Stock Market Investment Shot,6th December 2022

Stock Market Investment Shot, 21st December 2022

Stock Market Investment Shot, 21st December 2022

If the current growth trends are indicative, then exports of Apple smartphones from India may surpass Samsung by March 2023. Currently, for the first 7 months of FY23, Samsung recorded smart phone exports of $2.8 billion and Apple $2.2 billion. However, at the rate of growth, Apple is likely to exceed exports of Samsung by early next year. Both Apple and Samsung manufacture and have exported $5 billion worth of smart phones from India in 7 months of FY23 under the state Production-linked Incentives (PLI) scheme.

For the month of November, the high frequency indicator (PMI Services) came in at a 3-month high of 56.4 compared to 55.1 in October. PMI above 50 indicates expansion and below 50 indicates contraction. However, the momentum if captured by the MOM change. This is 16th consecutive month of expansion seen in PMI Services. New service orders grew at the fastest rate since August while the services sector also saw enhanced job creation. The month of November also saw a sharp spike in international orders.

Amazon, which was initially planning to lay off 10,000 employees, has now doubled its retrenchment target to 20,000 globally. India is also expected to take a good chunk of the hit. That would translate into 1.3% of the global Amazon workforce. However, Amazon is not alone as others like Meta, Twitter and Microsoft are also aggressively laying off staff. Most American companies are getting jittery with the US economy expected to slip into recession in 2023. They just want costs to remain light before that period.

The stock of LTI Mindtree Ltd, the merged entity of L&T Infotech and Mindtree, started trading under its new name from 05th December. The stock was trading 1% lower on Monday. The combined entity now handles a client portfolio of more than 750 global enterprises and close to 90,000 professionals spread across over 30 countries. It is already the fifth largest Indian IT company in terms of market after TCS, Infy, HCL Tech and Wipro. The swap ratio for Mindtree shareholders was 73 shares for every 100 shares held.

Despite the recent row over the accidental death of a customer of M&M Finance, the stock has recently scaled a 52-week high of Rs244. Its business in November saw record disbursements of Rs4,500 crore, a growth of 75% yoy. This takes the year to date disbursements to Rs31,050 crore for the first 8 months of FY23. For November 2022, collection efficiency (CE) stood at 96%, although the gross NPAs continue to be slightly iffy for the company. The RBI ban on vehicle repossession may not have a real material impact.

The regulator is closely watching the practice of brokers running client funds without having the license for the same. This is one of the reasons for which the Finfluencer bill is being brought out by SEBI since most of them use trader influencers to promote their service. Investors are increasingly getting wary of trader-influencers, who have been selling their talking skills rather than exhibiting their stock picking skills in this issue. At the core is the flight by night customer who wants to make a fast buck in the markets.

The stock of Go Fashion and Rainbow Children’s Medicare (both recent IPOs) fell more than 2% after a large number of shares changed hands in blocks. The IPO lock-in expiry was over for Rainbow Children’s Hospitals on 05-November while the lock-in for Go Fashions was over on 25-November. While CDC is a major shareholder in Rainbow, Sequoia is a major investor in Go Fashion. In recent weeks, big digital IPOs like Paytm, Nykaa, Zomato and PB Fintech came under immense pressure on the end of IPO lock-in period.

ICICI Bank stock is back in focus after Morgan Stanley retained ICICI Bank as its top banking pick with target price of Rs1,250 per share. That translates into a 34% upside on the stock. According to Morgan Stanley, ICICI Bank was gaining market share in the larger profit pools and had already closed in with HDFC Bank on net interest margins (NIM). ICICI Bank is also betting big on customer acquisitions via digital assets. It expects ICICI Bank to see series of positive re-ratings in coming years. The stock quotes at Rs932 currently.

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