Stock Market Updates For March 31st, 2014 …

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Corporate News/Results Corner

Banks clear ABG Shipyard’s Rs 11 bn loan recast plan – Positive in short to medium term for ABG Shipyard

Banks consortium has cleared the debt restructuring package for ABG Shipyard. The Rs 110 bn CDR includes restructuring of loans to the tune of around Rs 90 bn and fresh advances of Rs 18 bn as working capital loan and another Rs 3 bn as term loan to ABG Shipyard. ABG Shipyard got 2 years of moratorium for interest payment. And after that period, the company have to repay the loan in 8 years. The interest rate has been reduced from 13.5% to 11% per annum. We believe this development to be positive in short to medium term for ABG Shipyard.

As per media reports, Jain Irrigation likely to sell stake in food processing business – Positive in short to medium term for ABG Shipyard .

As per media reports, Jain Irrigation Systems is looking to sell a stake in its food-processing business to private equity funds to raise up to Rs 6.1 bn as it seeks to cut debt and boost growth. The company plans to divest 30-35% in the food-processing unit to strategic investors for $80-100 million. The company has held preliminary talks with private equity funds, including Warburg Pincus. The money generated from the stake sale may be used to retire part of Jain Irrigation’s substantial debt amounting to ~Rs 29 bn. The company is l ikely to transfer its food-processing business to a separate company as part of the exercise.

Economic & Other News

FDI goes down by 3% to USD 22bn in 2013

Foreign direct investment (FDI) in India dipped by 3% to USD 22.03bn in 2013. In 2012, India attracted USD 22.78bn of FDI, according to the data by Department of Industrial Policy and Promotion (DIPP). Services, pharma, auto, construction, telecom, computer software and hardware, chemicals and power were among the sectors that attracted foreign investment in 2013. The countries which invested in India during the year include Mauritius, Singapore, the UK, the Netherlands, Japan, Germany, France and UAE.

Karnataka overtakes Gujarat in industrial performance, Maharashtra tops the list

The latest annual survey of industries shows in 2011-12 Karnataka has toppled Gujarat from the second position in terms of Industrial performance with latter possibly suffering because of the slowdown in exports. Maharashtra continues to lead the tables of net value added, which is simply total output minus the total input and depreciation. Gujarat had been on the second position since at least 1998-99. Tamil Nadu and Andhra Pradesh are fourth and fifth on the list.

World News

Japan February Industrial Production dips 2.3%

Industrial production in Japan contracted a seasonally adjusted 2.3% on month in February, falling for the first time in four months. The headline figure was well shy of forecasts for an increase of 0.3% following the 3.8% increase in January. On a yearly basis, industrial production added 6.9%, also missing expectations for 9.9% following the 10.3% jump in the previous month. Industries that mainly contributed to the decrease included transport equipment, business oriented machinery and communications equipment.

U.S. Consumer Sentiment deteriorated slightly in March

Consumer sentiment declined to a final March reading of 80 from a final February level of 81.6. That was the lowest level since November for the closely watched gauge of U.S. consumer attitudes.

Economists expected that the index would rise to 81.0 from a preliminary reading of 79.9. Rumblings about the Federal Reserve possibly raising interest rates sooner than expected may be causing some anxiety.

Rally to continue with Bulls on the Rampage!!

CNX Nifty (CMP 6696):

Relentless buying by FII’s in cash segment in anticipation of a Narendra Modi victory with stable global cues on easing of Geo-political tensions pertaining to Ukraine has led the Nifty to inch upto its life-time highs of 6700 zone. With 6500 & 6600 PE having maximum OI of 32-33 lakhs & along with 6700 Call having an OI of 34 Lakhs, 6590-6610 is the immediate support.

Till 6610 is held, Expect this current uptrend to continue upto 6800-6810 where the current upmove could end & a short term reversal can be witnessed. Break & sustenance below 6610 with volumes could pave in a way for a short term correction in Nifty upto 6500-6390 zone. Weekly Range could be 6610-6810.

Technically, Technical Oscillators RSI & MACD are placed above their respective averages on daily as well as weekly charts along with Stochastic placed in overbought zone on Weekly Charts. Hence some profit booking from these higher levels can be expected.

Large-caps have started to look stretched & are approaching over bought zone; focus has shifted to the quality mid-caps & small-caps where the next round of wealth would be created. Now it is all the more important to be very stock specific as in the forthcoming 1 months, the political uncertainty increasing day by day ahead of the Lok Sabha Elections in May.

Going forward, Movement of the Markets would be dictated by RBI Policy Announcement, News-Flow from the political front pertaining to the forthcoming Lok Sabha Elections, Macro-Economic data, FII Fund Flows, trend in global markets, movement of Rupee against the Dollar & crude oil price movement.

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