DHFL depositors face haircuts | ZEE promoters raise Rs 4,500 crore to repay debt | Auto volumes may lose steam after festival sales

MORNING NEWSLETTER 22 Nov, 2019 | 08:25 AM IST SENSEX 40,575 -76.47 NIFTY 50 11,968 -30.70 Gold 37,944 -211.00 USD/INR 71.77 -0.05

Good Morning! While the divergence between the market and the economy is being blamed on the abundance of liquidity, Dalal Street veteran Vallabh Bhanshali has another theory: he says Indian market is different from a classic liquidity-driven market, where liquidity becomes blind and enters every home. "We have got liquidity and also the intelligence in it. And some stocks are quality-driven as well. Cheap prices are the biggest friend of an investor and that is what she should focus on, and not all-time highs or all-time lows SGX Nifty traded flat at 7 am (IST) this morning, signalling indecisiveness on Dalal Street. Elsewhere, Asian equities rose, bouncing from a three-week low touched a day earlier, but gains were capped by persistent worries over the status of US-China trade negotiations. HERE'S WHAT TO WATCH MSCI index for Asia-Pacific shares outside Japan rose 0.12%. Australian shares were up 0.52% and Japan's Nikkei gained 0.1%. On Wall Street, Dow fell 54.8 points to 27,766, while the S&P 500 lost 4.92 points to 3,103 and the Nasdaq 20.52 points to 8,506. Oil prices rose, as investors continued observing the escalating geopolitical frictions between Yemen's Houthi rebels and the Saudi-led coalition in West Asia. WTI crude futures for January delivery rose $1.57 to $58.58 a barrel while Brent for January delivery rose by $1.57 to $63.97 The rupee pared initial losses to settle 5 paise up at 71.76 against the US dollar on Thursday on robust foreign fund inflows and softening crude oil prices. LOOK WHO'S ZEE Share Sale Fetches Rs 4,500 cr ... ZEE promoters on Thursday raised more than Rs 4,500 crore by selling shares in block deals to repay lenders. Several foreign funds, including the New York-based BlackRock, Singapore government-backed GIC, HSBC Global, Citigroup, Morgan Stanley Asia, Vanguard and Wellington Management, picked up stakes in ZEE as the promoters sold stock to repay loans. Domestic buyers included SBI MF and ICICI Prudential. The shares were sold in block deals on the NSE at Rs 304 apiece. The promoters are now left with just 5% stake in the company. Read More Junk Bonds in Demand... Demand for junk bonds is picking up, mostly from overseas banks such as Barclays and Deutsche Bank, reflecting a surge in the market for high-yield, high-risk paper. They have been snapping up bonds rated below investment grade from DHFL, Altico Capital, Reliance Capital and others. All three companies are rated 'D', or default grade. The liquidity crisis that's gripped NBFCs has led to India's corporate debt market opening up for junk bonds. Read More Aramco IPO on in Full Steam… Saudi Aramco's IPO has attracted approximately 73 billion riyals ($19.47 billion) in institutional and retail orders so far, Saudi Arabia's Samba Financial Group said on Thursday. Some 1.8 million retail subscribers have injected more than 14 billion riyals into the IPO so far, Samba, one of the banks managing the deal. Institutional subscriptions amounted to 58.4 billion riyals and 1.82 billion subscribed shares. Read More WHO'S DHFL Depositors Face Hair Cut... After the central bank superseded the board of DHFL, deposit holders with overall exposure of Rs 6,000 crore to the stressed lender face the risk of losing a large part of their savings. Public deposits contribute 7% to DHFL's overall borrowing mix of Rs 83,900 crore. Debenture holders have 37% exposure, followed by 31% of bank term loans. Read More OECD Sees Growth Rebound… The Organisation for Economic Co-operation and Development (OECD) on Thursday marginally cut India's economic growth forecast for 2019 to 5.8%, but said it would pick up to 6.2% in 2020 and further to 6.4% in 2021. The forecast came ahead of the release the GDP numbers for the July-September quarter by the government's statistics office, scheduled for November 29. India's economy grew 6.8% in FY19. Read More Meanwhile... In an attempt to allay fears that trade talks might be unraveling, the Chinese commerce ministry said Beijing would strive to reach an initial trade agreement with the US as both sides keep communication channels open. Ministry spokesman Gao Feng said Beijing was willing to work with the US to resolve each other's core concerns on the basis of equality and mutual respect, and would try hard to reach a "phase one" deal. Read More

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KEY INDICES Nifty Midcap 100 16,862  -131.75 S&P BSE Small-Cap 13,357  -57.31 Nifty Bank 31,350  -3.9 Nifty IT 15,294  -24.55 Price Movers|Volume Movers|Near 52 Week High|Near 52 Week Low

Stocks to Watch >>> Global PE majors Blackstone, KKR, Apax and TPG Capital have joined Advent and Temasek-backed Crompton Greaves Consumer in the race to acquire a controlling stake in Eureka Forbes NCLAT may have eased the way for RIL to delist textile maker Alok Industries and take it private. RIL officials feel neither the tribunal nor Sebi have rejected their plea for delisting Bad-loan aggregator Asset Reconstruction Company India (Arcil) has managed to increase recoveries to the highest in a decade in FY19, aided largely by the sale of properties across the country. The strategic sale of 53.29 per cent in Bharat Petroleum Corporation (BPCL) would be done without Numaligarh Refinery (NRL) as it is part of the Assam Accord, and it may go to OIL or IOC. Country's largest power producer NTPC may make an aggressive bid of about Rs 10,000 crore to buy out the Centre's stake in two hydro power producing companies - NEEPCO and THDC UTI Mutual Fund is eyeing valuation of Rs 10,000 crore in its initial public offering, which could hit the market before the end of this financial year UnQuote: SHARE SALE If any one divestment does not take place, we would run a big risk Vikas Khemani, Carnelian Capital Advisors

The DAY PLANNER ETMarkets Global Summit in Mumbai RBI forex reserves Japan Oct inflation rate ECB President Lagarde Speech Baker Hughes Oil Rig Count OUTLOOK STOCK VALUATION Vallabh Bhanshali, Chairman, Enam Group, says the market clearly seems stretched when we look at the top companies and leaving some 50-75 stocks, not many are performing. "The valuations are not reasonable by any stretch of imagination. But then we look at a world where one-third of the bonds are rallying at negative interest rate and another scenario is emerging," he said. TELECOM DEBT Rajan Mathews of COAI says the moratorium on spectrum payment does not really fix the ultimate problems that telecom firms are faced with, which is a debt overhang. The government needs to look at the whole AGR issue. "There is a way for the government to deal with the AGR ruling of the Supreme Court without violating the Supreme Court diktat," he said. STRATEGIC SALE Dipan Mehta of Elixir Equities says the government is testing the waters with BPCL. "It is one big serious disinvestment action and if the political backlash is not as bad as they fear, then it will pave the way for many more disinvestment candidates and that is going to completely change the entire economic landscape," he said.

STOCKS RECOMMENDATIONS PVR Ltd. Buy PVR, price target Rs 1,860: Kunal Bothra 21 Nov, 2019 | 01:03 PM IST Buy Tata Motors Ltd. Buy Tata Motors, price target Rs 175: Kunal Bothra 21 Nov, 2019 | 01:06 PM IST Buy

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