Posts Tagged ‘SBI’

Weekly Update 2nd – 6th August 2010

Asian markets saw buying as more than half of the companies that announced results in the MSCI Asia Pacific Index have exceeded the analyst’s estimates, boosting confidence about the strength of the recovery. U.S. economy expanded at a 2.4 percent annual pace in the second quarter less than forecast, indicating that the world largest economy will see a moderate recovery.

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The jobless recovery is curbing household purchases as consumer spending that accounts for about 70 percent of the economy rose 1.6 percent in last quarter, compared with a 1.9 percent rate in the previous three months. U.S. financial system recovery is fragile and as per IMF stress tests banks may need as much as $76 billion in capital. In India, as per expectations RBI hiked the policy rates and indicated that monetary steps will continue in order to moderate inflationary pressures.

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RBI chief said that despite of the monetary measures, monsoon rains would play a critical role in moderating food prices. Now RBI will release eight monetary policy statements in a year that will cut short the time of monetary policy adjustments. The central Bank also revised its estimates for inflation and economic growth to 6 percent and 8.5 percent from earlier estimates of 5 percent and 8 percent respectively.

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The annual monsoon rains bounced back from a 17-percent deficit in the previous week to 38 percent above normal in the week to 28 July 2010.Heavy, well distributed showers in the past week helped total rainfall rise to normal during July have raised the farm sector prospects thereby indicating a pickup in rural demand.

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Till now the results announced so far have shown a mixed picture with some disappointment coming from the large caps.The combined net profit of a total of 1,085 companies declined 12.6 percent to `47280 crore on 23.1 percent increase in sales to 609368 crore in Q1 June 2010 over Q1 June 2009. Going next week some of the top companies like SBI, Bharti Airtel, Tata Motors, Tata steel, etc will announce their quarterly numbers and would help in setting the undertone of the market.

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Indian Stock Markets are holding on to the gains though the momentum for rise is lacking. But the world stock markets are slowly inching up with base metals commodities also showing strength. The rise in Rupee and the midcap stocks rally in the week gone by gives a hope of further rally. It seems the market would take a clearer direction in the coming week. Nifty has support between 5315-5250 levels and Sensex between 17700-17500 levels.

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It is quite visible that good corporate earnings have propped up the sentiments of financial market and commodity is not an exception. Hence we have seen that capital inflow switched to riskier asset from safe asset like gold and dollar index.

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Base metals are the major beneficiary and they are trading at multi months high whereas crude is reacting on stocks pile up in US and ignoring other positive cues. If positive outcome of economic indicators and earnings continue to come in near future then all base metals will trade in a range with upside bias and vice a versa.

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Even in crude oil some lower level buying may occur this week. Expect further fall in gold and if it breaches the mark of 17500 then we may see some spurt in physical buying. In agro commodities, spices may trade in a range on mix fundamentals.

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SBI strikes 52-week high on partnering with Oxigen Services

State Bank of India (SBI) is currently trading at Rs. 2502.20, up by 29.00 points or 1.17 % from its previous closing of Rs. 2473.20 on the BSE.

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The scrip opened at Rs. 2465.00 and has touched a new high and low of Rs. 2519.90 and Rs. 2450.50 respectively. So far 490137 shares were traded on the counter.

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The BSE group ‘A’ stock of face value Rs. 10 has touched a 52 week high of Rs. 2519.90 on 30-Jul-2010 and a 52 week low of Rs. 1644.00 on 30-Jul-2009.

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Last one week high and low of the scrip stood at Rs. 2519.90 and Rs. 2401.00 respectively. The current market cap of the company is Rs. 159324.02 crore.

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The promoters holding in the company stood at 59.41% while Institutions and Non-Institutions held 28.71% and 8.59% respectively.

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Public Sector Lender, State Bank of India (SBI) has tied up with recharge and billing services company, Oxigen Services and its supported company Sahyog Microfinance Foundation to offer banking services to customers through its Kiosk banking system by connecting directly to SBI’s core banking system by Oxigen web retailers.

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This move is being seen as the banking major’s attempt to reach out to ‘unbanked masses’ and help them open accounts, avail loans and make investments through web-based kiosks. Meanwhile, the services will be facilitated by Sahyog Microfinance Foundation which will appoint existing Oxigen retailers as Customer Service Points to carry out the banking services. The service will be rolled out initially in Delhi-NCR and Mumbai and will be taken nationwide in due course.

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Presently, three kiosk banking outlets have been opened up in villages in NCR region namely at a village near Jangpura, Gurgaon and Noida. The customers will also be able to get auto/home loans and loans against property and gold, get NSC/KVP certificates, invest in mutual funds, and activate different accounts current, term deposits and recurring deposits at these locations.

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India’s Wealth Lies in Its Cities

It was once believed that India lives in its villages.

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Now it is clear that India’s wealth lies in its cities, or more specifically, Mumbai.

 

India's Wealth Lies in Its Cities

A study conducted by Delhi-based SMC Global classified companies geographically on the location of their registered offices.

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It reveals that Mumbai-registered companies account for 36.28% of the total BSE 500 market cap.

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Some of the prominent names based out of Mumbai are Reliance Industries, L&T, HDFC and SBI.

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Also, out of the market capitalisation ascribed to Maharashtra which has the highest market capitalization among the states — more than 90% originates from Mumbai.

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In fact, Mumbai and six other cities account for 85.71% of the total market capitalisation of BSE 500.

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With Delhi NCR (National Capital Region, which includes satellite cities such as Gurgaon and Noida along with the capital) contributing 27.82%.

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After the financial and political capitals, state capitals take the fore.

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Bangalore lays claim to 7.10%,

Hyderabad to 4.86% and Kolkata accounts for 3.83%,

while Ahmedabad and Chennai account for 3.35% and 2.47%, respectively.

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On a state-wide basis, five states in combination with Delhi NCR and Maharashtra account for 94.20% of the total market cap.

A total of 66.17% of the index’s market cap can be traced to Maharashtra and Delhi NCR.

While the latter accounts for 38.35%, Delhi accounts 27.82%.

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Karnataka accounts for 7.74%, Gujarat, 7.48%, Andhra Pradesh is at 4.95% and Tamil Nadu at 4.02%, while Bengal has 3.83%.

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Though the big Indian companies have a pan-India presence with factories or plants located across the country, they tend to have registered offices in metros.

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That is because of the ease of operations and presence of other corporate houses, suggested the study.

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“The traditional metro cities have accumulation advantage.

Its ultimately the money which brings in more money.

As the Indian economy keeps evolving, tier-2 and tier-3 cities may catchup gradually, to bring-in more equitable distribution of wealth across the country.”

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…said Jagannadham Thunuguntla, equity head at SMC Capitals.

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ICICI, SBI write off, sell debt to reduce bad loans

By restructuring the repayment terms of prospective bad loans and writing off loans in Q3, the leading banks are putting in check their non-performing assets (NPAs).
ICICI, SBI write off, sell debt to reduce bad loans
However, State Bank of India (SBI) restructured Rs 2,832 crore loans, while ICICI Bank did so with Rs 850 crore of loans. Further, SBI wrote off Rs 900 crore of bad loans in the first half of 2009-10 while ICICI has written off Rs 600 crore in Q2.

Moreover, the level of gross NPAs depends on the amount of write-offs/upgrades of NPAs hence; the more relevant figure is the absolute level of net NPAs while SBI”s advances are growing faster than the system at 16%, but its NPAs are also growing.

Meanwhile, there is no need for concern as most loans are in the recoverable category and they stemmed from home loans, education loans and international business, which were closely related to the downturn.

In addition, the sale of bad loans also helped ICICI Bank ensure its gross NPAs were lower at Rs 9,200.89 crore at the end of Q2.

On the other hand, the bank restructured about Rs 4,800 crore of bad loans whereas in the next 2-3 quarters they should be able to clean up their balance sheet.

As for HDFC Bank, gross NPAs rose to Rs 2,025.88 crore at the end of Q2, about 20% higher than a year earlier while most of the bad loans on HDFC Bank”s books are on account of the merger of Centurion Bank.

Banks Appease Home Loans with Festival Offers :)

Banks appease home loans with festival offers

Banks appease home loans with festival offers

Banks are coming out with festival schemes on home loans ahead of Diwali.

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The move is aimed to increase credit demand.

Meanwhile, deals include teaser rates for initial years, amid some lenders providing alternative to shift to either fixed or floating rates in following years.

Lenders like Canara Bank, Bank of Maharashtra (BoM) and Dena Bank are offering fixed-rate loans for the first five years, and afterward, linking the loans to their prime lending rates.

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However, others like Bank of India are offering fixed-rate loans for the first two years.

Besides, SBI is offering fixed rates for the first three years.

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Moreover, the competition to gain market share has resulted in a small price war.

Development Bank of Credit introduced a fixed rate of 7.95 per cent for the first year, which is the lowest for the first year, in any case. From the second year onwards, the home rates will be linked to floating rate loans.

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BoM and Dena Bank offer a fixed rate of 8 per cent for loans up to Rs 30 lakh in the first two years.

Canara Bank offers 8 per cent in the first year for Rs 30 lakh and SBI offers 8 per cent for the first five years for loans up to Rs 5 lakh.

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Summer sales during the existing year were flat due to uncertainties.

Now, builders and lenders are making a fresh pitch to push sales during Diwali through limited period offers.

Most banks have also waived off the processing fee during the festival season.

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Interest Rate Futures Trading Re-Launched in India after 6 years :)

IRF-trading-Nse

Trading in interest rate futures (IRF) kicked off in India after about six years on the National Stock Exchange (NSE)’s platform on Monday.

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The exchange traded financial instrument will give banks and corporates an avenue to hedge their interest rate risks.

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IRFs are contracts traded on the bourses with an agreement to buy or sell an underlying instrument with the date and the price pre-specified.

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The launch of IRF came a year after trading started in currency futures, which gives participants an avenue to hedge against currency risks.

With the launch of IRF, market participants now have the option to hedge foreign currency risks as well as interest rate risk.

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The launch of interest rate derivatives means a lot to the NSE, its constituency of brokers and all economic entities who face interest rate risk,experts quoted on the recent development.

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SBI, Union Bank of India, Central Bank of India, Axis Bank, ICICI Bank, and Standard Chartered Bank actively traded in the IRF market.

It’s the second birth for IRF as the product was launched in 2003 but did not succeed.

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All resident Indians and financial institutions, including

banks and FIIs, can trade in IRF in its new format. 🙂