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Focus to shift to Primary market – Market Watch

The Indian Rupee gained Rs 0.10 or 0.14 per cent to close at Rs 73.44. Dow Jones too ended flat for the week losing 8.22 points or 0.03 per cent to close at 27,657.42 points.

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Indian Rupees Sensex Economy

The week gone by had plenty of action and was volatile. While the benchmark indices were just about flat, BSEHEALTHCARE and BSEIT gained significant ground and helped the benchmark indices. Similarly post the SEBI announcement on multi-cap funds being directed to match the allocation of stocks based on their definition of large cap, midcap and Smallcap at 25 per cent each as a threshold level, we saw BSEMIDCAP and BSESMALLCAP indices gain substantially.

BSESESEX lost 8.73 points or 0.02 per cent to close at 38,845.82 points while NIFTY gained 40.50 points or 0.35 per cent to close at 11,504.95 points. The broader market saw BSE100, BSE200 and BSE500 gain 0.67 per cent, 0.92 per cent and 1.22 per cent respectively. BSEMIDCAP gained 2.65 per cent while BSESMALLCAP was up 5.09 per cent. Clearly market breadth gained while the benchmark indices were flat. BSEHEALTHCARE had a huge gain of 9.14 per cent lead by Dr Reddy which was up 21.04 per cent and supported by Lupin 12.31 per cent and Cipla 11.16 per cent. Even BSEIT gained 6.19 per cent. The laggard was BSEBANKEX which was down 1.84 per cent with the banking pack losing for the third consecutive week. SBI was down 4.98 per cent for the week.

The Indian Rupee gained Rs 0.10 or 0.14 per cent to close at Rs 73.44. Dow Jones too ended flat for the week losing 8.22 points or 0.03 per cent to close at 27,657.42 points.

From the above movement one can infer that there is some fatigue factor setting in among the benchmark indices stocks. The rally which was earlier led buy one single stock Reliance has now shifted to a handful of pharma and IT stocks. With their weightage being significantly lower, the net effect is not here to be seen. The gains are offset by losses in the BFSI space. In the broader markets there is a wider participation in small and midcap stocks and people seem to be mis-reading the SEBI circular. How long this optimism remains is anybody’s guess.

There is plenty of action in the primary markets. Shares of Happiest Mind Technologies listed on Thursday and had a dream debut with the stock price gaining a massive 123.49 per cent to close at Rs 371, against the issue price of Rs 166. Considering the non-anchor portion which has a lock-in of 30 days, delivery on day one was to the extent of 92.99 per cent of the IPO size. This indicates that almost all except 7 per cent of the investors whether they be QIB, HNI or Retail sold on day one. The share closed at Rs 358.45 for the week, a gain of 115.93 per cent. Effectively we have new investors in Happiest Mind who have invested at Rs 370 instead of Rs 166.

Shares of Route Mobile Limited would list on Monday, September 21.

The week ahead sees two primary market issues open on Monday and one open on Tuesday, making a total of three issues for the week. It seems September has suddenly brought the primary markets alive and there is a strong possibility that the last week of September may see a couple of more issues opening.

The first issue opening on Monday and closing on Wednesday, September 23 is from Computer Age Management Services Limited (better known as CAMS). The issue is an offer for sale from NSE Investment for 1.82 crore shares in a price band of Rs 1,229-1,230. The company’s primary business is being an RTA (Registrar and Transfer Agent) for mutual funds. The EPS for the year ended March 2020 is Rs 35.54 and the price earning multiple at which shares are being issued is 34.58-34.61. The asking price is rich in valuation and may not offer much scope for appreciation after listing. The expected listing price is likely to be in the region of Rs 1,560-1,600.

The second issue is from Chemcon Speciality Chemicals Limited which is into the business of speciality chemicals in the pharmaceutical and completion fluids for the oil well industry. One of the raw materials for the company is the bromide family which is a hazardous chemical and a difficult material and chemistry to handle. One of the recently listed peers in the similar field in Neogen Chemicals which also processes Bromide for different application. The issue opens on Monday, September 21 and closes on Wednesday, September 23. The price band is Rs 338-340. The EPS for the year ended March 2020 is Rs 15.37 and the PE multiple is between 21.99-22.12 times. The issue consists of a fresh issue of Rs 165 crore and an offer for sale of 45 lakh shares.

The third and final issue for the week is from Angel Broking Limited which opens on Tuesday, September 22 and closes on Thursday, September 24. The company is issuing fresh shares for Rs 300 crore and an offer for sale of Rs 300 crore. The price band is Rs 305-306. The EPS for the year ended March 2020 is Rs 11.44. The PE multiple for the company based on this EPS for March 2020 is 26.66-26.75 times. Even considering the fact that the April-June quarter was a great period for the broking industry during the Covid-19 pandemic time, it is difficult to expect the good times to continue. Margin rules being changed have affected volumes at the bourses and volumes have slipped from peak levels. Secondly, while the company had garnered new clients with a massive drop and restructuring of broking rates, the newness and effectiveness of the growth on account of the same is wearing off. At the asking PE, the share is more expensive than listed players from the industry, challenging the logic to subscribe.

The week ahead sees September futures expire on Thursday, September 24. The current level of NIFTY of 11,504.95 points means that the series is lower by 54.30 points or 0.47 per cent. While the loss is marginal, the law of averages may play catch up as we have been seeing monthly gains for the last three months from June 20 expiry onwards.

Covid-19 front saw the world have 3,09,92,980 patients, 9,61,475 deaths and 2,25,87,905 people recover. In India the number of patients has increased to 54,00,619 patients, 86,774 deaths and 43.03,043 people having recovered. Compared to the previous week the world saw 20,46,352 new patients, 36,865 deaths and 17,74,755 people recovering. In India the number of new patients has increased by 6,46,263 people, 8,160 deaths and 6,00,448 people recovering.

The week ahead would see the focus shifting to the primary markets with three new issues and one new listing. Further the euphoria in the small and midcap space would in all probability reduce and people take a breather. Also, the huge rally in HealthCare and IT stocks could also see profit taking while BFSI space is likely to see some value buying. Considering all of these factors including September futures expiry, expect markets to be choppy, volatile, two sided sharp movements and mixed. Trend determination may be difficult in the week and one must be prepared to see a correction which is long overdue. Caution is drawn to people asking them to refrain from shorting the market on an overnight basis and use sharp rallies to sell and equally sharp dips to buy. Be patient.

(Arun Kejriwal is the founder of Kejriwal Research and Investment Services. The views expressed are personal)

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Hotel industry’s recovery to pre-Covid levels profits 3 yrs away: ICRA

“This will keep revenues moderated, resulting in operating losses and stretched debt metrics during FY2021 and FY2022.”

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Park Hotel Delhi

New Delhi, Oct 24 : The Indian hotel industry’s recovery to pre-Covid levels profits is at least three years away, ratings agency ICRA has said.

The ratings agency said that road ahead for the industry is rough as revenues and margins are expected to post record decline in FY21 with losses mounting over the next two years.

The hotel industry has witnessed one of the worst revenue declines, in Q1FY21, with revenues for the industry sample declining by 85 per cent.

“Given the high operating and financial leverage in the industry, the revenue decline led to huge operating and net losses in Q1 FY2021 despite the extensive cost-cutting measures adopted by most entities in the industry,” ICRA said in a statement.

“Despite sharp weakening in interest coverage, recourse to the RBI provided moratorium on debt servicing as part of its Covid relief package announced in March 2020 supported the industry.”

As per the statement, about 66 per cent of ICRA’s hospitality portfolio applied for moratorium under this scheme and several of these will apply for restructuring under the K.V. Kamath committee too.

“Although hotels have been gradually allowed to reopen, occupancies have remained subdued in H1FY2021,” the statement said.

“This will keep revenues moderated, resulting in operating losses and stretched debt metrics during FY2021 and FY2022.”

The industry has reported a 2.7 per cent de-growth in topline with flat operating margins at 22 per cent in FY2020.

“With an 85 per cent YoY decline witnessed in revenues in Q1 FY2021 and subdued occupancies witnessed in Q2 FY2021 as well, industry wide revenues are expected to witness sharp de-growth of 60-65 per cent for FY2021,” ICRA said.

“Despite several measures taken by the companies to variabilise the fixed costs, the industry is likely to report massive operating and net losses in FY2021.”

–IANS

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31% adolescents battled extreme anxiety in past few months due to COVID-19, says survey

About 31% surveyed adolescents battled extreme anxiety in the past few months worrying about the impact of coronavirus pandemic on their family’s financial status, according to a survey

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work-load office tension stress

About 31 percent surveyed adolescents battled extreme anxiety in the past few months worrying about the impact of coronavirus pandemic on their family’s financial status, according to a survey of over 7,300 adolescents from four states of Jharkhand, Chhattisgarh, Bihar and Odisha.

The survey on ‘What do the Adolescents have to say? COVID-19 and its Impact’ by NGO Centre for Catalysing Change was conducted in two rounds in the months of April, July and August.

Out of the 7,324 adolescents surveyed, 31 percent admitted to battling extreme anxiety worrying about the pandemic’s impact on their family’s financial status.

The survey also found that adolescent girls faced significant gender discrimination in these months due to the pandemic.

“Only 12 percent of surveyed adolescent girls had access to their own mobile phones to be able to attend online classes, while 35 percent boys had access to their own mobile phones,” the survey found.

“Further, 51 percent of the adolescent girls surveyed lacked access to essential textbooks in comparison to boys, highlighting how the pandemic had jeopardized girls’ access to education,” it said.

About 39 percent of the girls were found to be contributing to housework as opposed to the number of boys at 35 percent, it said.

Under the survey, the adolescent girls also stated how their mobility has been curbed, with only 39 percent girls saying they were allowed to go out alone in comparison to 62 percent boys of the same age who were allowed to go out alone.

“At the same time, only 36 percent adolescents knew the correct helpline numbers, while awareness about the use of the helplines was even lower. Only 18 percent was aware that the helplines could be used in reporting domestic violence and only 22-23 percent knew that it could be used in reporting child labour and child trafficking cases,” it added.

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Sahir Ludhianvi death anniversary: Top Bollywood songs penned by the legendary poet

On Sahir Ludhianvi’s death anniversary, here’s looking at top Bollywood songs written by the legendary poet!

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Sahir Ludhianvi

Born in Ludhiana, Punjab, in 1921, Sahir began writing since childhood. Born as Abdul Hayee, he found the word ‘Sahir’ while reading Iqbal’s poetry and decided to use it as his pen name.

Sahir’s poetry was remarkably concerned with socio-economic and political problems of the country. He often voiced problems of the downtrodden with his words.

Sahir’s debut as film lyricist was with Azadi Ki Rah Par and Baazi. In recognition of his contributions, he was honoured with Padma Bhushan. Sahir died in Mumbai on October 25, 1980.

On Sahir Ludhianvi’s death anniversary, here’s looking at top Bollywood songs written by the legendary poet.

Dekha hai zindagi ko kuch itna kareeb se

Main Pal Do Pal Ka Shayar hu

Kabhi Kabhi Mere DIl Mein

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