Traders’ Diary: What Sebi has just done to protect your money
Sebi has tightened disclosure norms for promoter share pledges, imposed royalty payment rules on companies and lowered sectoral cap on liquid mutual funds.
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Sebi measures will protect investor interest and get confidence back in liquid and as a category of debt mutual funds. I feel current NBFC crisis is making investors nervous about debt mutual funds and it is very important to take some hard decisions and make this industry more investor friendly. Liquid fund as a vehicle is more for short-term needs and contingency oriented planning so safety security and liquidity are primary requirement and 20% requirement in liquid asset and 20% limit in sector is a step in the right direction
- Tarun Birani, Founder and CEO, TBNG Capital Advisors
If Thursday’s profit booking was expiry-related, and the market stabilises on Friday, then Nifty50 should ideally pick up momentum. In such a scenario, one can look for higher targets placed around 12,000. Clarity will emerge after Friday’s session. For the time being, it would be prudent for traders to remain neutral
- Mazhar Mohammad, Chartviewindia.in
In terms of the Fibonacci retracement, Thursday’s pullback was just short of the 61.8 per cent retracement of the June series decline, which was at 11,920. Thus, the next downward leg looks around the corner. On the downside, the 11,820-11,800 range is an immediate support zone below which the index can test the June low of 11,625
- Gaurav Ratnaparkhi, Sharekhan
With its close in the red, Nifty has completed the three-wave pullback that had started from 11,625. The pullback was contained within a rising channel on a closing basis. Hence, the bearish outlook remains intact
- Gaurav Ratnaparkhi, Sharekhan
Nifty formed a Spinning Top kind of candle as it failed to hold at higher levels, but ended up forming higher highs and lows from past two sessions, which suggests every dip got bought into at lower levels. Now, Nifty has to hold above 11,761 to extend its move towards 11,929 and then 12,000 levels, while on the downside supports are seen at 11,761 and 11,720 levels
Widening the scope of “encumbrance” by including negative lien and NDUs (non-disposal undertaking) etc is a welcome step by Sebi. This would help in tightening norms for disclosure by promoters and will further improve the transparency
- Pavan Kumar Vijay, Founder of Corporate Professionals
Amit Singh, CEO of Investica on Sebi’s board outcome
Sebi has created a tighter framework for debt mutual funds, which will ensure that investors are not exposed to undue risk.
By making it mandatory to invest in listed NCDs and CPs, Sebi has taken a step towards ensuring the liquidity of the instruments.
Valuation of securities in debt funds will now be on mark-to-market value and hence there will be uniformity across the industry with fair valuation of each debt security.
Since Sebi refused to agree with standstill agreements made of MF companies with the borrowers, MFs now have to do complete due diligence before taking exposure in any debt security.
Sebi has also revised the sectoral caps for debt funds, which will make sure that the fund is not overexposed to a single sector.
With the focus on protecting investors' interests, the actions taken by Sebi should streamline the inflow in debt funds which was on a downward trajectory post-ILFS saga.
Issues framework on differential voting rights share issue
Issues enhanced norms for disclosure of pledged shares
Okays introduction of superior voting rights share for tech firms
Liquid funds to hold at least 20% assets in cash equivalents
Cap on sectoral limit in liquid funds cut to 20%
Royalty payment of over 5% of sales to be considered material
Any direct, indirect lien on shares to qualify as encumbered shares
Money market securities valuation based on own trades disallowed
Reason must for pledged shares if over 20% of equity capital
Firm audit panels must be told of any undisclosed encumbrance
MFs can't have standstill agreements with firms
Took action against MFs who had standstill pact with firms
Consolidated debt-equity ratio must be considered for buybacks
Sebi approves framework for issuance of DVR shares
Nifty opened on a positive note, but failed to sustain levels above 11,900 and corrected in second half of the trading session. Going ahead Nifty is expected to take immediate support at around 11,800 level, which has the highest open interest concentration in put series. On the upside, Nifty will form bearish harmonic gartley pattern at around 11,920 level, which may act as an immediate hurdle. The broader range for Nifty is expected to be 11,780-11,980 till the upcoming event
- Gaurav Bissa, AVP Derivatives & Technicals - LKP Securities
A healthy environment was developed ahead of the G20 meet. Today we have a pause in the momentum awaiting its final outcome this weekend. This hope and positive trend will continue in the short-term supported by domestic tailwinds like budget stimulus & Q1FY20 results
- Vinod Nair, Head of Research, Geojit Financial Services
CLOSING BELL: Sensex flat, Nifty ends June F&O series at 11,842; SCUF rallies 20%, Dilip Buildcon 9%
Axis Bank considers $1.3 billion share sale
Shares of Axis Bank fell over 2 per cent from the day’s high of Rs 806.65 in Thursday's session on a Bloomberg report, suggesting that the lender was considering raising at least $1.3 billion through a share sale to institutional investors. The scrip rose nearly 2 per cent to hit a high of Rs 806.65 in early trade. But the scrip erased gains following the report.
KPR Agrochemicals IPO: All you need to know
KPRAC is coming up with an initial public offering (IPO) with 34.4 million shares as a fresh issue and 12 million shares as offer for sale (OFS).
Post issue promoter and promoter group’s holding will reduce to 48.0% and non-promoter shareholding will increase to 52% from 28%.
The issue will open on 28th June 2019 and close on 02th July 2019.
Not more than 25% of the issue will be allocated to qualified institutional buyers. Further, not less than 35% of the issue will be available for non-institutional bidders and not less than 40% for retail investors.
Total issue size is Rs 2,832 million on higher price band out of which ~25.8% is OFS.
Promoters are selling 3.9 million of shares and thus their holding post issue will reduce to 48% from 72%.
Retail as well as employee will get Rs 3 discount on the offer price.
The company has reserved 0.43 million equity shares for eligible employees.
The average cost of acquisition of shares by the promoters is Rs. 1.73, Rs. 1.90, Rs. 2.48, Rs. 2.59, Rs. 2.67 and Rs 9.38 per share
Amar Ambani says, don't be in a hurry to deploy funds.
Top bank losers on NSE
Price as on 27 Jun, 2019 02:22 PM, Click on company names for their live prices.
SRS, RPP Infra among top 5 losers
Price as on 27 Jun, 2019 01:43 PM, Click on company names for their live prices.
India gets 24% below-average rainfall this week: IMD
India’s monsoon rains were 24% below average in the week ended June 26, the weather office said on Thursday, as the seasonal rainfall was scanty over central and western parts of the country.
The rains are crucial for farm output and economic growth as about 55% of the south Asian nation’s arable land is rain-fed, and the farm sector makes up about 15% of a nearly $2.5-trillion economy that is Asia’s third-biggest.
Top 10 NSE gainers in afternoon session
Price as on 27 Jun, 2019 01:04 PM, Click on company names for their live prices.
LGT buys majority stake in India's Validus Wealth
Private bank and asset manager LGT, owned by Liechtenstein's princely family, has agreed to buy a majority stake in Validus Wealth to gain a foothold in India's growing market for high-net-worth private clients, LGT said on Thursday. It gave no financial terms for the deal, in which current management will continue to hold the rest of Validus shares.
The government will set up a financial sector exchange trade fund (ETF) comprising shares of listed public sector banks, insurance companies and state run financial institutions. The department of investment and public asset management (DIPAM) on Thursday invited expression of interest (EoI) for appointment of an advisor to create this fund.
“We had successful stints with the CPSE ETF and later Bharat 22 ETF. There is a scope for a financial sector ETF given that strength of state run banks have improved in the last one year,” an official at DIPAM said.
In 2018-19, the government raised Rs 18,729.85 crore through Bharat 22 ETF in two tranches. It raised another Rs 26,350 crore through CPSE ETF.
Going by the Prime Minister addresses to the Parliament houses, it clearly shows that he wants to maintain continuity. The very fact that the NITI Aayog head has been given an extension is a clear onus on maintaining continuity. One would assume that the small fixes are likely to be addressed in this budget. There does not seem to be enough room to manoeuvre now for big bang reforms.
- Sameer Narayan
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Coffee Day Enterprises surges 12% amid stake sale buzz
Shares of Coffee Day Enterprises surged nearly 12 per cent in morning trade on Thursday after reports emerged that beverage maker Coca-Cola is in talks to pick up a significant stake in the country’s largest coffee chain.
ET reported that Coca-Cola has entered exclusive talks to pick up a significant stake in Café Coffee Day (CCD) as the soft drinks giant looks to gain a foothold in the rapidly growing cafés space and hedge risks associated with its core carbonated drinks business.
However, Coca-Cola has denied any such development.
Institutional investors pumped in $3.5 billion (Rs 24,220 crore) in India’s real estate sector so far in 2019, the highest for the first half in at least the past six years, said a recent report by Colliers International.
Gagan Randev, the national director for capital market at Colliers International, expects the ongoing year to witness the highest inflows from private equity funds in the real estate sector in India.
Investor-friendly reforms by the Union government, followed by positive investor sentiment after the listing of India’s first Real Estate Investment Trust, have helped boost investment.
Private equity firm True North has sold 7.39 per cent stake in Aster DM Healthcare worth over Rs 448 crore through open market transactions. A total of 3.73 crore shares, amounting to 7.39 per cent stake, were offloaded by True North Fund III A at a price of Rs 120.03 per scrip Wednesday, translating into a Rs 448.47-crore transaction, according to bulk deal data available on NSE.
IndusInd Bank climbs 2%; Deutsche Bank maintains buy on the stock
Shares of IndusInd Bank climbed 2 per cent in morning trade on Thursday after Deutsche Bank maintained 'buy' recommendation on the stock with a target price of Rs 1,900.
Deutsche said the Bharat Financial-IndusInd Bank merger benefits will play out and the fears on nonperforming loan (NPL) are misplaced as the stress book is gradually declining.
It expects IndusInd to deliver nearly 2 per cent return on assets (RoA) and 20 per cent return on equity (RoE) by the financial year 2021.
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Shares of Dewan Housing Finance Corporation traded in the green, rising as much as about 5 per cent, in morning trade on Thursday. The debt-laden DHFL on Wednesday said it has received the Securities and Exchange Board of India's (Sebi) approval to exit its mutual fund business by selling its 50 per cent stake to Prudential Financial. The company had entered an agreement with Prudential Financial to divest its 50 per cent holding in DHFL Pramerica Asset Managers (DPAMPL) -- 17.12 per cent held directly and 32.88 per cent held by its wholly-owned subsidiary, DHFL Advisory & Investments.
RPower, RIfra, YES Bank and DHFL among most active stocks on NSE
Price as on 27 Jun, 2019 09:56 AM, Click on company names for their live prices.
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OPENING BELL: Sensex gains 80 pts, Nifty above 11,850; Coffee Day jumps 6%, ADAG stocks climb up to 5%
Sensex climbs 200 pts, Nifty above 11,850; rupee trades at 69.72 against dollar.
Singapore trading sets stage for flat start
Nifty futures on the Singapore Exchange were trading 1.50 points, or 0.01 per cent, lower at 11,867.50, indicating a flat start for Dalal Street.
Tech view: Nifty forms Bullish candle
Nifty50 on Wednesday broke above the crucial 11,625-11,845 range where it was stuck for the past eight sessions. In the process, the index formed a small bullish candle on the daily chart. During the session, the index faced resistance at the 11,870 level, which will be its next immediate resistance.
Market-wide rollovers at 69%
The market-wide rollovers till Wednesday stood at 69 per cent. Stock futures rollovers stood at 73 per cent, which were higher compared with the average rollovers of 69 per cent seen in the last three series. Nifty futures rollover stood at 55 per cent were in line with the average three-month rollovers of 56 per cent. “We eliminate the possibility of major expiry related-volatility in the volume-weighted average price (VWAP).”
Asian markets busy going nowhere
Asian markets were busy going nowhere on Thursday as confusion shrouded the chances of any progress in the Sino-US trade standoff, while bulls scaled back wagers for a drastic cut in US interest rates. Japan's Nikkei added 0.3 per cent while Australian stocks eased 0.4 per cent.
Oil prices fall as market awaits G20, OPEC
Oil fell on Thursday, erasing some of the previous session's strong gains, as traders eye the G20 summit in Japan and a meeting of OPEC and other oil producers to decide on an extension of output cuts. Brent crude futures were down 44 cents, or 0.7 per cent, at $66.05.
China industrial profits up 1.1% in May
Bolstered by improving sales, profits for China's industrial companies rose in May after shrinking the previous month, bucking a months-long downtrend, official data showed on Thursday. Industrial profits rose 1.1 per cent in May from a year earlier to 565.6 billion yuan ($82.21 billion).
Trade deal with China possible this weekend: Trump
President Donald Trump said that a trade deal with Chinese President Xi Jinping was possible this weekend but warned he was prepared to impose US tariffs on virtually all remaining Chinese imports if talks fail.
US stocks ended mixed
In overnight trade, the S&P500 index fell 3.60 points, or 0.1 per cent, to 2,913.78. The Dow Jones Industrial Average declined 11.40 points, or 0.04 per cent, to 26,536.82. The Nasdaq Composite index gained 25.25 points, or 0.3 per cent, to 7,909.97.
IndiaMart IPO subscribed 36 times
The initial public offer of e-commerce company IndiaMART InterMESH was oversubscribed 36 times on the last of the bidding on Wednesday. This would be the second-best IPO in 2019 in terms of demand.
FIIs buy Rs 106 cr worth equities
Foreign portfolio investors (FPIs) bought Rs 106 crore worth of domestic stocks on Wednesday, data available with NSE suggested. DIIs were net sellers to the tune of Rs 51 crore, data suggests
Sensex on Wednesday
BSE Sensex jumped 157 points or 0.40 per cent to 39,592 while NSE Nifty ended at 11,848, up 51 points or 0.43 per cent. The advance-decline ratio stood at 2:1 on BSE, indicating two out of every three stocks that traded rose.
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