Wednesday, October 20, 2021
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Listen In: All-in-one stock that allows exposure to several Tata stocks | The Economic Times Podcast


Hi there, Good Morning. Welcome to ETMarkets Morning, the show about money, business and markets. I am Nikhil Agarwal. Let’s start with the headlines first.

– Govt fixes minimum reserve price for Air India
– FPIs ask Sebi to postpone T+1
– Piramal sets eyes on demerger of pharma biz
– Invesco drags ZEE to NCLT seeking EGM

Now lemme give you a quick glance on the state of the markets.

Dalal Street is likely to have a negative start this morning. Nifty futures on the Singapore Exchange traded 55 points lower at 8:20 hours (IST). Most Asian markets fell Thursday as investors remained cautious ahead of the deadline for the US debt ceiling bill later in the day, fearing a potential government shutdown, analysts said. MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.35 per cent.

Elsewhere, the yield on 10-year Treasuries fell one basis point to 1.51%. The dollar hovered near a one-year high versus major peers, following a two-day surge amid expectations for a tapering of Federal Reserve stimulus from November and a possible interest rate hike in late 2022. Oil prices fell, extending losses after official figures showed an unexpected rise in inventories in the United States although prices seem to have stabilised following a recent run of gains. Brent crude was down 11 cents at $78.53 a barrel.

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That said, here’s what is making news.

Seasoned investors know that they can have exposure to several Tata group stocks by owning just one stock – Tata Investment Corporation (TIC). Being the investment arm of Tata Sons, which holds 68.5 per cent stake in TIC, its valuation is derived by discounting the value of its portfolio. It is then imperative that the opportunity to invest in TIC depends upon the extent of the discount, which has expanded making the stock attractive in the light of rising trend in dividend payment by the company. The discount has now increased to 63 per cent from 38 per cent in 2018 largely due to a sharper gain in the underlying stocks compared with the increase in TIC’s stock price.

Delivery-based volumes on both the exchanges hit a four-year high in 2021 as investors are now keen on deploying funds with a longer perspective. Low interest rates on fixed deposits and a sharp increase in margins are also reasons for the increase in delivery volumes, said experts. According to the latest data available with the exchanges, the average daily delivery ratio – the percentage of shares actually changing hands in relation to the total traded quantity – was 38% in 2021, a level seen in 2017. The delivery ratio hit a 10-year low of 33% in 2019, and since then, it has risen steadily. The average daily delivery volume in 2020 was 35.28%, while in 2018, it was 35%.

Shares of utility companies are witnessing investor appetite in a market struggling to find momentum after hitting lifetime highs last week. Analysts said the heightened interest in these stocks is because of cheaper valuations. The BSE Power index hit a 10-year high, ending up 3.8% at 3,192 after hitting an intraday high of 3,208.6. Tata Power surged the most among utility companies, ending up nearly 9%, followed by NTPC, Power Grid, BHEL, Torrent Power, Adani Power and Siemens, which rose 2-7%. Power Grid and Torrent Power hit all-time highs.

LASTLY,

Standalone provident funds have begun to reduce their stock exposure and book profits as equity indices hit record highs, raising concerns of stretched valuations in growth assets. They are diversifying into fixed income instruments such as triple A bonds and higher yielding state government bonds even though returns are circumspect – yet safe. There are about 1,552 such funds – known as exempted provident funds – with an estimated Rs 7-8 lakh crore corpus which can invest as much as 15 percent of corpus in equities. Many funds nearly exhausted the limits through the bull run.

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NOW Before I go, here is a look at some of the stocks buzzing this morning…

HCL Technologies has signed a multi-year deal to build a digital foundation and transform the data centre business of Belgium’s
Proximus Group, a digital services and communications solutions
provider.

IndusInd Bank on Wednesday said it has acquired a 4.79 per cent stake in embattled tea plantation firm McLeod Russel India by invoking 50 lakh pledged shares of the company.

State-owned NTPC said it has got shareholders’ approval to raise up to Rs 18,000 crore through the issuance of bonds or debentures. All resolutions listed in its annual general meeting (AGM) held on September 28 were passed with requisite majority, it said in a BSE filing.

Private lender HDFC Bank added more than 4 lakh credit cards in a month, after the Reserve Bank of India lifted curbs on issuing cards last month on August 17. The bank is now aiming to add 5 lakh credit cards every month. The bank has a total card network of more than 1.5 crores.

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Do also check out over two dozen stock recommendations for today’s trade from top analysts on ETMarkets.com.

That’s it for now. Stay with us for all the market news through the day. Happy investing!



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