Archive for the 'Banks' Category

Recession in India does not seem to be imminent

October 12, 2008

Friends,

Recession can be said to be some thing like declining economic activity of high order which covers most sectors of economy and is for a longer duration. By this yardstick the recession in India does not seem to be imminent. But one condition preceding the full-fledged recession seems to have been there ie that the markets drop most before the recession begins and then the bear markets last for some time but usually show little further losses during the rest of the bear market. The recovery starts even before the recession has actually ended.

These are some very interesting observations. The markets have dropped more than they have dropped before the recession at other times in history. So whatever way look at it, the markets are calling for entry as supposing there will be recession, there will not be much further drop in market and in case there is no recession in fact and the drop is due to fear in light of the financial mess elsewhere in the world, there would be very steep recovery taking bears by storm. So only pre-requisite for investing is having money with slightly longer period horizon in mind. Another plus point is that the nominal earning rate is equal to interest yield and interest rates on down hill path.

Don’t you think Islamic practices of not giving loans for earning interest will have saved the US from falling to such pass. The Islamic method calls for straight purchase of asset and enjoy only fruits of enterprise. I also have been advocating some thing similar that buy assets straight away and do away with interest based transactions to have better peace of mind and hope for good profits by buying shares. Inflation would not eat into your money’s worth and there will be no hassles of recovering money and monitoring health of borrowers. Isn’t there a lurking fear in minds of Indians too about the safety of FDs with banks. Bad debt is death of capital , bad investment is only a loss of a part of it.

HariOm,
Krsna Khandelwal

BIRDINFO Stock Rx – A prescription for stock market

Market matrix – G7 finance ministers will some how find a solution

October 10, 2008

Friends,

The banks deposits have grown by 19.8 pc and the bank advances have grown by 24.8 pc (YoY). The inflation number for latest week declared at 11.8 pc. The IIP number for Aug is just up 1.3 pc Crude prices go down to 82 dollars/bbl.

The banking stocks are trading way down in European markets and have spoilt sentiment. The DoW has lost 21 pc over last five session. Our Nifty too lost 232 points and closed at 3279 points. Indian banks have yet not reported any panic situation so far but the measures taken here have not helped matter either.

Rupee weakens further and is 48.4 to a dollar. I am surprised that it is losing value against a currency of much more afflicted economy. Sale of dollar to stem rupees’ fall in fact dried up liquidity. RBI says 14 Indian banks have revealed exposure to Lehman Bros but only nominally. FDI flow is continuing and suggests that Indian economy is being rated highly.

I think that G7 finance ministers will some how find a solution to crisis facing the world.

If there is further lowering of bench mark interest rates, the equity market as also other markets should have support.

There is a rumour that the two warring brothers who now represent the divided house of the big empire are in to markets. One is shorting and the other is on bullish side. If this be so, the one shorting the market will be in soup.

HariOm,
Krsna Khandelwal

BIRDINFO Stock Rx – A prescription for stock market

Market Matrix – Public Sector Banks shares may be bought

June 30, 2008

By krsna Khandelwal – A veteran market analyst

Friends,

The PSBs net NPAs are up by 24 p.c. In 3 years but only in absolute terms i.e. up at Rs 17015 crs in 07-08. The system-wide net NPA ratio is below 1 p.c.only. 24 PSBs have below 1 p.c.NPA at present while only 14 PSBs had it below 1 p.c. In 06-07. This remarkable and speaks of generally better corporate performance of PSBs. The public sector bank’s share may be bought at current prices as the gloom displayed in market may not remain there forever and may be the first quarterly results will make it a heady times in the markets.

Hari Om

BIRDINFO Stock Rx – A prescription for stock market

Market Matrix: Current Economic News Analysis

January 9, 2008

By krsna Khandelwal – A veteran market analyst

Friends,

Information Technology Department has drawn mega-city plans which are identified as investment regions for hardware an software companies.Land acquisition and development of the region will be done by the states. The IT sector is preferred child of govt , no doubt.

Govt suggested to oil PSUs to issue bonus shares who have in turn declined to do so on the pretext of under-recoveries which will make it difficult to maintain yield post bonus issue. Both parties are have reasons but I have many a times brought before you the requirement of a firm predetermined policy regarding oil pricing rather than whimsically acting in that direction. This is one area that should be immediately paid attention to.

IOC want govt to raise petrol prices by Rs 8-9 per litre to meet Rs 120 cr deficit per day, a tall order either way. In West Bengal , petrol at refinery gate is Rs 20.39 per litre while motorists have to pay Rs 46.86 per litre at pumps.

Singur is abuzz with activity and the Tata Motors would change the face of region without doubt and would establish West Bengal back as an important automobile manufacturing state.

Four Indian banks , namely, SBI,ICICI,BOB and BOI have to book mark to market losses for exposure in US Sub-Prime securities. BOB has however clarified that it may not have to do it.

Licensing for banks may be done away with in India . RBI says there is now no need for it as the banks are opening branches in rural and semi-urban area on their own initiative. The license free regime for the banks will be hotting up competition in profitable centres and thereby will affect profitability of banks.

Hari Om

BIRDINFO Stock Rx – A prescription for stock market

Panch Tattva Points: Post Result as on 25 Oct 2007

October 27, 2007

By krsna Khandelwal – A veteran market analyst

INGVYSYABK @ 268 (251007) gets 870 panch-tattva points and may be sold off.

BABKRAJAS @ 117 (251007) gets 908 panch-tattva points and may sold off.

ZUARIAGRO @ 226 (251007) gets 973 panch-tattva points and may be bought on declines for medium term.

CHAMBLFERT @ 44 (251007) gets 1055 panch-tattva points and may be bought but profit should be booked on surges.

Hari Om

BIRDINFO Stock Rx – A prescription for stock market