Thursday, December 9, 2021
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Listen In: How FPIs are protecting downside from pricey valuations | 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.

– Paytm and Sapphire Foods to list today
– Tata Sons working on AirAsia India-AI Express merger
– Zomato may invest $500 million in Grofers
– Vedanta mulls demerger of some businesses with separate listing & leadership

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

Asian stocks opened lower on Thursday with investors disheartened by Wall Street falls on profit-taking and their focus shifting to the expected announcement this week of new stimulus in Japan. MSCI’s index of Asia-Pacific shares outside Japan was down by 0.53 per cent.

Elsewhere, the yield on 10-year Treasuries was at 1.59%. The dollar hovered below a 16-month peak in early Asian trade on Thursday, having lost ground on the pound and yen overnight as the U.S. currency took a breather while traders considered whether its recent surge was starting to run out of steam. US oil was under pressure on Thursday, adding to an overnight plunge on a Reuters report that the United States was asking major oil consumers like China and Japan to consider a coordinated release of oil reserves to lower prices.

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That said, here’s what is making news.

ESG-themed concerns may still be impacting the so-called ‘sin stocks’ of cigarette and liquor companies, but the fast-food companies listing on the bourses have so far managed to dodge them even as the spotlight moves to health amid the pandemic. While a large cigarette-to-hotels conglomerate ITC trades at the PE of 20.3 — lowest among FMCG companies — and leading liquor company United Spirits at a PE of 80.6; pizza company Jubilant FoodWorks is trading at a PE of 126.3.

Zomato is in talks to invest as much as $500 million in Grofers, people close to the development told ET, making it the food delivery and restaurant platform’s largest investment so far in a company. The proposed deal marks an extension of its food delivery battle with Swiggy into the so-called ultrafast commerce segment, which is attracting a slug of investor capital globally.

Foreign portfolio investors (FPIs) have adopted a switch-trade strategy to protect the downside from elevated valuations. In October, they pruned exposure to the IT sector where valuations reached a 15-year high while raising allocation to the cyclical such as banking and automobile companies where valuation are relatively lower.

LASTLY,

Institutional investors are cutting their holdings in the National Stock Exchange (NSE) as the timing of a public listing for India’s biggest bourse remains uncertain. However, the delays have not deterred individual investors from betting on India’s most profitable capital-markets platform. NSE shares have surged over 85 per cent since April this year in the unlisted market, dealers said.

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

Lower demand from small transporters who account for over half of the commercial vehicles (CV) market, partly due to lenders’ reluctance to extend financing, has impacted sales recovery in this segment, a senior executive at Tata Motors has said.

The Bombay High Court has allowed the petition filed by Dewan Housing Finance Ltd (DHFL) to discharge its name and drop proceedings against it in an ongoing investigation by the Central Bureau of Investigation (CBI).

JM Financial has jumped onto the retail fixed income investment bandwagon with the proposed launch of Bondskart.com, a digital application that would enable retail investors to trade or invest in fixed income securities including corporate bonds, a facility similar to the RBI’s retail direct platform for government bonds.

PNB Housing Finance on Wednesday said the Securities Appellate Tribunal (SAT) has allowed it to withdraw its appeal in the matter related to the Rs 4,000 crore Carlyle deal, which stands scrapped now.

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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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