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Need to learn from others’ mistakes to succeed in investing: Vijay Kedia

November 25, 2020 - 2:23pm
Mumbai-based investor Vijay Kedia says no academic degree can guarantee success in the stock market.“Education is an important factor in anyone’s life and it is a lifelong asset that grows with an individual. But investing is a different thing altogether,” says Kedia, who confesses that he failed in Class X, but later went on to complete his graduation.“You need to study the concept of investing separately to become a successful investor,” Kedia said, adding that one has to learn to invest, practise investing and do the same in the market in order to become a successful investor.Kedia says the more you fail in the market, the more you will learn. “That’s why failure is important in the equity market. It is important to stay on the pitch and play,” he says and admits that he too has a long list of failures in the stock market.The Dalal Street veteran says one who invests early and falls early learns more in the stock market. “In equities, a wise person learns from his own mistakes while smart people learn from the others’ mistakes. If you want learn everything from your own mistakes, then one life will not be enough,” says he.Kedia also says luck has played a crucial role in his life. In the recent past, the value investor has spotted many multibaggers such as Vaibhav Global, Sudarshan Chemicals, Ramco Systems.In an earlier interaction with ETMarkets.com, Kedia said he follows the SMILE principle in investing; Small in size, Medium in experience, Large in aspiration and Extra-large in market potential.“But luck too plays a crucial role in dealing with risky assets. In the stock market, 2+2 can be zero, 2+2 can be 4 and the same can be 22. For multibagger return, you need luck,” Kedia told the India Investor Show 2020.
Categories: Business News

Cement stocks hover at 52-week highs. Will this momentum stay?

November 25, 2020 - 2:23pm
Mumbai: Shares of cement manufacturers are ruling near their 52-week highs, but analysts are still upbeat on the pack, given the robust earnings reported for the September quarter, and signs of pickup in construction activity in the rural areas.A number of stocks such as ACC, Ambuja Cements, Ultratech Cement, The India Cements, JK Cement, Deccan Cements and Sagar Cements have scaled 52-week highs this month, having risen between 20 per cent and 108 per cent for the year to date, compared with a 7 per cent gain seen in the Sensex in the same period.Jiten Parmar, partner at Aurum Capital, says from a 2-3 year horizon, capacity utilization will keep on increasing for cement companies. He said most companies surprised with a volume uptick in the September quarter amid good rural demand.Blockbuster Q2 report cardsThe 14 listed cement companies, which comprise 67 per cent of the overall capacity, reported consolidated volume growth of 5 per cent year on year in the September quarter, led by sustained demand in rural areas and a gradual pickup in the infrastructure segment besides improved labour availability.A low-cost petcoke inventory and strong measures to control fixed costs helped companies report better-than-expected profitability.“The key industry metric of ebitda per tonne hit a record high for many of the cement firms. Selling prices were firm, input costs were lower, and that resulted in excellent profit margins for these companies. That helped this pack to surge,” Parmar said.In a report dated November 18, JM financial said the ebitda per tonne stood better with 33 per cent YoY growth, amid a 2.5 per cent year-on-year improvement in realisations complemented by benign commodity prices, negotiation with third-party contractors, control on discretionary spend such as travel, advertisement, marketing, and the likes, and favourable operating leverage.Vinit Sambre, Head of Equities at DSP Mutual Fund, said cement stocks are a better option to play on infrastructure spend and growth is coming back to the cement business because they are more diversified in terms of their mix.“If infrastructure grows, anyways cement firms will see see good demand. Even if the sector is dull for a period, the cement companies would still see demand from individual housing and other areas,” Sambre said in an interaction with ETNow on November 20.Where is valuation looking attractive?Parmar of Aurum Capital said a number of midcap and smallcap cement firms are trading at decent valuations. “We like JK Lakshmi Cement. The stock has a long way to go, if you compare it with its largecap peers. There is a lot of room for Ebitda/tonne to expand. In the Andhra Pradesh-Telangana region, Deccan Cements is one of our favorites, as it has fantastic Q2 numbers, and looks very juicy from a valuation perspective,” he said and clarified that his company owned and recommended these shares to clients.Sandip Sabharwal, founder of asksandhipsabharwal.com, said his company has been holding on to UltraTech for a very long time.“The good thing going for UltraTech is that it acquired capacities from Century and Jaypee at the right time and at right valuations. They have been able to repay the debt they took for those acquisitions very fast. Cash flow generation in the first half of the year itself has been more than Rs 10,000 crore and that is the strength of UltraTech,” he told ETNow on November 20India Cement is the other stock, where there is absolute deep value and there could a possibility for some inorganic acquisition. “This stock has been doing well lately, but it trades below its intrinsic value. At some point of time, that will also be realised,” he said.
Categories: Business News

What we know about AstraZeneca-Oxford's head-scratching Covid vaccine results

November 25, 2020 - 11:23am
This month has seen a torrent of news about experimental vaccines to prevent COVID-19, with the latest development from AstraZeneca and the University of Oxford. On Monday they announced that a preliminary analysis showed their vaccine was effective — especially when the first dose was mistakenly cut in half.The announcement came on the heels of stunning reports from Moderna, as well as Pfizer and BioNTech. But AstraZeneca’s news was murkier, leaving many experts wanting to see more data before passing final judgment on how effective the vaccine may turn out to be.What is the AstraZeneca vaccine?Researchers at the University of Oxford built the vaccine using a kind of virus, called an adenovirus, that typically causes colds in chimpanzees. They genetically altered the virus so that it carried a gene for a coronavirus protein, which would theoretically train a person’s immune system to recognize the real coronavirus. Adenovirus-based vaccines are also being tested by Johnson & Johnson, as well as by labs in China, Italy and elsewhere. An adenovirus-based vaccine called Sputnik V is already being distributed in Russia on an emergency basis, although researchers have yet to release detailed results from their late-stage trial.Scientists have been testing adenovirus-based vaccines for decades, but it wasn’t until July of this year that the first one was licensed, when Johnson & Johnson got approval from European regulators for an Ebola vaccine.What have the AstraZeneca trials found?In the spring, AstraZeneca and Oxford started running clinical trials, first in Britain and then in other countries including the United States. The first round of trials showed that the vaccine prompted volunteers to produce antibodies against the coronavirus — a good sign. On Monday, AstraZeneca and Oxford released details about the first 131 volunteers to get COVID-19 in late-stage trials in the United Kingdom and Brazil. All of the volunteers got two doses about a month apart, but in some cases the first dose was only at half strength.Surprisingly, the vaccine combination in which the first dose was only at half strength was 90% effective at preventing COVID-19 in the trial. In contrast, the combination of two, full-dose shots led to just 62% efficacy.Why would that be?No one knows. The researchers speculated that the lower first dose did a better job of mimicking the experience of an infection, promoting a stronger immune response. But other factors, like the size and makeup of the groups that got different doses, may also be at play.Why did the researchers test two different doses?It was a lucky mistake. Researchers in Britain had been meaning to give volunteers the initial dose at full strength, but they made a miscalculation and accidentally gave it at half strength, Reuters reported. After discovering the error, the researchers gave each affected participant the full strength booster shot as planned about a month later.Fewer than 2,800 volunteers got the half-strength initial dose, out of the more than 23,000 participants whose results were reported Monday. That’s a pretty small number of participants on which to base the spectacular efficacy results — far fewer than in Pfizer’s and Moderna’s trials.Is the AstraZeneca vaccine safe?For years, Oxford researchers have been testing their chimpanzee adenovirus vaccine, ChAdOx1, on a number of other diseases including Ebola and Zika. Although none of those studies have reached the final, Phase 3 trials, they have allowed researchers to examine the safety of the vaccine platform. The researchers have not found any serious side effects.When the researchers adapted ChAdOx1 for COVID-19, their early clinical trials also did not turn up any adverse reactions. In Phase 3 trials, however, the testing had to be paused twice when volunteers experienced neurological problems. The Food and Drug Administration did not directly tie the vaccine to the problems, but when the agency allowed the trial to resume in the United States, it advised the company to be vigilant for any signs of similar problems.In their announcement on Monday, AstraZeneca and Oxford said that no serious safety issues were confirmed related to the vaccine.How much does the vaccine cost?AstraZeneca’s vaccine has a number of advantages over other leading vaccine candidates: It’s easier to mass produce and store, and it’s also cheaper, at $3 to $4 per dose. That reflects the prices paid by governments like the United States that have placed orders for tens or even hundreds of millions of doses of the vaccine. U.S. health officials have promised that COVID-19 vaccines will be available free of charge to any American who wants one.Does this mean it will soon be available in the United States?There’s still a long way to go.It is not yet clear whether the results announced Monday are enough for AstraZeneca to take the first formal step of the regulatory process: submitting an application to the FDA to get emergency authorization to distribute its vaccine. AstraZeneca plans to start testing the half-strength initial dose in its continuing United States trial and to ask the agency for guidance on how to proceed. The agency is likely to advise the company to collect more data on its promising dosing plan before submitting a formal application to authorization, several vaccine experts said.Collecting more data might mean waiting for more results from participants in Britain who got the half dose. It might also mean waiting for the first results from the American study, which aren’t expected until next year.How does the AstraZeneca vaccine stack up to the other candidates?Outside experts have plenty of unanswered questions.“The only thing that you can really say right now is that the vaccine seems to work,” Florian Krammer, a virologist at the Icahn School of Medicine at Mount Sinai in New York City. “It’s just hard to say how well it works compared to others.”Experts have had a hard time parsing the results because of the way they were announced. Like the results from Pfizer and Moderna, the data on AstraZeneca’s vaccine was summarized in a news release.Although the announcement gave efficacy rates, it left out details that would have helped outside researchers independently assess the data: It did not say how many cases of COVID-19 were found in the group that got the half-strength initial dose, or in the group that got the regular-strength initial dose, or in the group that got a placebo. It also did not say how many severe cases were found in the placebo group.The results were pooled from across the two studies in Britain and Brazil, which have slightly different designs. To complicate matters further, details weren’t available on exactly how those trials were designed, because AstraZeneca and Oxford haven’t publicly released the protocol documents that serve as a road map for how those trials are evaluating the vaccine. (AstraZeneca has, however, released the protocol for its continuing trial in the United States.) That means we don’t know, for example, how many COVID-19 cases will need to turn up in order to prompt the end of the British and Brazilian studies.Some of these questions may be answered when the results are published in a peer-reviewed journal, which is expected soon.Untitled Carousel 79375187 79205553 79379294 79367253
Categories: Business News

‘Big Brother’ Amazon targeted in fight with Mukesh Ambani over Kishore Biyani's Future

November 25, 2020 - 11:23am
A battle between Amazon.com Inc. and Reliance Industries Ltd. to dominate India’s $1 trillion consumer market is stoking nationalist rhetoric in a courtroom and outside, as the two companies tussle over the future of a distressed local retailer.At the center of the case is Amazon’s efforts to block Reliance’s planned purchase of Future Group’s assets, saying the Indian retailer violated a contract by agreeing to a sale to a rival controlled by billionaire Mukesh Ambani. The Delhi High Court is now weighing if the U.S. e-commerce giant has any legal basis to object to the transaction and a ruling is expected in weeks.The legal spat has not only revealed the intensity of the fight between two of the world’s richest men -- Jeff Bezos and Ambani -- but has also sparked a “foreign versus local” debate. A lawyer for Future, in his argument, painted Amazon as the “Big Brother in America” out to crush a small local company, while a retailer lobby group declared its “support to Indian company Future Group in its fight against Foreign Amazon.”For its part, Amazon wants Indian courts and regulators to enforce a business contract in what it views as a commercial dispute. If Future is allowed to renege on its contract with Amazon, it may signal to global investors that investments in India are risky, the U.S. company alleges. That is an inconvenient image at a time when Prime Minister Narendra Modi needs foreign investment to create jobs and reboot an economy pummeled by the pandemic.The stakes are high for both Amazon and Reliance. Securing Future’s assets will give Reliance, already India’s biggest retailer, an unparalleled edge in a market where most of the consumers still prefer shopping in stores. That’s an advantage Amazon is not willing to cede. Nor is Amazon willing to be upstaged by nationalistic arguments after losing ground to home-grown rivals in China. India, with its billion-plus consumers, is effectively the last big growth frontier.Ambani, 63, has been playing the nationalist card as well. The tycoon, who’s been warning against data colonization since 2018, often presents Reliance as a homegrown champion and its telecommunications, retail and digital ventures as nation-building initiatives.Vocal for LocalThis week, Reliance Retail introduced the “Indie” and “Swadesh” -- meaning from one’s own country -- taglines on its e-commerce websites to promote indigenous handicrafts and textiles, dovetailing with Modi’s call to be “Vocal for Local.” In a key May speech, Modi mentioned “self-reliance” at least 17 times during a 33-minute address to the nation.In August, Reliance announced the $3.4 billion purchase of the indebted Future Group that was straining under a severe cash crunch triggered by the coronavirus-led slump. Amazon, which holds a 49% stake in an unlisted Future Group entity, objected to this transaction and secured an order from a Singapore arbitration court that temporarily put the asset sale on hold. Future petitioned against this freeze-order in the Delhi High Court.East India Co.Harish Salve, the celebrity lawyer representing listed Future Retail Ltd., told the court that Amazon was behaving “like the East India Company of the 21st century.” Amazon’s stand is “either you do business with me or you shut down,” he said, stressing that an aborted asset sale deal will lead to thousands of job losses and bankruptcy.The East India Company -- formed by a group of British merchants who arrived in India in the 17th century to trade in spices and ended up colonizing the country for centuries -- has been an unpleasant memory in Indian history. This emotive reference marks the latest Indian versus outsider dispute this year that also saw Google face pushback from Indian startups and over 200 apps from Chinese technology companies being banned following a military clash along the Indo-China border.“Amazon has no investment in Future Retail,” Salve said in court. “Reliance wants to buy, but I have to ask Big Brother in America?” he said, asking if an overseas firm should be allowed to control an Indian company’s business dealings.$6.5 BillionAmazon’s lawyer Gopal Subramanium, India’s former attorney general, countered that the American e-tailer was no Big Brother or East India Company and had in fact introduced Future Retail to a prospective investor to ease its distress. Amazon has created thousands of jobs and invested $6.5 billion in India so far, he said.Reliance’s lawyer has argued that the Singapore arbitration tribunal’s emergency order halting the transaction isn’t recognized by Indian law and the deal is crucial to save the retailer from collapse.These arguments in court were prompted by a Future Group legal petition after Amazon had written to India’s market and antitrust regulators apprising them of the Singapore arbitration order of an interim stay.Amazon suffered its first setback in the case last week, when the antitrust regulator, Competition Commission of India, approved the Reliance-Future deal. Earlier, Reliance said it intends to complete the transaction “without any delay.”--With assistance from Upmanyu Trivedi.
Categories: Business News

Indian stock market rally to continue in 2021 on vaccine hopes

November 25, 2020 - 11:23am
By Indradip Ghosh and Rahul Karunakar BENGALURU: India's stock market rally is set to continue and hit new record highs in 2021, according to a Reuters poll of equity strategists who overwhelmingly expected corporate earnings to return roughly to pre-pandemic levels within a year. The Nov. 12-24 Reuters poll of over 35 equity strategists predicted the BSE Sensex index, which is currently trading at a record high, would set new all-time peaks in the next year. It was forecast to rise about 3% from Tuesday's high to 45,750 by mid-2021. It was then predicted to rise another 4% to 47,550 by the end of 2021, with forecasts ranging from 36,000 to 54,400. Those forecasts were based on recent progress in developing COVID-19 vaccines even as cases rise around the world, according to over three-quarters of strategists, or 26 of 34, who answered an additional question. Global stock markets have rallied since a sharp sell-off in March, ignoring deep recessions in most economies and driven largely by billions of dollars of fiscal and monetary stimulus and hopes for a swift economic recovery. Emerging market assets have also gained on the weakness in the dollar, which hit a three-month low against a basket of currencies on Monday. The Sensex has repeatedly hit record highs this month, surging more than 10% on hopes for an economic revival on coronavirus vaccine progress. "Looking ahead, continued improvements in global risk appetite will further boost Indian equities, despite the weakness of the economy," said Shilan Shah, senior India economist at Capital Economics. From a low of 25,638.9 on March 24 at the start of the pandemic, the Sensex has rallied over 70% to a record high of 44,601.6 on Tuesday, marking about an 8% gain for the year. That was despite Asia's third-largest economy shrinking nearly a quarter in April-June, much worse than forecast and pointing to a longer road to recovery. India - the world's fastest-growing major economy until a few years ago - now looks to be headed for its first full-year contraction this fiscal year since 1979, according to a separate Reuters poll which predicted gross domestic product would take over a year at least to reach pre-COVID-19 levels. But asked in the latest poll when corporate earnings would return to pre-COVID-19 levels, 28 of 32 strategists said within a year, including 10 who said within the next six months. "We remain in a bull market that started in March, and even though one should expect corrections along the way, the equity market may have more legs before it tops out," said Ridham Desai, equity strategist at Morgan Stanley. "We raise EPS estimates and (the) index target. As revenues slowed during COVID-19, companies were quick to cut costs to protect margins and profits relative to expectations. We are now seeing an improvement in earnings estimate revisions breadth and earnings estimates."
Categories: Business News

Work from home revolution is a surprise boon for India’s women

November 25, 2020 - 11:23am
The coronavirus pandemic has hit women worldwide with job losses and closures of childcare centers. Yet a surprising bright spot is emerging: India’s $200 billion technology services industry, where new rules are expected to provide female workers with a broad swath of flexible work arrangements and fresh employment opportunities.On the outskirts of New Delhi, Teena Likhari, 45, quit her job running operations for the Indian back office of a Silicon Valley company in 2018 because of a family medical emergency. Looking to rejoin this year, she expected a market stunted by lockdowns. Instead, the pandemic had made work-from-home mainstream in her industry, which had long shunned the practice.Not only did the operations manager quickly land a job with Indian outsourcer WNS Global Services, but working from her home in the city of Gurgaon, she began overseeing a 100-member team in the city of Pune about 900 miles away.Likhari is one of the early beneficiaries of India’s decision to lift decades-old restrictions on remote work in back office firms because of the pandemic. The tech services industry -- one of the country’s most important financially -- can now allow employees to shift from traditional offices to work-from-anywhere arrangements, permanently if needed. Indian women, who have often had to sacrifice for their husbands’ careers or other commitments at home, have much to gain from the policy change.“Even a year ago, an operations leader working remotely would’ve been unimaginable,” said Likhari, who has seen scores of women quit work after childbirth, marriage or when a family member fell ill. “The change will allow so many career women like me to do what we do from home, it’s a game changer.”India’s large numbers of English-speaking graduates and cheaper costs relative to the West have spawned a sprawling industry that’s often called the world’s back office because of its global reach. The broad outsourcing sector, which includes technology services in addition to business processes, employs about 4.5 million people. Foreign banks from Deutsche Bank AG to Barclays Plc run wholly owned centers handling everything from global payrolls to technology infrastructure maintenance for themselves and customers. Local outsourcers Tata Consultancy Services Ltd. and WNS offer everything from data analytics to support on financial and accounting processes to international clients.The pandemic has changed workplaces globally but the new norms are particularly significant in India. Social conventions that required women to move to their husband’s locations or stay with family in small towns, or simply be available inside the home to care for elders and children have shut out millions of qualified female workers. Greater flexibility and the opportunity to work from anywhere would give them choices they’ve never had before.Also, India’s old rules - originally designed to prevent misuse of leased telecom lines - had prevented permanent work from home arrangements in back offices. But the pandemic pushed the government to remove decades-old reporting obligations, such as those requiring companies to provide office network diagrams in order to get international communication circuit allocations. The changes opened the door for people to work from home on a long-term basis.A huge segment of working women in India, particularly the less privileged, have faced many of the same problems that have beset their global counterparts during the pandemic as they’ve had to juggle childcare, online schooling and office work from home, forcing some to drop out. Millions of female rural workers and daily wage earners lost jobs because they can’t work from home. Yet, the changes in the technology services industry show just how deeply the pandemic is forcing Indian companies to reimagine workplaces.Companies like WNS, which caters to the likes of Virgin Atlantic Airways Ltd., Tesco Plc and Avon Products Inc., are envisaging a hybrid office and home model, satellite offices in small cities and a blend of full-time employees and gig workers. “We’ll see work going to people rather than people going to work,” said Keshav Murugesh, group chief executive officer of WNS which employs 43,000 workers globally, nearly 30,000 of them in India. “With flexible hours or selected work days, over 100 million Indian women with secondary degrees, could potentially find employment,” he said.Mumbai-headquartered Tata Consultancy, closing in on half a million workers, has already committed to a “25-by-25” strategy -- by 2025, only 25% of its workforce will be working inside an office at any one time.Asia’s largest outsourcer with $22 billion in annual revenue. “More women will stay in the workforce, more will reach senior leadership levels.”A third of India’s technology services labor force comprises women, already a better gender ratio than most other industries in the country, Nasscom, the industry trade association says. Work from home opportunities in back offices may now offer more opportunities to qualified women in small towns who aren’t allowed to migrate to bigger cities for work.Most of the back office outsourcing centers are located in sprawling campuses within big cities like Bangalore or New Delhi. Barclays, for instance, has over 20,000 workers providing technology solutions globally and UBS Group AG has 6,000 employees, about a third of them in Mumbai alone. Deutsche Bank employs 11,500, nearly half of whom are in the neighboring city of Pune. Most of these workers have been operating from home during the pandemic.“There is so much talent in smaller cities that has been untapped so far,” said Madhavi Lall, head of human resources at Deutsche Bank India. “Flexible work arrangements would certainly bring that talent to the fore, especially women who find it difficult to migrate or shift their base.”The pandemic has pushed discussions on future work models and strategies, especially with regard to arrangements like staggering employee shifts, rotating days or weeks of in-office presence, she said. And that along with the change in India’s government rules will enable more women to join the workforce.While India is evolving, cultural norms need to progress further, said Debjani Ghosh, president of Nasscom. Added flexibility could certainly improve women’s participation in the workforce. But it could also increase pressure to simultaneously deliver on the home front.“If work-from-anywhere has to succeed,’ Ghosh said, “the mindset that women have to work as well as single-handedly manage the home has to change.”
Categories: Business News

Bureau of Indian Standards to bring service norms for e-commerce companies, aggregators

November 25, 2020 - 8:23am
NEW DELHI: The Bureau of Indian Standards (BIS) is in the process of setting standards for services provided by ecommerce companies and aggregators like Flipkart, Ola, AirBnB among others.The BIS, which lays down norms with regards to quality and safety of goods sold in the country, has been in discussion with various stakeholders to lay out standards for several issues ranging from standardisation of invoices and websites.It also plans to come out with certification for secure websites in order to curb the menace of fly-by-night operators in the digital commerce industry. "There are several fraudulent websites that fleece money from consumers under the garb of being an ecommerce firm selling goods. The certification will help consumers in identifying the reliable ones," said an official who did not want to be identified."The idea is to safeguard consumer interest," the official added.These standards will touch upon areas which are outside the scope of the ecommerce policy in order to avoid any overlap.The bureau has set up various committees to decide these standards. All major companies including Snapdeal, Flipkart and JioMart are a part of these committees.
Categories: Business News

Post-Diwali sales drop leaves smartphone companies with mixed feelings

November 25, 2020 - 8:23am
NEW DELHI: After record-breaking smartphone sales until Diwali, demand has slumped 20-25% on-month in November so far, retailers and experts said.A national retail store association said it was a Black Diwali this year, with sales falling over 50% on-year. Smartphone sales likely fell as much as 25% in November and may decline further in December, according to Counterpoint Technology Market Research. Month-on-month sales usually fall right after Diwali, but the downside this year could be sharper given that peak demand in the lead-up to the festival was the highest, analysts said."September usually records the highest shipments as brands begin stocking up for festive sales. But after Diwali sales, there is an immediate drop, which is close to 20-25%," said Tarun Pathak, research director at Counterpoint."The general trend in the festive season is that Diwali sales, backed by discounts and deals, witnesses 2-3 times of usual business and an equal drop immediately after Diwali, and the next month the demand normalises," said Ashwini Bhadoria, VP-exchange programmes and alliances at Cashify. "Right now, we are at one-third of business of our peak days."Top brands including Xiaomi, Vivo and Realme all reported their highest Diwali sales this season while Apple recorded its highest shipments in the July-September period, even before the launch of its latest iPhones."Mainline retailers were anyway witnessing Black Diwali this year with sales having declined by 50%. October was the worst month for us. There was some pick-up in November because of Diwali but now it's again heading towards the worst," said Arvinder Khurana, president of the All India Mobile Retailers' Association, which represents 150,000 stores.
Categories: Business News

Stars powering D-St rally on a strong base, can go further

November 25, 2020 - 8:23am
ET Intelligence Group: Every market rally has its own winners and skilled investors recommend to stick to the winners. In the current rally, over 50 stocks in the BSE 200 index have more than doubled from their lows in March but not all will be able to retain the momentum. ETIG lists 12 stocks that seem to hold more steam given their sound business models and demand revival over the past few months.Adani EnterprisesAdani group companies have emerged as the biggest gainers in the recent rally. Every business including renewables, ports, power and gas distribution that the group has ventured into has created value for investors. The flagship company, Adani Enterprises, has recently forayed into airports, aerospace, defence and data centres and the interest in the stock is likely to remain high.Aurobindo PharmaThe company has reported a faster recovery in the injectables segment than expected. The management has guided for a 20-23% annual growth in FY20-23 for the segment. Given this, the current earnings multiple of 16 still looks attractive despite the sharp stock gain over the past few months.Ashok LeylandThe revival in the CV demand and the company’s efforts to expand the market by launching models in the light CV category should help sustain the growth momentum. The cost optimisation programme and debt reduction will also support margin expansion. Balkrishna IndustriesThe tyre manufacturer reported a blowout September quarter by clocking record volume. The management has a firm growth outlook in the second half of the fiscal year. Analysts expect over 20% annual earnings growth between FY20 and FY23. The stock trades at 16 times FY23 earnings.EmamiHigher revenue contribution of nearly 60% from the robust rural market has brought the stock back in focus. Alleviation of promoter level pledging concerns will also re-rate the stock which was the primary reason behind cheap valuation multiples vis-à-vis peers.InfosysThe country’s second largest software exporter revised the revenue and margin guidance upwards for FY21 while reporting a sustained deal flow in the September quarter. The momentum should continue given the spate of new deals and acquisitions over the past few quarters.Jindal Steel & PowerThe company’s September quarter performance was way better than expected. For October, standalone sales were up 10% year-on-year, production was up 13% and product prices have risen by up to 10%. This paves way for a sustained growth of company. 79395967Mahindra & MahindraThe continued buoyancy in the tractor segment is likely to drive earnings growth of the country’s largest tractor maker. M&M increased tractor industry volume growth outlook to low double digits in the current fiscal year. The contribution of the farm equipment segment to the operating profit in the September quarter reached more than two-thirds with 197% RoCE.Motherson SumiThe auto ancillary major has set a revenue target of $36 billion by FY25 compared with $10 billion in the previous fiscal. The automotive segment is expected to contribute 75% of the total targeted revenue. It expects to achieve the target by entering into new geographies and increasing content per vehicle.Muthoot FinanceA 30% year-to-date rise in gold prices will give further legs to gold loan growth. In the first-half of FY21, loan growth was muted due to funding constraints amid the pandemic outbreak. However, with improved liquidity in the system over the past few months, the growth in the second-half is expected to be strong given its leadership in the segment.PI IndustriesThe agro-chemical company which does custom synthesis manufacturing for global majors has reported strong growth. The domestic business too is growing fast with the revival in the rural economy. The Management has guided for 20-25% revenue growth in FY21.Piramal EnterprisesThe company’s contract research and manufacturing pharma division is growing at over 15% annually. Over 90% of the company's net worth is invested in the finance business which attracts lower valuation due to high exposure to real estate business. A gradual recovery in real estate demand augurs well.
Categories: Business News

13,200 bulls’ target for November expiry

November 25, 2020 - 8:23am
Mumbai: With markets having comfortably surpassed the 13,000 psychological barrier, rising almost 12 per cent so far in the current series, Nifty bulls are now aiming for the upper band of the 12,600-13,200 range for November expiry, due Thursday. Post this, markets could consolidate with a positive bias, said analysts.The precise range, based on the 13,000 straddle value — combined call and put option price — at closing Tuesday, is 12,833-13,167. As the risk-on rose, MCX gold futures shed 1.85 per cent while silver futures traded 2.5 per cent lower.Such has been the confidence of bulls that they sold a massive 26.63 lakh shares (75 shares make one lot) at the 13,000 put, with the market closing just 55 points above this strike. This put, with 37.11 lakh shares, has the third - highest open interest after the 12,800 put, making it a strong support.Simultaneously, both, 12,900 and 13,000 calls, saw significant short covering, showing bears have been trumped for now by the momentum."The heavy put writing is a clear signal that bulls don't expect the market to fall from current levels, said Rajesh Palviya, derivatives head, Axis Securities. "I am expecting the series to end nearer to or at 13,200."Every rise in the market in the current series has seen massive put writing at or slightly out of the money, with massive short covering of calls, and Tuesday was no different . The active options' put call ratio rose to 1.63 from 1.31 Monday."The market could test the 13,200 mark before consolidating with a positive bias,” said Amit Gupta, fund manager, Isec PMS. "Post this action will be stock specific."Not all market mavens are as optimistic though. UR Bhat, director Dalton Capital Advisors, expects the market to pull back to 12,600 initially, after or at the end of November , when the MSCI flows come through.
Categories: Business News

JSW Steel to acquire 26.45% stake in JSW Vallabh Tinplate for Rs 35 crore

November 25, 2020 - 2:22am
Mumbai: JSW Steel has entered into a legally binding share purchase agreement to acquire the remaining 26.45% stake of JSW Vallabh Tinplate for a total sum of Rs 35 crore from the existing third party shareholders as it will add strategic value, the company said.“JSW Steel Limited (“Company”) has entered into a legally binding share purchase agreement to acquire JSW Vallabh Tinplate Private Limited in one or more tranches, 1,32,37,227 equity shares of INR 10/- each,” the company said in a BSE Filing on Tuesday.Upon closing of the transaction JSW Vallabh Tinplate will become a wholly-owned subsidiary of the company, with the company's direct and indirect shareholding in JSW Vallabh Tinplate increasing from 73.55% to 100%, the company said.“The prospects for tinplate are encouraging and it will be of strategic importance for JSW Steel Ltd to become an important player in this segment,” the company said in its statement. The company clarified the acquisition does not fall within related party transaction(s) and the promoter/ promoter group/ group companies do not have any interest in the entity being acquired.JSW VTPL manufactures tinplate and has a 1,00,000 MT per annum tinplate manufacturing facility in Beopror Village, Rajpura, Patiala District in the State of Punjab in India.The company has clocked a turnover of Rs 534.74 crore during FY 2019-20.In the year 2014, JSW Steel marked its entry into tinplate business, by acquiring 50% stake in Punjab-based Vallabh Tinplate Pvt Ltd (VTPL) for about Rs 46 crore. VTPL was owned by Vardhman Industries Ltd, However, In the year 2019, JSW Steel completed the acquisition of Vardhman Industries Ltd (VIL) by infusing Rs 63.50 crore into the debt-ridden company.
Categories: Business News

EU steel market’s demand recovery to boost Tata Steel Europe's earnings in H2 of FY21

November 25, 2020 - 2:22am
Mumbai: For Asia’s oldest maker of the primary infrastructure alloy, Tata Steel, Europe has suddenly become very crucial, as the old continent shows distinct signs of stirring back to life despite isolated lockdowns.Top steelmakers in Europe have raised prices of carbon steel – something that would have a material impact on their performances. So much so that Tata Steel Europe may post positive earnings in Q3 and Q4, say analysts.“Europe is witnessing price hikes in carbon steel…which if it sustains for longer will lead to earnings upgrades for companies including Tata Steel,” said global brokerage firm, Morgan Stanley in its recent report.ArcelorMittal has raised its EU HRC spot prices by euro 600 per tonne from around euro 540 per tonne. If accepted, this would take the European spreads to a record level of around $400 per tonne vs the historical average of $244 per tonne, other steelmakers will follow suit.“Most of the European peers like ArcelorMittal, SSAB and Voestalpine have indicated a probable pick up in demand in the Dec 2020 quarter on a sequential basis with potential for better spreads,” said Morgan Stanley’s reportTata Steel did not comment.Along with a strong demand revival, a structural shortage of steel and lower solid fuel prices are also helping boost profit performance. “While capacities idled in Q1FY21 are gradually restarting, we expect supply constraints to sustain in Q3FY21…lending support to prices,” said Amit Dixit, research analyst, Edelweiss Institutional Equities.Tata Steel Europe could surprise the street in Q3 and Q4. Spreads have been increasing, and they have been booking contracts since June, and these price increases will boost their Ebitda, added Dixit.Morgan Stanley has said that a sustained period of wider spreads would benefit European operations and limit cash losses.Tata Steel reported a consolidated net profit after three quarters at Rs 1,665.07 crore for the September quarter, and Tata Steel Europe reported a loss of Rs 462.07 crore during the same quarter. “We expect the company’s European operations to post a positive Ebitda in Q3,” said Amit Murarka, research analyst, Motilal Oswal Financial Services.Tata Steel recently announced holding talks with Sweden-based steelmaker, SSAB, for the potential sale of Tata Steel’s Netherlands business, including the Ijmuiden Steelworks. While the deal is still at an early stage, analysts believe that with positive demand revival in Europe, the company will get a good deal on the sale.“The recovery in demand in the EU might result in the company getting a good price on the deal, but the deal is still at a very early stage of completing the due diligence process,” added Murarka. The recovery will come in as a breather for Tata Steel’s struggling operations at Port Talbot in the UK. While the company has planned to sell its profit-making Netherlands business, it is looking for some support from the UK government for its Port Talbot plant.“This is positive for Tata Steel India too. With Europe seeing recovery and prices moving up which will be sustained until the end of Q4, there won’t be any debt from the parent to the UK operations for FY 21 at least,” said an analyst tracking the company, requesting anonymity. Given China’s faster-than-expected recovery in demand and prices, EU prices will likely sustain until the end of FY21, said the person cited above.
Categories: Business News

OEMs stare at Rs 3.5 lakh crore capex in 7 years to meet govt's EV target: Report

November 24, 2020 - 11:22pm
Mumbai: Original equipment manufacturers (OEMs) will require a massive capex to the tune of around Rs 3.5 lakh crore for electric vehicles (EVs) in the next five to seven years to meet the government's target of 30 per cent of the total vehicles on road being EVs by 2030, a report said on Tuesday. However, it seems unlikely that OEMs will be able to incur such significant capital expenditure (capex) as the business environment has been badly hit due to the pandemic and larger OEMs are expected to take the inorganic growth path and acquire smaller, but specialised, players in the EV space, boutique advisory company Brickworks Analytics (BWA) said in the report. OEMs currently have a capex of around Rs 25,000 - 30,000 crore per year in terms of enhancing their capacity for model launches and upgradation of existing models, according to BWA. Recently, the auto sector started showing gradual recovery signs after facing disruptions due to the lockdown, which is largely attributed to pent up demand which materialised particularly during the festival season, the report said. However, what's much more worrisome is that the investments have taken a backseat, that too at a time when the government is increasingly supporting the adoption of EVs through various policy initiatives, with the vision of EVs constituting 30 per cent of the overall vehicles on road in India by 2030. The total EV sales, across segments (two-wheelers, passengers vehicles and buses) stood at 1.56 lakh units last fiscal as compared to 1.30 lakh EVs sold in 2018-19, as per the report. According to BWA, to boost the adoption and manufacturing of EVs by creating manufacturing capacities of a global scale and competitiveness, the firms' capex requirements are crucial at the initial stage. Apart from multiple factors such as price, charging infrastructure, mass acceptability and evolving technology, setting-up manufacturing units for EVs is a significant requirement for the EV market, it said. In line with rising customer demand, many auto manufacturing companies have already increased their capital expenditure to widen the scope of proposed EV businesses. However, the current crisis situation might lead them to rethink their proposed capital expenditure, said the report. As per BWA, OEMs will have to incur capex to the tune of around Rs 3.5 lakh crore exclusively for EVs in the next five to seven years to meet the government's vision. However, it seems unlikely that OEMs will be able to incur such significant capex as the business environment has been badly hit due to the pandemic, it said. Vehicle sales were already at their decadal low when the pandemic hit, and the sector is one of the worst hit during the pandemic as well. The cash accruals of OEMs were badly impacted during FY20 and FY21, and will take more time to return to pre-COVID levels, it said, adding that these two years of continuous slowdown and the subsequent capex already incurred to meet the BS-VI emission norms will restrict firms from committing significant capex towards EVs. However, BWA expects larger OEMs to take the inorganic growth path and acquire smaller, but specialised, players in the EV space, especially in the relatively lower value two-wheeler space, considering that this segment accounts for 80 per cent of the domestic auto sales. The report also said that given the expectation of an about 10 per cent contraction in the domestic economy in full year FY21, demand for EVs is also likely to slow down. Pitching for more government support, BWA said the Centre needs to come up with a scheme similar to the Technology Upgradation Fund Scheme (TUFS) in the textile sector to help OEMs upgrade towards EV technology. The amended TUFS envisages interest reimbursement on the loans taken for technology upgradation and provides one-time capital investment subsidy of 10 to 15 per cent on eligible machines for different segments with a subsidy cap. Such a subsidy, if proposed for the automobile sector, will take away some burden from the OEMs and help them achieve the EV vision, it added.
Categories: Business News

Imposed financial disincentives on telcos for not stopping unsolicited com communications: TRAI to HC

November 24, 2020 - 11:22pm
New Delhi: Telecom regulator TRAI has told the Delhi High Court that it has imposed financial disincentives ranging from Rs 34,000 to Rs 30 crore on telecom companies like BSNL, Reliance Jio, Airtel and Vodafone for not preventing unsolicited commercial communications (UCC) over their networks between April to June 2020. Financial disincentive of Rs 30 crore for failure to curb UCC on its network in April, May and June was imposed on state-run Bharat Sanchar Nigam Ltd (BSNL) along with an additional Rs 10 lakh for non compliance of Code of Practices, TRAI has told the high court. It has further said that financial disincentives to the tune of Rs 1.33 crore, Rs 1.82 crore, Rs 1.41 crore and Rs 14.99 lakh were imposed on Airtel, Vodafone, Quadrant Televentures and Reliance Jio, respectively. It has said that these amounts have to be deposited with it by the companies within 20 days from November 23 when the orders were passed. The submission by the Telecom Regulatory Authority of India (TRAI) came pursuant to the court's direction in September to start taking action in accordance with law against unregistered entities and those persons not complying with its regulations to curb the problem of UCCs. A bench of Chief Justice D N Patel and Justice Prateek Jalan had given it eight weeks time to take action and had warned that failure to do so could lead to imposition of cost on it. The court's direction had come while hearing a plea by One97 Communications Ltd, which runs online payment platform Paytm, alleging that telecom operators are not blocking "phishing" activities over various mobile networks. Phishing is a cyber crime where people are contacted by e-mail, phone calls or text messages by someone posing as a legitimate representative of a organisation to lure them to part with their sensitive data, including banking and credit card details and passwords In its affidavit filed pursuant to the court's direction, TRAI has said that financial disincentives of Rs 1.73 lakh, Rs 15.01 lakh and Rs 34,000 have been imposed on Mahanagar Telecom Nigam Ltd, Tata Teleservices Ltd and V-Con Mobile and Infra Pvt Ltd, respectively. TRAI has said that initially show cause notices were issued to the telecom companies for failure to meet laid down benchmarks and curb UCCs and after completion of due process the financial disincentives were imposed on them. It has also said that according to the monthly performance monitoring reports submitted by the telecom companies, they have taken action against unregistered telemarketers in accordance with the Telecom Commercial Communications Customer Preferences Regulations (TCCCPR) 2018, which was notified by the TRAI to curb problem of UCCs, TRAI has said that according to the performance monitoring reports, the access providers have imposed usage cap in more than 1.9 lakh cases during investigation of complaints and thereafter, warning notices were issued in 1.15 lakh cases, usage caps were imposed in around 77,000 cases and 17,000 connections were disconnected. Besides that more than 2.23 lakh headers of various principal entities have been registered till November 23. Paytm had earlier told the court that unregistered players are operating on a large scale leading to frauds to the tune of Rs 1-2 crore being committed against its customers every month. Paytm, in its plea filed through advocate Karuna Nandy, has claimed that millions of its customers have been defrauded by the phishing activities over the mobile networks and the failure of the telecom companies to prevent the same has "caused financial and reputational loss" to it for which it has sought damages of Rs 100 crore from them. Paytm has contended that the telecom majors are violating their obligations under the TCCCPR 2018.
Categories: Business News

Private equity legends are no longer living up to their hype

November 24, 2020 - 11:22pm
By Benjamin RobertsonSuperstar private equity firms have lost their edge, according to a new long-term study.Investing in buyout funds with top track records used to come with an above average chance that future returns would outstrip peers. That theory no longer stands, with first time funds performing just as well, said the study, published by the U.S. National Bureau of Economic Research and using data from about 2,200 funds over three decades.Prior to 2001, more than a third of managers ranked among the top 25% of performers at the time of fund raising went on to score market-leading returns in their next fund. Since the start of the century, top managers only had around a one-in-four probability of repeating their performance, which is “pretty much random”, co-author Tim Jenkinson said. The report doesn’t identify any firms.“It tells you it is hard to repeat top quartile performance and investors should look at broader metrics,” Jenkinson said by phone.That matters for the private equity investors, including pension funds, endowments and sovereign wealth funds, who have poured trillions of dollars into the asset class in recent years. Past performance, including quartile rankings, is an important metric for investors to decide to commit to new funds, given capital is locked away for upwards of half a decade.“A lot of investors say we need to have a track record before we can invest, but if you invested in first-time funds across the board you did pretty well,” said Jenkinson, a finance professor at the University of Oxford’s Said Business School.On average, the study found that first-time funds returned 1.93 times their multiple of invested capital, a commonly used performance metric, Jenkinson said. This put them on par with top quartile buyout funds run by established managers.Returns for existing buyout and first-time funds continued to exceed those of public markets as measured by the S&P 500, the study said. The report’s other authors are Robert Harris, Steven Kaplan and Ruediger Stucke.
Categories: Business News

After NSE, BSE declares Karvy Stock Broking as defaulter, terminates membership

November 24, 2020 - 11:22pm
The BSE followed the National Stock Exchange suit and terminated the brokerage membership of Karvy Stock Broking with effect from Tuesday.The leading stock exchange said investors having any outstanding claims against the brokerage can file their claims with the exchange within 90 days from the date of issue of the notice (by February 22, 2021).Earlier in the day, the NSE declared Karvy Stock Broking as a defaulter for non-compliance with the regulatory provisions of the bourse. In addition, Karvy Stock Broking has been expelled from the membership of the exchange, the NSE said in a circular.The move effective from November 23, was taken as the broker failed to comply with NSE guidelines, it added.Under the guidelines, stock brokers are required to fulfill their obligations and should not involve in any misconduct, or unprofessional conduct among others.Earlier, Karvy had unauthorisedly transferred securities of clients into its demat accounts by misusing the PoAs (Power of Attorney) given by its clients.In November 2019, the market regulator Securities and Exchange Board of India (Sebi) had barred Karvy from taking new brokerage clients after it was found that the brokerage firm had allegedly misused clients' securities to the tune of more than Rs 2,000 crore. The firm misused client collateral for its own trades.
Categories: Business News

Food park inaugurated in Punjab to benefit 25000 farmers and create 5000 jobs

November 24, 2020 - 8:21pm
Food Processing minister Narendra Singh Tomar inaugurated a mega food park (MFP) at Phagwara in Kapurthala district of Punjab that will benefit 25,000 farmers and create 5,000 jobs, an official statement said. "Punjab and Haryana have significant role in development of agriculture sector of India. This MFP built at project cost of Rs 107.83 crores and spread over 55 acres of land is expected to benefit about 25000 farmers," he said. Till date, 37 MFPs have been sanctioned and 20 have already started functioning.Tomar added that due to untiring efforts of farmers of these two states, India is not only self reliant in food grains but is food surplus. He said that Punjab has been ahead in production of rice and wheat however, due to reduced ground water levels, diversification of crops is required for which Punjab farmers have taken several steps. "Food processing sector needs to be focussed upon so that farmers get fair prices and related sectors can also benefit," he said in a statement. The Sukhjit mega food park is equipped with warehouses, silos ,cold storage, deep freezer and other related food processing facilities. Tomar said that the government is continuously working for welfare of farmers under leadership of Prime Minister Narendra Modi. A Rs 10,000 crore fund has been created under Aatmanirbhar Bharat, for development of food processing sector which will benefit farmers and create employment opportunities, he said. Rameswar Teli, MoS, food processing, said that latest technology and processing facilities will reduce wastage of food products and ensure fair prices for farmers.
Categories: Business News

upGrad buys The Gate Academy, to invest Rs 100 crore in test preparation business

November 24, 2020 - 8:21pm
New Delhi: upGrad, an online higher education company, on Tuesday said it has acquired The Gate Academy (TGA) for an undisclosed amount, a move that will help the company establish its presence in the Rs 40,000 crore test preparation market in the country. upGrad also plans to invest over Rs 100 crore into the test preparation business and will develop over 20,000 hours of content in multiple languages to provide access to at least one million test-takers annually. Bengaluru-based TGA operates 57 coaching centres across the country and has had 76 million video hours consumed by its almost two lakh-enrolled learners for GATE and other entrance tests for various public/government sector jobs. upGrad Co-founders Ronnie Screwvala and Mayank Kumar, in a joint statement, said the acquisition of TGA provides upGrad a non-linear growth opportunity in a new segment entry, and deeper penetration in the semi-urban and rural markets. "...(This) is in line with our core vision of making Bharat employable by adopting the mantra of lifelong learning. With every strategic move, we are ensuring that upGrad leads from the front as India emerges as the teaching capital of the world," they said. The company cited industry data to state that just the government exam prep market sees around 40 million applicants every year spending in a range of Rs 10,000. This opens a new Rs 40,000 crore market for the company, it added. Post the acquisition, TGA will operate as a subsidiary of upGrad and will continue with its brand name. TGA founder Ritesh Raushan will take on the role of CEO of the subsidiary to build this business line with upGrad providing its proprietary online learning solution and tools as well as sales, marketing, and content. "upGrad also plans to invest over Rs 100 crore into this test preparation subsidiary and will be developing over 20,000 hours of content in multiple languages to provide access to at least one million test-takers annually," the statement said. Arjun Mohan, CEO - India at upGrad, said in the coming months, the company plans to add over 100 new programmes with top national and international universities, coupled with other acquisitions in the higher education space. upGrad provides online programmes in the areas of data science, technology, management, and law. These programmes are designed and delivered in collaboration with universities like IIT Madras, IIIT Bangalore, MICA, BIMTECH, NMIMS Global Access, Jindal Global Law School, Duke CE, Deakin University, Liverpool John Moores University and others.
Categories: Business News

Nov FPI investment may equal aggregate inflows of last 2 years: Shah, Kotak AMC

November 24, 2020 - 8:21pm
NEW DELHI: Market vateran Nilesh Shah says foreign inflows in November might exceed the total inflows that domestic equities market had witnessed in the previous two calendar years.Calendar 2019 witnessed total inflows of Rs 1,01,122 crore while Calendar 2018 saw FPI outflows of Rs 33,014 crore. Net inflows for last two years stood at Rs 68,108 crore. This month, FPIs have already infused Rs 48,278 crore so far."There are 4-5 days left in the month. My feeling is FPIs will invest more money this month than it did last year. Since the market had negative foreign flows a year ago, effectively we would see two years of inflows in just one month," said Shah, Managing Director at Kotak Mahindra Asset Management.When money comes like this, prices get supported, Shah said, adding that FPIs will continue to remain bullish on India amid MSCI and FTSE index recasts.Speaking at a webinar, India Investor Show- 2020, Shah said FPI investments in November jumped significantly since PM Narendra Modi's meeting with foreign investors on November 5, making him believe the rally in the indices is here to sustain.Shah said retail investors are having the last laugh after they bought into the market at March loss, while high networth individuals (HNIs) chose to book profits after the recent rise.Shah said mutual funds have been net sellers of equities in last 3-4 months, not due to their negative view on the market, but the fact that some of the investors such as EPFO and HNIs have redeemed, which in turn has pushed fund managers to sell.On earnings, Shah said September quarter results were amazingly ahead of estimates with Nifty recording its highest ever profit of Rs 1.07 lakh crore, up 17 per cent on a year-on-year basis; that too when sales were down 7 per cent for the quarter.For such a thing, you need to expand your margins. "Earnings have come in due to tight cost control, productivity enhancement and the organised sector grabbing market from the unorganised sector. If such a performance continues, Nifty's forward earnings would move to 23 or 24 times from 30 times at present," Shah said.He said the market is discounting huge inflows from retail and foreign investors, and is hoping that HNIs will eventually jump in. It is discounting that India will not be hit by a second wave of virus as hard as the US and European economies.Shah said some of the companies would benefit while some otherz will suffer in Covid era. He gave the example of early 1990's liberalisation, where old textile mill owners used to say if their businesses are shut down, the whole country would go down the drain. The mood, he said, was quite different when the same question was asked to business managers in IT, pharma or telecom companies. "Those new industry managers," he said, "used to say that we would see a 'new India' and they really talked about tremendous opportunities ahead.""In reality, they both were right. Inefficient companies do die. There were many Sensex companies of the early 1990s that have even ceased to exist today. But IT companies creared tremendous wealth for investors," he said.Economic data talks about the past, but the market talks about the future, Shah said, as he tried to explain why the stock market is at record high levels even as the quarterly GDP has shrunk to historic lows.Nifty50 hit a record high of 13,070 earlier in the day. Latest GDP data suggests the economy contracted 23.9 per cent in the June quarter.
Categories: Business News

Asian equities' bull run to continue throughout 2021: UBS

November 24, 2020 - 8:21pm
Mumbai: Even as the Indian equities continued its upward trend on Tuesday, the bull run could continue throughout 2021, a UBS global research said.Underpinned by recovering economies, earnings should boom in 2021. We forecast 30% earning per share growth in Asia ex Japan, 5% ahead of the consensus, on the back of strong revenues and margins, the research said.The equities markets globally have been growing following the hopes of a Covid vaccine. Also investors that had invested in the US dollar as a safe bet during the peak of the pandemic are now exiting the currency. Most global investors have been selling gold and the USD and seem to be rushing towards equities.“We are much less bullish on equity returns – valuations at 15.8x 2021 EPS are already rich. Even taking into account low rates and bond yields our models suggest a fair value forward PE of 13.8x by end next year. With 12% forecast EPS growth in 2022 (still 2x estimated nominal GDP growth), that gives us only 5-6% upside by end next year. Our Japan models point to similar returns over the year. Our end 2021 Index targets are 840 for MSCI Asia ex Japan and 1850 for TOPIX,” Niall MacLeod, Strategist, UBS Securities Asia said.The research added that the some of the countries including Singapore, Indonesia and Malaysia would be able to beat China and Taiwan in 2021 equities growth. “In 2020 markets that saw the biggest negative delta on GDP growth were among the biggest underperformers. We expect this to reverse in 2021 as growth recovers more in south Asia than north Asia with relative valuations more attractive in south than north as well. We are underweight China and Taiwan – both expensive and with less recovery upside than south Asia. Tactically we are still overweight Korea and Japan for now to capture cyclical recovery but are warming to ASEAN. We add Indonesia and Philippines to our existing overweight in Singapore, with Thailand, India, and Malaysia, neutral,” the research said.
Categories: Business News

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