Commodity Research Report 17 October 2016 Ways2Capital

Page 1


✍ MCX DAILY LEVELS DAILY

R4

R3

R2

R1

PP

S1

S2

S3

S4

ALUMINIU 31-OCT-2016 118 M

116

114

112

112

110

110

108

106

30-NOV-2016 329

324

319

316

314

311

309

304

299

CRUDE OIL 19-OCT-2016 3622

3535

3448

3393

3361

3306

3274

3187

3100

GOLD

05-DEC-2016 30409 30144 29879 29767 29614 29502

29349

29084

28819

LEAD

31-OCT-2016 141

138

135

134

132

131

129

126

123

NATURAL 26-OCT-2015 241 GAS

234

227

222

220

215

213

206

199

708

702

700

696

694

690

684

678

41252

40652

40052

148

146

144

COPPER

EXPIRY

NICKEL

31-OCT-2016 714

SILVER

05-DEC-2016 43652 43052 42452 42136 41852 41536

ZINC

31-OCT-2016 156

154

152

151

150

149

✍ MCX WEEKLY LEVELS WEEKLY

R4

R3

R2

ALUMINIUM 31-OCT-2016

120

117

114

113

111

110

108

105

102

COPPER

30-NOV-2016

359

345

331

322

317

308

303

289

275

CRUDE OIL

19-OCT-2016

3836

3675

3514

3426

3353

3265

3192

3031

2870

GOLD

05-DEC-2016 30942 30517 30092 29874 29667 29449 29242 28817

28392

LEAD

31-OCT-2016

159

151

143

138

135

130

127

119

111

NATURALGA 26-OCT-2015 S 31-OCT-2016 NICKEL

263

248

233

225

218

210

203

188

173

774

748

722

709

696

683

670

644

618

SILVER ZINC

EXPIRY

R1

PP

S1

S2

S3

05-DEC-2016 45025 44013 43001 42411 41989 41399 40977 39965 31-OCT-2016

178

169

160

155

151

146

142

133

Monday, 17 October 2016

S4

38953 124


WEEKLY MCX CALL SELL CRUDE OIL OCT BELOW 3300 TGT 3240 SL 3351 BUY ZINC OCT ABOVE 151 TGT 153 SL 149 PREVIOUS WEEK CALL SELL LEAD OCT BELOW 136.80 TGT 133.80 SL 139.60 - TGT ACHIEVED SELL NATURAL GAS OCT BELOW 206 TGT 198 SL 2013 - NOT EXECUTED ✍ FOREX DAILY LEVELS DAILY

EXPIRY

R4

R3

R2

R1 67

PP

S1

S2

S3

USDINR

26-OCT2016 67.60 67.40 67.20

EURINR

26-OCT2016 74.70 74.50 74.30 74.10 73.90 73.70 73.50 73.30

GBPINR

26-OCT2016 82.60 82.40 82.20

JPYINR

26-OCT2016 65.05 64.85 64.65 64.45 64.25

82

66.80 66.60 66.40 66.20

81.80 81.60 81.40 81.20 64

63.80 63.60

S4 66 73.10 81 63.40

✍ FOREX WEEKLY LEVELS DAILY

EXPIRY

R4

R3

R2

USDINR

26-OCT2016

68

EURINR

26-OCT2016

75

GBPINR

26-OCT2016 82.90 82.60 82.30

JPYINR

R1

S2

S3

S4

67.70 67.40 67.10 66.80 66.50

66.20

65.90

65.70

74.70 74.40 74.10 73.80 73.50

73.20

72.90

72.60

81.70 81.40

81.10

80.80

80.50

26-OCT2016 65.40 65.10 64.80 64.50 64.25 63.95

63.65

63.35

63

82

PP

S1

WEEKLY FOREX CALL BUY GBPINR OCT ABOVE 81.70 TGT 82.60 SL 80.90 BUY JPYINR OCT ABOVE 64.35 TGT 65 SL 63.75 PREVIOUS WEEK CALL BUY JPYINR OCT ABOVE 65.40 TGT 66.10 SL 64.90- NOT EXECUTED


✍ NCDEX DAILY LEVELS DAILY

EXPIRY DATE

R4

R3

R2

R1

PP

S1

S2

S3

S4

SYOREFIDR

18-NOV-2016

709

693

677

671

661

655

645

629

613

SYBEANIDR

18-NOV-2016

3197 3168 3139

3126 3110

3097

3081

3052

3023

RMSEED

18-NOV-2016

4694 4640 4586

4561 4532

4507

4478

4424

4370

JEERAUNJHA

18-NOV-2016 17618 1729 16978 16787 1665 8 8

16467

16338

16018

15698

GUARSEED10

18-NOV-2016

3806 3708 3610

3548 3512

3450

3414

3316

3218

TMC

18-NOV-2016

8043 7789 7535

7389 7281

7135

7027

6773

6519

✍ NCDEX WEEKLY LEVELS WEEKLY

EXPIRY

R4

R3

R2

R1

PP

S1

S2

S3

S4

714

696

678

672

660

654

642

624

606

SYBEANIDR 18-NOV-2016 3538 3403 3268 3190 3133

3055

2998

2863

2728

18-NOV-2016 4951 4811 4671 4603 4531

4463

4391

4251

4111

JEERAUNJH 18-NOV-2016 18285 17765 1724 16920 16725 16400 16205 15685 5 A

15165

GUARSEED10 18-NOV-2016 3989 3836 3683 3585 3530

3432

3377

3224

3071

18-NOV-2016 8843 8289 7735 7489 7181

6935

6627

6073

5519

DATE SYOREFIDR 18-NOV-2016

RMSEED

TMC

WEEKLY NCDEX CALL BUY SOYABEAN NOV ABOVE 3160 TGT 3220 SL 3095 BUY RM SEED NOV ABOVE 4600 TGT 4660 SL 4547 PREVIOUS WEEK CALL BUY JEERA NOV ABOVE 17100 TGT 17500 SL 16700 - NOT EXECUTED BUY SOYABEAN NOV ABOVE 3273 TGT 3346 SL 3204 - NOT EXECUTED


MCX - WEEKLY NEWS LETTERS � BULLION Gold prices edged lower on Friday as stocks firmed and the US dollar rose on expectations the Federal Reserve would raise interest rates by the end of the year. Spot gold was down 0.1 per cent at $1,256.50 an ounce by 0257 GMT. The metal was on track to end the week mostly flat. US gold futures were steady at $1,257.90 an ounce. "People are happy to buy at these levels. But, there are a lot of expectations of a Fed rate hike in December, which will be bearish for gold," said Ronald Leung, chief dealer, Lee Cheong Gold Dealers in Hong Kong. There will also be some uncertainty going into the elections, said Leung adding that if Democratic presidential candidate Hillary Clinton wins over Republican Donald Trump then the dollar could strengthen and pull gold down. "Gold looks a bit weaker on charts. We need to see if prices can hold at $1,240 levels ... then we would be heading towards $1,260 and later to $1,275," he said. Spot gold may consolidate further in a narrow range of $1,250-$1,266 per ounce for one day before falling to the October 7 low of $1,241.20, according to Reuters technical analyst Wang Tao. Markets will next look to Friday's US retail sales data and remarks from Fed Chair Janet Yellen, who will address a Boston Fed economics conference at which Boston Fed governor Eric Rosengren will also speak. "We think its rate hiking trajectory will remain very much intact," INTL FCStone analyst Edward Meir said in a note. "As a result, the dollar will likely push higher going into year-end, offering gold its most formidable headwind and even countering the impact of weaker equities." The dollar index, which measures the greenback against a basket of six major currencies, gained 0.1 per cent to 97.612. Asian stocks edged higher and the dollar bounced on Friday as global markets took a breather after being churned by downbeat Chinese economic data the previous day. Global equity markets had slumped to a three-month low on Thursday. Holdings of the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.28 per cent to 961.57 tonnes on Thursday. Among other precious metals, silver edged 0.3 per cent lower at $17.39 an ounce. The metal was on track for its third consecutive weekly loss. Platinum was down for the fifth straight session as it fell 0.3 per cent at $933.75 an ounce. The white metal is down over 3 per cent this week. Palladium shed 0.3 per cent to $636. 10 after having touched a new three-month low of $633.22 an ounce. The metal is down over 4 per cent this week. Demand for gold in India, the world's second-largest consumer, picked up as the festive season began and discounts narrowed, while demand across rest of the Asia continued to improve. Gold traded within a narrow range throughout the week, after falling nearly 5 per cent in the previous week. Gold discounts in India narrowed to the smallest level in nearly nine months as


prices fell during a key Hindu festival Dussehra boosted retail demand. Dealers were offering gold at $2 an ounce discounts to official domestic prices this week, the narrowest since the week ending on January 23. Last week discounts were $4. "During Dussehra demand was very good. Jewellery shops were crowded after a long time," said Fatechand Ranka, a jeweller based at Pune in western state of Maharashtra. India celebrated the Dussehra festival on Tuesday. "At the end of the month we have Diwali festival. If prices remain at the current range, then certainly demand will remain robust even during Diwali." Demand for gold usually strengthens in the final quarter of the year as India gears up for the wedding season as well as festivals such as Diwali and Dussehra, when buying the precious metal is considered auspicious. � ENERGY Oil prices on Tuesday retreated from one-year highs, after OPEC said it was trying to reach a global agreement to cap production for at least six months amid doubts about how much that would reduce a crude glut. The International Energy Agency, the energy watchdog of the West, said it was unclear how rapidly global oil supply could fall in line with demand even if the OPEC Countries and major producer Russia agreed on a steep output cut. "Net, we find that an agreement to cut production, while increasingly likely, remains premature given the high supply uncertainty in 2017," Goldman Sachs said in a note. a deal would be "self-defeating if it were to target sustainably higher oil prices," Goldman said. Oil has rallied than 13 percent in less than two weeks since OPEC proposed its first production curbs in eight years. Still, prices remain about half of mid-2014 highs above $100 a barrel. On Tuesday, Brent crude LCOc1 settled down 73 cents, or 1.4 percent, at $52.41 a barrel, retreating from a one-year high of $53.73 hit on Monday. U.S. West Texas Intermediate crude CLc1 fell 56 cents, or 1 percent, to settle at $50.79. Global oil industry officials in Istanbul for the World Energy Conference issued a raft of statements on OPEC's production plan. India's purchases of Iranian oil fell 4.1 percent in September, slipping from August when imports from Tehran hit their highest in at least 15 years, according to ship tracking data and a report compiled by Thomson Reuters Oil Research and Forecasts. India, Iran's top customer after China, still imported about 552,200 barrels per day of oil from the Persian Gulf nation in September, more than double the same month a year ago following the end of sanctions targeting Tehran in January. India's oil imports from Tehran in January-September grew 90.5 percent to an average 411,900 bpd oil, the data showed. Iran has been boosting oil shipments to recoup market share ceded to rivals Saudi Arabia and Iraq. The OPEC producer's total crude oil and condensate sales likely reached around 2.8 million barrels per day in September, two sources said, nearly matching a 2011 peak in shipments before sanctions were imposed. along


with Libya and Nigeria, is allowed to produce "at maximum levels that make sense" as part of any output limits in a surprise deal reached last week by the Organization of the Petroleum Exporting Countries. Oil prices fell on Thursday after OPEC said its production had risen to the highest level in at least eight years and following reports of an increase in U.S. crude stockpiles. International Brent crude oil futures LCOc1 were trading at $51.37 per barrel at 0256 GMT, down 44 cents, or 0.85 percent, from their previous close. U.S. West Texas Intermediate crude futures were down 54 cents, or 1.08 percent, at $49.64 per barrel.Traders said oil markets had come under pressure after the Organization of the Petroleum Exporting Countries reported a rise in output, despite the producer cartel having plans, potentially with non-OPEC producer Russia, to cut output in a bid to rein in a global supply overhang. "Crude responded predictably, with both Brent and WTI falling," said Jeffrey Halley, senior market analyst at brokerage OANDA in Singapore. OPEC on Wednesday reported its oil production climbed in September to the highest in at least eight years and raised its forecast for 2017 non-OPEC supply growth, pointing to a larger surplus next year despite the group's deal to cut output. The producer cartel pumped 33.39 million barrels per day last month, according to figures OPEC collects from secondary sources, up 220,000 bpd from August. the absence of any OPEC-Russia headlines to give crude its daily adrenaline shot, the market looks nervously to the EIA Crude Inventory figures due in the U.S. this evening," Halley added. The U.S. Energy Information Administration is due to publish official storage inventory data later on Thursday. The American Petroleum Institute, a trade group, reported on Wednesday that U.S. crude inventories rose by 2.7 million barrels to 470.9 million barrels in the week to Oct. 7. This would be the first rise in oil stocks following five straight weeks of declines. softer gasoline consumption, flagging demand from China and the return of refineries from maintenance will likely drive up global stock levels over Q4," BMI Research said in a note, � BASE METAL Nickel futures traded 1.34 per cent down at Rs 697.10 per kg on Thursday as speculators reduced their exposure, tracking a weak trend in base metals at the London Metal Exchange amid muted demand at the domestic spot markets. At the Multi Commodity Exchange, nickel for delivery this month shed Rs 9.50 or 1.34 per cent to Rs 697.10 per kg in a business turnover of 2,451 lots.The metal for delivery in November too fell by Rs 8.90 or 1.25 per cent to trade at Rs 703 per kg in 114 lots. Market analysts said the fall in nickel prices was mostly in tune with a weak trend in the base metals pack at the LME as an unexpected drop in Chinese exports spurred concern about the outlook for the global economy.China's exports plummeted 10.0


percent year-on-year to $184.5 billion in September, government data showed on Thursday.Besides, muted demand from alloy-makers at the domestic spot markets weighed on metal prices in futures trade here.Globally, nickel prices retreated by 1.6 per cent at the LME, reversing earlier gains. Lead prices were down 0.29 per cent to Rs 135.50 per kg in futures trading today as participants reduced their exposure, triggered by subdued demand from consuming industries in the spot market and weak global cues.

At the Multi Commodity Exchange, lead for delivery in

November month declined by 40 paise, or 0.29 per cent to Rs 135.50 per kg in business turnover of 24 lots. Likewise, the metal for delivery in current month contracts shed 25 paise, or 0.19 per cent to Rs 134.85 per kg in 483 lots. Marketmen said the weakness in lead futures was due to a sluggish demand from batterymakers at the domestic markets, apart from weak global cues after China's exports unexpectedly declined, raising global demand outlook. Zinc futures fell by 0.30 per cent to Rs 150.45 per kg today as speculators indulged in reducing positions amid a weak trend in base metals overseas and low spot demand. Zinc for delivery in current month shed 45 paise or 0.30 per cent to Rs 150.45 per kg at the Multi Commodity Exchange. It clocked a business turnover of 734 lots. The metal for delivery in November too fell by a similar margin to trade at Rs 151.10 per kg in 23 lots. Analysts attributed the fall in zinc futures to cutting down of bets by participants, tracking weakness in base metals pack at the London Metal Exchange amid concerns over China's economy. Zinc prices declined by Rs 3 per kg at the non-ferrous metal market due to reduced offtake by consuming industries. Traders attributed the fall in zinc prices to easing demand from consuming industries. In the national capital, zinc ingot declined by Rs 3 to Rs 100-106 per kg. Following are today's metal rates (in Rs per kg): Zinc ingot Rs 100-106, Nickel plate (4x4) Rs 823-828, gun metal scrap Rs 227, Bell metal scrap Rs 229, copper mixed scrap Rs 360, chadri deshi Rs 295. Lead ingot Rs 85, lead imported Rs 91, aluminium ingots Rs 158, aluminium sheet cutting Rs 154, aluminium wire scrap Rs 154 and aluminium utensils scrap Rs 152. NCDEX - WEEKLY MARKET REVIEW The recent rains in Gujarat and Rajasthan and lower stocks in international market have boosted the prospects of jeera, the second largest exported spice from India. The near month jeera futures prices in Ncdex hovered around Rs 163 per kg on Saturday. But the November and


December futures prices are showing a higher price trend. The export demand going through a sluggish phase following reduced buying by China and Hanjin shipping company fiasco is expected to pick up in the months. ``Indian cumin is priced $200 lower than the stock in Syria and Turkey at $2500 per tonne but there are no takers with China going slow on purchase. The bankruptcy of Hanjin shipping company also led to delay in shipments affecting exports,’’ said Dipak Parikh, partner of Kanu Krishna Corporation. The political turmoil in Syria and the depletion of stocks in that country and Turkey, which are the two major producers of cumin after India, could lead to a shift in demand to India in the coming months, according to Religare Broking. The falling rupee is also expected to benefit the Indian exports in the medium term. The cumin exports at 41,000 tonnes valued at Rs 637.50 crore for three months to June 2016 had shown 55% increase in quantity and 50% rise in value from a year ago. increase in quantity and 50% rise in value from a year ago. ``The good rains in Gujarat region are good for cumin, the sowing of which will commence this month. Since the situation is not ideal for coriander, another

spice

cultivated

in

these

regions,

farmers

may

shift

to

cumin,’’ said

KrishnakumarMenon, head of procurement of Eastern Condiments Pvt. Ltd., a major curry masala company.

ICE cotton closed lower last week on waning fears of crop damage due to Hurricane Matthew pressured speculators to continue selling their positions. Moreover, Harvest pressure in all key cotton-producing regions in the United States also weighed down prices. Weekly export sales report from the U.S. Department of Agriculture showed net upland sales totaled 158,900 running bales for the week ended Sept. 29, up 73 percent from the previous week, but down 18 percent from the prior four-week average. The U.S. cotton harvest has just begun with 6% of cotton harvested as of the week ended Sept. 18 compared to a five-year average of 7%. The U.S. Department of Agriculture's weekly crop progress report released showed that 49% of cotton crops in the US were in good-excellence condition, up marginally from 48 percent a week ago. Cotton complex prices traded mixed last week as new season cotton started to arrive in some parts of India. Moreover, the sudden spell of heavy rains in cotton-growing regions of Maharashtra, Gujarat, Telangana and Karnataka during the last 10 days may lift the yield by an additional 10 %, as per officials of the Nagpur based Central Institute for Cotton Research. Last week, NCDEX Kapas for Apr’17 closed lower by 2.22% while MCX Oct’16 cotton closed higher by 0.30%. As per, the Cotton Association of India , the apex trade body of the fibre crop, The trade body has retained the cotton crop estimates for the year 2016-17 season at 336 lakh bales of 170 kg each. The projected balance sheet drawn by CAI estimated total cotton supply for the cotton season 2016-17 at 398 lakh bales, while the domestic consumption is estimated at 309 lakh bales thus leaving an available surplus of 89 lakhbales.


✍ JEERA Jeera futures closed lower during the last week due to lower domestic and export demand. NCDEX Oct’16 Jeera closed 3.55% down to close at Rs 16,715 per quintal. The physical stocks are dwindling with the stockists but anticipation of good crop in the next season pressurizes the prices in the futures market. According to the trade sources, jeera exports may have raise by 29% to 58,000 tonnes in Apr-Aug compared to last year figure of 45,000 tonnes. According Department of commerce data, the exports of Jeera in thefirst four months Apr-Jun of 2016-17 is at 51,904 tonnes, higher by 61.5% compared to last year same time. The exports of jeera during July 2016 decreases 20% m/m to 7,881 tonnes but increase y/y by 27.3%. As per 4thadvance estimate of Gujarat State for 2015-16, production is pegged at 2.38 lt compared to 1.97 lt in 2014-15. In 2013-14, production was 3.46 lt.

✍ TURMERIC Turmeric futures closed lower last week on forecast of dry weather across turmeric growing states during the second half of October, which may be favorable for crop maturing and higher yield. Turmeric Oct’16 delivery contract on NCDEX closed 3.84% down to settle at Rs 6,910 per quintal. Lowering export demand in recent months is pressurizing prices The prices of turmeric are moving sideways to down due to mixed fundamentals of good sowing acreage coupled with declining supplies and forecast of higher rains in the state of Telangana. The demand from the industrial buyers will support the prices just before new season harvesting. On the export front, country exported about 42.923 tonnes of turmeric during April-July period up by 34,5% compared last year, as per department of commerce data. Turmeric acreage in Telangana as on 28 Sep was up 12% at 46,000 hectares as compared to 41,000 hectares last year. Sowing of turmeric is over in 95% of normal area and up by 107 % of normal sowing area.

✍ REFINED SOYA Refined soy oil closed lower last week due to expectation of sufficient stocks in the physical market as import duty cut by the government. The most active Ref Soy oil Oct’16 expiry contract closed 0.41% lower last week. Recently, government increases the tariff value of crude soya oil to $827/tonnes or 1.22% compared to previous fortnight. Government fixes the tariff value every fortnight. As per SEA data, India's edible oil imports fell 8.4% to 1.25 mt in August, while cumulative imports in the first 10 months of the current oil rose 4.0% to 12.04 mt. India Aug crude soyoil import 333,599 tonnes, lower by 18 % compared to 406,116 tonnes year ago.


Earlier, India has cut import taxes on both crude palm oil and refined edible oils by 5% points to 7.5 and 15 % respectively. ✍ SOYABEAN Soybean futures closed lower on week due to reports of new season soybean crop from MP, Rajasthan and Maharashtra. The most-active Oct’16 delivery contract closed 0.31% down to settle at Rs. 3,225 per quintal. As per Soybean Processors Association of India recent survey across Madhya Pradesh, Maharashtra, and Rajasthan India's soybean production in 2016-17 JulJun to 10.9 mt, up 58% from the last year. Soybean production is estimated higher in all the three states, which account for over 80% of the country's output. U.S. soybean fell as U.S. farmers are expected to boost the pace of harvesting on forecasts of dry weather in the Midwest. Moreover, Brazil's CONAB forecast that 2016/17 soybean production in the country, a key exporter, will rise to between 101.9 million and 104 mt from 95.4 mt in the previous marketing year. The USDA reported weekly soybean export sales rose to 2.180 mt from 1.693 mt a week ago, well above forecasts for 1.2 mt to 1.5 mt.

✍ SUGAR Sugar prices in India depend to a large extent on supply from the leading producer, Maharashtra, but the state government and the Indian Sugar Mills Association differ widely in the estimates of this year’s output, making forecasting prices hazardous. ISMA has pegged drought ridden Maharashtra’s 201617 sugar production at 62.7 lakh tonnes while the state’s sugar commissionerate expects output of just 50.28 lakh tonnes. In 2015-16, Maharashtra had produced 84.3 lakh tonnes of sugar and India’s total output was 251 lakh tonnes. According to ISMA’s first advance estimate for 201617, India’s sugar output is expected to decline 7% to 233.7 lakh tonnes this year. However, the fall will be nearly 12% to 221.3 lakh tonnes if the state government’s estimate is taken into consideration.


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