Go with the momentum or play on valuation, that is the question. And even the most seasoned investors on Dalal Street have no clear answer. A market flush with liquidity can remain irrational for longer than one can remain solvent, says Nilesh Shah of Kotak AMC. So how you maintain the delicate balance between momentum and valuation is a call every investor has to take on her own. A bubble is forming and no one knows where it will see its end.
STREET PULSE: Where we stand Nifty futures on Singapore Exchange traded some 75 points lower at 7 am (IST), signalling a negative start on Dalal Street. Global shares and oil extended losses as the spread of the coronavirus outside China accelerated with infections jumping in South Korea, Italy and the Middle East.
HERE'S WHAT TO WATCH  | MSCI's broadest index of Asia-Pacific shares outside Japan was off 0.7% to 541, the lowest since February 5. Australia's benchmark index slid 1.6% while New Zealand was down about 1%. South Korea's KOSPI fell 2.2%. Japanese markets were closed for a public holiday. |
| US stocks fell sharply on Friday after the number of new coronavirus cases escalated. Dow tanked 227 points, or 0.8%, to 28,992, while S&P500 slid 1.1% to 3,337 and the Nasdaq 1.8% to 9,576. |
| Oil prices slid as investors fretted about crude demand being pinched by the impact of the coronavirus outbreak, while leading producers appeared to be in no rush to curb output. Brent crude slumped 2.8%, or $1.63, to $56.87 a barrel while US crude dropped 2.6%, or $1.4, to $51.97. |
| The rupee declined by 10 paise on Thursday to settle at a more than one-month low of 71.64 against the US dollar amid heavy selling in domestic equities and strengthening of the American currency in the overseas market. The currency market was closed on Friday for Mahashivratri. |
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RoE Rebound… Return on Equity, a key metric to evaluate efficiency of capital allocation that had dipped to a 16-year low for BSE 500 companies, is likely to improve on several government initiatives, according to a report by Motilal Oswal Financial Services. RoEs of corporate India — excluding public sector banks (PSBs), the telecom and automotive sectors — have already improved to 14% in financial year 2019 from a decade low of 12.5% in fiscal year 2015, the brokerage said.
Read More Make in India... Hyundai Motor India, the country's second-largest carmaker, said it was accelerating the localisation plan for its electric vehicles (EV) as the government is set to hike basic customs duties on completely-built as well as knocked-down EVs and components making imports more expensive. "We understand the government's direction of Make in India. We will look to localise more," said SS Kim, the managing director of Hyundai Motor India.
Read More What's Cooking at Haldiram… Homegrown snack maker Haldiram's has held discussions with global private equity major General Atlantic for a minority stake sale, valuing the eight-decade-old company at $5-6 billion, said multiple people in the know. The development comes on the back of last year's failed talks between Haldiram's and US breakfast cereal giant Kellogg for a capital raise at a reported $3 billion valuation. NYSE-listed Kellogg Company had been keen on a majority stake, which led to the collapse of the deal.
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Voda Woes… Vodafone Idea will not be able to cash out of the Bharti Infratel-Indus Towers merged entity early enough to generate money to help pay off a bigger part of its huge adjusted gross revenue dues by March 17, the deadline set by the Supreme Court, said industry executives and analysts. There are two more steps left before the deal can be closed and these would take another twothree months, they said. The merger will have to be first cleared by the National Company Law Tribunal-Chandigarh and then taken on record by the Registrar of Companies.
Read More Hard Bargain… All three suitors for Altico Capital — SSG Capital, Cerberus Capital Management and the incumbent management team — have revised their offers further, as lenders to the cash-strapped home financier drive a hard bargain that may see them recover at least 67% of the total dues upfront, said people in the know. The three submitted their latest offers on Friday after lenders had met last Monday to consider the earlier proposals. A key issue is whether to wind down Altico or keep it as a 'going concern'. Creditors and bidders are slated to meet Monday.
Read More Meanwhile... Power Futures Are Here… India's power sector is poised to open up for forward and derivative contracts trading on exchanges as decadelong jurisdictional issues between the Sebi and the electricity regulator are being resolved. That's seen as paving the way for more efficient and reliable energy trading in line with global practices. Experts said this will allow distribution companies to trade their forward contracts, increase power trading and discourage instances of utilities reneging on contracts.
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