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PremiumAsian equities were mostly up Friday following a tumultuous trading period on Wall Street, which rebounded at the close after investors calmed down about US policies to counter surging inflation. World markets have been volatile for much of 2022 owing to China's Covid-19 lockdowns, Russia's invasion of Ukraine, and as surging inflation weighed on consumer sentiment
Samsung Electronics is in talks to hike chipmaking prices by up to 20%, Bloomberg TV reported on Friday.
Samsung did not have an immediate comment.
Samsung Electronics is the world's second-largest chip contract manufacturer, after Taiwan Semiconductor Manufacturing Co (TSMC).
India's biggest lender State Bank of India (SBI) said on Friday its fourth-quarter profit rose 41% to a record 91.14 billion rupees ($1.18 billion) as it set aside less money to account for sour loans.
Investors cheered the lower bad loan provisioning by state-run SBI, widely seen by investors as a bellwether for the broader lending industry. Shares rose as much as 3.1% to 477 rupees after SBI reported results.
Most Indian lenders have reported healthy growth for the March quarter on back of an uptick in loan growth and improving asset quality, which has helped to keep provisions low.
SBI set aside 32.62 billion rupees as a provision for loan losses, over two-third lower than 99.14 billion rupees in the same period last year, the bank said in a filing to exchanges on Friday.
The bank saw its income from interest on loans grow 8.6% to 707.33 billion rupees during the quarter. Overall lending grew 11% during the quarter, driven by a strong 15.1% growth in retail loans.
Reliance Industries Ltd’s (RIL) gross revenues for financial year 2022 (FY22) have surpassed the $100-billion landmark (at ₹7.9 trillion). These revenues include the goods and services tax (GST) and excise duty, which brings RIL’s net revenues for FY22 to just below $100 billion mark, or ₹7 trillion. (Read here)
Bank’s performance on PAR/NPL reduction and credit cost has pleasantly surprised in recent quarters. This coupled with waning Covid uncertainty improves visibility of future growth and profitability. A successful capital raising via the planned QIP (to meet MPS requirement) could act as a positive trigger in the near term as it would buffer capital adequacy by 400-500 bps. We upgrade the stock to ADD from Reduce on expectations of average RoA/RoE delivery of 1.8%/14% (factoring the capital raise). The bank currently trades at an undemanding valuation of 0.8x P/ABV and 6x P/E on FY24 estimates.
While credit cards and microfinance book still threw up material slippages, RBL looks forward to a relatively benign FY23. (2) After closing out year with tepid growth, RBL stands ready to deliver far healthier growth in FY23. (3) While margin benefited on sequential basis due to a one-off, loan mix evolution augurs well for structural margin expansion. (4) We maintain ‘Buy’ rating on RBL with a revised price target of ₹126.
Mortgage financier LIC Housing Finance on Friday increased interest rate on home loans by 20 basis points to 6.9% from 6.7% for select borrowers.
For borrowers with CIBIL score of 700 and above, the rate hike has been limited to only 20 bps, LIC Housing Finance said in a statement, adding that the revised rates are applicable from Friday.
For customers having CIBIL score (less than 700) maximum hike is 25 basis points (bps). For NTC (New to Credit) customers the hike is 40 bps.
As India’s inflation surges, the cheap single-serving packets of staples like soap and cookies aren’t budging in price -- they’re just getting lighter.
By paring the weight of fixed-price items -- popular among lower income and rural areas at the equivalent of roughly a penny, nickel or a dime -- firms are using “shrinkflation" to cope with higher input prices while keeping customers. (Read here)
India’s largest private lender HDFC Bank plans to launch a digital platform for merchants between June and September, which will allow them to accept online and offline payments on the lines of China’s Alipay. (Read here)
Shares of Tata Motors Ltd are up by more than 9% in Friday’s morning trade on NSE. This comes on the back of better-than-expected margin performance in its fourth quarter results (Q4FY22). (Read here)
Cryptocurrencies nursed large losses on Friday, with bitcoin trading near $30,000 and set for a record losing streak as the collapse of TerraUSD, a so-called stablecoin, rippled through markets.
Crypto assets have also been swept up in broad selling of risky investments on worries about high inflation and rising interest rates. Sentiment is particularly fragile, as tokens supposed to be pegged to the dollar have faltered.
Oil prices rose around 1.5% on Friday but were headed for their first weekly loss in three weeks as worries about inflation and China's COVID lockdowns slowing global growth offset concerns about dwindling fuel supplies from Russia.
Brent crude futures were up $1.68, or 1.6%, at $109.13 a barrel, while U.S. West Texas Intermediate (WTI) crude futures climbed $1.40, or 1.3%, to $107.53 a barrel.
Both benchmark contracts were, however, on track to post declines for the week, with Brent set to drop nearly 3% and WTI 2%.
Gold prices hovered near a three-month low on Friday and were set for their fourth straight weekly fall, as the strongest dollar in two decades dampened demand for greenback-priced bullion.
Spot gold was up 0.2% at $1,825.94 per ounce, in choppy trade. Earlier in the session, it hit its lowest since 7 February. U.S. gold futures were flat at $1,824.80.
Vodafone Idea's March quarter performance was a mixed bag. While the tariff hike partial pass through was lower than expected, margins saw an improvement led by lower network opex (partly with one-off benefits).
Revenues rose 6.6% QoQ to ₹10,240 crore, as ARPU grew ~7.8% QoQ to ₹128. The subscriber base decline at ~3.4 million (mn) (vs. 8.2 mn in Q3) also moderated, with churn rate at 3.4%. The 4G sub base saw addition of merely 1.1 mn QoQ to 118.1 million.
Loss was at ₹6,563 crore.
Key triggers for future price performance:
Substantial fund raising to meet capital spends to expand 4G network coverage and stay competitive
Improvement in subscriber churn and 4G subscriber metrics
Q4FY22 Result Update - Prospects pipeline remains healthy
Quick Pointers:
Management guided 12-15% growth in revenue and order inflow, while core EBTDA margin to be ~9.5% for FY23.
Tender prospects remains healthy at Rs8.53trn for FY23 (vs Rs9.06trn in FY22), comprising of domestic ~Rs6.31trn and international Rs2.22trn.
We believe that L&T is well-placed to benefit from pickup in economic activity and private capex given its financial, technical & managerial capability for sustaining, gaining market share and focus on divestment of non-core assets. Given the strong international outlook from infrastructure as well as hydrocarbon segment, prospect pipeline and continued execution momentum we expect revenue and PAT CAGR of 10.1% and 17.2% from FY22-24E. The stock is currently trading at PE of 20.2x/18.1x FY23/FY24E. We maintain our ‘Buy’ rating on stock with revise TP of Rs2,091 (Rs2,357 earlier), factoring in revised valuation for subsidiary businesses.
Q4FY22 Result Update - Short-term pain, long-term gain
Quick Pointers:
Consolidated margins of 14.6% (+210bps QoQ) surprised positively despite commodity price pressure.
Record order book of 168k units at JLR of which 46k for New Range Rover.
We maintain our positive stance on Tata Motors as the (1) PV segment will likely gain further market share led by revamped portfolio, customer preference for SUVs and rising EV penetration (2) CV volumes will continue to benefit from cyclical upturn, improving fleet utilization and freight rates (3) revival in JLR and strong order book to benefit and drive FCF generation. Our EBITDA margin estimate contract by ~60bps for FY23/24 to factor inflation headwinds. Maintain ‘BUY’ with revised SOTP based FY24TP of ₹600 at 11.5x EV/EBITDA for standalone operations, 2.5x EV/EBITDA for JLR and 9x for PV business (on improved market positioning vs 8x earlier).
India raised 205.6 billion rupees ($2.7 billion) as its biggest initial public offering priced at the top of the indicated range following strong demand from local investors and a last-minute dash by foreign funds.
Life Insurance Corporation of India will offer at 949 rupees a share, the state-run firm said in a prospectus filed Friday. Trading on the stock exchange is due to begin May 17.
The country's largest-ever IPO was oversubscribed 2.95 times as six days of bidding came to an end on May 9.
In its semi-annual review, the MSCI India Index added Bank of Baroda, Cholamandalam Investment & Finance and Jindal Steel & Power Ltd, and excluded HDFC Asset Management, Indraprastha Gas, MRF Ltd and Shriram Transport.
All changes will be implemented as of the close of 31 May. The MSCI India domestic SmallCap Index also added 50 small-cap firms to the index and removed 10 firms, MSCI said on Friday in its Semi-Annual Index Review.
Oil prices firmed in early trade on Friday but were headed for their first weekly losses in three weeks as worries about inflation and China's COVID lockdowns slowing global growth outweighed concerns about dwindling fuel supply from Russia.
Brent crude futures were up 97 cents, or 0.9%, at $108.42 a barrel, while U.S. West Texas Intermediate (WTI) crude futures climbed $1.00, or 0.9%, to $107.13 a barrel.
Both benchmark contracts were, however, on track to post declines for the week, with Brent set to drop more than 3% and WTI more than 2%.
Tata Motors has said inflation and a chip shortages are the biggest challenges for the auto major. The company will nevertheless meet its profit and cashflow targets for the year. Capex is likely to increase to up to ₹6,000 crore this fiscal. Tata Motors saw its consolidated net loss narrow to ₹992.05 crore in March quarter from ₹7,585.34 crore a year ago. Revenue from operations fell to ₹78,439.06 crore from ₹88,627.90 crore in the year-ago period.
Indian stocks markets are likely to open gap up as SGX nifty is up around 184 points compared to Yesterday’s spot Nifty closing. Asian Markets trading in green as Nikkei is up 2.6%, while Hang Seng is up 1.9%.
The previous swing low of 15670 is not far away, and it would be a matter of time to retest the same. Though the market subsidized in the oversold region for quite some time, a further correction could be disruptive in the coming period. For the time being, any breach below the 15670 odd zone would bring the possibility for the index to shed another 200-300 odd points in the near period. On the higher end, the 16000-16050 zone is expected to act as immediate resistance, while the strength only could be seen above the 16500-16650 zone.
The ongoing rampage is due to the global macro factors, hence any improvement from the overseas market should act as a catalyst for the bulls. Technically, the bearish formation would only get discarded above the mentioned resistance zone. Until that time, one should remain cautious and keep close track of global and domestic developments. Also, traders are advised to avoid aggressive bets and look for stock-specific action, while investors could now seize this opportunity by initiating accumulation in good blue-chip companies but in a staggered manner.
The Senate on Thursday confirmed Jerome Powell for a second four-year term as Federal Reserve chair, giving bipartisan backing to Powell's high-stakes efforts to curb the highest inflation in four decades.
The 80-19 vote reflected broad support in Congress for the Fed's drive to combat surging prices through a series of sharp interest rate hikes that could extend well into next year. The Fed's goal is to slow borrowing and spending enough to ease the inflation pressures.
Since February, when his first term expired, Powell had been leading the central bank in a temporary capacity.
Shares of SBI, Tech Mahindra, RIL, Bank of Baroda, Airtel, Tata Motors, among others, will be in focus today.
SBI, Eicher Motors, Tech Mahindra, Bank of Baroda, Bandhan Bank, Union Bank of India, Alkem Laboratories, Emami, Escorts, Hindustan Aeronautics, Nazara Technologies, REC, Reliance Power are among the companies scheduled to announce their earnings on 13 May.
Nifty futures on the Singapore Exchange rose 166 points, or 1.05%, to 15,982.50, hinting at a positive start to Indian indices.
On Thursday, Sensex tumbled 1,158.08 points to finish at an over two-month low of 52,930.31, while the broader NSE Nifty tanked 359.10 points or 2.2% to 15,808.
Stocks and U.S. equity futures rose Friday amid a bout of calm in global markets after Federal Reserve Chair Jerome Powell again pushed back against speculation of more aggressive interest-rate hikes.
Japan, China and Hong Kong helped an Asian share gauge climb 1%. US and European contracts advanced after a volatile S&P 500 session saw the index rebound to close little changed.
Powell reaffirmed the Fed is likely to raise rates by a half point at each of its next two meetings and isn’t “actively considering" a 75 basis-point move.
But he left open the possibility of doing more if needed to get high inflation under control. Concerns that tightening monetary policy will spark an economic downturn continue to shadow markets and have tended to snuff out rebounds.
S&P 500 futures rose 0.7%, Nasdaq 100 futures added 0.9%, and Euro Stoxx 50 futures rose 0.8%.
Japan’s Topix index climbed 1.7%, Australia’s S&P/ASX 200 index rose 1.4%, South Korea’s Kospi index increased 1.6%, China’s Shanghai Composite index rose 0.5%, and Hong Kong’s Hang Seng index added 1.4%.
Overnight, US stocks ended a volatile session slightly lower, as investors juggled fears of nagging inflation with signs it could be peaking. The S&P 500 came within striking distance of confirming a bear market since falling from its all-time high reached in January.
The Dow Jones Industrial Average fell 103.81 points, or 0.33%, to 31,730.3, the S&P 500 lost 5.1 points, or 0.13%, to 3,930.08 and the Nasdaq Composite added 6.73 points, or 0.06%, to 11,370.96.
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