Last week was moving as predicted and expected but then Donald Trump decided that he was left out of the picture. The massive crowd at the funeral of the late Iranian Supreme leader Ayatollah Ali Khamenei received an unprecedented response which rattled Trump. Further there was a death call raised against Trump at the funeral and this made Trump even more worried. What happened to global markets on Wednesday the 8th of July was a blood bath and it shook markets all over the world. Crude shot up, equities crashed, and so did gold and silver. It was mayhem. BSESENSEX lost 1,677 points while NIFTY lost 520 points. All in one day. The momentum, it appeared was gone, but markets have a mind of their own. Over Thursday and Friday, they almost made up what they lost. The week ended with BSESENSEX losing 194.52 points or 0.25% to close at 77,569.39 points while NIFTY lost 63.95 points or 0.26% to close at 24,206.90 points. BANKNIFTY gained 107.40 points or 0.19% to close at 58,045.90 points. The broader markets saw BSE100 lose 0.15% while BSE200 and BSE500 gained 0.16% and 0.20% respectively. BSEMIDCAP was up 1.15% while BSESMALLCAP gained 0.44%. The top sectorial gainer was BSEREALTY which was up 5.38% while the top loser was BSEFMCG which was down 1.18%. 

The Indian Rupee lost 14 paisa or 0.15% to close at Rs 95.47 to the US Dollar. Dow Jones gained on three of the five trading sessions and lost on two. It was down 263.06 points or 0.50% to close at 52,637.01 points. 

There were two mainboard listings in the last week. The first was from Aastha Spintex Limited which had issued shares at Rs 136. The share listed on Monday the 6th of July at Rs 130. It closed day one at Rs 136.45. By weekend it had fallen to Rs 122.90, a loss of Rs 13.10 or 9.63%. 

The second share to list was from Knack Packaging Limited which had issued shares at Rs 170. The share listed on Wednesday the 8th of July at Rs 186 and closed day one at Rs 182.70. Over the remaining two days of the week, the share gained further to close at Rs 209.95, a gain of Rs 39.95 or 23.50%. 

The week ahead sees the mega issue from SBI Funds Management Limited, hitting the markets. The entirely an offer for sale of 17,09,56,631 equity shares is in a price band of Rs 545-574. There is a reservation of 1,30,55,629 equity shares for shareholders of SBI who can participate in this offer.  SBI is the largest AMC in the country and has an AUM of Rs 29.3 lakh crores. This comprises of a mutual fund AUM of Rs 12.5 lakh crores. The AMC has strong parentage in State Bank of India and its French partner Amundi. The share is reasonably priced and offers appreciation in the short term and medium term as well. 

The offer from Kusumgar was very well received and was subscribed 135.76 times overall. QIB portion was subscribed 299.59 times, HNI portion was subscribed 174.29 times and Retail portion was subscribed 27.88 times. There were 37.19 lac applications in all. 

Coming to the markets, even though we had a sharp correction on Wednesday which was entirely war related, levels of 23,800 held. This indicates strength at this level. This becomes ‘LAXMAN REKHA’ for the markets on the downside. As long as this holds, one should be long in the markets. On the upside we came quite close to 24,600 and had it not been for Wednesday, would have in all probability breached the level. That becomes the immediate target for the coming week. Just about 400 points on NIFTY and if all goes well, should be able to breach the same. That would be a level to increase long positions and with a stop loss at 24.200-24,300 points. Its early days, but even FPI’s are turning bullish. 

Trade cautiously and on the long side. 

The week gone by had plenty of action and moist importantly it built up on previous week’s strength and is now poised after months to move forward and upwards. Markets gained on three of the five trading sessions and lost on two. BSESENSEX gained 663.44 points or 0.86% to close at 77,763.91 points while NIFTY gained 214.85 points or 0.89% to close at 24,270.85 points. BANKNIFTY lost 238.55 points or 0.41% to close at 57,938.50 points. The broader markets saw BSE100, BSE200 and BSE500 gain 0.75%, 0.72% and 0.83% respectively. BSEMIDCAP gained 0.23% while BSESMALLCAP was up 1.00%. The lows of the week were made on Tuesday while the highs were made on Friday. This indicates some sort of change in trend as we have seen highs made on Friday after a couple of weeks signifying that markets are able to hold on to their gains. Highs made on Friday were at 78,157.52 points and 24,378.15 points while the lows made on Tuesday which was June futures expiry day were at 76,329.39 points and 23,829.20 points. A fairly narrow range of about 550 points on NIFTY and 1,800 points on BSESENSEX in a week. 

The Indian Rupee lost 74 paisa or 0.78% to close at Rs 95.33 to the US Dollar. Dow Jones gained on three of the four trading sessions and lost on one. Dow gained a massive 1,023.96 points or 1.97% to close at 52,900.07 points. Incidentally Friday was a trading holiday on account of US Independence Day which is celebrated on the 4th of July. 

June NIFTY futures expired on a quiet note. The bears won the series by a whisker but it was one where things could go in either direction. After the whole series was over, bears took it with series loss of 47.95 points or 0.20% to close at 23,865.75 points. 

Coming to the primary markets we had four listings last week. The first of the lot was from Turtlemint Fintech Solutions Limited which listed on Monday. Against the issue price of Rs 152, the share ended day one at Rs 135.40, a loss of Rs 16.60. By the end of the week, the share recovered marginally and narrowed the loss to Rs 138.55, a loss of Rs 13.45 or 8.85%. This issue was barely subscribed at 1.24 times overall with HNI portion remaining undersubscribed at 0.56 times. 

The second issue to list was Advit Jewels Limited which had issued shares at Rs 138 and listed on Wednesday the 1st of July. The share closed day one at Rs 178.15, a gain of Rs 40.15. Over the next couple of days the share lost some ground and closed at Rs 167.10, a gain of Rs 29.10 or 21.09%. 

The third share to list was Waterways Leisure Tourism Limited which had issued shares at Rs 808 and listed on Wednesday the 1st of July. The share had a very weak start and closed day one at Rs 667.35, a loss of Rs 140.65. Over the next couple of days, the share gained 10% each, closing at upper circuit to close at Rs 807.45, a minor rounding off loss of Rs 0.55 or 0. 07%. 

The fourth and final listing to happen was from CSM Technologies Limited which had issued shares at Rs 113. Shares which listed on Friday the 3rd of July, closed at Rs 107.35, a loss of Rs 5.65 or 5%. The going is tough for any IPO where there is expensive valuation or the business model is not understood. With a flood of IPO’s expected now onwards, one hopes that valuations are kept in mind when pricing the issues. The object of bringing the issue is not only to list and provide an exit to existing investors, but also ensure that the risk taker makes money going forward. 

There were two IPO’s which were open for subscription during the week. The first was from Aastha Spintex Limited which was open from Monday the 29th of June to Wednesday the 1st of July. The issue price band was Rs 125 -136. The issue size was Rs 170 crores. The issue was oversubscribed 5.05 times overall with QIB portion subscribed 3.59 times, HNI portion subscribed 8.29 times and Retail portion subscribed 2.54 times. There were 1.11 lakh applications. 

The second issue was from Knack Packaging Limited which was open from Wednesday the 1st of July to Friday the 3rd of July. The issue price band was Rs 161-170. The issue size was Rs 440 crores. The issue was oversubscribed 87.15 times overall with QIB portion subscribed 160.22 times, HNI portion subscribed 146.64 times and Retail portion subscribed 21.04 times. There were 19.74 lakh applications. 

The week ahead sees the IPO from Kusumgar Limited opening on Wednesday the 8th of July and closing on Friday the 10th of July. The issue is entirely an offer for sale for Rs 650 crores and is in a price band of Rs 398-419. Kusumgar is a manufacturer and solutions provider for fabrics made from polyamides and polyester filaments and polyurethane chemistry. It supplies to the aerospace and defense segments and also to automotive and active wear segments. The company has a fair mix of export and domestic sales which include the Armed forces. It reported revenues of Rs 692 crores for the year ended March 26 with a profit of Rs 98.2 crores. It’s in an interesting business and has favorable tail winds. The industry has huge entry barriers and qualification is time consuming and milestone linked. The working capital intensity can be a challenge considering inspections at various stages as many products in defense and aerospace are mission critical with zero tolerance. Invest with a medium term perspective of 12 to 18 months. 

Markets have held on to 23,800 on NIFTY and 76,000 points on BSESENSEX. On the upside they have moved up and seem set to cross the barrier at 24,400-24,600 in the coming weeks. Results for the April-June quarter would kick in from the coming week and the first major IT result is from TCS on Thursday the 9th of July. Not much is expected from these results as it was affected by the Iran-USA war. While everyone is aware of it, markets behave differently when results are declared, more so when in the same circumstances somebody does better than another. Results could be an opportunity to buy on dips. 

In terms of support the level of 23,800 would shift to 24,000 while the resistance would continue to be initially 24,500-24,600 and then moving up to 24,850-24,900 points. Time to start building a portfolio and keeping a close eye on companied declaring results.