Why is Indian Stock Market Falling?

 

                     Why is Indian Stock Market Falling?

The stock market has taken a beating for sixth day in a row. On Thursday, 24^th September 2020, #SENSEX fell 650 points while the #NIFTY slipped below 11,000. Several factors have been responsible for the fall in #stock market. It came in the wake of #Fed US Officials reiterating that the US economy was actually much worse than the market pricing. Moreover, a reemergence of Corona Virus (COVID-19) scare in European cities followed by lockdown restrictions, are some of the main causes why the stock market has taken a plunge. We will go in detail how each one of the causes has affected the stock market and what are the future predictions.

2020 US Presidential Elections

This year’s #Presidential elections in the United States are scheduled for Tuesday, 3^rd November. History reveals that the market returns are independent of which political party occupies the Oval Office, but still, around 93% of investors believe that the US elections are going to impact their returns.

A second win for the republican candidate and current US President, #Donald Trump is predicted as most of the Presidents in the past have been reelected unless, they witnessed a recession. This probably explains why President #Trump has been recently stressing on trade. Also, if Trump is reelected, it would be favorable for the market.

On the other hand, #democratic Presidential candidate #Joe Biden has announced the reversal of 2017 tax cuts if he is elected to the oval office.

The markets depend hugely on the US President’s ability to enact legislation. Moreover, around the time of Presidential elections the stock market becomes a little unpredictable and witness fluctuations.

$2 Trillion Scam by Global Big Banks

Financial Crime Enforcement Network or #FinCEN has reported a global fraud including big banks, to the tune of $ 2 Trillion. It is revealed that many big banks have deliberately allowed fraudsters to rotate money even after they had a clue about their suspicious activities.

#HSBC, a British multinational investment bank and financial services holding company has deliberately allowed the fraudsters to move millions of dollars even after it was informed by the #US investigators about the suspicious nature of the scheme.

Another, American bank, #JP Morgan and Co. had allowed a company to move over $ 1 Billion through a London account, without even verifying, the owner of the company. It is suspected that a gangster on the #FBI’s 10 most wanted list might be the actual owner of the company.

Similarly, #Deutsche Bank and #Standard Chartered allowed drug traffickers, terrorists and mobsters to move money throughout the globe for illegal activities.

The #SAR i.e. Suspicious Activities Report submitted by the #FinCEN also includes 44 Indian banks and over 2000 transaction amounting to $ 1 billion.

Some of the major Indian banks found helping the fraudsters are – #Punjab National Bank (290 transactions), #State Bank of India (102 transactions), #Bank of Baroda (93 transactions), #Union Bank of India (99 transactions) and #Canara Bank (190 transactions).

Immediately after the scam was unearthed, stock prices of several banks involved, dipped sharply, taking the stock market by a surprise.

 London Lockdown

New #COVID-19 restrictions have been imposed in UK as the corona virus cases have been increasing. The UK Prime Minister has spoken publically that they now seem to be staring at the second wave of COVID-19 across the UK.

After the lockdown was imposed, the #FTSE or the Financial Times Stock Exchange took a straight plunge of £15billion.

Some of the worst hit companies by the COVID-19 scare are #British Airways, down by 12%; #Mitchells & Butlers, one of the biggest pub and restaurant owners of the UK saw a fall of steep 15%.      

Continuing Indo-China Border Dispute

Since mid June this year when 20 Indian soldiers have died in a brutal skirmish with their Chinese counterparts, the tension between the neighbors has only been escalating. 

Experts are also of the opinion that India’s border dispute with China will linger a bit longer and wouldn’t be easy to resolve.

With both sides imposing sanctions on each other it’s very likely that the trade gets affected. Many pharmaceutical giants in India import raw chemicals from China. The total Indian exports to China stands at $16.6 billion, while the Chinese exports to India stands at $58 billion. The two are too deeply involved in trade and any dispute is likely to impact the market negatively.  

The Indian stock market is emotionally driven and the predictably long dispute with China has taken it for a dip.

*Kindly have advise from expert for portfolio balancing before including stock in your portfolio.

*Investment in securities market is subject to market risk.

* Mr. Vinay Prakash Tiwari is a SEBI Registered investment Advisor

Investing Daddy

+917415511526

+919628519650

 

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CAMS VS CHEMCON ?

 

#CHEMCON and CAMS #IPO

CHEMCON IPO

Chemcon Specialty #Chemicals Ltd is an India based #pharmaceutical chemicals manufacturer. It is also the largest manufacturer of CMIC (chloromethyl isopropyl carbonate) chemicals in the world.

CHEMCON India has released an IPO which would be on sale from 21^st September ’20 to 23^rd September ’20.

The IPO price is fixed at something between Rs 338 to Rs 340

Minimum 1 lot consisting of 44 shares for Rs 14, 960 has to be purchased.

Maximum 13 lots consisting of 572 shares for Rs 1, 94,480 can be bought.

In wake of the scenario after the COVID 19 pandemic and given to the fact that CAMCON is the largest producer of CMIC, its growth prospects in the near future are tremendous.

#CAMS IPO

Computer Age Management Services or CAMS has issued an IPO from 21^st September 20 to 23^rd September 20 with a price band of Rs 1229 to Rs 1230.

Minimum bid quantity of IPO is 12. The IPO will be listed in BSE only.

*Kindly have advise from expert for portfolio balancing before including stock in your portfolio.

*Investment in securities market is subject to market risk.

* Mr. Vinay Prakash Tiwari is a SEBI Registered investment Advisor

Investing Daddy

+917415511526

+919628519650

 

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ADANI GREEN RESEARCH REPORT BY INVESTING DADDY

Adani Green Energy Ltd

Adani Green Energy Ltd (ADANIGREEN) is an Indian renewable energy company that is owned by the #Adani Group. #ADANIGREEN was incorporated in 2015 and in just 5 years it has grown up to become the world’s largest solar power generation company. By far, ADANIGREEN is the world leader in terms of operations, under construction and awarded solar projects. In 2017 the company got public and was listed in #NSE and got full control of solar projects in Adani Group.  

Talking specifically about AGEL, it is present in 66 locations across 11 Indian states, generating 4373 Million Units. AGEL’s #Renewable Energy Portfolio of 13, 990 MW, surpasses the total installed capacity of the entire US solar industry in 2019.

AGELL Projects

Adani Green Energy’s First project was a 20MW capacity wind power project at Lahori, Madhya Pradesh in collaboration with Noida based #Inox Wind, a subsidiary of #Gujarat Fluorochemicals Ltd.

At present, AGELL manages 5290 MW of wind energy and solar power plants and around 46 operational projects in Uttar Pradesh, Gujarat, Chhattisgarh, Madhya Pradesh, Andhra Pradesh, Karnataka, Telangana, Maharashtra, Rajasthan, Punjab and Tamil Nadu.

Present AGEL operates the 648 MW Kamuthi solar Power Project in the state of Tamil Nadu. Spanning over an area of 10 Km² it is one of the largest solar photovoltaic plants in the world.

Adani Green energy Ltd presently has 39 subsidiaries and one joint venture with French Energy major Total SA.

Nearing Rs 1 Trillion Market Capitalization

In the morning of 14^th September 20, Adani Green Energy touched a total market capital value of Rs 99, 917 Cr, just Rs 83 Cr short of the elite Rs 1 Trillion Club. Also, the share value reached all time high of Rs 638.85 on the BSE. This surge has moved AGEL ahead of several big names like #Bajaj Finserv, #Hindustan Zinc, #Bharat Petroleum #Corp Ltd, #NTPC, etc.

AGELs peer group involve the #Calcutta Electric Supply Corporation (CESC), #GET&D India Ltd, #NLC India and #REL Infra. Adani Green Energy’s only competitor in stock market is the Kolkata based CESC Ltd which is a flagship company of RP Sanjiv Goenka Group.

Though Adani Green energy has greater market capitalization, the stocks of CESC are trading neck to neck with it both on NSE and BSE.

Another important point to be considered while buying stocks is that the book value per share of AGEL at Rs 9.43 is much lower than the book value per share of CESC at Rs 712.66.

Future Growth Prospects

The future for renewable energy in India and abroad is bright. The success story of Adani Green Energy began at the 2015 United Nations Climate Change Corporation (COP 21) held in Paris. The Hon’ble Prime Minister of India, Mr. Narendra Modi reiterated his commitment to making India a game changer in the field of renewable energy.

Since then, the government has announced number of wind mill and solar power projects in several states and even many are in the pipeline. In the Union budget 2020, the Hon’ble Finance Minister has allocated Rs 220 billion to power and renewable energy sector. This is a favorable market condition for AGEL Ltd which is by far the not only India’s but also world’s largest company solar power company. It also has largest number of awarded solar projects than any of its peers.

The company has an ambitious target of achieving an installed generation capacity of 25GW by 2025.

The company has also won the single largest (8GW) solar development bid ever awarded involving total investments of $ 6 billion. The project is also expected to generate around half a million direct and indirect jobs.

With 14 GW project already operational and 8GW in the pipeline, AGEL is all set to achieve its target of 25 MW by 2025.

AGELL has also come up with a joint venture with French energy major Total SA. This is a benchmark agreement for a 2, 148 MW project. Total SA has already invested Rs 3, 707 Cr into the project through one of its subsidiaries.

The domestic and international demand for a greener and cleaner energy puts AGELL at a very sweet spot in the coming future. None of its competitors in the same segment – Tata Power Solar Ltd, Suzlon energy Ltd, etc come any closer in terms of operational value and projects in hand.

 

 

 

Technical View:

In Terms of technical Chart views & Indicators, if we study daily charts

 

It has been making a new high almost daily since 24^th of August 2020 so lump sum investment together is a bit risky for such stocks, one need to invest that day on which stock makes low. Means Buy on every dip. Stock has a potential to achieve 1000 Target within next 3 Months & 2000 Target by March 2022. 

*Kindly have advise from expert for portfolio balancing before including stock in your portfolio.

*Investment in securities market is subject to market risk.

* Mr. Vinay Prakash Tiwari is a SEBI Registered investment Advisor

Investing Daddy

+917415511526

+919628519650

 

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Research Report For HEG LTD

 

HEG Ltd

#HEG Ltd or Hindustan Electro Graphite Ltd is #manufactures and supplies #electro_graphite, globally to steel manufacturers. It is one of the leading graphite electrode manufacturers in India. The company’s manufacturing plant at Mandideep in #Madhya_Pradesh is the largest graphite electrode manufacturing plant in the world, with an annual production capacity of 80, 000 MT.  Around 80% of the production is exported to 30 countries across the globe.

HEG Ltd #Financial_Analysis

Looking at the sales data of last 5 years it is known that the company had grown steadily at 11% annually; though, the figures continuously dipped from 2014-2017.  

One of the major reasons for the company’s sales decline from 2014-2017 had been the #crude_oil prices. HEG Ltd relies on crude oil companies for the raw materials required for producing graphite electrodes. From 2014-17, crude prices shot up, thereby, making the procurement of raw material costlier for the company.

Despite all the #downfalls, in the #FY 2017-2018, the company registered tremendous growth in terms of #profit, #sales, #gross_sales, #assets, #book_value, etc; however, this trend was common with graphite manufacturers all over the globe. There was a surge in electrode prices from 2017-2018 thereby boosting profits and also bringing up some new players in the industry.

Another reasons for this growth has been the increase in demand from China, which is by far the largest consumer of graphite electrode.

It is to be noted that graphite electrode is used in the production of steel through the EAF (Electric Arc Furnace) route.

In 2017 many #Chinese steel and graphite electrode manufacturing plants were shut down on the grounds of pollution. They were producing steel through blast furnace process which does not complied with the changed environmental regulations. This in turn increased the demand for those Chinese facilities that were already using EAF route. This naturally increased the imports of graphite electrode to China from India and other countries, thereby giving a boost to HEG Ltd sales.

  Total income of HEG Ltd in Mar’16 was only 831.71 crores which rose by a small margin to Rs 867.17 crore in Mar’17. But in Mar’18, the company registered a steep rise in its total income to Rs 2762.42 Cr, rising further to Rs 6702.02 Cr in Mar’2019. However, in Mar’20 the total income has come down to Rs 2292.78 Cr due to decline in electrode prices and other factors. Total company expenses have been the all time highest at Rs 2154.85 Cr in the last one year.

In the financial year 2016-17 the company registered a net loss of 50.5 Cr as compared to a net profit of 2672.06 Cr in FY 2017-18.

It must be told that the net sale of the company has declined from 816.51 Cr in June’19 to 233.29 Cr in June’20 that is a 75% drop in sales. The decline is possibly due to drop in global graphite prices and present escalation of some Indo-China border disputes and trade sanctions.

Indian Graphite Industry and China

China is the world’s largest producer of steel, producing around 1000 MT of steel annually. The two major Indian graphite electrodes catering to the Chinese steel industry are Graphite India Ltd (GIL) and HEG India Ltd.

Favorable Chinese policies in recent past have propelled the share prices of these two Indian bigwigs to a new high. In the FY 2017-18, HEG Ltd share prices surged by a whopping 1524% while GIL was trailing behind at 821%.

However, China itself was the largest producer as well as consumer of graphite electrode in 2017. But when the Chinese government shut down several steel and graphite manufacturers using blast furnace method in 2017 citing environmental concerns, it suddenly boosted Indian graphite electrode export to China.

Currently, HEG Ltd is selling graphite electrode to China at a price of $15, 000/ ton. But, the big question is will it be able to make the prices raise further or is it going to decline with time.

Chinese steel and graphite electrode facilities those have been closed in 2017 are now back on the foot and are in the process of complying with the environmental regulations. Once that happens, it would be difficult for HEG Ltd to see profits as it had witnessed in the past. Moreover, the prices of Needle coke, a raw material used in graphite electrode manufacturing is also predicted to go up, further reducing the profit margin.

The good news is that HEG Ltd is still selling graphite electrodes to China at a price close to $15000 and this is expected to rise further until China imports more GE than it exports.  

Another point for HEG Ltd to cheer up is that Chinese plants manufacture low quality HP Grade electrodes as compared to HEG’s high quality UHP grade.

#Technical_Analysis

In Day candle view stock is looking at bottom, #indicators are also at bottom but seeing the charts from April 2020 to Sept 2020 stock is stable & showing the possibilities to get a #high jump from here.

 

Now coming into #Monthly #candlestick view at the bottom stock has made a #tweezer_bottom & after that is stable from last 6 months even during lockdown as well stock did not fall. Indicators are also looking at the support which is indicating a bull during upcoming months.

 

 

Conclusion: Recommended by Investment Advisor Mr. Vinay Prakash from Investing Daddy Investment Adviser Varanasi it is recommended that

TARGET FOR HEG BY MARCH 2021 IS 1400-1450, IF ONE IS INCLUDING INTO PORTFOLIO SHOULD KEEP WITH SL OF 370-380

*Kindly have advise from expert for portfolio balancing before including stock in your portfolio.

*Investment in securities market is subject to market risk.

* Mr. Vinay Prakash Tiwari is a SEBI Registered investment Advisor

Investing Daddy

+9107415511526

+919628519650

 

Blog: https://investingdaddy.blogspot.com/2018/07/investing-daddy-investment-adviser-to.html

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