Month: December 2019

Key market themes for 2020: Here is the outlook by Sushil Kedia of Kedianomics

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The year 2020, according to us, begins with a note of deep caution and readiness to play downside in most large caps and glamourous valuations. A deep decline during 2020 will form the finale of a three-year sideways correction from where a massive 3-5 year bull run will begin again. Sectors, stocks and size would have re-aligned itself by then.

Below is a summary of our perspectives for the New Year:

• Valuation Extrema has met with Trend Extrema: Charts are perched at a point from where we are going to be watching extreme cautiously over the next few days for a big correction to set in.
  • Private Banks Index set for a 20 percent slide. Slide is the word! The trigger would be a slip below 17,700 on Nifty Private Bank Index. As this trigger comes in place, anticipations and anxiety for a similar move down on Bank Nifty and thus the Nifty too will kick in, technically speaking.
  • Metals rally is spent, by now.
  • Autos rally is spent, by now.
  • IT and pharma are insipid. Size effect visible here. Smaller names beginning uptrends and large caps are readying for a further brisk walk further south.
  • Infrastructure hasn’t taken off. The charts of these stocks are as boring as any can be. Deeper declines visible.
  • The only place to hide is “everything Public Sector”. Whether NTPC, PTC, PFC or the PSU Banks or BHEL, that’s where the money is for now.
• Value engineering and value unlocking will  pay : Whether divestments will drive PSUs or policy initiatives will continue to drive stocks and sectors, the earnings theme has not kicked in yet. Our long bias on PSU banks along with PSU power names and everything else PSU continues to strengthen. May be PSU is the only place to hide for in the first trimester of 2020.
• Size won’t matter: Size is the proxy for quality in markets. This quality meme is overdone. The Castrol syndrome, wherein Castrol today is trading at the lowest PE ratio ever in the recent history of the stock may happen to a large number of ultra-large cap stocks over the next few years, beginning  2020. That size doesn’t matter will be visible across sectors. For example, if superlative returns appear feasible in Zensar Technology and E-Clerx while we continue to find the TCS, WIpros and Infosys insipid will percolate as an investment meme across sectors. We are noticing early signs of the same, everywhere.

• Embrace the unglamorous: Driven by concerted policy action the rally from 10,600 to 12,300 is a flight to safety. Not to miss out on the policy action on one hand and not to get stuck up in low visibility investments the market has been extremely polarised. This polarisation will resolve now.
• Consensus is not necessary: Consensus is a sufficient condition for big market reversals, but never a necessary condition. If public participation does not come even when trend extremes are reached, professionals are not required to keep obliging holding up any market. Such markets where everyone who could have bought has bought tops out. Sometimes this topping out process happens with euphoria. That euphoria is not a necessary condition.

Sushil Kedia is the founder of Kedianomics.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Air India privatisation: Govt to invite expression of interest ‘in next few weeks’, says Hardeep Singh Puri

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The second attempt at the divestment of Air India is witnessing initial interest by several entities and the civil aviation ministry is expected to invite expression of interest for Air India in the next few weeks, aviation minister Hardeep Singh Puri told reporters on Tuesday.

The debt of the national carrier is unsustainable and it is making losses of up to Rs 26 crore every day so while it remains an asset, the problem is largely about the business model and hence, privatisation is the way forward, Puri added.

The alternative mechanism or the ministerial panel formed to oversee the divestment process will meet under the leadership of home minister Amit Shah before the preliminary bids are invited, said Puri.

On being asked if the liberalisation of foreign direct investment (FDI) norms in aviation is on the cards to make Air India divestment more attractive, the government clarified that its effective control and substantial ownership will stay with Indian nationals.

“Aircraft Act and Rules clearly state an airline in India should be substantially owned and controlled by Indian national. As per this rule, FDI in Airlines cannot exceed 49 percent,” aviation secretary Pradeep Singh Kharola said.

Finance minister Nirmala Sitharaman in the Union Budget 2019-20 speech in July had said that the government will look at further liberalising FDI norms in aviation.

Last year, ahead of its first attempt at Air India’s divestment, the Union cabinet had eased the FDI norms for the sector by allowing 100 percent FDI into domestic carriers under automatic route and had approved investment up to 49 percent under approval route in Air India.

Automatic route is a less restricted form of liberalisation where the investing company does not require the government or the Reserve Bank of India’s (RBI) approval. However, the government or its agencies have a say if an investment is made through the approval route.

As per the extant policy, foreign airlines are allowed to invest under government approval route in the capital of Indian companies operating scheduled and non-scheduled air transport services, up to the limit of 49 percent of their paid-up capital. However, this provision was not applicable to Air India, thereby implying that foreign airlines could not invest in Air India.

The government had decided to do away with this restriction and allow foreign airlines to invest up to 49 percent under approval route in Air India subject to conditions, under a Cabinet decision taken in January 2018.

“Foreign investment(s) in Air India including that of foreign airline(s) shall not exceed 49 percent either directly or indirectly substantial ownership and effective control of Air India shall continue to be vested in Indian national,” the statement said regarding the conditions.

So far, IndiGo has repeatedly indicated that it remains interested in Air India, but only in its international business.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Karvy Group names Amitabh Chaturvedi as new head for financial services arm

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Karvy Group said on Tuesday it has appointed a new head of its financial services unit as part of corporate restructuring, a month after the country’s market regulator slapped a ban on its stock broking arm for alleged misuse of client funds.

Karvy named Amitabh Chaturvedi as group chief executive officer of its financial services arm with a mandate to “completely overhaul the governance processes, ensure best practices and to bring in greater fiduciary discipline to these businesses,” the Hyderabad-headquartered firm said in a statement.

The Securities and Exchange Board of India (SEBI) barred Karvy Stock Broking last month after a preliminary investigation by the National Stock Exchange showed the brokerage pledged and sold some of its client securities to raise funds for its own use, without client authorisation and in violation of new rules.

Karvy had then said that there was no “mis-utilisation” of client securities.

Karvy Group is in the process of restructuring its overall business into financial services and non-financial services verticals, it said on Tuesday.

The restructuring will see its stock broking, wealth management, commodities trading and investment banking businesses come under the ambit of financial services, while non-financial services will comprise of data management services, data analytics, market research and allied businesses.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

DPIIT working on pan-India single-window clearance system for investors

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Ministry of Commerce and Industry is working on a plan to establish a pan-India single-window clearance system for investments. The Department for Promotion of Industry and Internal Trade (DPIIT) has proposed to set up an investment clearance cell that will be a one-stop shop for applying for licences, permissions and incentives given by both central and state governments.

Government sources told CNBC-TV18 that the cell will be set up in four phases. In the first three phases, all central government-related procedures and clearances will be packaged in a single online form. In addition, legislation has also been proposed to mandate time-bound clearances of central government-related permissions.

Currently, a new investor has to apply at different central departments for getting permissions like GST registration, industrial entrepreneur memorandum, import-export codes, environment clearance, EPF and ESIC registration, as well as company incorporation. It is proposed to have all these and other statutory permissions in a single online form.

In addition, the DPIIT also proposes to onboard state-based single window clearance systems into the investment clearance cell system. As of now, 21 states have established single window clearance systems but many of these work in silos. As a result, investors have to physically follow up at both the Centre and state levels as the IT systems of these individual departments don’t interact with each other.

As per the systems currently available at the central level, a new investor can approach Invest India – a body set up as a partnership between the government and the industry – to handhold investment proposals. The Invest India Query Management System as well as which is the primary response mechanism for investors, as well as e-Nivesh Monitor – which is a national portal for monitoring clearances, will be integrated into the investment clearance cell.

DPIIT will ask each central government department and state government to depute two nodal officers for coordinating clearances through the proposed cell.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Market maven SP Tulsian positive on this housing finance company

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Stock market expert SP Tulsian said that stress in Indiabulls Housing Finance has bottomed out and going forward, the stock’s prospect looked quite positive.

In spite of all stresses seen on the financials of the company, Indiabulls Housing maintained interim dividend of as high as 400-500 percent each quarter.

Tulsian told CNBC-TV18 that: “In spite of all stress seen on the financial working of the company, Indiabulls Housing have maintained interim dividend of as high as 400-500 percent per quarter. So, things seem to have bottomed out for the stock and going forward things seem to be quite positive and thus have a positive view on Indiabulls Housing Finance.”

Tulsian is a well-known equity and fundamental analyst with more than three decades of experience.

On L&T stock,  he  said: “Overall a lot of value is seen in L&T and I wouldn’t be surprise to see L&T moving up by about 10 percent in the next couple of months or maybe maximum in next 3 months or so,” he added.

“TCS having run up about Rs 2,200 and now seeing profit booking, probably one should not touch unless and until it falls to the level of Rs 2,050 and then only can look to buy again,” he further added.

When asked about Dish TV, the stock market expert said: “Unless and until consolidation happening with Airtel, I do not think there are any hopes or chances of recovery in share price of Dish TV.”

He was also positive on auto and auto ancillary sector. Whatever sales numbers for December comes, auto sector share prices will go up, whether it’s two-wheelers, passenger vehicles or commercial vehicles.

“Therefore, I will go with Maruti, Ashok Leyland, Mahindra & Mahindra and maybe TVS Motor because Hero Moto and Bajaj Auto have risen so much. So, these 4 stocks are looking good because things will be positive and it seems to be positive on rural front as well. So, these 4 stocks could be the stocks to buy from here on,” added Tulsian.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Over 1.15 crore FASTags already issued, says NHAI

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The National Highway Authority of India on Monday said that over 1.15 crore electronic toll collection system, or FASTags, have already been issued through multiple points of sale.

According to NHAI, more than one lakh FASTags are being issued daily.

“With the transaction number crossing 30 lakh, the daily transactional worth of electronic toll collection has crossed Rs 52 crore,” NHAI said in a statement.

NHAI had commenced electronic toll collection through FASTag at 523 toll plazas across the country from December 15.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Markets at close: How the major indices and stocks fared on Tuesday

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Indian equity benchmark indices, the BSE Sensex and NSE Nifty50, ended 2019 on a weak note as investors took to profit booking amid weak global cues. For the year 2019, the Sensex rose 14 percent and the Niifty50 rallied 12 percent, giving their best returns since 2017. Both benchmarks hit multiple record highs this year and have gained sharply despite economic growth slipping to a five-year low this year.

Here’s a quick recap of how top market indices and stocks fared on Tuesday:

Frontline indices

Sensex: The Sensex settled 304 points lower on the last day of 2019, or 0.73 percent, to close Tuesday’s trade at 41,253.74. So far this year, the 30-share benchmark BSE index has surged 14.38 percent, adding 5,185 points.

Nifty50: The Nifty50 dropped 87 points, or 0.71 percent, to settle at 12,168. So far this year, the broader NSE index has been positive by 1,306 points, or 12 percent.

Key stocks

Tata Consultancy Services: The IT major settled lower, down 0.74 percent, closing at Rs 2,166.70 per share on NSE.

Reliance Industries: The oil-telecom-retail conglomerates’ shares ended 1.83 percent lower, quoting at Rs 1,515.90 on NSE.

HDFC Bank: The private sector lenders’ shares settled 0.46 percent higher in trade today, quoting at Rs 1,275 on NSE.

Hindustan Unilever: The FMCG major’s stock closed lower at Rs 1,922 per share, down 0.76 percent at close on NSE.

HDFC: The NBFC stock settled at Rs 2,412.10, down 1.04 percent.

Major sectors

Nifty Bank: The banking gauge settled lower at 32,161, down 0.60 percent at close. So far this year, Nifty Bank has gained over 18.4 percent.

Nifty IT: The IT index ended lower, down 0.78 percent to settle at 15,652. So far this year, it has gained 8.4 percent.

Nifty FMCG: The consumer goods gauge settled 0.34 percent lower at 30,121.50. So far this year, Nifty FMCG has lost 1.29 percent.

Nifty Auto: The index ended 0.93 percent lower to settle at 8,248. So far this year, it has corrected by 10.69 percent.

Nifty Metal: The metal index gained 0.17 percent to settle at 2,801. So far this year, the index has lost 11.20 percent.

Disclosure: Network18, the parent company of CNBCTV18.com, is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Closing Bell: Markets end the year on weak note; Nifty slips below 12,200, Sensex down 304 points

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Indian shares ended lower in the last trading session of the year on Tuesday as investors booked year-end profits. Selling in banking, auto, and IT sectors dragged the markets further. Losses in index heavyweights like RIL, HDFC twins, ICICI Bank, and TCS also contributed to the fall.

Asian shares were also mostly lower as investors locked in profits after a buoyant year of gains, driven in recent weeks by hopes of an imminent US-China trade deal.

The BSE Sensex ended 304 points lower at 41,254, while Nifty50 settled 87 points lower at 12,167.

For the year, the Sensex rose 14 percent and the Niifty50 rallied 12 percent, giving the best returns since 2017. Both benchmarks hit multiple record highs this year and have gained sharply more than in 2018, even as economic growth slipped to a five-year low this year amid a slowdown in demand. Both indices gained around 3 percent in 2018.

Broader markets outperformed benchmarks with Nifty Midcap and Nifty Smallcap up 0.1 percent and 0.7 percent, respectively.

Among stocks, Coal India, NTPC, GAIL, Tata Motors, and Grasim were top gainers on the Nifty50 index, while Zee, Tech Mahindra, Reliance Industries, Bajaj Auto, and Eicher Motors led the losses.

Most sectoral indices ended the day in the red. Nifty Media fell the most, down 1.5 percent, followed by Nifty Auto, which fell 0.9 percent. Nifty IT also lost 0.8 percent and Nifty Bank was lower by 0.6 percent for the day. Nifty Pharma and Nifty FMCG fell 0.5 percent, and 0.3 percent, respectively.

Globally, MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.46 percent lower, set for its weakest performance since December 4. The index has gained nearly 16 percent this year, a sharp turnaround from a 16.2 percent drop last year but lagging a 23.8 percent year-to-date gain in MSCI’s global share index. The Asian index gained 33.5 percent in 2017, about the same as its total rise over the previous decade.

Australian shares ended their best year since 2009 1.78 percent lower, and Hong Kong’s Hang Seng finished down 0.46 percent in a half-day session.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Finance Minister Nirmala Sitharaman announces Rs 105 lakh crore national infra pipeline

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Narendra Modi government has ushered 2020 with a bang for the infrastructure sector. Finance Minister Nirmala Sitharaman on Tuesday has announced measures related to the Rs 105 lakh crore National Infra Pipeline. She also promised a slew of reforms like faster dispute resolution and an enhanced credit mechanism.

Sitharaman said that the government, keeping in line with PM Modi’s push for Rs 100 lakh crore infra investment over the next 5 years, has laid out a detailed plan.

The task force set up for this held consultations with 70 stakeholders for four months. It has now recommended investment of Rs 102 lakh crore.

The finance minister said that the infrastructure projects will be spread across 18 States & UTs.

In a report card of sorts, the FM said that both states and centre have spent Rs 51 lakh crore in projects in the last six years.

“We will be adding Rs 3 lakh core to Rs 102 lakh crore in 2-3 days, taking total investments to Rs 105 lakh crore,” Sitharaman explained.

The finance minister also gave a breakdown of how current projects were faring. She said that the private sectors’ share in infra projects pipeline was at 22 percent which will rise to 30 percent by 2025.

“Rs 42.7 lakh worth projects are under implementation. 63 percent of total infra project pipeline are already firmed up,” she said.

Sitharaman also said that the central and state governments will have a 39 percent share each in the infra pipeline. She also spoke about ways to enforce contracts better.

“Looking at various steps towards the enforcement of contracts. Also looking at various steps to reform PPP projects, dispute resolution. A robust monitoring framework will be established,” the FM said.

Sitharaman said that the infrastructure sector will see an annual global investor meet organised.

“The first edition of the annual global investor meet will be held in the second half of 2020. The States and the centre will get to interact with global investors here,” the FM said.

The Nifty Infra index reacted positively to FM Sitharaman’s announcement. The index was trailing when the speech started and saw a bounce during the speech, just before the close of trade.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow