(Bloomberg) -- Before the trading day starts we bring you a digest of the key news and events that are likely to move markets. Today we look at:
- Mega IPOs on the horizon
- NSE’s IPO hopes spark rally
- Power demand cools
Good morning, this is Alex Gabriel Simon, an equities reporter in Mumbai. Sentiment is still buoyant, with big bang IPO-listings and the market inching toward fresh highs. All eyes are on the size of the Fed’s rate cut, a crucial driver of flows to emerging markets including India, where the bull market is already the longest in over 20 years.
Big IPOs are still in the pipeline
Bajaj Housing Finance knocked it out of the park with its IPO, delivering a first-day gain of 136% — the best-ever debut for a large Indian public offering. The stellar start has opened the doors for even more big-ticket share sales. At least three more deals of over $1 billion each are in the pipeline. Among them are SoftBank-backed food delivery giant Swiggy, as well as Indian units of LG Electronics and Hyundai Motor, all planning to tap the market. With this year’s IPOs posting an average listing-day gain of 30% in India — higher than the global average of 22% — the craze shows no signs of cooling.
NSE’s IPO hopes sparks rally in market-linked stocks
NSE’s IPO hopes got a boost on Friday after the market regulator regulator dismissed a long-running case, clearing a major hurdle that’s kept its listing on hold since 2016. This is good news for stocks linked to India’s capital markets. The listing of the world’s largest derivatives exchange is expected to drive a surge in turnover at smaller rival BSE, as bourses can’t listing on their own platforms. It’s no surprise BSE’s shares jumped the most in over two years on Monday. Like Life Insurance Corp.’s IPO two years ago, NSE’s listing is expected to attract a new bunch investors, benefiting companies like Central Depository Services and stock brokers such as Angel One.
Plentiful rains cool power demand
While abundant monsoon rains are great for India’s economy and rural demand, they actually reduce the need for cooling and power for irrigation. The result: power generation dropped by about 5% in August compared to the same month last year — the first on-year decline in two years. Elara Securities is leaning toward government-run companies like NTPC and Power Grid, which offer steady returns from regulated assets, while private players seem overvalued.
Analysts actions:
- Ola Electric Rated New Buy at Goldman; PT 160 rupees
- Adani Green Rated New Buy at Investec; PT 2,515 rupees
- Gujarat Fluorochemicals Rated New Add at Avendus Spark
Three great reads from Bloomberg today:
- BOJ Faces Task of Flagging Rate Hike Path While Standing Pat
- Microsoft Announces $60 Billion Buyback, Raises Dividend 10%
- Big Take: Trump’s Banker Fights Whistleblowers, Marxists, Shorts
And, finally..
India’s stock market boom is set to become the country’s longest bull run in two decades. According to Nitin Chanduka, a strategist at Bloomberg Intelligence, the NSE 500 index has gone a record number if days without a drop of 20% correction from its peak. During the 2003-2007 cycle, the index suffered at least three falls of over 20%. The current rally, which began during the pandemic lows in March 2020, has been fueled by strong domestic liquidity, a robust earnings cycle and improving profitability.
--With assistance from Ashutosh Joshi.
©2024 Bloomberg L.P.
