Market is seen opening lower tracking weakness in Asian stocks and lackluster trading on Wall Street overnight. Trading of Nifty 50 index futures on the Singapore stock exchange indicates that the Nifty could fall 35 points at the opening bell.
In overseas stock markets, Asian stocks edged lower as investors await closely watched April US non-farm payroll numbers. US stocks closed slightly lower yesterday, 5 May 2016, as oil failed to hold much of its intraday gains and investors awaited the key nonfarm-payrolls data due later in the global day today, 6 May 2016. The nonfarm-payrolls data has implications for the US monetary policy. The US central bank's mandate centers on maximizing employment and keeping inflation at a 2% target level. The Federal Open Market Committee (FOMC) next undertakes monetary policy review at a two-day meeting on 14-15 June 2016.
Closer home, foreign portfolio investors (FPIs) sold shares worth a net Rs 388.51 crore yesterday, 5 May 2016, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 251.79 crore yesterday, 5 May 2016, as per provisional data.
Banking stocks will be in focus after the Reserve Bank of India (RBI) issued draft guidelines on granting licences on a continuous basis for setting up of universal banks in the private sector. The bank can be promoted by a non-banking finance company (NBFC) controlled by residents with a successful track record for at least 10 years and individuals/professionals who are residents and have 10 years of experience in banking and finance. The RBI has also allowed entities/groups in the private sector owned and controlled by residents to promote a universal bank subject to the condition that the non-financial business of the group does not account for 40% or more in terms of total assets/gross income. The initial minimum paid-up voting equity capital for a universal bank has been set at Rs 500 crore. Thereafter, the bank will be required to have a minimum net worth of Rs 500 crore at all times. The bank will have to open at least 25% of its branches in unbanked rural centres (population up to 9,999 as per the latest census). The bank will have to comply with the priority sector lending targets and sub-targets as applicable to the existing domestic scheduled commercial banks. The board of the bank should have a majority of independent directors, as per the draft guidelines.
The promoter group of the bank will be required to hold a minimum of 40% of the paid-up voting equity capital of the bank with a lock-in period of five years from the date of commencement of the business of the bank. The promoter group has to reduce its holding in the bank to 15% within a period of 12 years from the date of commencement of business of the bank. The bank will be required to get its shares listed on the stock exchanges within six years of the commencement of business. The RBI has invited feedback from the public on the draft guidelines by 30 June 2016.
ITC announced that the Supreme Court on 4 May 2016 passed an order transferring to the Karnataka High Court all writ petitions pending in various courts challenging the rules prescribing 85% pictorial warnings on packages of tobacco products. The Supreme Court observed that all parties should endeavour to follow the rules. In the meantime, ITC has had to shut its cigarette factories from 4 May 2016 until the company is in a position to comply with the interim requirements pending hearing in the Karnataka High Court, the company said. The announcement was made after market hours yesterday, 5 May 2016.
Hero MotoCorp's net profit rose 70.85% to Rs 814.16 crore on 10.57% increase in total income to Rs 7614.61 crore in Q4 March 2016 over Q4 March 2015. Earnings before interest, taxation, depreciation and amortization (EBITDA) margin edged higher to 15.65% in Q4 March 2016, from 12.34% in Q4 March 2015. The result was announced after trading hours yesterday, 5 May 2016.
The improved profit margins were the combined result of the highest-ever quarterly sales of 17.21 lakh units and several margin improvement initiatives taken during the period, the company said in a statement.
Hero MotoCorp's board recommended a final dividend of Rs 32 per share for the financial year ended 31 March 2016.
Bharti Airtel (Airtel) said that its subsidiary, Bharti Airtel International (Netherlands) BV, and Helios Towers Africa (HTA), a leading independent telecoms towers company in Africa, announced an agreement for the divestment of approximately 950 telecoms towers in the Democratic Republic of Congo (DRC) from Airtel to HTA. The divestment also includes towers currently under construction in the DRC. The deal will help expand HTA's tower coverage in Africa to over 6,500 owned towers. It will help Airtel deleverage through debt reduction and reduced ongoing capital expenditure. The agreement follows Airtel's and HTA's strategies to drive cost efficiencies throughout the industry, the promotion of passive infrastructure and to mitigate against the proliferation of towers. Post deal, Airtel will have full access to the towers from HTA under a long term lease contract. The agreement will allow Airtel to focus on its core business and customers, while enabling it to deleverage through debt reduction. The deal will significantly reduce Airtel's ongoing capital expenditure on passive infrastructure and also mitigate the proliferation of towers through enhanced sharing.
HTA is solely focused on providing telecoms infrastructure solutions which help its customers to achieve their goals. These goals typically include reducing operating cost, improving network uptime, preserving capital, focusing on their core business, and mitigating the proliferation of towers through infrastructure sharing, as they expand network coverage and capacity to meet the growing demand and improve quality of telecom service. The agreement is subject to statutory and regulatory approvals in the respective countries. The announcement was made after trading hours yesterday, 5 May 2016.
Wipro after trading hours yesterday, 5 May 2016, announced that it has successfully implemented its Software as a Service (SaaS) platform- Managed File Transfer as a Service (MFTaaS) on Amazon Web Services (AWS) for organizations, thereby helping them integrate digitally with their clients, partners and employees. Wipro anticipates that the MFTaaS platform can potentially reduce up to 30% in TCO (Total Cost of Ownership) for its clients vis-a-vis traditional deployments, the company said in a statement.
In a separate announcement, Wipro said that it has won a multi-year contract from Thames Water in the United Kingdom. Wipro will develop new IT systems and processes to help Thames Water improve customer experience and drive operational efficiencies. The announcement was made after trading hours yesterday, 5 May 2016.
NTPC after trading hours yesterday, 5 May 2016, announced that it has raised Rs 1000 crore through private placement of secured non-convertible debentures at a coupon of 8.05% per annum with a 10 year door-to-door maturity. The proceeds of the issue will be utilized to finance capital expenditure/refinancing the debt requirement in on-going projects including recoupment of expenditure already incurred.
Capital goods stocks and index heavyweights HDFC and ITC led gains for key benchmark indices yesterday, 5 May 2016. The Sensex rose 160.48 points or 0.64% to settle at 25,262.21, its highest closing level since 2 May 2016.
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