all restaurants impacted by the recent failure to renew the Eating House Licenses," McDonald's India said in a statement. The Total Investment & Insurance Solutions

On June 29, the company had temporarily suspended operations of more than 40 of its restaurants in Delhi after the 'Eating House Licences' of a number of outlets expired.

"As a result, CPRL is required to cease using the McDonald's system (including proprietary rights in McDonald's names, trademarks, designs, branding, operational and marketing practice and policies and food recipes) and its associated intellectual property in relation to these restaurants within 15 days of the termination notice," it said.

MIPL said it was compelled to take this step because CPRL had materially breached the terms of the franchise agreements relating to the affected restaurants and had failed to remedy the breaches, despite being provided with an opportunity to do so.

The announcement assumes significance after the National Company Law Tribunal (NCLT) on July 13 restored Vikram Bakshi as Managing Director of CPRL. 

CPRL is a 50:50 joint venture (JV) between MIPL and Bakshi, who was removed as MD in August 2013. McDonald's India and Bakshi have for long been embroiled in a fight over the control of CPRL. The Total Investment & Insurance Solutions

McDonald's India said the company will try and mitigate impact on the employees in these restaurants. The Total Investment & Insurance Solutions

"We understand that this action brings uncertainty for many. As we proceed to exercise our legal and contractual rights consequent on termination, a priority will be to mitigate impact on affected parties such as employees, suppliers and landlords and we are open to working with CPRL to achieve this," the statement said. The Total Investment & Insurance Solutions

McDonald's India said it was scouting for a new partner to re-establish a profitable business in the north and east of the country.The Total Investment & Insurance Solutions

US Stock Indexes Hold Steady After Back-To-Back Down Weeks-The Total Investment & Insurance Solutions

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21 August  2017

U.S. stock markets (The Total Investment & Insurance Solutions)

U.S. stock indexes were little changed in midday trading on Monday, holding relatively steady following back-to-back losses for the Standard & Poor's 500 index over the last two weeks.

The S&P 500 is close to its lowest level in six weeks, but this week may be a calmer one for stocks with few market-moving events approaching on the calendar. The highlight will likely arrive as the weekend approaches, when central bankers from around the world gather in Wyoming. The Total Investment & Insurance Solutions

KEEPING SCORE: The S&P 500 flipped between modest gains and losses through the morning. It was up nearly 2 points, or 0.1 percent, at 2,427, as of noon Eastern time. The Dow Jones industrial average gained 1 points, or less than 0.1 percent, to 21,676. The Nasdaq composite fell 7 points, or 0.1 percent, to 6,210.

CALM CALENDAR: The beginning of this week may be slow for markets. Earnings reporting season is almost over, and roughly 95 percent of companies in the S&P 500 have already said how much they earned during the spring quarter. Few major economic reports are on deck, meanwhile.

A calm week may be welcome, following a second straight, shaky week where the S&P 500 had its biggest one-day loss in three months. Worries about politics, both domestic and international, contributed to the nervousness. The S&P 500 has had two days in the last two weeks where it's dropped by more than 1 percent. It's had only four for the year so far, which is well below typical levels. The Total Investment & Insurance Solutions

ROCKY MOUNTAIN HIGH: This week's highlight will likely be a mountain gathering in Jackson Hole, Wyoming, for central bankers, economists and policy makers. Federal Reserve Chair Janet Yellen and European Central Bank head Mario Draghi are both expected to speak at the symposium, which begins Thursday and is hosted by the Fed's regional bank in Kansas City. The Total Investment & Insurance Solutions

Tremendous stimulus from central banks has been one of the main reasons for the stock market's surge since the Great Recession. But the Federal Reserve is now slowly raising interest rates and preparing to pare back the vast trove of bonds that it bought following the 2008 financial crisis. Investors are wondering when the European Central Bank may follow suit. The Total Investment & Insurance Solutions

Jackson Hole has been the site of market-moving news in the past, including in 2010 when former Fed Chair Ben Bernanke signaled the central bank may embark on another round of bond buying to shore up the economy.

KOREA DRILLS: One wild card for markets may lie in Asia, where U.S. and South Korean forces on Monday started their annual joint military exercises. Tensions are higher than usual with North Korea, and Pyongyang in the past has responded to the drills with weapons tests and a string of belligerent rhetoric.

MARKETS ABROAD: In Asia, South Korea's Kospi index dipped 0.1 percent, Japan's Nikkei 225 index fell 0.4 percent and the Hang Seng in Hong Kong rose 0.4 percent.

In Europe, France's CAC 40 fell 0.5 percent, Germany's DAX lost 0.8 percent and the FTSE 100 in London slipped 0.1 percent. The Total Investment & Insurance Solutions

BENCHED AGAIN: Stocks of athletic-gear companies sank a second straight day, and the 5.3 percent drop for Foot Locker was one of the largest losses among companies in the S&P 500.

Shares tumbled across the industry on Friday after both Foot Locker and Hibbett Sports said revenue fell last quarter. Under Armour's Class A shares lost 3.4 percent Monday, and Nike fell 2.5 percent.

POWERED UP: Sempra Energy rose 1.3 percent after saying it will buy Texas power-transmission company Oncor for $9.45 billion in cash. The deal snatches Oncor away from Warren Buffett's Berkshire Hathaway, which last month said that it would buy the company for $9 billion. The Total Investment & Insurance Solutions

YIELDS: Treasury yields fell. The yield on the 10-year Treasury note dipped to 2.19 percent from 2.20 percent late Friday. The two-year yield slipped to 1.30 percent from 1.31 percent, and the 30-year yield fell to 2.77 percent from 2.78 percent. The Total Investment & Insurance Solutions

CURRENCIES: The dollar dipped to 108.87 Japanese yen from 109.26 yen late Friday. The euro rose to $1.1812 from $1.1760, and the British pound rose to $1.2902 from $1.2876.

COMMODITIES: Benchmark U.S. crude fell 88 cents to $47.78 per barrel. Brent crude, the international standard, lost $1.12 to $51.60. The Total Investment & Insurance Solutions

Natural gas rose 7 cents $2.97 per 1,000 cubic feet, heating oil fell 4 cents to $1.59 per gallon and wholesale gasoline lost 4 cents to $1.58 per gallon. The Total Investment & Insurance Solutions

Gold rose $4.00 to $1,295.60 per ounce, silver rose 2 cents to $17.02 per ounce and copper gained 5 cents to $2.99 per pound.The Total Investment & Insurance Solutions

Dream more, achieve much more-Start your SIP today -The Total Investment & Insurance Solutions

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19^Th August  2017

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Nifty, Sensex May Head Higher – Weekly closing report-The Total Investment & Insurance Solutions

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18 August  2017

I had mentioned in last Friday’s closing report that Nifty, Sensex might bounce a bit mid-week. The major indices of the Indian stock markets alternately rallied and suffered a correction in the course of the week’s trading to close on Friday with small weekly gains over last Friday’s close. The trends of the major indices in the course of the week’s trading are given in the table below: The Total Investment & Insurance Solutions

 

Weekly Indices (The Total Investment & Insurance Solutions)

Broadly positive global cues, coupled with healthy buying in consumer durables, metals and automobile stocks, lifted the key Indian equity indices from their five-week lows to trade with gains during the mid-afternoon session on Monday. According to market observers, a strong rupee and individual index heavyweights like Tata Steel, Adani Ports, Cipla and Maruti Suzuki, among others, aided the BSE Sensex and the NSE Nifty50 to pare last week's losses. On the NSE, there were 1,237 advances, 270 declines and 26 unchanged.

The markets snapped its five-session long losing streak after Asian markets bounced tracking a firmer Wall Street after weaker-than-expected July consumer price data led investors to bet that benign inflation would keep the US Federal Reserve from raising rates again this year, pointed out market analysts. The broader NSE's Nifty, too, rose in the morning hours. The Indian rupee opened stronger against the US dollar. The shares of Cipla, and Adani Ports rose, whereas the shares of Infosys and Bharti Airtel fell, observed market analysts.

On Tuesday, the stock markets were closed on account of a holiday for Independence Day. On Wednesday, buying was observed in fast moving consumer goods (FMCG), metal and auto sectors, while selling pressure was seen in capital goods. On the NSE, there were 1,118 advances, 537 declines and 302 unchanged. The Total Investment & Insurance Solutions

The key Indian equity indices traded on a flat-to-positive note during the mid-afternoon trade session on Thursday, as buying in metal, oil and gas, and IT (information technology) stocks kept investors' sentiments buoyed. However, market observers opined that a mixed trend observed in the global markets, coupled with profit booking in automobile and banking stocks, pared gains. The Nifty50 of the National Stock Exchange (NSE) traded above the psychologically important 9,900-level. On the NSE, there were 796 advances, 615 declines and 66 unchanged. The Total Investment & Insurance Solutions

Indian equity benchmarks climbed during the morning session, following gains in Asian peers, after the US Federal Reserve meeting minutes reduced the odds of another interest rate increase this year. Infosys was the top gainer on both the indices after saying its board would consider a proposal to buy back shares. The Total Investment & Insurance Solutions

The Infosys’ Board of Directors would meet on Saturday to consider a proposal for buyback of its equity shares of Rs5 face value. "The Board of Directors would consider a proposal for buyback of equity shares of the company at its meeting to be held on 19th August," Infosys said in a regulatory filing. The outcome of the Board would be notified to the stock exchanges (BSE and NSE) on the same day. In view of the Board meeting on the share buyback, the company closed the trading window with immediate effect and would re-open on 22nd August, said Company Secretary AGS Manikantha in the filing. The company on 13th April had hinted at the buyback during this fiscal (2017-18) up to Rs13,000 crore. The company’s shares closed at Rs1,021.05, up 4.70% on the NSE. The Total Investment & Insurance Solutions

On Friday, the major indices of the Indian stock markets suffered a sharp correction, following a sharp decline in the US markets and as Vishal Sikka quit as the Chief Executive Officer (CEO) and Managing Director (MD) of IT (information technology) major Infosys. Selling in IT, healthcare and banking stocks, coupled with negative global cues, hampered investors' risk-taking appetite.  On the NSE, there were 614 advances, 1,038 declines and 304 unchanged. The major indices closed on Friday with losses over Thursday’s close.

Gold rose for a third day on Friday amid weaker Asian stocks, with some investors gravitating towards safe-haven assets on political uncertainty in the United States and after a terrorist attack in Spain killed 13 people, according to a Reuters report.The Total Investment & Insurance Solutions

Infosys feud: Broking firm cuts its rating to 'reduce' from 'hold' after Sikka's exit -The Total Investment & Insurance Solutions

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18 August  2017

 

Sikka(The Total Investment & Insurance Solutions)

Following the resignation of Vishal Sikka as Infosys’ Managing Director and Chief Executive (CEO), Emkay Global Financial Services Ltd (Emkay) has cut its rating on the company to 'reduce' from 'hold' while revising target price by 7.1% to Rs910. The Total Investment & Insurance Solutions

In its advisory, Emkay says, "Vishal Sikka's resignation from Infosys at this crucial stage of business transformation is a significant dent given the differentiated path the CEO led the company in last three years. We believe this is severe dent in brand reputation, client conversation, investor confidence, employee morale, business transformation, which would affect its financial performance in the short-to-medium term. Thus we believe that stock may command lower valuation given the absence of positive triggers and incremental uncertainty in coming period."

Commenting on the developments in Infosys, Kaustubh Belapurkar, Director - Fund Research, Morningstar, says, "Domestic fund managers have been pruning exposure to the technology sector over the last year, due to tepid growth seen in the industry due to global headwinds as well as Rupee strength. Technology sector allocation across all funds on an aggregate basis has come down dramatically to 8% from 9.75% over the last 1 year.  Infosys has been the favoured stock from the tech space, with about 40% of the mutual fund (MF) industry's overall Technology sector allocations being made in Infosys."

(Source: Morningstar)

According to Emkay, Mr Sikka's thought leadership on technology evolvement was well regarded and had helped Infosys to create a robust 'new services and software' that accounts for 50% of the incremental revenues over FY2015-2017.  'New Services and Software' accounts for 10% of total revenues and stood at $1 billion in size today all of these were new initiatives and revenue stream created under leadership of Mr Sikka. The Total Investment & Insurance Solutions

Infosys (The Total Investment & Insurance Solutions)

Clients under the macro business uncertainty would prefer for more certain business partners that provides continuity of thought process, Emkay says, adding, "We believe this event may benefit competitors such as TCS and Cognizant at least in short term."

However, it says, "The bigger dilemma (for Infosys) remains in terms of getting a replacement as there are not many choices internally, given several key personnel exits in last three years and equally challenge to find an external candidate given the way things have been." 

Mr Sikka has been appointed as Executive Vice Chairman of Infosys till March 2018, while UB Pravin Rao has been appointed interim CEO and MD reporting to Mr Sikka under the overall supervision and control of the Company's Board. The Total Investment & Insurance Solutions

In his resignation, Mr Sikka has highlighted concern over sickening repetition of allegations around Panaya acquisitions, CFO compensation despite repeated clarification post multiple investigations by third party consultants. "However," Emkay says, "we believe putting risk to three years of hard work on these personal challenges are not sufficient grounds and is severe blow to the company."

Infosys closed Friday 9.6% down at Rs923 on the BSE, while the benchmark Sensex ended the day marginally lower at 31,524.The Total Investment & Insurance Solutions