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Market Today with EZWealth – 08 Nov 2021
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Exchanges to rollout T+1 settlement cycle in equities from February 25
India stock exchanges have decided to rollout the T+1 equity settlement cycle from February 25, 2022, after receiving approval from the Securities and Exchange Board of India (Sebi) for a phase-wise implementation, a joint statement by bourses and depositories said. Stock exchanges said that the bottom 100 stocks based on daily market capitalisation averaged in October will be brought under the new settlement system followed by 400 stocks in March. The last batch of stocks will be brought under the new system by January 27, 2023.
Bourses said that any new stock getting listed after October 2021, will be added to the list based on the market capitalisation calculated on the basis of average trading price of 30 days after commencement of trading. In September, the capital market regulator allowed stock exchanges to move towards T+1 settlement, which will further accelerate the settlement process in the stock market to one day from two days earlier.
Government likely to take ‘middle path’ on crypto bill: Report
“A balance has to be found,” the report cites a person as saying, adding that a final call on the details of the proposed law would be taken shortly. “A middle path that balances the concerns of all stakeholders is more likely.” The person added that the bill would take into account the technological developments in the digital asset space, which the earlier draft lacked. A high-level inter-ministerial committee constituted by the finance ministry has examined the policy and legal frameworks and recommended the introduction of CBDC as a digital form of fiat money in the country.
The Reserve Bank of India had banned cryptocurrencies but the order was struck down by the Supreme Court in March 2020. The government, which has talked about regulating cryptocurrency, has said it is working with different stakeholders. Finance Minister Nirmala Sitharam had told The Economic Times that the government was “not against cryptocurrency and will instead look into ways it can help the country’s fintech sector”. The market watchdog had barred investment advisers from advising on unregulated instruments including cryptocurrencies, digital gold and other such products. India’s cryptocurrency market expanded 641 percent in the past year, driving growth of digital currencies in central and Southern Asia, according to a report by Chainalaysis.
Buy now, pay later business set to surge over ten-fold in India
India’s buy-now-pay-later (BNPL) industry is booming and set to surge over ten-fold within four years as tens of millions of online shoppers get lured by interest-free credit with fewer hassles, market players told Reuters. Redseer estimates India’s BNPL market will rocket to $45-50 billion by 2026 from $3-3.5 billion now. The research firm also estimates that the number of BNPL users in the country may rise to 80-100 million customers by then, from 10-15 million currently.
However, since the maximum credit currently being offered on BNPL is 100,000 rupees ($1,347.89), much lower than credit card offers, it will take some time before it can disrupt the cards market or wrest market share, said analysts at Macquarie Research. Fintech firm MobiKwik sees BNPL business nearly doubling for the company in two years, in a country where hundreds of millions of people have little access to formal credit. MobiKwik, which is among the top BNPL players in India and is backed by the Abu Dhabi Investment Authority, said income from the segment accounted for nearly a fifth of its 3.02 billion rupees revenue for the financial year ending March 31. “Only 60-70 million Indians have access to credit today, which means 93% of India has no access to credit,” said Upasana Taku, co-founder of the firm.
Xi Set to Unveil New Doctrine That Could Let Him Rule for Life
The first official declaration on Chinese history in 40 years is set to top the agenda when the ruling party huddles this week in the last major meeting before a twice-a-decade congress next year, where Xi’s expected to break precedent and secure a third term to extend his indefinite rule.
Mao Zedong and Deng Xiaoping’s historical resolutions came at critical junctures in the nation’s trajectory and enabled their authors to dominate party politics until their dying breaths. Issuing his own magnum opus would not only put Xi on par with those party titans, but could signal big changes afoot in the world’s second-largest economy.
Some investors have not got Evergrande unit’s bond interest due Nov 6: Report
Some holders of offshore bonds issued by a unit of developer China Evergrande Group had not received interest payments due on Nov. 6 by Monday morning in Asia, two people familiar with the matter said. Scenery Journey Ltd was due to make semi-annual coupon payments on Saturday worth a combined $82.49 million on its 13% November 2022 and 13.75% November 2023 U.S. dollar bonds. Non-payment of interest by Nov. 6 would have kicked off a 30-day grace period for payment.
Twice in October, Evergrande narrowly averted catastrophic defaults on its $19 billion worth of bonds in international capital markets by paying coupons just before the expiration of their grace periods. One such period expires on Wednesday, Nov. 10, for more than $148 million in coupon payments that had been due on Oct. 11. Evergrande is also due to make coupon payments totalling more than $255 million on its June 2023 and 2025 bonds on Dec. 28.
World food prices at decade highs
Commodity prices have been rising over the recent past and a similar trend is being seen in international food prices too. According to October month data from the Food Organization Global, there has been a 3 per cent price rise in the global food index. This third straight month of food price rise has pitched the index at a decade high. The last time food prices had come this close was in July 2011.
The rise comes on the back of strong demand ― household consumption has been rising. These are festival times, holiday times in the global market; so buying has been strong. Apart from that, the HoReCa (Hotel / Restaurant / Catering) segment also is opening up. Adverse weather has been reported in major food grain producing countries; this too has supported prices. As a result, for many commodities, the New Year is expected to kick in with opening stocks at multi-year lows.
Markets are also keeping a watch on the soaring fertiliser prices, and supply chain congestion which continues unabated. Port congestion continues to remain high, and container rates have not come down much. The markets are also reacting to the high cost of energy, and reduced harvest in major producing countries like Russia, Canada, and US. All these are supporting prices.
Coronavirus Update: Active COVID-19 cases in country lowest in 262 days
India logged 11,451 new coronavirus infections taking the country’s total tally of COVID-19 cases to 3,43,66,987, while the active cases declined to 1,42,826, the lowest in 262 days, according to the Union Health Ministry data updated on Monday. The death toll climbed to 4,61,057 with 266 fresh fatalities, according to the data updated at 8 am.
The daily rise in new coronavirus infections has been below 20,000 for 31 straight days and less than 50,000 daily new cases have been reported for 134 consecutive days now. The active cases comprise 0.42 per cent of the total infections, the lowest since March 2020, while the national COVID-19 recovery rate was recorded at 98.24 per cent, the highest since March 2020, the ministry said.
A decrease of 2,019 cases has been recorded in the active COVID-19 caseload in a span of 24 hours. The cumulative doses administered in the country so far under the nationwide COVID-19 vaccination drive has exceeded 108.47 crore. The cumulative doses administered in the country so far under the nationwide COVID-19 vaccination drive has exceeded 108.47 crore. India’s COVID-19 tally had crossed the 20-lakh mark on August 7, 2020, 30 lakh on August 23, 40 lakh on September 5 and 50 lakh on September 16.
Dengue death toll in Delhi rises to 9, cases mount to over 2,700
Three more deaths due to dengue have been recorded in Delhi taking the total number of fatalities to nine, while the number of cases of the vector-borne disease has climbed to over 2,700, according to a report released on Monday. This is the highest number of fatalities due to dengue recorded in a year in Delhi since 2017 when the cumulative death count officially reported was 10. Over 1,170 fresh cases have been logged in the last one week, according to the civic report on vector-borne diseases released on Monday. Of the over 2,700 dengue cases reported in Delhi this year, 1,171 have been reported this month till November 6. In October, 1,196 cases were reported.
The total number of cases this year till October 30 had stood at 1,537, and the official death toll then was six. According to the report, nine deaths and a total of 2,708 dengue cases have been recorded this season till November 6, which is the highest count since 2018 for the same period. In September this season, 217 cases were logged, the highest count for the month in the last three years.
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Stocks in the news
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Bakery products and biscuit maker Britannia Industries on November 8 reported a 22.9 percent year-on-year decline in Q2FY22 profit, dented by weak operating performance due to higher input cost. Consolidated profit fell to Rs 381.8 crore in the quarter ended September 2021 from Rs 495.2 crore in the corresponding period of the last fiscal. Consolidated revenue from operations grew by 5.5 percent year-on-year to Rs 3,607.4 crore during the September 2021 quarter.
Auto components major Motherson Sumi Systems Ltd on Monday said its board has approved raising of up to Rs 1,000 crore through the issuance of non-convertible debentures (NCDs) on a private placement basis. The company’s board of directors in its meeting held on Monday approved the issuance of rated, listed, unsecured, redeemable NCDs of a face value of Rs 10 lakh each, Motherson Sumi Systems Ltd said in a regulatory filing.
Inox Wind share price rose 3 percent in the morning trade on November 8 after the company bagged an order from NTPC Renewable Energy for a wind power project in Gujarat. “Inox Wind has bagged an order for a 150 MW wind power project from NTPC Renewable Energy Limited, a wholly-owned subsidiary of NTPC Limited, to be commissioned in the state of Gujarat,” the company said in its release. The project will be executed on a turnkey basis at Dayapar in the Kutch district and is to be commissioned by April 2023.
Bajaj Auto’s headquarters in Akurdi, Pune, could start rolling out vehicles once again if the company decides to make electric two and three-wheelers from this plant. Akurdi, which housed Bajaj Auto’s first-ever manufacturing plant, last saw a product roll out in 2007. Spread over 160 acres, the Akurdi plant currently houses Bajaj Auto’s research and development (R&D), corporate centre, and purchase and sales operations. A senior company official confirmed that Akurdi is the top contender to host the new plant, and that this would get confirmed in a couple of months.
SpiceJet on Monday launched a new scheme under which passengers will be able to pay for tickets in three, six or 12 instalments. “As part of the launch offer, customers will be able to enjoy three months EMI option at no additional cost (no interest),” the airline said in a press release. To avail the EMI scheme, passengers need to provide basic details like PAN number, Aadhar number or VID and verify it with a one-time password, it mentioned. Customers will have to make payment of the first EMI by providing their UPI ID and subsequent EMIs would be deducted from the same UPI ID, it noted.
Hero MotoCorp-backed Ather Energy on Monday said it has registered a 12-fold increase in sales in October riding on festive season demand. The company, which sells electric scooters 450X and 450 Plus, sold over 3,500 units last month. “The festive season has been very encouraging for us as Ather Energy recorded a 12 fold growth in sales in the month of October, when compared to last year,” Ather Energy CEO and Co-founder Tarun Mehta said in a statement.
IndusInd Bank share price declined 12.3 percent to Rs 1,042.10 in the early trade on November 8 following whistleblower allegations of loan evergreening. The private lender has denied the accusations. The allegations made by certain anonymous individuals purportedly acting as whistleblowers, as published in the Mumbai edition of The Economic Times on November 5, 2021 titled as “Whistleblowers Raise Loan Evergreening Issue at IndusInd Arm” are grossly inaccurate and baseless, IndusInd Bank said in a release on November 6. The bank clarified that all the loan products managed by Bharat Financial (BFIL) in the capacity of a business correspondent were approved by IndusInd Bank and fully compliant with regulatory guidelines.
Larsen & Toubro’s construction arm has bagged orders worth Rs 1,000 crore to Rs 2,500 crore from metal industry and Defence Research and Development Organisation (DRDO), the engineering major said on Monday. L&T bagged the DRDO order to construct their flight control system facility at Aeronautical Development Establishment, Bengaluru. The project entails construction of a 1.2 lakh square feet facility that would include six floors above the ground floor.
Shares of Pfizer rallied as much as 8 per cent in Monday’s session following a strong set of numbers in the September 2 1 quarter and rolling out its antiviral pill for Covid-19. The drug firm Pfizer reported an 8.81 per cent rise in net profit to Rs 142.95 crore for the quarter ended September 30, 2021. The company had posted a net profit of Rs 131.37 crore for the corresponding period of the previous fiscal.
MSCI will announce its semi annual index rejig on Friday, November 12, 2021 and brokerage house Edelweiss believes that stocks like Zomato, SRF, Tata Power, Mindtree, Godrej Properties, IRCTC, and Mphasis could see the inclusion in the index. If all of the above seven names, which are under Edelweiss’ high conviction inclusion list, get included then India can see passive flow of around $1.3 billion, the brokerage firm said in a note. Though, it believes that IPCA Labs and REC Limited could see exclusion from the Standard Index. The adjustment for its November semi-annual index rebalancing will take place on November 30, 2021 and the rejig will be with effect from December 1.
Jindal Steel & Power Ltd. expects its operating profit to rise in the latter half of the ongoing fiscal after the metric was weighed by raw input costs, including those of coking coal, and depletion of lower-cost iron ore inventory in the quarter ended September. The company plans to source almost 60% of the solid fuel from its Australian and Mozambique subsidiaries. Sharma pegged JSPL’s coal production volumes at 8-8.2 million tonnes for FY22, compared with 7.5 million tonnes in the preceding year. JSPL didn’t implement price hikes in October and November, he said, and won’t do so for the rest of the ongoing
Shares of Canara Bank hit an over two-year high of Rs 242.60 after they rallied 6 per cent on the BSE in Monday’s intra-day trade after rating agency ICRA upgraded the rating of Bank’s Basel III Tier II Bonds to “ICRA AAA (Stable)” from “ICRA AA+(hyb) (Stable)”. The rating agency has also upgraded its ratings on the Basel III Additional Tier I Bonds to “ICRA AA+ (Stable)” from “ICRA AA (hyb) (Stable)”. The stock of the public sector bank was trading at its highest level since July 2019. In the past one month, Canara Bank has outperformed the market by surging 37 per cent, as compared to less than 1 per cent rise in the S&P BSE Sensex. It has zoomed 62 per cent against qualified institutional placement (QIP) price of Rs 149.35 per share.
Shares of UltraTech Cement hit a record high of Rs 8,219.95, up 4 per cent on the BSE in Monday’s intra-day trade on strong demand outlook in an otherwise subdued market. In comparison, the S&P BSE Sensex was down 0.41 per cent at 59,856 points at 10:11 am. The stock of Aditya Birla Group Company surpassed its previous high of Rs 8,070.60 touched on September 4, 2021. In past two weeks, the stock has rallied 15 per cent from a level of Rs 7,147 on October 25. UltraTech Cement is witnessing strong demand from various infrastructure constructions such as highway construction, railways, metro rail, irrigation projects, airports and urban housing market in the Tier 2 and Tier 3 markets.
Shares of Divi’s Laboratories slipped 9 per cent to Rs 4,751 on the BSE in Monday’s intra-day trade as the company’s earnings before interest, tax, depreciation and amortization (ebitda) margin contracted by 180 basis points year-on-year (YoY) to 41.5 per cent in September quarter (Q2FY22) due to higher other expenses/employee costs. The stock of the pharmaceutical company had hit a 52-week high of Rs 5,425 on October 18, 2021. In comparison, the S&P BSE Sensex was down 0.11 per cent at 60,002 points at 09:39 am. In Q2FY22, Divi’s Labs’ profit after tax (PAT) grew by 17 per cent to Rs 606 crore as against a PAT of Rs 520 crore in the corresponding quarter of previous fiscal. Revenues also grew 13.6 per cent to Rs 1,987 crore from Rs 1,749 crore in the year-ago quarter.[/vc_column_text][vc_separator][vc_column_text]
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