Vol.

: 319
07 NOV,2016

Index
Market View

MARKET VIEW

I N T E R N AT I O N AL A N D L O C AL U N C E R T AI N T I E S H O L D T H E M AR Company Update

KET ON TENTERHOOK
The world market was discounting the victory of Hillary Clin-

Around the
Economy

Knowledge Corner

3 unaware. Now the market is discounting the possibility of Trump

Mutual Fund

Commodity Corner

5 is to do with the policies he is going to follow should he win. The

Forex Corner

Report Card

other major directions of US may be drastically changed under his

7 reign. W eather it will be positive for US and market is the future no

Short Term Call Status

8 one knows. W hile in case of victory of Hillary, the majority of poli-

Editor & Contributor

Darshana Mishra

ton since long. But the sudden rise of Trump has caught the market
victory. Since last one week pre poll surveys show parallel results
in favor of both the candidates. W hy the market fear Trump victory
tax policy, interest rate policy, international relations policy and

cies will remain same. Under the circumstances and considering the
present economic scenario of the world, this election result has a
great bearing on global currency, bond and equity market. Locally,

Special Contributors
Kunal Shah
Dhaval Ghodasara

some issues have been raised in the form of disagreement at GST

council. If the issues are not resolved in this month only, the
chances of delay in GST rollout will increase. Uncertainties are also
looming large about the UP election. All this uncertainties are keeping the market nervous and it has breached all important support of
8500-8550 range. Till the 200 DMA is not broken, it can be considered as correction in ongoing bull phase. The 200 DMA is in the
range of 8000-8100. Technically if the market breaks 8400 level de-

For suggestions, feedback

and queries
jstreet@jhaveritrade.com

cisively it can taste 8320 and 200 DMA. On upside the market
should decisively go beyond 8650 level. The next week will be a
crucial one for the global market including India.

Kamal Jhaveri
MD- Jhaveri Securities

-1-

Vol.: 319
07 NOV,2016

Company Update : Edelweiss Financial Services Ltd.

Financial Basics

Company Basics
BSE Code
NSE Symbol
EQUITY (` in Cr.)
MKT.CAP (` in Cr.)

EDELWEISS

FV (`)
EPS (`) (TTM)
P/E (x) (TTM)

1.00
0.14
20.4

79.57

P/BV (x) (TTM)

2.54

BETA

0.7

532922

9362.17

Share Holding Pattern

Holder's Name
Public
Promoter
Others

% Holding
57.47
37.11
5.42

Outlook and valuation : We forecast EPS growth of 37%/25% for FY17-18. We believe ROEs will expand 4.2 ppts
over FY16-18 to 16.4%. Despite a 90% run-up in the stock price YTD, we envisage further upside. Earnings upgrade
and higher multiple for credit business at 2x FY18F P/BV (vs. 1.5x earlier) drive our TP to Rs 150. NBFCs peers with
16-17% ROEs trade at 2.0-2.5x P/BV.
Company Overview :
Edelweiss Capital Limited (ECL) is one of India's fastest growing integrated investment banking companies. The Group's
services include investment banking, institutional equities, private client broking, asset management, wealth management,
insurance broking, wholesale financing and mutual funds. During the year 2006, the company made NBFC registration of
ECL Finance Limited and managed the first Qualified Institutional Placement under the new regulatory framework in India.
As of May 2008, the company had received final regulatory approval from the Securities & Exchange Board of India (SEBI)
to start its mutual fund business.
Investment Rational :
Strong performance in the market.
Edelweiss is one of the best pick among the NBFC space. Credit book is delivering good ROEs which I s being driven by healthy asset
quality, controlled costs and higher margins Future asset growth visibility is very high in the credit line businesses. What we specifically
like is its non monoline credit book which is well diversified across sectors.Q1 profit up by 54% YoY, and EPS by 8%. Loans grew up by
29% YOY across segments'. Credit business now forms 70% of earnings from 35% in FY11.
Edelweiss Financial Services Consolidated ROEs at 15% Ex-insurance ROEs have been improving in recent years as EDEL scales up
its credit business. Concurrently, the drag from low-yielding treasury investments has shriveled 1QFY17 annualized consolidated ROE
leapt to 15% from 12 % in FY16.Ex insurance ROE also improved to 19.4% YoY. We expect consolidated ROEs of 16-18% by FY18.
Agency business gaining strong footing
Last 7-8 years have been spent to build different agency line businesses and majority of them have gained considerable size now. In
capital market segment, broking average daily volume increased by 20% yoy to Rs60 bn for the quarter. Interestingly, broking businesses has enabled the NBFC to gain clients to whom they cross- sell wealth management, insurance products etc. Currently, nearly,
15% of its insurance products and 10-12% of housing loans are sold via its broking arm.

- 2-

Vol.: 319
07 NOV,2016

Around The World

Weekly Market Recap :
On the economic front, the GST council on 3 November 2016 approved four main tax slabs 5%, 12%, 18% and 28% under a proposed
Goods and Services Tax (GST). While there will be two standard tax rates 12% and 18% - under the GST, half of the items in the consumer price index would not be taxed at all to safeguard the interests of the poor. The growth in the Index of Eight Core Industries stood
at 5% in September 2016, stronger than the 3.2% growth seen in August, The Eight Core Industries comprise nearly 38% of the weight of
items included in the Index of Industrial Production (IIP).
The Bank of England (BoE) scrapped its plan to cut interest rates, which it said could now move up or down, and raised its forecasts for
2017 growth and inflation sharply due to the slide in sterling since Britain's vote to leave the European Union. China's official manufacturing PMI rose to 51.2 in October from 50.4 in September, adding to signs that the world's second-largest economy is stabilizing. The Bank
of Japan (BOJ) said it would keep its deposit rate steady at -0.1%.

Market Eye Week ahead :

On macro front, the government will announce data on index of industrial production (IIP) for September 2016 after market hours on Friday, 11 November 2016. Industrial production declined 0.7% in August 2016 compared with a revised 2.5% decline in July 2016. Asian
stock markets including Indian equities on Monday, 7 November 2016, will react to the outcome of the crucial US non-farm payrolls data
due on Friday, 4 November 2016.
Macroeconomic data, outcome of US presidential elections, In US, Chicago Federal Reserve Bank President Charles Evans will give
opening remarks at a conference in Chicago on Monday, 7 November 2016. The University of Michigan's Consumer Survey Center will
announce data on consumer sentiment index based on preliminary estimates for November on 8 November.

Key Events / Factors to Watch

1. Mon : Results: Aegis logistics, Britannia Industries, CEAT Ltd, ICICI Bank ltd, Sanofi India Ltd.
2. Tue : - Results: Bharat forge, BHEL Ltd, IndiGo, Ashok Leyland, Bombay Dyieng, Tata Communications.
3. Wed : Results : Cipla ltd, Apollo Tyres, Cipla ltd, Godrej Properties, Indian Bank.
4. Thu: Results: AB Nuvo, Bajaj Electricals, Blue Star Ltd, Fortis Healthcare, Jain Irrigation.
5. Fri : Results: Aarti Indusatries, Apollo hospitals, BPL Ltd, Godfrey Philips, FAG Bearings.

Knowledge Corner :
Qualified institutional placement (QIP)

These Qualified institutional placement (QIP) is a capital-raising tool, primarily used in India and other parts of southern
Asia, whereby a listed company can issue equity shares, fully and partly convertible debentures, or any securities other
than warrants which are convertible to equity shares to a qualified institutional buyer (QIB).

How much can companies raise via QIP : In a single financial year a company can raise not more than 5 times its net
worth based on the audited financial statements of the previous financial year.
- 3-

Vol.: 319
07 NOV,2016

Mutual Fund Corner

Top 10 Sector Break-Ups

Fund Name
Scheme Name

Financial
Automobile

23.62
7.23

Energy

7.96

Healthcare

9.22

Open-ended

Engineering

5.32

Feburary 2011

Technology

13.01

Services

5.61

Construction

6.88

Diversified

5.55

Chemicals

2.36

AMC

ICICI Prudential Asset Management Company

Type

Equity-oriented

Category
Launch Date
Fund Manager
Net Assets
In crore )

History

Mrinal Singh since Feb 2011

(`

Rs. 14460.6 crore as on Sep 30,2016

2014

2015

62.15

107.99

113.86

126.86

Total Return (%)

8.31

73.76

5.44

11.42

Rank (Fund/Category)

9/47

25/78

37/187

119/155

52 Week High (Rs)

62.15

108.70

120.07

128.60

52 Week Low (Rs)

47.85

58.56

106.67

97.50

NAV (Rs)

Fund (%)

Sector Weights

ICICI PRUDENTIAL VALUE DISCOVERY FUND

2013

Risk Analysis

2016

Volatility Measures
Standard Deviation

17.13

Sharpe Ratio

1.49

Beta

1.02

R-Squared
Alpha

0.78
15.62

Composition (%)
91.36

Equity
Net Assets (Rs.Cr)
Expense Ratio (%)

2830.81

7367.40

2.33

2.26

10664.05
2.24

14044.28
-

Debt

8.07

Cash

0.57

Fund Performance v/s S&P BSE 100

Fund Style
Investment Style
Growth

Blend

Value

Medium
Small

Fund
S&P BSE 100
(Rebased to 10,000)
- 4-

Capitalization

Large

Source : - www.valueresearchonline.com

Vol.: 319
07 NOV,2016

Commodity Corner
BULLION
FUNDAMENTAL: Bullion prices ended with gains on weekly basis as investors weighed the need for a haven before American presiden-

tial election against expectations of higher U.S. interest rates. Gold ended for third weekly gain, the longest run since early July, when
investors sought a haven following the U.K.s vote to leave the European Union. Global equity markets slipped amid investor concerns
about the outcome of Tuesday's U.S. presidential election, while the dollar eased, despite a solid U.S. jobs report that supported expectations for a Federal Reserve rate hike next month. An initial dip in prices was quickly bought into as investors remained on edge ahead
of Tuesday's vote. The dollar index was on track for its biggest weekly drop since July after the Federal Bureau of Investigation said last
week it was reopening a probe of Democrat presidential candidate Hillary Clinton's use of a private email server while she served as
secretary of State. U.S. job gains in October were "solid," and showed continued stable progress towards the Federal Reserve's monetary policy goals, Atlanta Fed president Dennis Lockhart said as the central bank progresses towards a possible rate increase in December. The U.S. trade deficit shrunk in September, according to new government data released. The U.S. trade deficit narrowed to $36.4
billion in September. This compared to $40.5 billion seen in August.
RECOMMENDATION : BUY GOLD @ 30200 SL 29800 TGT 30650-900 BUY SILVER @42950 SL 42200 TGT 43900-44450

BASE METALS
FUNDAMENTAL: Base metals prices last week ended with gains where copper prices ended with almost with 3 percent gains followed by

around 2 percent and over one percent gains in zinc and lead respectively. Copper continued to gains amid the weaker dollar and demand signals from China. Healthy demand signals from China, confirmed by the recent release of manufacturing PMI data, supported
the rally in copper prices. Zinc hovered near its highest in more than five years supported by a softer dollar and stronger than expected
China demand. Prices have surged by 53 percent so far this year as a shortfall of mine supply crimps production of refined metal. Glencore third quarter zinc production rose 13 percent from the previous quarter, the first time quarterly output has increased since the group
announced sweeping mine suspensions to boost prices, a production report showed. However, worrying for zinc bulls was the quarteron-quarter rise of 13 percent to 282,700 tonnes. Also a negative are large zinc inventories in warehouses monitored by exchanges and
those not reported. Zinc stocks in LME approved warehouses at 449,350 tonnes and according to Macquarie analysts inventories outside of exchanges stand at around 1.4 million tonnes; more than 13 percent of global consumption estimated at around 14.5 million tonnes.
RECOMMENDATION : BUY ALUMINIUM @ 112 SL 109 TGT 115-117 BUY COPPER @ 326 SL 318 TGT 335-344 BUY ZINC @ 158 SL 154
TGT 162-168. BUY NICKEL @ 675 SL 650 TGT 695-720.

ENERGY
FUNDAMENTAL : Energy prices on weekly basis ended with more than 10 percent losses where pressure on crude oil prices ended with

losses after data showed that crude supplies in the U.S. rose by the most since at least 1984. The U.S. Energy Information Administration said in its weekly report that crude oil inventories rose by 14.4 million barrels in the week ended October 28. Total U.S. crude oil inventories stood at 482.6 million barrels as of last week, which the EIA considered to be historically high levels for this time of year. The
report also showed that gasoline inventories decreased by 2.2 million barrels, compared to expectations for a decline of 1.1 million barrels. U.S. crude oil exports rose to about 692,000 barrels per day in September, the highest on record, from about 657,000 bpd in the
previous month, foreign trade data from the U.S. Census Bureau showed. The American Petroleum Institute said crude stockpiles rose
by 9.3 million barrels in the week to Oct. 28, more than nine times the amount expected. The API report also showed a decline of 3.6
million barrels in gasoline stocks, while distillates showed a drop of 3.1 million barrels on the week. OPEC reached an agreement to cap
output to a range of 32.5 million to 33.0 million barrels per day in talks held in Algeria in late September.
RECOMMENDATION : SELL CRUDE @ 3100 SL 3250 TGT 2950-2880. SELL NAT.GAS @ 198 SL 205 TGT 188-175.

- 5-

Vol.: 319
07 NOV ,2016

Commodity Corner

Forex Corner

Market Recap :

The Indian rupee on Monday was trading marginally lower against the US dollar, tracking the
losses in its Asian peers.

The benchmark 10-year government bond yield

was trading at 6.835% compared to Fridays close
of 6.841%. Bond yields and prices move in opposite directions.

Market Eye Week ahead :

The USDINR On daily chart pair has formed DOJI candlestick pattern. Which represent uncertainty, and other
hand pair has been trading below all short term, medium term, and long term moving average which is 20, 100
and 200.Whereas on weekly chart pair has continually taking support at 50WMA. Which suggest short term trend
is bullish. So for trading perspective, one could buy up to the level 66.85-66.95 with SL of 66.50 for target of
67.07-67.20.

USD/INR
Level

S2

S1

CP

R1

R2

High

Low

Close

USD/INR

66.74

66.84

66.97

67.07

67.20

67.11

66.88

66.93

Level

S2

S1

CP

R1

R2

High

Low

Close

EUR/INR

73.01

73.66

74.07

74.13

74.72

74.48

73.42

74.31

Level

S2

S1

CP

R1

R2

High

Low

Close

GBP/INR

81.29

82.46

83.06

84.23

84.83

83.67

81.90

83.62

Level

S2

S1

CP

R1

R2

High

Low

Close

JPY/INR

63.17

64.10

64.68

65.19

65.61

65.25

63.74

65.04

EUR/INR

GBP/INR

JPY/INR

-- 46--

Vol.: 319
07 NOV,2016

J Street Recommendations Report Card

Nifty last week opened at 8653.15 a t t a i n e d a high at 8669.84 and f a l l t o a l o w o f 8 4 0 0 . 8 4 , n i f t y F i n a l l y c l o s e d t h e w e e k a t 8 4 3 3 . 7 5 T h e r e f o r e s h o w e d a n e t f a l l o f 1 9 1 p o i n t s o n week to

week basis. Sell below 8500 was triggered last week and the low last week was 8400.25. Trader who managed to
sell had the opportunity to benefit during the week. Trader short and holding the same can maintain the stop loss
at 8670.
Top Fundamental Stocks
Rec. Date

CMP on Rec.

CMP

Target

Absolute
Return @
CMP

30/08/2016

630

656

732

-3%

Buy

25/07/2016

235

265

308

-3%

Buy

Capital First

06/06/2016

552

676

660

-4%

Profit book

Wonderla Holidays

25/04/2016

387

376

498

-2%

Accumulate

Mold-Tek Packaging

04/04/2016

138

48

179

-2%

Buy

Jamna Auto

22/02/2016

133

217

181

-4%

Buy

MT Educare

01/02/2016

164

135

230

2%

Buy

Garware-Wall Ropes

28/12/2015

425

546

550

0%

Buy

AYM Syntax

23/11/2015

121

79

223

-6%

Buy

Natco Parma

02/11/2015

509

580

636

-2%

Buy

SRF

21/09/2015

1140

1721

1374

-2%

Buy

Ahluwalia contracts

24/08/2015

235

287

368

0%

Buy

20/07/2015

190

241

255

0%

Buy

04/05/2015

298

268

430

-1%

Buy

16/03/2015

152

156

251

-6%

Buy

DHFL

16/02/2015

252

310

368

-3%

Accumulate

TV Today Network

27/01/2015

222

340

337

-1%

Buy

M&M

12/01/2015

1238

1384

1452

2%

Buy

Havells India

27/10/2014

274

396

346

-3%

Buy

PTC India Fin. Ser.

07/07/2014

39

39

45

-5%

Profit book

Adani Port

05/07/2014

280

292

347

-3%

Accumulate

Stocks
Alembic Pharmaceuticals
Coromandel
International

Infinite Computer
Sol.
Sadbhav
Engineering Ltd.
Omkar speciality
Chemicals

Status

It's not important whether you are right or wrong, Its about how much money you make when you're right and how
much you lose when you're wrong.
- 7-

Vol.: 319
07 NOV,2016

J Street Short Term Call Status

Sr.
No.

DATE

STOCK

BUY/
SELL

RANGE

RANGE

16-Sep-16

BRITTANIA

BUY

3510

3540

19-Sep-16

ITC

BUY

260

20-Sep-16

BIOCON

BUY

21-Sep-16

HDFC

22-Sep-16

SL

STATUS

%
RETURN

3525.00 3690.00

3390

EXPIRE

264

262.00 275.00

252

SL

-3.60

925

935

930.00 972.00

900

TA

4.50

BUY

1385

1395

1390.00 1450.00

1355

EXPIRE

INFRATEL

BUY

370

375

372.50 391.00

358

OPEN

23-Sep-16

TVSMOTOR

BUY

347

353

350.00 367.00

337

TA

4.80

26-Sep-16

HDFC

BUY

1405

1435

1420.00 1492.00

1365

SL

-3.80

27-Sep-16

JUBLFOOD

SELL

960

950

955.00 912.00

985

TA

4.50

28-Sep-16

ITC

SELL

248

245

246.50 235.00

254

TA

4.40

10

29-Sep-16

TATAGLOBAL BUY

143

147

145.00 153.00

139

TA

5.50

11

3-Oct-16

BUY

1395

1415

1405.00 1476.00

1355

EXPIRE

12

4-Oct-16

MOTHERSUMI BUY

325

330

327.50 342.00

315

SL

-3.50

13

5-Oct-16

LICHSGFIN

BUY

596

606

601.00 624.00

576

TA

4.40

14

6-Oct-16

ASIANPAINT

BUY

1190

1210

1200.00 1258.00

1156

OPEN

15

7-Oct-16

TATASTEEL

BUY

402

410

406.00 429.00

386

TA

4.90

16

13-Oct-16

NTPC

SELL

148

146

147.00 140.00

152

SL

-3.80

17

14-Oct-16

BATAINDIA

SELL

498

492

495.00 480.00

509

TA

3.20

18

17-Oct-16

NBCC

SELL

257

255

256.00 245.00

265

TA

4.00

19

18-Oct-16

ZEEL

SELL

508

498

503.00 478.00

520

SL

-3.80

20

19-Oct-16

YESBANK

BUY

1285

1296

1290.50 1348.00

1249

TA

4.20

21

20-Oct-16

WIPRO

BUY

490

498

494.00 518.00

475

SL

-4.10

22

21-Oct-16

HINDALCO

BUY

154

156

155.00 163.00

150

TA

4.30

23

24-Oct-16

IGL

BUY

856

870

863.00 904.00

834

OPEN

- 7-

M&M

TRIGGER
PRICE

TGT

Vol.: 319
07 NOV, 2016

J Street Short Term Call Status

Sr. No.

DATE

STOCK

BUY/
SELL

RANGE

RANGE

TRIGGER
PRICE

TGT

SL

STATUS

24

25-Oct-16

LUPIN

BUY

1515

1535

1525.00

1595.00

1468

OPEN

25

26-Oct-16

DRREDDY

BUY

3180

3220

3200.00

3348.00

3090

TA

26

27-Oct-16

BIOCON

SELL

915

900

907.50

864.00

940

OPEN

27

1-Nov-16

CADILAHC

BUY

416

427

421.50

441.00

405

OPEN

28

2-Nov-16

AXISBANK

SELL

480

470

475.00

451.00

495

OPEN

29

3-Nov-16

GRASIM

SELL

945

925

935.00

885.00

975

OPEN

30

4-Nov-16

WOCKPHRMA SELL

845

830

837.50

795.00

870

OPEN

STATUS

CALLS

RATIO

TA+PB

12

66.66

SL+EXIT

06

33.33

TOTAL

18

100.00

%
RETURN

4.60

One call on daily basis is given keeping view of short term trading on closing basis.
Time frame and expected % of return is also mentioned with the suggested call.
This call are purely given on technical trading system generated by the Technical Research Desk.
Generally Expected Return on investment is 5-6 % with time horizon of 6-7 days.
Profit Booking update is considered if on an average expected return exceed 3.50-4.00 % against the
Expected return of 5-6%
Risk- Reward ratio percentage wise depends on the volatility of stock Normally it stands ( 3 : 9)

- 7-

Vol.: 319
07 NOV,2016