Road project awards have gathered momentum in FY16, with $5.7bn of contracts awarded by NHAI till Sep-15. The ordering intensity is likely to sustain at least through next fiscal with mix skewed towards EPC (engineering, procurement and construction) vs. BOT (build-operate-transfer). EPC ordering thus far in FY16 has been more fragmented as compared to last year. Six players have market share between 8%-11% and Gayatri Projects has the highest share (16%). L&T (Neutral) has ceded market share of EPC contract wins so far this fiscal (9% share in first half of FY16 vs. 24% in FY15).

EPC road project awards pick up meaningfully in August and September: The ministry of road transport and highways (MoRTH) is targeting 10,000kms to be awarded in FY16 vs. 8,000km in FY15. ~50% are to be awarded via NHAI which has already contracted 2,600kms in first half of FY16 worth $5.7bn vs. only $1.8bn in FY15. The mix between EPC and BOT contracts is ~65:35 both by value and kms, with balance sheet risk appetite of concessionaires still remaining relatively low. So far only seven BOT projects have been awarded in the year.

Ordering momentum to continue in FY17 as well: As per The Economic Times, MoRTH is targeting to award 15,000kms in FY17 i.e. 50% more than the target for FY16, performance against which is so far is on track. The mix between EPC and PPP is expected to be 70:30. As of Sep 2015, NHAI was yet to award 14,000kms under the NHDP programme which at the current pace of ordering would take two to three years to complete.

FY16 ordering split across multiple parties; L&T appears to have lost its pole position: Amongst listed players, ITNL (IL&FS Transportation Networks Ltd) and IRB (IRB Infrastructure Developers Ltd) continue to bid for and win BOT projects. Other construction companies including L&T are predominantly bidding in the EPC space; L&T has not added any BOT road project to its portfolio in the past 2.5 years. In the first half of FY16, Gayatri Projects leads in EPC contract awards with R40bn of new projects i.e. 16% market share, L&T and five other players have won contracts worth R21-27 bn each (6 players with 8%-11% share) while ~30% of the balance contract awards are further fragmented. In FY15, EPC ordering was more concentrated with L&T leading the pack with 24% market share (Rs 40 bn of projects) by project value. L&T may still win subcontracts from EPC contractors or BOT concessionaires.

No takers yet for the hybrid annuity model rolled out in 2015: The hybrid annuity model which transferred the revenue risk of the project to the government was launched in 2015. However thus far there have been no projects awarded under the same. As per ITNL, only one hybrid project had been put up for bidding which did not receive any bids and the government is planning to launch three projects under this model in the near term.

BSE’s new contracts will allow traders to take positions across two different option contracts — call and put — with same underlying asset (such as rupee-dollar exchange rate) and with the same expiry by entering a single order. (PTI)

Leading exchange BSE will offer from tomorrow new specialised contracts named ‘straddle and paired options’ in its currency derivatives segment.

These new contracts will allow traders to take positions across two different option contracts — call and put — with same underlying asset (such as rupee-dollar exchange rate) and with the same expiry by entering a single order.

The BSE had earlier made these specialised straddle and paired option contracts available in simulation environment for testing, while they were also tested in a market-wide mock trading conducted yesterday.

The ‘paired options’ contracts are specialised two-legged contracts that allow a trader to take positions on two different option contracts belonging to the same product, at the same strike price and expiry.

The paired option contract will comprise one Call leg and one Put leg having same strike price and expiry. Buying such contract implies taking a buy position in the individual Call option contract and sell position in the individual Put option contract with same strike price and expiry.

The ‘straddle’ contract is a specialised two-legged option contract and comprises two individual legs — the first being the call option leg and the second being the put option leg, having same strike price and expiry.

Buying a straddle contract implies taking a buy position in the individual Call option contract and buy position in the individual Put option contract with same strike price and expiry.

The BSE said both these contracts are available on current, near and far monthly as well as quarterly and half yearly option contracts.

The paired option contracts are already available in the BSE’s Equity Derivatives segment and now they will also be available in the Currency Derivatives segment.

The straddle contracts will be offered in the Currency Derivatives segment to start with.

Over the past week, the BSE benchmark index Sensex lost 490.09 points or 1.87 per cent to end at 25,638.11.

The combined market valuation of top nine Sensex plunged by Rs 47,139.45 crore last week amid an overall weakness in the broader market.

Over the past week, the BSE benchmark index Sensex lost 490.09 points or 1.87 per cent to end at 25,638.11.
Barring Sun Pharma, rest nine companies have witnessed erosion in their market capitalisation (m-cap), including TCS, RIL, ITC, HDFC Bank, SBI and HDFC.

HDFC was the worst hit as its m-cap tanked by Rs 9,176.8 crore to Rs 1,84,948.43 crore, the most among the top-10 firms.

The market valuation of SBI tumbled Rs 6,675.99 crore to Rs 1,87,044.11 crore, ITC took a hit of Rs 6,583.12 crore to Rs 2,69,569 crore and ONGC saw a dip of Rs 6,544.95 crore to Rs 1,94,722.96 crore.

TCS’s m-cap dropped by Rs 4,433.46 crore to Rs 4,59,139.27 crore and HDFC Bank lost Rs 4,409.88 crore to Rs 2,67,487.74 crore.

The valuation of RIL declined by Rs 4,307.94 crore to Rs 3,12,812.09 crore and that of Infosys slipped by Rs 4,249.35 crore to Rs 2,40,673.86 crore.

Similarly, CIL took a hit of Rs 757.96 crore to Rs 2,11,629.79 crore in m-cap. In contrast, Sun Pharma added Rs 3,889.42 crore to Rs 1,81,953.67 crore in its valuation.

TCS yet again emerged as the most valued Indian firm, followed by RIL, ITC, HDFC Bank, Infosys, CIL, ONGC, SBI, HDFC and Sun Pharma.

MFs are investment vehicles that pool funds collected from investors to park in securities such as stocks, bonds, money market instruments and other assets.

Mutual funds pumped in over Rs 6,300 crore in equity schemes in November, taking the total inflow to nearly Rs 87,000 crore this year.

In comparison, equity MFs had witnessed an infusion of Rs 49,000 crore in the entire 2014. They had seen an outflow of Rs 8,700 crore in the preceding year.

According to the latest update available with Association of Mutual Funds in India (AMFI), fund managers poured in a net sum of Rs 6,379 crore in equity schemes in November.

This has taken the total inflow from various equity schemes to Rs 86,959 crore in 2015 (during January-November).
It is a strong sign that equitisation of savings is getting entrenched despite volatile equity market in past few months, say marketmen.

Overall, the fund managers have been bullish on equity schemes ever since the Modi government came to power at the Centre last year.

Besides, many investors are moving away from poor performing asset classes such as gold and focussing on equity.
In addition, robust inflows from retail investors in the equity segment have helped. Till April last year, holdings were facing liquidation due to redemptions from investors.

Further, heightened investor interest has led to retail folios at over 3.4 crore.

The latest inflow has helped the mutual fund industry to reach near Rs 13 lakh crore mark in assets under management (AUM) at the end of November.

MFs are investment vehicles that pool funds collected from investors to park in securities such as stocks, bonds, money market instruments and other assets.

Market regultor, Sebi proposed in the investors’ interest that if the newly-listed company does not utilise its IPO proceeds in the manner stated in the offer document, then investors have a right to exit with no loss on their shoulders. (Reuters)

Benchmark indices ended the week nearly 2 per cent down on account of Chennai rains, weak rupee, some selling pressure by foreign institutional investors and concerns over US interest rate hike, due later this month. This week, Sensex and Nifty slid 490.09 points and 160.80 points to 25,638.11 and 7,781.90 on December 4 from 26,128.20 and 7,942.70 on November 27, respectively.

The week saw some buying in metal, healthcare and real estate stocks while selling was visible in banking, auto and consumer durables stocks. Among the sectoral indices on the BSE (formerly known as Bombay Stock Exchnge), the BSE Bankex tumbled the most — 2.68 per cent at 19,325.36 on December 4 from 19,857.73 on November 27, it was followed by BSE Auto index (down 2.12 per cent at 18,480.13), BSE Consumer Durables index (down 1.83 per cent to 12,112.48) and BSE TECk (down 1.66 per cent at 5,810.54). On the other hand, BSE Metal index, BSE Healthcare index and BSE Realty index gained 1.91 per cent, 0.85 per cent and 0.35 per cent, respectively, during the period.

During the week, Tata Steel (up 4.02 per cent), Dr Reddy’s Labs (up 2.97 per cent), Sun Pharma (up 2.03 per cent), IndusInd Bank (up 2.03 per cent) and Hindalco Industries (up 2.03 per cent) jumped the most in the Nifty pack.
Share price of Punjab National Bank, Bank of Baroda and Bharti Airtel slid 6.93 per cent, 6.44 per cent and 5.84 per cent, respectively, during the week.

Gaurav Jain, director, Hem Securities, said, “Status quo monetary policy by RBI, US Fed Chairman Janet Yellen speech indicating a certain hike in its meet during mid of the current month, status quo policy of European Central Bank, weak HSBC Manufacturing PMI of India, continued selling pressure by foreign portfolio investors and weakening of rupee against dollar has created havor for the Indian benchmarks during the week.”

According to the website of NSDL, foreign institutional investors or foreign portfolio investors remained net sellers in the equity market segment as they sold shares of worth Rs 2,820 crore this week.

Rupee fell 0.13 per cent to 66.84 levels on December 4 from 66.75 levels on November 27. Brijesh Ved, senior portfolio manager, equities, BNP Paribas Mutual Fund, said, “The Indian rupee slipped due to continued selling by FIIs in stock and debt markets.”

Among major events, the Reserve Bank of India kept all key policy rates unchanged in its fifth bi-monthly monetary policy review. Market regultor, Sebi proposed in the investors’ interest that if the newly-listed company does not utilise its IPO proceeds in the manner stated in the offer document, then investors have a right to exit with no loss on their shoulders.

Shares of companies based out of Chennai took a sharp hit as heavy flooding in the region paralysed operations across many companies. Chennai is a major auto manufacturing and IT outsourcing hub for companies including TVS Motors, Infosys, TCS and Cognizant Technology. Prakash Diwan, market expert, prakashdiwan.in said, “The rains in Chennai are likely to adversely impact output of auto companies in the month of December 2015.

In a stock specific development, Bharti Airtel rattled the entire telecom industry by announcing its plan to invest Rs 60,000 crore over a three year time span potentially indicating a tectonic shift in the industry dynamics and at the same time throwing questions in the minds of the investors of how the telecom sector can thrive with so much investment and intense competition, and Reliance Jio just waiting at the door steps.

Market movement in near term will depend on domestic macroeconomic numbers i.e. industrial production (IIP) data for October 2015, developments in winter session of the parliament especially its stance on GST Bill, outcome of OPEC meet, interest of foreign portfolio investors, trend in commodity prices globally and rupee-dollar movement.
On GST, Jimeet Modi, CEO, SAMCO Securities, said, “GST expectations are getting louder and louder with each passing day. The difference of opinion between the parties is converging and it is expected that the bill will be cleared in the winter session of the parliament. Market will go into wait and watch mode prior to the FED meeting outcome causing the market to oscillate in a narrow range.”