Tag: Stock market

IIFL Holdings, Motilal Oswal Financial Services crack up to 9% post Sebi order

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

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Shares of IIFL Holdings and Motilal Oswal Financial Services (MOSL) fell up to 9 percent on Monday after the Securities and Exchange Board of India (SEBI) declared the commodity broking arms of both the brokerages not ‘fit and proper’ for their alleged role in the Rs 5,600 crore NSEL scam in 2013.

“In view of the seriousness of the matter, facts and circumstances of the case, the conduct of the noticee in its functioning as a commodity broker is questionable and has certainly eroded its general reputation, record of fairness, honesty and integrity and has therefore affected its status as a ‘fit and proper person’ to be an intermediary in the securities market,” the designated authorities said in the report submitted to SEBI.

IIFL Holdings shares slumped as much as 8.9 percent to Rs 332.50 per share intraday on the BSE. Motilal Oswal shares fell 5.11 percent intraday to Rs 581 per share.

At 9.52 AM, IIFL Holdings was down 3.02 percent at Rs 354.30 per share and Motilal Oswal traded 3.98 percent lower at Rs 587.90 per share, while the benchmark Sensex gained 0.16 percent to 35,930.63.

Both the stocks have fallen over 50 percent in the last one year.

SEBI has also ordered both Motilal Oswal and IIFL to transfer securities of all their clients and allow withdrawal within 45 days of the order.

Failing this, “the noticee shall transfer its balance clients with their corresponding securities and funds to another person, holding a valid certificate of registration to carry on such activity, within a further period of 30 days”, the order said.

Both brokers, in separate statements, said that they could appeal against the orders and that the ban will not impact the groups’ 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

Closing Bell: Sensex, Nifty end almost 1% higher; IT, auto and financial stocks lead

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

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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

China shares, yuan soar as Trump delays tariffs; Hong Kong lags

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

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Chinese stocks posted their biggest single-day gains in more than three years on Monday after US President Donald Trump said he would delay an increase in tariffs on Chinese goods thanks to “productive” trade talks.Trump said that he and Chinese President Xi Jinping would meet to seal a deal if progress continued.

China’s Shanghai Composite index surged 5.6 percent to end the day at 2,961.28 points, its highest close since June 15, 2018 and the strongest daily percentage gain since July 9, 2015.

The blue-chip CSI300 index also posted its biggest one-day rise since July 9, 2015, ending 5.9 percent higher at 3,729.48 points, the highest closing level since June 15.

After falling more than 11 percent in the fourth quarter of 2018 due to concerns about slowing domestic growth and the trade war, the Shanghai Composite index has staged a rebound in 2019. As of Monday’s close, it is up 18.7 percent so far this year. The CSI300 has gained 23.9 percent in the year to date.

News last week that China and the United States were achieving progress in high-level trade talks had pushed the CSI300 to its best week in more than three years as investors bet that the two countries would reach a deal before the original March 1 deadline.

Zhang Qi, an analyst at Haitong Securities in Shanghai, said that the market’s strength following last year’s slump was natural given increased foreign inflows, policy support and looser money conditions.

But he said that without external factors like US trade talks providing support, the market would still be “at a discount” from current levels.

Despite the jump in equities on Monday, Paul Sandhu, head of Multi-Assets Quant Solutions Asia Pacific at BNP Paribas Asset Management, said he doesn’t expect a significant change in market dynamics in the short term.

“Tariff talk in the past has been the cause of market volatility and also a decoupling of the markets to some degree. As we have been through the talk around tariffs a number of times over the short horizon, much of this may be priced in,” he said.

The reaction in Hong Kong was more muted, with the Hang Seng index even dipping briefly into the red in the morning session. But a 0.5 percent gain was enough to push the index to its highest close since June 25, 2018, at 28,959.30 points.

The Hang Seng’s China Enterprises index ended 1.8 percent higher.

Victor Huang, head of investment strategy at Guotai Junan International in Hong Kong, said institutional investors remained wary ahead of the release of company earnings and 2019 outlooks in March.

“The global economic environment has not improved that much,” he added, noting that the A-share market “still has more room to improve than the Hong Kong market.”

Trump’s announcement also pushed China’s yuan higher, with the onshore unit trading as firm as 6.6738 per dollar, its strongest level since July, before easing to 6.6903 by 0710 GMT.

Its offshore counterpart strengthened to 6.6742 per dollar, its firmest since July 13, and was changing hands at 6.6910 per dollar around 0710 GMT.

“A delay in the tariff deadline is what has been expected. Still, a near confirmation of such a delay, together with reassurance from Trump’s comments, is supportive of the yuan,” said Frances Cheung, head of macro strategy at Westpac.

“Beyond the initial reaction, however, market will need a follow-up in terms of a trade deal for further impetus,” she said.

Stephen Chiu, FX and rate strategist at China Construction Bank (Asia) in Hong Kong said he expected the yuan to strengthen to the 6.6-per-dollar level once the United States and China reach a trade deal.

“Therefore, as the two sides get close to settling such a trade agreement, the pace of the current rally in the yuan will slow down,” he said.

Chinese 10-year government bond futures fell as risk appetite rose, with the most traded contract, for July delivery, down 0.4 percent at 97.140.

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

Donald Trump delays increase in tariffs on Chinese goods, cites progress in trade talks

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

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President Donald Trump said on Sunday he would delay an increase in US tariffs on Chinese goods scheduled for later this week thanks to progress in trade talks and said if progress continued, he and Chinese President Xi Jinping would seal a deal.

Trump had planned to increase tariffs to 25 percent from 10 percent on $200 billion worth of Chinese imports into the United States if a deal were not reached by Friday between the world’s two largest economies.

The president said in a tweet that progress had been made on a host of divisive areas including intellectual property protection, technology transfers, agriculture, services and currency.

As a result of the talks, he said: “I will be delaying the US increase in tariffs now scheduled for March 1. Assuming both sides make additional progress, we will be planning a Summit for President Xi and myself, at Mar-a-Lago, to conclude an agreement. A very good weekend for US & China!”

Mar-a-Lago is the president’s property in Florida, where the two men have met before.

The delay in tariffs was the clearest sign yet of a breakthrough the two sides have sought since calling a 90-day truce in a trade war last year. It will likely be cheered by markets as a sign of an end to the dispute that has disrupted commerce worth hundreds of billions of dollars of goods and slowed global economic growth.

During talks that extended into the weekend, US and Chinese negotiators were discussing on Sunday the thorny issue of how to enforce a potential trade deal after making progress on other structural issues, according to a source familiar with the talks.

The two sides were discussing tariffs on Sunday as well as commodities, the source said.

US officials said on Friday that talks would extend into the weekend after negotiators produced a deal on currency during talks last week.

Negotiators were seeking to iron out differences on changes to China’s treatment of state-owned enterprises, subsidies, forced technology transfers and cyber theft.

The two sides have been negotiating an enforcement mechanism. Washington wants a strong mechanism to ensure that Chinese reform commitments were followed through to completion, while Beijing insisted on what it called a “fair and objective” process. Another source briefed on the talks said that enforcement remained a major sticking point as of Saturday.

Trump said on Friday there was a “good chance” a deal would emerge, and foreshadowed that he might extend the March 1 deadline and move forward with a meeting with Xi.

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

This Nifty50 stock eroded 50% of investors’ wealth in last 1 year

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

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Tata Motors has eroded over 50 percent of investors’ wealth in the last 1 year on the back of plummeting sales of JLR, downgrade by credit rating agencies and poor earnings performance.

The stock has fallen by 55 percent from its 52-week high Rs 377 hit on Feb 27, 2018, and is currently trading at Rs 171. It hit a 52-week low of Rs 142 on Feb 8, 2019, after posting December quarter results. In comparison, Nifty50 has gained nearly 4 percent in the last 1 year.

The December quarter has been weak for the entire auto sector. Tata Motors in its Q3FY19 reported a consolidated quarterly loss of Rs 26,961 crore, the biggest ever in its history. The major reasons behind the quarterly loss were weak sales in China and de-stocking of Jaguar Land Rover (JLR).

JLR reported a loss for the third straight quarter as net sales declined by 1 percent on a YoY basis to GBP 6.2 billion, as volumes fell 11 percent on a YoY basis. EBITDA margin shrank 180 bps to 7.3 percent impacted by one-off cost on account of de-stocking and warranty cost.

The automaker, post earnings,  said its performance was impacted by challenging market conditions, particularly in China and inventory corrections.

Brokerage firms such as Axis Capital and Motilal Oswal downgraded the company post-December quarter results.

Though most analysts see no near-term trigger for the stock, they say crude prices, Brexit, trade wars might continue to affect margins of the automaker. The company should now focus on cutting costs to improve profitability in JLR, the analysts add.

Global sales of the company for the month of January, including Jaguar Land Rover, also fell by 12 per cent as compared to January 2018.

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

Tech Mahindra’s share buyback has limited upside triggers

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

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Tech Mahindra announced a share buyback plan on Thursday at a price of Rs 950 per share through a tender offer. The stock did not react to the news massively for two reasons. First, the amount is less than the 10 percent of the company’s net worth. And, second, the stock was already priced in much before when the news was doing the rounds. Within one month, the stock rose up to 15.26 percent.

Following the announcement, Tech Mahindra shares rose over 3 percent to a 52-week high of Rs 840 per share, but failed to hold the momentum and settled at Rs 820.40 per share, up 1.07 percent.

At 11.24 AM, the stock is trading at Rs 820.30 down by 0.04 percent on NSE.

Considering the current valuations of the company, it is trading at a value of 18.36 times to the current market price with return on equity of 20.66 percent. But Motilal Oswal doesn’t see the stock as a ‘value opportunity’.

The brokerage believes that the amount of Rs 1,956 crore was decided much later when the company needed capital for its future needs. Furthermore, this buyback is not in lieu of dividend. The company will not like to retain too much cash in its books and thus, it will apply the strategy of ‘Dividend+Buyback’ in the future depending on the need of the business.

In the past, Tech Mahindra’s cash position has never crossed the line of more than Rs 4,000 crore, and currently, they hold Rs 6,500 crore cash. Thus, this buyback was necessary to bring the net cash down to the range of Rs 4,500 crore, said the report.

Normal dividend announcement in Q4 will pull it down further. If Tech Mahindra pays the same dividend as last year (Rs 14/share), then it will bring net cash down to Rs 3,000-3,500 crore.

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

Don’t expect significant slowdown in order inflows in infra sector, says SBICAP Securities

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

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The infrastructure sector saw strong topline growth in the third quarter but order inflow remains the key concern, said Abhineet Anand, lead analyst, Research Equities at SBICAP Securities.

There has been a slowdown in order inflows right since November. However, year-to-date order inflows are up in double-digits, said Anand. When asked if the government capex would get reduced because future flows are committed to farmers, Anand said, in the Budget, there were schemes for sectors like rail, road and defence so there may not be a significant slowdown but the growth may not be same as last year.

Anand said a lot of stocks have fallen 15-30 percent. Stock specific,  the multiples of Larsen and Toubro have corrected. It is a buy on dips because it is a bellwether stock, said Anand.

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 anchored towards BJP-led coalition scenario, says UBS Securities

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

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The government’s scheme to provide direct income transfer to farmers is a wild card for voters in Madhya Pradesh and Uttar Pradesh, but it is uncertain if people will vote for the Bharatiya Janata Party in the upcoming general elections, according to Gautam Chhaochharia, MD and head of India research at UBS Securities.

In an interview with CNBC-TV18,  Chhaochharia shared his views on the outlook for the market with an eye on elections and on the ground reality of various schemes announced by the government after their trip to UP and post meeting politicians, journalists, policymakers and local people.

“This scheme is definitely a wild card for Modi in Uttar Pradesh and other states,” he said, adding that it is uncertain whether farmers will vote for BJP because of the scheme. The other sense they got was that there isn’t a wave for Modi like it was in 2014 but he is clearly in the fulcrum of all debates, said Chhaochharia.

From the fiscal perspective, Chhaochharia said there is no fiscal space left to drive sustainable economic activity through capex or infrastructure.

He said the market seems to be anchored toward BJP-led coalition scenario and, that market valuations are not pricing in a non-Modi government. The base case for Nifty is 10,000, the upside is at 11300-11400 and downside would be below 10000, said Chhaochharia.

The house, he said, have been cautious on capex cycle and do not see private capex cycle coming back. Therefore, all the industrial, infrastructure capex, cement names remain underweight. However rural-focused stocks selectively would continue to do well in any political formation, he said. Banks and IT services would do well. It would be a stock specific call, he added.

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

Jet Airways shares rise on reports shareholders likely to have approved bailout plan

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

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Jet Airways shares rose 3 percent on Friday after various media reports said that the airlines shareholders are likely to have approved the company’s bank-led provisional resolution plan at the extraordinary general meeting on Thursday.

The stock rose as much as 3.23 percent intraday to Rs 242.45 per share on the BSE. At 9.20 am, Jet Airways shares were trading 2.32 percent up at Rs 240.30 per share, while the benchmark Sensex Index was down 0.06 percent at 35,877.42.

Jet Airways shareholders are likely to have approved banks’ bailout plan for the debt-laden airline, Mint reported, citing a person who attended the meeting. The reported further said that some shareholders raised concerns over banks holding a majority stake in the airline.

Shareholders also asked questioned about the future of Naresh Goyal and other management roles after banks become majority shareholders, according to Mint.

Results of the vote will be announced on Friday.

The special resolution to allow conversion of loans into “shares or convertible instruments or other securities” comes after Jet Airways Board approved the BLPRP on February 14.

“The BLPRP currently estimates a funding gap of Rs 8,500 crore (including proposed repayment of aircraft debt of Rs 1,700 crore) to be met by appropriate mix of equity infusion, debt restructuring, sale or sale and leaseback or refinancing of aircraft, among other things,” the company said in a regulatory filing to the BSE on February 14.

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