In today’s briefing:
- Hindustan Zinc (HZ IN) Silver Rally Is a Sweetener
- NSE NIFTY50/ Vol Update / IVs Subdued as Options Markets See Low Risk of U.S. Trade Tension Blowup.
Hindustan Zinc (HZ IN) Silver Rally Is a Sweetener
- Hindustan Zinc (HZ IN) is set to see significant earnings upgrades driven surge in silver prices (40% EBITDA share), local currency weakness and benign costs.
- Planning for major US$2-2.5b growth expenditure to double output over next 3=5 years.
- Valuations: Entering a strong earnings upgrades cycle. Stock can re-rate despite trading at slight premium to historic averages. Stake sales by key holders is a risk.
NSE NIFTY50/ Vol Update / IVs Subdued as Options Markets See Low Risk of U.S. Trade Tension Blowup.
- IVs remain subdued, trading sub-12% levels, as Option Markets expect low impact from U.S.-trade tensions. Risk premia compresses in spite of upcoming FOMC event risk.
- Vol term-structure has moved further into Contango. Realized Vol continues to underperform.
- Vol-Surface is exhibiting interesting behaviour as Skew has compressed while Smile has extended.
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