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Global Markets Turn Cautious, IPO News & Cues To Watch Out Today

On Monday, share markets in India finished in red, marking a negative start to the week.

The BSE Sensex closed lower by 281 points to end at 33,034 while the broader NSE Nifty ended the day lower by 97 points to close at 10,225.

Among BSE sectoral indices, metal stocks fell the most by 1.9%, followed by consumer durables stocks 1.8%. Coal India and ONGC were among the top losers.

Top Stocks in Action Today

Idea Cellular share price is set to be in focus today after the company and Vodafone India said that they have separately agreed to sell their standalone tower businesses to ATC Telecom Infrastructure Pvt. Ltd for about $1.2 billion.

The two operators have about 20,000 towers. Vodafone and Idea are in the process of merging operations to create the largest mobile operator in the country. While Idea Cellular would get Rs 40 billion, Vodafone would get Rs 38.5 billion if the tower deal goes through prior to their merger.

Coal India share price is likely to be in focus today after the company reported close to 40% fall in its consolidated net profit to Rs 3.7 billion in the quarter ended September 30, 2017 as compared to Rs 6.1 billion in the corresponding quarter last fiscal. A key factor that drove the miss was that CIL made a provision of Rs 23 billion towards wage settlement in its employee costs. What also adversely affected profitability was that other income dropped sharply by 56% YoY.

India to be Third Largest Economy by 2028

According to a recent Bank of America Merrill Lynch report, India is likely to become world's third largest economy by 2028 and overtake Japan in nominal gross domestic product (GDP).

According to the report, India is also well on track to cross France and the United Kingdom (UK) to emerge as the world's fifth largest economy after Germany by 2019.

The report assumes the Indian economy will grow at 10% (in nominal US GDP) in the next 10 years, well ahead of Japan's 1.6%, and will be driven by the services sector. At the same time, various structural factors will likely weigh on growth in China, Brazil and Russia

Disclaimer: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. ...

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The report sees three strong growth drivers over the next 10 years that will help India achieve this. First, falling dependency ratios should raise saving and investment rates. Second, financial maturity, due to financial liberalisation and inclusion, should continue to lower lending rates structurally. Finally, increasing incomes and affordability will likely underpin the emergence of mass markets, supporting an expected 7% real GDP growth.

Growth will be driven by services, as India cannot replicate the export-led strategy of Asian tigers that was possible in a different world environment during the Cold War.

Global Markets Turn Cautious

Global stock markets were cautious, as market participants showed increasing concerns about the US tax overhaul plan. Market participants in Europe will be closely watching speeches by central bank leaders, with European Central Bank President Mario Draghi and Federal Reserve Chairwoman Janet Yellen both set to speak Tuesday. In the U.S., investors will keep a close eye on the October Consumer Price Index, due Wednesday, as a proxy for inflation. While the Federal Reserve is widely expected to increase rates in December, a soft inflation reading could fuel the debate around the flattening of the U.S. yield curve.

IPO Buzz

In news from stocks in the IPO space, shares of The New India Assurance Co. Ltd (NIA) IPO debuted 10% lower on the bourses, after the general insurer saw its Rs 96 billion initial public offer (IPO) get subscribed 1.19 times earlier this month.

The New India Assurance share price ended the day lower by 9.4% on the BSE compared to the issue price of Rs 800, which was the upper end of the price band.

One space which tests the investor's contrarian philosophy is the IPO space. The demand for IPO's has reached sky-high levels. Avenue Supermarts was the first company this year to cross the 100-time subscription mark swiftly followed by CDSL and Dixon technologies lately, with MAS Financial Services being the newest entrant to the list.

Disclaimer: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. ...

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With so many new IPOs set to hit the market, it is prudent to be ready with a strategy to take advantage of the frenzy.

It's good to be very selective when investing in IPOs. Carefully analyse each company for its own merits and don't give in to the hype surrounding the public offering.

That's Ankit Shah's approach at Equitymaster Insider. He keeps a sharp eye on developments in the IPO space and keeps his readers up to date on the big-ticket IPOs.

Disclaimer: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. ...

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