Market View 10th August 2023

View on market: Volatility Prevails, Market is searching for better value

Following a tech-driven sell-off on Wall Street, Asian equities futures traded slightly lower as investors awaited U.S. monthly inflation data that will help determine the outlook for the Federal Reserve’s upcoming actions. American futures saw a small increase in early Asian trading. While contracts for Australian shares barely changed, those for benchmarks in Japan and Hong Kong declined. Wednesday saw a 0.7% loss in the S&P 500 and a 1.1% decline in the Nasdaq 100 due to a 4.7% decline in Nvidia Corp. On worries that a potential escalation of the war between Russia and Ukraine may choke off additional supply in an already constricting market, oil rose to its highest level in over nine months. Meanwhile, Brent crude was trading around $87 a barrel and West Texas Intermediate was below the $85-mark. The yield on the 10-year U.S. bond was trading at 4% and Bitcoin was below 30,000-level. At 5:17 a.m., the GIFT Nifty was down 88 points or 0.44% at 19,759.

Economic Calendar:

• USD : CPI (MoM) (Jul) on 10th Aug, 2023
• USD : Initial Jobless Claims on 10th Aug, 2023
• INR : Interest Rate Decision on 10th Aug, 2023
• INR : Reverse REPO Rate on 10th Aug, 2023

Brokerage Radar:

UBS ON SIEMENS: Buy, TP Rs 4500; Topline beat of 7% vs expectation, while EBITDA missed est. by 2%, driven by 100bps miss on EBITDA margins; PAT ahead by 7% largely driven by higher other income; On new order intake, quarterly run rate remains well above Rs50bn for past 3 qtrs now

MS ON TRENT: EW, TP raised to Rs 1624; Earnings beat est.; Continued strong fashion topline growth delivery momentum, reduced subsidiary losses & better investor disclosure are +ves

CITI ON BHARAT FORGE: Sell, TP Rs 800; 1Q above Est., Driven By Defence Exports; Mgmt. outlook +ve across segments; Though demand environment is benign, new biz should drive rev & profit growth; Think +ves from defence export orders are now well priced in

CLSA ON MAX FIN: Buy, TP Raised to Rs 1025; Steady 1Q24 with VNB margins up 1% YoY; Axis Bank to increase stake to +19% in Max Life; VNB margin of 22.2% given cyclical quarter; Healthy traction in retail protection, non-par savings & proprietary channel

International Markets

U.S & Europe:

Asian markets:

ADR Watch:

Commodities & Currency:

FIIs & DIIs:

News Update:

Axis Bank: The board has approved the proposal to infuse Rs 1,612 crore in Max Life through preferential allotment. The bank’s direct stake in Max Life will increase to 16.22%, and the collective stake of Axis Entities will increase to 19.02%. The bank will acquire 14.25 crore shares with a face value of Rs 10 each and a market value of Rs 113.06 apiece.

Rate-sensitive sectors: The RBI will announce its interest rate decision along with its economic outlook on Thursday. In focus will be the banking and financial services, auto, real estate, and consumer durables sectors.

Bombay Dyeing: The board approved the termination of the deposit agreement and the delisting of GDR from the Luxembourg Stock Exchange.

Zee Entertainment: The NCLT will pronounce its verdict today on the Zee-Sony merger. On July 10, the tribunal reserved its order on the merger.

Suzlon Energy: The company set the floor price at Rs 18.44 apiece for Qualified Institutional Placements that opened on Aug. 9. It aims to raise Rs 1,500 crore, with a green shoe option of Rs 500 crore.

Angel One: The board approved the Scheme of Arrangement involving the transfer of business undertakings to two subsidiaries—Angel Securities and Angel Crest. No cash consideration is payable for slump sales.

FDC: The board approved the acquisition of an additional 7% stake in its subsidiary FDC SA from other existing shareholders and the settlement of their existing outstanding loan with interest. It also approved the buyback of up to 31 lakh shares (1.87% of the total paid-up equity capital) at a price of Rs 500 apiece, for an aggregate amount not exceeding Rs 155 crore.

Source: Moneycontrol, Bloomberg Quint, Investing 

Disclosure in pursuance of Section 19 of SEBI (RA) Regulation 2014

Elite Wealth Limited does/does not do business with companies covered in its research reports. Investors should be aware that the Elite Wealth Limited may/may not have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only information in making their investment decision and must exercise their own judgment before making any investment decision.

For analyst certification and other important disclosures, see the Disclosure Appendix, or go to www.elitewealth.in. Analysts employed by Elite Wealth Limited are registered/qualified as research analysts with SEBI in India.( SEBI Registration No.: INH100002300)

Disclosure Appendix

Analyst Certification (For Reports)

Kiran Tahlani, Elite Wealth Limited, kirantahlani@elitestock.com

The analyst(s) certify that all of the views expressed in this report accurately reflect my/our personal views about the subject company or companies and its or their securities. I/We also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report. Unless otherwise stated, the individuals listed on the cover page of this report are analysts in Elite Wealth Limited.

As to each individual report referenced herein, the primary research analyst(s) named within the report individually certify, with respect to each security or issuer that the analyst covered in the report, that:

(1) all of the views expressed in the report accurately reflect his or her personal views about any and all of the subject securities or issuers; and

(2) no part of any of the research analyst’s compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed in the report.

For individual analyst certifications, please refer to the disclosure section at the end of the attached individual notes.

Research Excerpts

This note may include excerpts from previously published research. For access to the full reports, including analyst certification and important disclosures, investment thesis, valuation methodology, and risks to rating and price targets, please visit www.elitewealth.in.

Company-Specific Disclosures

Important disclosures, including price charts, are available and all Elite Wealth Limited covered companies by visiting https://www.elitewealth.in, or e-mailing research@elitestock.com with your request. Elite Wealth Limited may screen companies based on Strategy, Technical, and Quantitative Research. For important disclosures for these companies, please e-mail research@elitestock.com.

Options related research:

If the information contained herein regards options related research, such information is available only to persons who have received the proper option risk disclosure documents. For a copy of the risk disclosure documents, please contact your Broker’s Representative or visit the OCC’s website at https://www.elitewealth.in

Other Disclosures

All research reports made available to clients are simultaneously available on our client websites. Not all research content is redistributed, e-mailed or made available to third-party aggregators. For all research reports available on a particular stock, please contact your respective broker’s sales person.

Ownership and material conflicts of interest Disclosure

Elite Wealth Limited policy prohibits its analysts, professionals reporting to analysts from owning securities of any company in the analyst’s area of coverage. Analyst compensation: Analysts are salary based permanent employees of Elite Wealth Limited. Analyst as officer or director: Elite Wealth Limited policy prohibits its analysts, persons reporting to analysts from serving as an officer, director, board member or employee of any company in the analyst’s area of coverage.

Country Specific Disclosures

India – For private circulation only, not for sale.

Legal Entities Disclosures

Mr. Ravinder Parkash Seth is the Managing Director of Elite Wealth  Ltd (EWL, henceforth), having its registered office at Casa Picasso, Golf Course Extension, Near Rajesh Pilot Chowk, Radha Swami, Sector-61, Gurgaon-122001 Haryana, is a SEBI registered Research Analyst and is regulated by Securities and Exchange Board of India. Telephone: 011-43035555, Facsimile: 011-22795783 and Website: www.elitewealth.in

EWL discloses all material information about itself including its business activity, disciplinary history, the terms and conditions on which it offers research report, details of associates and such other information as is necessary to take an investment decision, including the following:

1. Reports
2. a) EWL or his associate or his relative has no financial interest in the subject company and the nature of such financial interest;

(b) EWL or its associates or relatives, have no actual/beneficial ownership of one per cent. or more in the securities of the subject company, at the end of the month immediately preceding the date of publication of the research report or date of the public appearance;

(c) EWL or its associate or his relative, has no other material conflict of interest at the time of publication of the research report or at the time of public appearance;

2. Compensation

(a) EWL or its associates have not received any compensation from the subject company in the past twelve months;

(b) EWL or its associates have not managed or co-managed public offering of securities for the subject company in the past twelve months;

(c) EWL or its associates have not received any compensation for investment banking or merchant banking or brokerage services from the subject company in the past twelve months;

(d) EWL  or its associates have not received any compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company in the past twelve months;

(e) EWL or its associates have not received any compensation or other benefits from the subject company or third party in connection with the research report.

3 In respect of Public Appearances
(a) EWL or its associates have not received any compensation from the subject company in the past twelve months;
(b) The subject company is not now or never a client during twelve months preceding the date of distribution of the research report and the types of services provided by EWL

Provided that research analyst or research entity shall not be required to make a disclosure as per sub-clauses (c), (d) and (e) of clause (ii) or sub-clauses (a) and (b) of clause (iii) to the extent such disclosure would reveal material non-public information regarding specific potential future investment banking or merchant banking or brokerage services transactions of the subject company.
(4) EWL or its proprietor has never served as an officer, director or employee of the subject company;
(5) EWL has never been engaged in market making activity for the subject company;
(6) EWL shall provide all other disclosures in research report and public appearance as specified by the Board under any other regulations.