Wall Street hits record highs on strong technology, health stocks

Nasdaq's biotechnology index rose 2.5% in its biggest one-day gain since February

 

 

US stocks(wall street) rose on Monday, with the S&P 500 and the Dow hitting record highs with growth sectors such as technology in favour again as investors appeared to regain confidence in the economy after upbeat comments from Federal Reserve officials.

Nasdaq's biotechnology index rose 2.5 per cent in its biggest one-day gain since February while the S&P's healthcare index had a record-high close.

Amazon.com's Friday announcement that it would buy Whole Foods and an upbeat tone from Federal Reserve speakers seemed to help reassure investors after the US central bank's rate hike last week, according to J Bryant Evans, portfolio manager at Cozad Asset Management, in Champaign, Illinois.

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"It looks like a bet that interest rates, such as the 10-year yield, are bottoming out," said Evans. "It's a resumption of this idea that the economy is in decent shape."

He added that a "push in M&A tends to propel the market" and that the Amazon/Whole foods $13.7 billion deal was a "tangible sign the mergers and acquisition environment is pretty good right now."

The Dow Jones Industrial Average rose 144.71 points, or 0.68 per cent, to end at 21,528.99, the S&P 500 gained 20.31 points, or 0.83 per cent, to 2,453.46 and the Nasdaq Composite rose 87.26 points, or 1.42 per cent, to 6,239.01.

The S&P's financial sector was also one of the benchmark's strongest gainers with a 0.98 per cent rise after New York Federal Reserve President William Dudley said US inflation was a bit low but should rise alongside wages as the labour market continues to improve, allowing the Fed to continue gradually tightening monetary policy.

The Fed commentary last week had surprised investors who expected more caution after some weak US economic data...(read more...)

BSE debuts on NSE: 6 little-known facts about the bourse

Asia's oldest stock exchange has finally listed on NSE, its much younger rival

 

After a long and wobbly road so far, Asia’s oldest stock exchange BSE finally listed on rival National Stock Exchange on Friday. As it adds another chapter in its 142-year-long history, Business Standard lists six little-known facts about BSE that will surprise you:

1) The origin: Under a banyan tree

2) Admission fee: An exorbitant Rs 51

3) BSE: Brokers’ Stock Exchange?

4) When BSE underestimated NSE

5) The term Sensex

6) One-week holiday

 BSE debuts on NSE: 6 little-known facts about the bourse on Business Standard. Asia's oldest stock exchange has finally listed on NSE, its much younger rival. (read more...)

US Elections 2016: Trump victory is negative for India, volatility will shoot up

A Donald Trump victory in the US presidential election would be negative for all emerging markets, including India. It would create demand for safe-haven bets like gold and developed-world bonds. 

Currency market is bracing for volatility even if Hillary Clinton secures a win as Trump has not cleared the air on whether he would accept the election results should he lose in a close finish.

ALSO READ:  US Election 2016: Is Donald Trump a dictator in the making?

"Even if Clinton wins, Trump may continue to push her and stoke uncertainty. If Trump wins, everything will fall and volatility will shoot up. This is not a time to take risk," said Jamal Mecklai, chief executive of Mecklai Financial, a currency consultancy firm.  

Sensex, which has come off three per cent in the past fortnight, is likely to drop further as Trump's victory could see a Brexit-like knee-jerk reaction from investors, say analysts. US bond prices will rally as investors would dump emerging market bets and that would impact the Indian bonds. Similarly, dollar will strengthen on increased inflow in US assets. This may lead to a sharp depreciation of the rupee and other emerging market currencies. For now, local bonds and currencies markets are stable. 

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5 factors that can impact markets in Samvat 2073

With a rise of around 9.5% since the beginning of Samvat 2072 till October 17, the markets have taken all developments in their stride.

Good monsoon that would boost income in the hands of rural India, keep inflation under check, nudge the Reserve Bank of India (RBI) to lower interest rates and induce spending; and the excess cash in the hands of government employees on the back of 7th Pay Commission recommendation implementation and the passage of the goods and services tax (GST) bill were some of the factors that aided sentiment.

Related Story:  I foresee China as the next big bull bet: Shankar Sharma

With a gain of around 48% from the beginning of Samvat 2072 till October 20, the S&P BSE Metal index was the top sectoral gainer, followed by oil & gas, consumer discretionary, auto, realty and banking indices that moved up around 16% - 38% during this period. S&P BSE Telecom, information technology (IT) and healthcare indices were along the key losers that slipped 1% - 11%.

 

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Death of a family man

B K Bansal is dead. With him, his 25-year-old son also gave himself to the rope. The twin-suicides that rocked the capital last week came on the back of the similar suicides of the corporate affairs ministry official's wife and daughter. Bansal was accused of taking bribes from executives of Elder Pharmaceuticals to prevent a possible reference to the Serious Fraud Investigation Office (SFIO) of allegations of irregularities in the company. Bansal was reportedly caught red-handed by the sleuths of Central Bureau of Investigation (CBI).

The action was demonstrative of the Narendra Modi government's efforts to root out corruption at all levels. There can be no two opinions about the need to eradicate this social evil.

However, the methods followed have come under criticism following the detailed suicide notes mailed to media organisations by the Bansals. Some commentators have said that CBI is an 'uncaged vulture' and not a caged parrot, as described by the Supreme Court once. Political rivals such as Arvind Kejriwal have opportunistically latched on to a reference to Bharatiya Janata Party leader Amit Shah in the note.

A more useful line of probe would be to find out which are the serious fraud cases that Bansal referred to the SFIO and those he did not during his tenure in this position. Preferably, this should be a time-bound judicial probe as the CBI cannot be the judge of its own case and the credibility of a local police would always be under cloud.

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Undervalued stocks

The parade of some of the most interesting first-quarter corporate performances continues. Here is the evidence:

Vivimed Labs:

In the first quarter of the current financial year, the company reported its best Ebitda (earnings before interest, taxes, depreciation and amortisation) in four quarters of nearly Rs 67 crore, rising from Rs 51 crore in the immediately preceding quarter. Even as this should have been good enough, there is a remarkable bonus: Interest outflow has declined sharply from Rs 24.51 crore to Rs 15.21 crore within a space of a single quarter (the lowest in five quarters) - interest cover of four-plus.

Prime Securities:

The Mohinder 'comeback' Amarnath of the stock market. The company encountered dramatic roller-coasters in the last decade. This is what it has translated into: No debt or broking income; only capital market advisory services. Prime is now an advisory pure-play, possibly the only one of its kind in the markets.

Venky's: 

My first suspicion when I saw the company's performance was that there must have been a typo error. Consider the Ebitda sequence in the last five quarters: Rs 53 crore, Rs 28 crore, Rs 28 crore, Rs 55 crore and Rs 91 crore. In the last quarter, the company generated a profit larger than the combination of the two preceding quarters. What I love is the sequential interest outflow: Rs 20 crore, Rs 21.5 crore, Rs 22 crore, Rs 21 crore and Rs 21 crore (other income has been averaging Rs 8-10 crore per quarter incidentally).

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ICICI Prudential Life Insurance extends fall after listing below issue price

ICICI PRUDENTIAL LIFE INSURANCE COMPANY LTD

LIVE STOCK PRICE - CLICK HERE FOR MORE

ICICI Prudential Life Insurance has slipped to Rs 297, down 11% against its issue price of Rs 334 per share on the National Stock Exchange (NSE) in intra-day after weak listing. LINK

The stock listed at Rs 330, 1.2% lower against its issue price. It hit an intra-day high of Rs 333.90 post its listing.

At 12:45 pm, the stock was trading at Rs 301, with 64.64 million shares changing hands on the counter so far.

ICICI Prudential Life Insurance has raised Rs 6,057-crore through initial public offer (IPO), become the first insurer to list.

The company's public issue was oversubscribed 10.5 times. The quota set aside for qualified institutional buyers was subscribed 11.83 times while for the non-institutional investor category, it was 28.55 times. The retail portion was oversubscribed 1.42 times, the exchange data shows.

The insurer is a venture between banking major ICICI Bank and UK's Prudential Corporation Holdings. Singapore's Temasek and PremjiInvest are also the shareholders.

Read Source...

5 key events that will drive the markets from here on

After a knee-jerk reaction to the surgical strike by India across the Line of Control (LoC) that saw the S&P BSE Sensex tumble over 500 points in intra-day deals on Thursday, the markets remained on the edge on Friday. The S&P BSE Sensex and the Nifty 50 indices lost ground after opening on a flat note.

Analysts expect markets to remain choppy as investors adopt a wait-and-watch mode over the next few sessions till there is more clarity on the geopolitical situation.

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Besides the second quarter results of India Inc, here are 5 key factors that will determine the market direction over the next couple of months.

Clarity on the geopolitical situation...

RBI Monetary Policy review...

US Presidential Election...

Rate hike by the US Fed...

Oil Prices...

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ICICI Prudential Life Insurance lists below issue price

ICICI PRUDENTIAL LIFE INSURANCE COMPANY LTD.

LIVE STOCK PRICE - CLICK HERE FOR MORE

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ICICI Prudential Life Insurance has listed at Rs 330, 1.2% below its issue price of Rs 334 per share, on the National Stock Exchange (NSE).

At 10:01 am, the stock was trading at Rs 331.60, after hitting a high of Rs 333.80 post its listing.

ICICI Prudential Life Insurance has raised Rs 6,057-crore through initial public offer (IPO), become the first insurer to list.

The company's public issue was oversubscribed 10.5 times. The quota set aside for qualified institutional buyers was subscribed 11.83 times while for the non-institutional investor category, it was 28.55 times. The retail portion was oversubscribed 1.42 times, the exchange data shows.

The insurer is a venture between banking major ICICI Bank and UK's Prudential Corporation Holdings. Singapore's Temasek and Premji Invest are also the shareholders...Read Source

ICICI Prudential Life IPO subscribed 10 times

The Rs 6,000-crore initial public offering (IPO) of ICICI Prudential Life Insurance Company, the biggest in six years and the first by an insurance company, attracted strong demand from investors. The IPO saw nearly 10 times more demand than shares on offer with bids totalling about Rs 45,000 crore.

Demand was particularly strong from institutional and wealthy investors (those applying for more than Rs 2 lakh). The retail portion, however, was subscribed just 1.3 times. The IPO also had special reservation for individual shareholders of ICICI Bank. The shareholder portion saw 12 times subscription.

The price band for the IPO was Rs 300-334 per share. Given the demand, the IPO is likely to be priced at the top end, valuing the insurer at Rs 48,000 crore.

ICICI Prudential Life’s strong brand, leadership in the private life segment and attractive valuation against its peers (HDFC Life and Max Life combined) attracted investors.

On March 18 enterprise value (EV), ICICI Prudential Life was valued at 2.45-2.73 times, 20-30 per cent discount to the multiple of HDFC and Max Life combined, according to the Nomura report.

Retail participation was low as most demand for the IPO came just hours before the close, said experts. “The issue was barely subscribed two hours before close. As retail investors take cues from others, they didn’t participate thinking the issue is read full story

ICICI Pru Life Insurance IPO: Should you invest?

The initial public offer (IPO) of the country’s largest insurer in the private sector, ICICI Prudential Life Insurance Corporation (I-Pru), opens today for subscription. On offer are 18.13 crore equity shares of Rs 10 each via book building route in price band of Rs 300-344/share.

According to reports, I-Pru had Rs 1.09 trillion worth of Assets under Management (AUM) as of June 30, 2016, making it one of the largest fund managers in India. Ahead of its IPO, it raised Rs 1,635 crore from anchor investors.

Here is a quick compilation of recommendations from leading brokerages on whether should you subscribe to the offer or not.

NOMURA

ICICI Prudential Life’s IPO price of Rs 300-334 per share implies a valuation of Rs 43,000-48,000 crore. On March-18 enterprise value (EV), this implies a valuation of 2.45-2.73 times which is a 20-30% discount to the multiple of HDFC+ Max Life combined.

Excluding excess capital (solvency at 200%), ICICI Pru Life’s EV multiple is 2.9-3.2 times March 2018 EV. This implies a 10-20% discount to the EV multiple for HDFC + Max combined. Our price target for ICICI Bank is Rs 285/share. Benchmarking ICICI Pru Life’s valuation to Rs 43,000 - 47,800 crore would imply 4-6% upside to our price target for ICICI Bank.

MOTILAL OSWAL RESEARCH

The company relies heavily on bancassurance and has tied up with ICICI Bank, Standard Chartered Bank and Capital Small Finance Bank for product distribution. Bancassurance accounted for over 58% of retail APE in FY16. We believe termination of one or more of these partnerships poses significant threats to the business over the medium-term.

That apart, over 80% of retail Annual premium equivalent (APE) for FY16 was in ULIPs. This makes the company prone to the cyclicality of the stock markets, as retail investors generally purchase ULIPs during stock market booms and vice-versa. This could impact new business premiums as well as margins. Additionally, the company has a low share of non-participating business, which is a  read full story

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 ICICI Pru: Good record, growth prospects

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 ICICI Pru Life IPO signals jump in valuations

 ICICI Pru Life files for India's biggest IPO in six years

ICICI Pru's Rs 6,000 crore IPO to open tomorrow

ICICI Prudential Life Insurance's IPO, worth up to Rs 6,057 crore and biggest for Indian markets in about six years, will hit the capital market on Monday (tomorrow).

The first public offer by an insurer in Indian market would open for bidding on September 19 and is scheduled to close on September 21, during which the stock would be offered in a price band of Rs 300-334 per share.

Ahead of the IPO, ICICI Prudential has allocated over 4.89 crore shares at Rs 334, the top-end of the price band, aggregating Rs 1,635.33 crore to a clutch of anchor investors from India and abroad.

It marks one of the biggest anchor investor placements in the Indian IPO market. Among the 40-odd anchor investors are Morgan Stanley, Goldman Sachs, Nomura, Government of Singapore, UTI MF, Russell Investment, GMO Emerging, SBI MF, Tata MF, HDFC Standard Life, Reliance, Birla Sun Life, Kotak Mahindra, IDFC,National Pension Service Managed By Oaktree Capital Management L P and The Boeing Company Employee Retirement Plans Master Trust.

The public offer comprises of up to 18,13,41,058 equity shares of ICICI Prudential Life Insurance Company, including a reservation of up to 1,81,34,105 equity shares(10% of the offer) for the shareholders of  read full story

Related Stories:

 ICICI Pru: Good record, growth prospects

 Whatever we do, we do in an arm's-length relationship: Chanda Kochhar

 ICICI Pru Life IPO signals jump in valuations

 ICICI Pru Life files for India's biggest IPO in six years

TCS slips 6% on guidance recast. Should you sell?

Information technology (IT) stocks took a hit in trade on Thursday, after TCS warned of a slowdown in discretionary spending in the BFSI (banking and financial services) vertical. The stock lost 6% in morning trade to hit a low of Rs 2,284 levels on the National Stock Exchange (NSE). The vertical contributed nearly 40% to the company’s revenues in the first quarter ended June 2016, reports suggest.

HCL Technologies, Tech Mahindra and Infosys were among the other losers that lost 2.2 – 2.6%. Wipro, at Rs 470.2 hit its 52-week low on the NSE in intra-day deals. A fall in these heavyweights dragged the Nifty IT index nearly 3% lower in intra-day deals on Thursday.

Since the presentation of the Union Budget in February 2016 when the sentiment turned positive for the overall markets, IT stocks have remained underperformers. The Nifty IT index has been mostly flat – up a modest 0.3% till close of trade on September 07, as compared to 27% rise in the Nifty50.

Earlier, Infosys had lowered its annual revenue guidance for FY17 while announcing its results for the June 2016 quarter to 10.5 – 12% in constant currency (CC) terms, as against a market expectation of 11.5 – 13.5%.

Given the growth concerns, analysts say that the sector seems to be facing more headwinds than tailwinds, with a high probability of those read more..

Also Read: Here's why IT companies are not growing fast enough

Also Read: Can the Indian IT services industry do away with the offshore delivery player tag?

Also Read: Brexit, tight-fisted banks might upset Nasscom's growth projection

Reliance Jio impact: Should you sell Bharti Airtel, RCom, Idea Cellular?

After eroding around Rs 13,000 crore in market capitalisation (m-cap) on Thursday after Mukesh Ambani, chairman of Reliance Industries (RIL) announced the launch of Reliance Jio from September 05 with an aggressive pricing structure, telecom stocks - Bharti Airtel, Idea Cellular and Reliance Communications - trade mixed on the National Stock Exchange (NSE) on Friday.

While Bharti Airtel was trading marginally higher at Rs 312 levels, up 0.4% in early morning deals, Idea Cellular and Reliance Communications (RCom) slipped around 2.1% and 1.5%, respectively. By comparison, the Nifty 50 index was trading 0.2% higher at 8,788 levels.

On Thursday, Bharti Airtel, the largest loser in terms of m-cap, lost Rs 8,455 crore m-cap at Rs 124,199 crore, the BSE data show. Idea Cellular lost Rs 3,528 crore at Rs 30,140 crore, and RCom eroded Rs 1,182 crore at Rs 12,333 crore.

So what should you do with telecom stocks? Here is a quick compilation of what the leading brokerages across the  read more..

Also Read: Jio launches mother of all telecom battles

Also Read: Why Jio may not bring down your mobile bill

Also Read: Jio may impact profitability of existing operators: Analysts

Also Read: Low price points push back Jio break-even

41 companies reward shareholders with bonus in FY17

The number of companies that have announced a bonus issue in the first five months of financial year 2016-17 (FY17) has surpassed the last year's figure with 41 companies declaring a bonus, as compared to 30 companies that did so in the previous corresponding period. During entire previous financial year 2015-16 (FY16), total 59 companies announced bonus shares, data show.

These 41 companies, according to Capitaline Plus data, includes four central public sector enterprises (CPSEs) - Hindustan Petroleum Corporation (HPCL), Bharat Petroleum Corporation (BPCL), Indian Oil Corporation (IOC), Rural Electrification Corporation (REC) and Power Finance Corporation (PFC). In previous year, Bharat Electronics, was the sole CPSE that issued bonus shares during this period.

Except BPCL, the remaining four companies have announced their April - June (Q1) quarter earnings, and have reported 20% year-on-year growth in their aggregate net profit. On a sequential basis, the combined net profit of these companies has more than read more..

Also Read: Bajaj Finance gains on fixing record date for bonus, stock split

Also Read: ITC trades ex-bonus; hits fresh 52-week high

Also Read: Indian Oil Corp Q1 profit jumps 25% to Rs 8,269 crore, to issue bonus shares

RBL Bank shares list at Rs 274.2, a 22% premium to listing price

The shares of private sector lender RBL, formerly known as Ratnakar Bank, on Wednesday debuted on the National Stock Exchange(NSE) at Rs 274.2 per share, a 22% premium over the offer price.

The price band for RBL's Initial Public Offer (IPO), the first by a private bank in a decade, was fixed at Rs 224-225 per share. The IPO opened for subscription on August 19 through August 23, with an issue price of Rs 225 a share.

The company's IPO was subscribed a staggering 70 times over.

Yes Bank was the last private lender to hit the capital markets in 2005. Taking into account state-run banks as well, Punjab and Sind Bank last went public six years ago in 2010.

Kotak Mahindra Capital, Axis Capital, Citigroup, Morgan Stanley were the global merchant bankers for the read more..

What's driving Maruti Suzuki stock?

Maruti Suzuki hit a 52-week high of Rs 5,103.90 on the National Stock Exchange (NSE) in intra-day deals on Tuesday. From a 52-week low hit on February 29 earlier this year, the stock has rallied around 60% as compared to a 23% rise in the benchmark index, the Nifty 50. By comparison, the Nifty Auto index has also lagged behind, rising around 36% during this period.

The overall sentiment for the auto sector has been improving on the back of an above-normal monsoon, which could eventually trigger rural demand for entry level vehicles. That apart, the increased payout in the hands of government employees on account of the 7th Pay Commission recommendation implementation has also bolstered sentiment.

The passage of the goods and services tax (GST) bill by the Rajya Sabha, the implementation of which (assuming an 18% tax rate) will also benefit Maruti Suzuki by stimulating demand, analysts say. That apart, there will be gains from savings and distribution, reports suggest.

“Entry level cars would see reduction in on-road prices by around 8%, driving demand for this segment. Maruti Suzuki, which has over 80% of this segment, would be the biggest beneficiary, says a report from read more..

Also Read: How the GST Bill will impact various sectors and stocks

Also Read: Maruti launches Swift variant priced upto Rs 6.86 lakh

Also Read: Small cars, two-wheelers set for a cheaper ride