[money making ideas 2020]Why are HDFC group stocks suddenly losing allure?

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

  Sebi tweaks independent directors’ norms for India Inc

  Suddenly, HDFC group stocks lose allure on D-Street

  India Inc’s earnings upgrades slowing

  Apollo Tyres grabs eyeball as it shifts to a fast lane

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

  Dalal Street looked headed for a mild gap-up start this morning. Nifty futures traded some 45 points higher on the Singapore Exchange at 7 hours (IST). Other Asian markets rose early Wednesday. Japanese, Australian and South Korean shares climbed modestly. US shares closed at a record in overnight trade on economic optimism.

  Elsewhere, US Treasuries traded steady as traders digested the latest Fed comments. The dollar has firmed up on haven demand due amid delta outbreaks. Oil climbed back above $73 a barrel. Opec+ ministers are divided ahead of a key meeting later this week on production policy. The dollar’s climb has hurt gold, which is set for the biggest monthly drop in over four years.

  That said, here’s what is making news?

  Sebi has just tweaked the rules for independent directors. In an attempt to give more power to non-promoting shareholders in a company, the markets regulator on Tuesday said that two-thirds of the members of the nomination & remuneration committee and the audit committee of the board of a listed company should be independent directors. Currently, rules say that a majority of the members of these two important committees of the board should be independent directors.

  HDFC Group stocks are losing allure, maybe because quality has come at too steep a price there. Recent tepid returns on the listed HDFC group portfolio appear to give the impression that the allure might temporarily be fading of the powerhouse that pioneered mortgage lending in the country and created India’s most valuable bank. Investor preference for beaten-down value stocks has lately crimped returns for expensive quality shares, such as those from the HDFC group, which had driven the rally in Indian equities prior to the March 2020 blowout.

  The broad-based earnings upgrade momentum that started in November 2020 is beginning to wane with upgrades for metal companies camouflaging the broadening cuts elsewhere. Global brokerage UBS has retained its 12-month Nifty target at 15,500 which implies a downside from current level of around 15,800. Its stance on Indian equities remains overweight. “Concentrated big upgrades are camouflaging cuts elsewhere. Twenty-two of Nifty-50 stocks are in downgrade mode vs. 11 a couple months ago,” UBS said.

  In a move to deepen the commodity derivatives segment, Sebi has permitted exchanges to offer cross-margining benefits to clients arbitraging between commodity index futures and their underliers, which could slash margins to trade to just one-fourth of that currently chargeable. For trading a commodity or index futures contract a client has to put up a margin to trade, comprising a value at risk (VaR) margin and an extreme loss margin (ELM). Normally VaR is 10% for a commodity futures contract and 7% for an index futures contract. In addition, an extreme loss margin of 1.25% is also applicable on both index and commodity contracts


  Apollo Tyres may regain investors’ attention after a range-bound stock performance over the past three months as it focuses on accelerating topline growth while strengthening the balance sheet. The company aims to double the revenue to $5 billion (Rs 36,000 crore) by FY26, which implies an annual growth rate of 15%. Revenues had grown by 7% annually between FY17 and FY21.

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

  RIL and the UAE’s state-run oil giant Abu Dhabi National Oil Company have announced a new petrochemical joint venture to produce chlor-alkali, ethylene dichloride and polyvinyl chloride at Ta’ziz Industrial Complex in Ruwais.

  Radhakishan Damani’s Avenue Supermarts has bought Rs 100 crore worth of retail space from property developer Sunteck Realty at its upcoming project Sunteck City in the Goregaon suburb of Mumbai.

  In a late-night filing, HDFC informed the stock exchanges that it has acquired an 8.4% stake in Ansal Housing after invoking shares pledged with the corporation for recovery of loans

  Nomura said PNC Infratech is its preferred pick in the road engineering, construction and procurement space due to a combination of strong execution, robust balance sheet and relatively inexpensive valuations.

  The Yamuna Expressway Industrial Development Authority (Yeida) has restored close to 2,500 acres of land to Jaiprakash Associates that had been reclaimed by the authority after a default by the builder.

  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 put with us for all the market news through the day. Happy investing

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