shareBazar: July 2016

Sunday 31 July 2016

{LONGTERMINVESTORS} HSBC Global Asset Management Market Update: India Insights (July 2016)

Hi,

Please find attached the report on India Insights - Monthly update on Indian markets

Kindly attributed to HSBC Global Asset Management.

Please see a note by HSBC Global Asset Management

India Insights (July 2016)

Please find the latest issue of India Insights attached below. India Insights provides a comprehensive update on Indian economic and market developments, along with our asset class views on a monthly basis.

Key takeaways

Optimism surrounding the likely passing of the long awaited Goods & Services Tax (GST) bill has picked up in recent weeks after India's Parliamentary Affairs minister said that the government hopes to clear the path for the rollout of the nationwide tax in the ongoing session of parliament that started on July 18
After a slow start and about a week's delay in arrival, rains covered the whole of India in mid-July and are slightly above average since the beginning of June
In June, headline CPI inflation stayed elevated, driven mainly by higher food prices. Unfavourable base effects would likely keep headline inflation high in the next couple of months, with food price trajectory likely to remain a key factor
India's export growth turned positive after 18 straight months of contraction, on a lower base effect and pick up in non-commodity exports
Following the announcement of Rajan's impending departure the INR initially weakened against the dollar but, subsequently the currency picked up on the back of strong global equity markets and month-end selling by exporters

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Re: {LONGTERMINVESTORS} Research Reports extracts & summaries - Thread

Find out why Edelweiss Securities is upbeat on ICICI Bank

On Mon, Aug 1, 2016 at 12:11 PM, Rajesh Desai <stockdesai@gmail.com> wrote:

Maruti Suzuki: (CLSA)
Margin drop hurts 1Q Ebitda but financial income offsets

Maruti's 1Q Ebitda was up just 2% YoY (a 5% miss), dragged down by
production disruption and weaker margin but net profit was up 23% YoY
(10% beat) driven by higher financial income and lower depreciation. The
bulk of the yen/steel cost pressures came through in 1Q and FY17 margin
is likely to be around the 15% handle, which is not as bad as we feared a
few months back. With positives from new products now in the price, a
revival in industry demand is now key to Maruti's stock rising, which
cannot be ruled out in FY18. We upgrade FY17-18 EPS by 7%. Maintain
O-PF with a Rs5,000 target (Rs4,500 earlier).

Ebitda growth for 1Q slows substantially due to lower volume/margin
In 1Q, Maruti's volumes rose a modest 2% YoY and were impacted by a fire at
a key vendor plant but revenues rose at a much higher 12% YoY, driven by a
better product mix in both domestic sales and exports. Ebitda was, however,
up just 2% YoY and missed our estimate by 5%. Ebitda margin weakened
140bp YoY (50bp QoQ) to 14.8% owing to the impact of a stronger yen and
higher commodity prices. Net profit grew at a higher 23% YoY (10% beat)
boosted by a big rise in financial income (the effect of a shift to Ind AS) and a
fall in depreciation, due to increase in the useful life of dies.

Better visibility on FY17 margin now; not as bad as feared
While some part of the yen appreciation impact will flow through in 2Q, we
believe that the bulk of it came through in 1Q. Similarly, while Maruti is yet to
conclude negotiations for raw material contracts, adequate provisions have
been taken in 1Q. We believe that the bulk of the yen and steel impact came
through in 1Q and expect margins to be near the 15% handle in FY17. This is
a much better margin profile than we feared a few months back. Maruti's net
yen exposure has turned out to be lower than believed earlier, due to
disclosures on non-yen imports and rising yen-denominated Baleno exports.
In addition, the strong response to the Baleno and the Vitara Brezza raise our
margin expectations for these two models.

New product positives priced in; industry demand revival key now
We upgrade FY17-18 EPS by 7% factoring in higher financial income and
lower depreciation. Maruti's stock has recovered most of its 2016 losses but
valuations are once again looking rich at 20x/17x FY17/18CL PE. We believe
that an industry demand revival is now needed for Maruti's stock to rise,
which cannot be ruled out in FY18, given potential catalysts like
implementation of the 7th Pay Commission award, GST introduction and better
rural demand. Maintain O-PF.

CA. Rajesh Desai

{LONGTERMINVESTORS} CS on Indian Financial Sector - Foreward by Nandan Nilekani

Re: {LONGTERMINVESTORS} HDFC..New thread..

{LONGTERMINVESTORS} Fwd: Edelweiss Market Next - Shares Consolidate shead GST Vote

July 29, 2016

Quick Links: Visit Website

Visit Edelweiss.in every day!
A smarter place to make research-backed investments

In This Issue:
• Market View	• Sectoral Outlook	• Technical Outlook

Market View

Indian market ended in the green during the week. Nifty and Sensex up this week by 1.14% and 0.92% respectively.
In terms of sectors Media, Paints and Construction were the winners of the week. Metals, Energy and Engineering sectors were the notable losers this week.
Government mulls curbs on sugar sales at mill level to check prices: Government is mulling imposing stock limit for sugar millers and restricting domestic sales by fixing quota on each mill to tame sweetener's retail prices, which are currently ruling as high as Rs 43 per kg. Food Secretary Vrinda Sarup reviewed the price situation here in a video conference interaction with both sugar producing and consuming states. "The sugar price was discussed. Prices are rising because of tight supply situation created mostly by holding of stocks by millers. We are looking at imposing stock limits on millers too and reintroduce monthly release mechanism," a senior Food Ministry official told PTI after the meeting.

Read More...
	FII and DII Flows
	Prominent Bond Yields
	INR Yields
	Domestic Quick Bites
	International Quick Bites
	Top 5 Gainers
	Top 5 Losers

Technical Outlook

Indian markets outperformed hitting fresh 2016 high of 8,674 and extended its bullish run for straight fifth month as July expiry gains 4.6% (E-o-E) to settle at 8,666. The global markets post Brexit has seen a strong upsurge while good monsoon and positive prospects of GST bill passage in the ongoing monsoon session of Parliament has kept Indian markets in sweet spot amongst Emerging Markets basket. Foreign Institutional Investors have pumped Rs.101.36bn in the secondary market in July alone suggesting a well placed economic markets. The OI (Open Interest) base on Nifty to start August series has risen to 23.4mln shares against 19.6mln shares in July series whereas overall Nifty OI is at 6 years high of 3.71cr. Market wide OI are highest since the start of April 2015 expiry.
Nifty hit fresh 2016 high of 8,674; ends week at 8,638 gaining 1.1%.
Indian markets gain for straight five expiry; July ends at 8,666 gaining 4.6% (E-o-E).
Index is trading above the short to medium term moving averages.
Open Interest on Nifty is at 6 years high, last in October 2010.
Oscillators are trending bullish suggesting more upside.
We maintain medium term target of 8,900 on Nifty.
The support for the week are 8,560-8,490 and resistance at 8,741-8,823.

Click here to read more

Submission of FATCA and CRS is mandatory and needs to be completed before 31st July, 2016. Please get in touch with your Relationship Manager/ Equity Advisor for further details. If you have already submitted the FATCA form please ignore this note.

Broking and DP services offered by Edelweiss Broking Limited under SEBI Registration No.: INZ000005231 (Member of NSE, BSE and MSEI) and IN-DP-NSDL-314-2009 (DP with NSDL). Research services offered by Edelweiss Broking Ltd. under SEBI Registration No. INH000000172. Investor grievance resolution team: 040-40316936. Name of the Compliance Officer for Trading - Mr. Dhirendra Rautela, Email ID: complianceofficer.ebl@edelweissfin.com ; Name of the Compliance Officer for DP - Mr. Dhirendra Rautela, Email ID : ebl.dpcompliance@edelweissfin.com. Corporate Office: Edelweiss House, Off CST Road, Kalina, Mumbai - 400098; Tel. (022) 40094400 / 40885757 / 4088 6278.

Disclosure | Disclaimer

CA. Rajesh Desai

{LONGTERMINVESTORS} S&P 500 and FTSE 100 charts (Jul 29 '16): bull market consolidations continue

The following remarks appeared in last week's post on the daily bar chart pattern ofS&P 500: "Some more consolidation - or a correction - is likely. Booking part profits may be a good idea."

The index continued its sideways consolidation for the 2nd week - touching a low of 2159 and a new high of 2177 - but closing slightly lower for the week.

All three EMAs are rising, and the index is trading above them in a bull market. An upward break out from the consolidation zone is likely.

{LONGTERMINVESTORS} Fwd: Morning Market Starter - August 1, 2016

---------- Forwarded message ----------
From: <research@icicibank.com>
Date: Mon, Aug 1, 2016 at 11:16 AM
Subject: Morning Market Starter - August 1, 2016
To: stockdesai@gmail.com

Key developments:

European Banking Authority (EBA) published its 2016 EU banking sector stress test results indicating overall resilience of the banking sector. Italian Bank Monte Paschi fared the worst among all EU banks on the back of its NPA build-up.

Central Bank watch:

New York Fed President William Dudley commented that it would be "premature" to rule out a rate hike this year, adding that US is very close to its inflation and employment objectives, though slow global growth is dampening the pace of recovery.

o Dallas Fed President Robert Kaplan said that he is still "hopeful" for a sturdy US growth rate. He also added that Federal Reserve's policy stance is not as accommodative as it may appear.

o San Francisco Fed President John Williams remarked that strong data prints warrant the case for two interest rate hikes this year, though Q2 2016 GDP print came in slightly lower than expected partly due to inventory swings.

Bank of Japan (BoJ) Governor Haruhiko Kuroda commented post policy that Japan's economy is likely to expand moderately as a trend, and that the Government's economic package is appropriate in helping achieve BOJ's inflation target. He also added that he still sees room for further accommodation by the Central Bank.

Chart : US GDP (ann.) for Q2 2016 (advance print) came in steeply below forecasts, at 1.2% QoQ vs. the expected 2.5% QoQ

Global market developments:

Macroeconomic data:

o US:Advance estimate for Q2 2016 GDP reading (ann.) came in steeply below forecasts, at 1.2% QoQ vs. the previous (revised) print of 0.8% QoQ. Chicago purchasing manager's index in July was lower at 55.8 (prior print: 56.8). On the other hand, University of Michigan sentiment index came in higher at 90.0 (prior print: 89.5).

o EZ: Headline inflation in July edged higher to 0.2% YoY vs. 0.1% YoY previously. Meanwhile, Q2 2016 GDP reading (advance estimate) showed a decline, coming in at 0.3% QoQ as against 0.6% QoQ earlier.

o CN: Manufacturing PMI in July slipped into the contractionary zone (below 50 levels), to 49.9 (prior print: 50.0). However, Caixin manufacturing PMI rose to the expansionary zone in July (final print) to 50.6 from 48.6 earlier.

US markets ended mixed on Friday. While lower than expected Q2 2016 GDP data prints weighed on the indices, upbeat earning results from major technology companies capped the downside. Dow Jones closed 0.1% lower while S&P was 0.2% higher.

Asian equities are trading largely in the green. Slight gains in crude prices and some downward correction in Japanese Yen are aiding the indices this morning. However, downbeat manufacturing PMI from China are weighing on Chinese shares. Nikkei (0.2%) and Hang Seng (1.3%), Kospi (0.7%) and Australia's ASX (0.8%) are trading up. Meanwhile, Shanghai Composite (-1.0%) is posting losses.

US Treasuries are trading slightly lower with the 10Y benchmark yield currently at 1.47% vs. the prior close of 1.45%. However, overnight, yields declined sharply by over ~8 bps, retracing thereafter.

Global market snapshot

Domestic market developments:

India's Apr-Jun fiscal gap currently stands at 61.1% of FY2017 budgeted aim vs. 51.6% in the corresponding period last fiscal.

Indian Oil Corp Ltd on Sunday cut prices of petrol by INR 1.42/litre and diesel by INR 2.01/litre.

Regards,
ICICI Bank

Contact:

Sonal Surana
(+91-22) 2653-1414 (extn: 7243)
sonal.surana@icicibank.com

Radhika Wadhwa
(+91-22) 2653-1414 (extn: 7206)
radhika.wadhwa@icicibank.com

CA. Rajesh Desai

{LONGTERMINVESTORS} Long Term Stocks that Mutual Funds are Betting in 2016

Link to the Articles - Long Term Stocks that Mutual Funds are Betting in 2016

Re: {LONGTERMINVESTORS} Research Reports extracts & summaries - Thread

Maruti Suzuki: (CLSA)

Margin drop hurts 1Q Ebitda but financial income offsets

Maruti's 1Q Ebitda was up just 2% YoY (a 5% miss), dragged down by

production disruption and weaker margin but net profit was up 23% YoY

(10% beat) driven by higher financial income and lower depreciation. The

bulk of the yen/steel cost pressures came through in 1Q and FY17 margin

is likely to be around the 15% handle, which is not as bad as we feared a

few months back. With positives from new products now in the price, a

revival in industry demand is now key to Maruti's stock rising, which

cannot be ruled out in FY18. We upgrade FY17-18 EPS by 7%. Maintain

O-PF with a Rs5,000 target (Rs4,500 earlier).

Ebitda growth for 1Q slows substantially due to lower volume/margin

In 1Q, Maruti's volumes rose a modest 2% YoY and were impacted by a fire at

a key vendor plant but revenues rose at a much higher 12% YoY, driven by a

better product mix in both domestic sales and exports. Ebitda was, however,

up just 2% YoY and missed our estimate by 5%. Ebitda margin weakened

140bp YoY (50bp QoQ) to 14.8% owing to the impact of a stronger yen and

higher commodity prices. Net profit grew at a higher 23% YoY (10% beat)

boosted by a big rise in financial income (the effect of a shift to Ind AS) and a

fall in depreciation, due to increase in the useful life of dies.

Better visibility on FY17 margin now; not as bad as feared

While some part of the yen appreciation impact will flow through in 2Q, we

believe that the bulk of it came through in 1Q. Similarly, while Maruti is yet to

conclude negotiations for raw material contracts, adequate provisions have

been taken in 1Q. We believe that the bulk of the yen and steel impact came

through in 1Q and expect margins to be near the 15% handle in FY17. This is

a much better margin profile than we feared a few months back. Maruti's net

yen exposure has turned out to be lower than believed earlier, due to

disclosures on non-yen imports and rising yen-denominated Baleno exports.

In addition, the strong response to the Baleno and the Vitara Brezza raise our

margin expectations for these two models.

New product positives priced in; industry demand revival key now

We upgrade FY17-18 EPS by 7% factoring in higher financial income and

lower depreciation. Maruti's stock has recovered most of its 2016 losses but

valuations are once again looking rich at 20x/17x FY17/18CL PE. We believe

that an industry demand revival is now needed for Maruti's stock to rise,

which cannot be ruled out in FY18, given potential catalysts like

implementation of the 7th Pay Commission award, GST introduction and better

rural demand. Maintain O-PF.

{LONGTERMINVESTORS} CS-Financials

FYI

Re: {LONGTERMINVESTORS} RELIANCE INDUSTRIES... thread....

No plans to shut jewellery business: Reliance Retail

Moneycontrol.com

As the company right sizes its chain of jewellery stores, run under Reliance ... Disclosure: Reliance Industries has acquired management control of ...

No plans to shut jewellery biz: Reliance Retail - Business Standard

Re: {LONGTERMINVESTORS} Research Reports extracts & summaries - Thread

Dabur: (CLSA)

Margin expansion still saved the quarter

Dabur's revenue growth of ~1% YoY was at a multi-year low; volume

growth of 4% was bolstered by promotions which weighed on realisation

growth. Gross margins continued to move up and a planned cut on A&P

spends helped operating margins and allowed Dabur to report 12%

growth in earnings, just in line with estimates. Near-term outlook was

cautious. We cut FY17-18CL EPS estimates by 3-4% and cut our rating to

O-PF (from BUY), maintaining target of Rs325. Pick-up in revenue growth

and implementation of GST would be key triggers to watch out for.

1Q results sharply below estimates

Dabur's 1Q Ebitda grew 9% YoY which was 2% below our estimates. This was

despite a big miss on revenues, as margins saved the day. Interest was

slightly higher but was offset by lower tax rates. Overall net earnings were up

12% YoY to Rs2.9bn which were almost in line with estimates.

Weak volume growth coupled with realisation decline

Dabur's volume growth moderated to 4% YoY which was a disappointment.

Overall revenue growth was just 1% YoY, implying a 3ppt decline in

realisation due to increase in promotions to generate demand. Except for

homecare, oral and foods, revenues declined in health supplements (-1%),

digestives (-6%), hair care (-3.5%) and skin care (-3%). Management also

blamed this on disruption in wholesale/retail during June due to PAN card–

related issues on purchases of >Rs200k.

Margin gains helped

Despite heightened promotions, gross margins expanded 1.1ppt to 51.3%

which was a positive, as input costs remained benign. It, however, reduced

A&P spends by 13% YoY to 10.2% which was a surprise but understandable

in the context of higher promotions. Overall Ebitda margins expanded 130bp

YoY to 17.9% which was again a positive and allowed Dabur to almost meet

our estimates. Going ahead, management expects to raise A&P spends which

could be a threat to margin if demand environment does not improve.

Cut to O-PF after a 13% stock price rally in the past three months

Management commentary was fairly cautious, as macro remains challenging

though there are hopes of a recovery during 2HFY17. Despite expected rise in

A&P spends, Dabur is confident of maintaining current margins. We cut our

FY17-18 EPS estimates by 3-4% and downgrade to O-PF (from BUY) after a

13% stock price rally in the past three months. Pick-up in revenue growth

and implementation of GST would be key triggers to watch out for.