Stock Futures Roll Over Pressures Exist :: HDFC Securities

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Today is the settlement day, as the markets will be closed on Thursday for Christmas. While the external triggers are not negative, if the Nifty comes under pressure today, it will be largely because of the fact that the rollovers in stock futures have been only 57% as compared to 63% last month and the three month average rollover of 61%.

With puts having being written at 8250 on Tuesday, the chances of the level holding are fair. Calls were written at 8300 strike.

BJP makes political history, but markets unfazed

The BJP created political history in both Jharkhand and Jammu & Kashmir. But the markets were unfazed.

In Jharkhand, it is going to form the next government with the help of its pre-poll partner. Its tally of seats individually is the highest it has ever seen in 14 years of the teen state.

In Jammu and Kashmir, it has also bagged the highest number of seats in history and probably has got higher vote share than the PDP, which has got the highest number of seats. Though it is dismally below its target of 44 seats, it has done well enough to give some breathing space to Modi.

The markets are not amused as their performance falls short of the expectations of a majority of their own in Jharkhand and it has not emerged as the largest part in J&K.
 
Ordinance for coal, insurance likely today

Now that the Winter Session of the parliament is over, the Government can now think of taking the Ordinance route for Coal and Insurance reforms.

The Union Cabinet on Wednesday is likely to consider bringing out of ordinances to push through reforms in two key sectors of insurance and coal. These Bills could not be taken up in the Rajya Sabha due to a logjam between the treasury and Opposition benches in the just-concluded winter session.

While the Cabinet is expected to clear the ordinance on the Coal Mines (Special Provisions) Bill, 2014, in the meeting, the government is yet to decide on whether an ordinance should be promulgated for the Insurance Laws Amendment Bill, 2008.

The Insurance Bill could not be taken up for discussion despite being approved by a Select Committee of the Rajya Sabha due to the uproar over the conversion and other issues. The Coal Mines (Special Provisions) Bill, 2014, has already been approved by the Lok Sabha during the session but was again stalled in the Upper House.

Cabinet to consider easing FDI norms for medical devices sector

The Union cabinet is expected to consider tomorrow liberalising foreign direct investment (FDI) policy for the cash-starved medical devices sector.

The proposal to relax the policy has been mooted by the Commerce and Industry Ministry.
At present, the medical devices sector falls under the pharmaceutical category and is accordingly subjected to FDI limits and other conditions such as mandatory government nods.

While 100 per cent FDI is permitted in the Pharma sector, the FDI is permitted through automatic route in the case of greenfield investment or new venture and the Foreign Investment Promotion Board (FIPB) approval is required in the case of brownfield investment or in existing companies.

There are several other riders, including FDI in medical devices sector being permitted through the government-approval route and the industry has been demanding that it should be put under the automatic route.

As per estimates, India imports about 70 per cent of its requirement of medical devices. The industry size in the country is about $7 billion.

UltraTech Cement buys JP Associates' two MP plant for Rs 5400 crore

UltraTech Cement has agreed to buy two cement plants from Jaiprakash Associates for Rs 5400 crore ($852 million) including debt. Both the plants are in Madhya Pradesh. The acquisition will create significant synergies for UltraTech, the country's leading cement maker, it said

The two units in Madhya Pradesh include clinker capacity of 2.1 million tonne and cement grinding capacity of 2.6 MT at Bela along with a captive power plant of 25 MW. In addition, 3.1 MT of clinker capacity and 2.3 MT of cement grinding capacity at Sidhi will also be sold along with a 155 MW power plant.

It will initially raise UltraTech's cement capacity in India to 65 million tonnes per year from 60 million tonnes, with this figure expected to rise to 71 million tonnes a year by 2016, the company added.

Jaiprakash will remain the country's third-biggest cement producer after the plant sales, with a capacity of 22 million tonnes a year, it added.

GIC arm to acquire 34.2 % in Nirlon, to make open offer

Reco Berry Private Ltd., an affiliate of Singapore?s sovereign wealth fund GIC, has signed definitive agreements to purchase up to 34.2 per cent stake in Nirlon from shareholders Geraldton Finance, Real India Invest and promoters Maneesha Rahul Bhat, Mallika Vir Advani, Bilby Pte Ltd and Guildford Pte Ltd at Rs.222 a share,(Close Rs 193) aggregating Rs.684 crore.

As per Securities and Exchange Board of India norms, the acquirer will make an open offer to the public shareholders of Nirlon to acquire an additional 28.4 per cent stake at Rs.222 per share, aggregating Rs.568 crore. On completion of the open offer, Reco Berry?s holding is expected to go up to 62.6 per cent in Nirlon. This would cost the acquirer over Rs.1250 crore

The acquirer has also signed definitive agreements to purchase up to 5 per cent shareholding in Nirlon from Alfano Pte Ltd, Deltron Pte Ltd, Kunal Sagar and Rahul Sagar, the existing promoters of Nirlon. The acquirer has also entered into a shareholders? agreement with Alfano Pte, Deltron Pte, Kunal Sagar and Rahul Sagar with respect to their shareholding if they continue to be shareholders. The acquirer is also in discussions with certain other shareholders to acquire 2 per cent more shares in Nirlon.

BSE-listed Nirlon does not have any manufacturing activity. At present, the company owns Nirlon Knowledge Park, which has come up on the mill land located in Goregaon suburb of Mumbai.

Novartis-GSK deal gets CCI clearance

The Competition Commission of India (CCI) has approved a multi-billion dollar deal between global pharma giants GlaxoSmithKline Plc and Novartis.

The multi-layered deal involves UK-based GlaxoSmithKline (GSK) acquiring the Swiss major's vaccine business, while the latter will purchase GSK's cancer drugs.
In an order dated December 12 and made public today, the CCI said it was of the opinion that the "the proposed combination is not likely to have appreciable adverse effect on competition in India".

The three-part deal involves the acquisition of GSK's portfolio of oncology (cancer) products by Novartis for $16 billion. It also involves the purchase of the global human vaccines business of Novartis (excluding influenza vaccines) by GSK for an estimated $7.1 billion.

Besides, both the companies have entered into an agreement to form a consumer healthcare joint venture in which GSK will own 63.5 per cent and Novartis the remaining 36.5 per cent.
GSK will contribute its global consumer health care business to the joint venture. However this will not include its consumer healthcare business in India.

Alstom T&D secures order worth Rs 180 Cr from NTPC

Alstom T&D India, a leading player in the power transmission business, has secured an order worth Euro 23 million (Rs 1.8 billion) from NTPC to supply a 765 kV switchyard at the 2x800 MW Darlipalli Super Thermal Power Project (STPP) in Sundergarh, Odisha. The 765 kV switchyard will facilitate evacuate the 1600 MW of power produced by STPP to the stage grid of Odisha.

Alstom T&D India will design, engineer, manufacture, install and commission eleven 765 kV bays and fourteen 132 kV bays. All equipments will be manufactured and supplied from Alstom T&D India's manufacturing facilities located in Padappai, Hosur and Pallavaram.
 
Manappuram  board approves  the acquisition of Asirvad Micro Finance

Manappuram Finance Ltd informed that the Board of Directors of the Company has approved the acquisition of 70% stake in Asirvad Micro Finance Pvt. Ltd., Chennai subject to approvals from Reserve Bank of India and to execute necessary agreements to conclude the transaction.
The Company also intends to increase its stake up to 85% by infusion of additional capital. The total capital commitment will be close to Rs. 136 crore.

Chennai-based Asirvad Microfinance is promoted by SV Raja Vaidyanathan. Founded in 2007, the company is present in Tamil Nadu, Kerala, Odisha and Gujarat. The company has set itself an ambitious target of achieving a Portfolio of Rs.500 Croresby 2016 by lending to the people of urban and rural India.
Manappuram has over 3,200 branches across 25 states and four union territories with assets under management (AUM) of Rs 8,530 crore as on December 31, 2013.
 
Dow Turns 18

The Dow Jones Industrial Average turned 18 on Tuesday , closing above the 18k mark on better than expected reading of the GDP.

This has been a  classic Santa Claus rally that has continued for the 5th day on the trot. The markets have risen 5% since the last Tuesday. Both the S&P 500 and the Dow closed at new highs.

The Dow Jones Industrial Average surged 65 points or 0.36% to close at 18,024.
The S&P 500 rose 3 points or 0.17% to 2,082. This was the 51st time the benchmark has risen to a new high in the calendar year 2014.

The Nasdaq Composite, however, lost 16 points or 0.34% at 4,765.
The advances were relatively modest, particularly after some of last week?s monster gains. But investors appeared to be particularly heartened by a far-stronger-than-expected revision to third-quarter economic growth that put the U.S. on its best pace in 11 years.

Herding the markets higher was the third and the final reading of the Q3 GDP that came in at 5%. This is the highest reading of the GDP growth  in 11 years.
The first estimate for the July-September or Q3 GDP had come in at the end of October at 3.9%. It was revised higher to 4.3% at the end of second reading in November and the final reading has now come to 5%.

There is need for more than one reading as all the data pertaining to the quarter is not available at one go. As more and more data comes in the readings are revised. These revisions need not necessarily be on the higher side. They can be revised lower as well. But the third reading is final.

Now in the last week of January, we will get the first reading of the October-December quarter.
Consumer sentiment surged to 93.8 in the first two weeks of December, according to the Reuters/University of Michigan Sentiment Index. Cheaper gasoline prices have helped to fuel discretionary spending in other parts of the consumer economy. Economists had expected a reading of 93.

It wasn't all peaches for markets, though, as the Nasdaq was pulled 0.33% lower by a selloff among pharmaceutical and biotech stocks. Gilead Sciences, Regeneron Pharmaceuticals and Achillion Pharmaceuticals  were all trading lower after Express Scripts announced an exclusive deal to cover only AbbVie's newly approved hepatitis C treatment.

The Health Care SPDR ETF slid 2.3%. The iShares Nasdaq Biotechnology ETF fell 4.6%.
Oil prices continued to yo-yo with West Texas Intermediate crude adding 3.6% to $57.24 a barrel. Arab OPEC producers said they expect global oil to rebound to between $70 and $80 a barrel by end-2015 as demand picks up in line with a global economic recovery.

The commodity rally pushed energy stocks higher with large-caps Exxon Mobil and Chevron Corporation each posting gains of more than 1%. The Energy Select Sector SPDR ETF  spiked 1.3%.
Hertz  jumped 8.2% after raising car rental prices. The hike will go into effect on Jan. 1. The firm said the increase in base prices was due to escalating costs related to the entire fleet.
NQ Mobile spiked 34% after announcing a buyback program worth $80 million. The 12-month program can repurchase one-quarter of outstanding shares at current levels.

Chesapeake Energy jumped more than 10% after closing the sale of a bundle of properties to Southwestern Energy for just under $5 billion. The company's board separately authorized a $1 billion stock buyback program.

Europe?s benchmark SXXP, ended higher for a sixth straight day. But Greek stocks were mired in the red as the parliament failed to elect a new president. A third presidential vote is scheduled for Dec. 29,

In bond markets, 10-year Treasury yields jumped 9 basis points to 2.26%.
Oil prices rose, but most metals slumped, with gold futures falling further below $1,200 an ounce. The dollar rose after a stronger-than-expected GDP data. The ruble recovered and was trading at around 54.9095 to the dollar.

Trading volumes were extremely low and volatility measure Vix  has also tumbled.
Stock-market volumes are expected to be thin today, ahead of the Christmas Day holiday on Thursday. Christmas Eve typically sees the lowest trading volumes of the year as investors check out early or take the day off. U.S. stock markets close at 1 p.m. Eastern Time on Dec. 24 and are closed on Dec. 25. But it?s business as usual on the New Year?s Eve.