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India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Now, LIC Housing Fin launches teaser home loan
More lenders are joining the fixed-cum-floating interest rate home loan
bandwagon. LIC Housing Finance on Friday launched such a product. ICICI Bank
had introduced such a product last month and HDFC Ltd launched one last week.
Under the new home loan product, “New Advantage 5”, LICHF is offering home
loans at a fixed rate of interest for the first five years and floating rates thereafter.
For loans up to Rs 3 mn, LICHF will charge a fixed interest rate of 11.15 per cent in
the first five years; for loans above Rs 3 mn and less than Rs 7.5 mn, 11.40 per
cent; and for loans of Rs 7.5 mn and up to Rs 15 mn, 11.65 per cent. (Business
Line)
IRDA to slash exposure to promoter companies
Insurance companies promoted by corporate houses will not be allowed to invest
more than five per cent in group companies, the insurance regulator has
proposed. In its draft guidelines on investment norms, the Insurance Regulatory
and Development Authority (Irda) has recommended the overall exposure in
promoter group companies should be brought down to five per cent, from 25 per
cent. (Business Standard)
Banker hunt leads NBFCs to headhunters
The draft guidelines for licensing of new banks in the private sector released last
week, have set off a flurry of activity among stakeholders seeking to eye a number
of candidates with the help of headhunters. Non-banking finance companies
(NBFC) have given out mandates to recruiters to look for suitable candidates for
the corner offices. Business groups and enterprises who are seriously looking at a
banking foray have also engaged consulting firms for charting out a road map. This
involves looking at the existing competitive landscape; emerging opportunities and
business focus – corporate, retail and geographical coverage of banks. (Business
Standard)
DB RESEARCH
India Financials – Are asset quality concerns overdone? (Manish Shukla)
Our asset quality and sensitivity analysis shows that the current pessimism on
Indian financials is excessive. As economic growth moderates, a rise in NPL levels
is inevitable, but we do not believe the increase will be sharp and overall NPLs
should remain manageable. While global uncertainties could lead to short-term
volatility in stock prices, we believe that recent correction provides select
opportunities. Our preferred picks are HDFC Bank, Axis Bank and HDFC Ltd
among large caps and Yes Bank and SHTF among mid-caps.
Company news
ICICI Bank to hire 6,000 people this fiscal: Kochhar
The country's largest private lender ICICI Bank will recruit up to 6,000 people this fiscal to
cater to its business growth and expansion plans, a top official said. "Our business is growing
between 18 to 20% and we are also adding branches... It's expected that we would hire
between five to six thousand people in our workforce," the bank's managing director and
CEO Chanda Kochhar told reporters. Most of the recruitments will be at the entry-level and
will be done either directly or through institutes training graduates in banking and insurance
with which the bank has tie-ups, she said. (Business Standard)
IOB to increase repayment period for borrowers in retail, MSME sectors
Following directions from the Union Ministry of Finance to help borrowers in retail and
MSME (micro, small and medium enterprises) segments to tide over the problem of rising
interest rates, Indian Overseas Bank has decided to increase the repayment period for these
borrowers. Credit growth, CMD said, was subdued in the current economic situation.
However, there was no dearth in credit demand from MSME, retail and agriculture sectors.
Mr Narendra hoped that IOB would be able to achieve credit growth of 22 per cent against
the industry projection of 18 per cent this fiscal. (Business Line)
Compulsory annuity provision in unit-linked pension products may hurt policyholders
The insurance regulator's proposal requiring beneficiaries to compulsorily buy annuity from
the same insurer from whom the pension plan was bought may go against policyholders'
interest, say insurance industry experts. The Insurance Regulatory Development Authority
(IRDA) had released the draft guidelines on pension products offered by life insurance
companies for discussion on August 1. Earlier, pension plans allowed consumers to
commute one-third of the total amount and two-thirds were to be used to buy annuity from
any insurer. Under the present IRDA draft proposal on pension products, the investor will
have to buy the annuity from the same insurer. (Business Line)
PNB holds Mega Recovery Camps for small agricultural loans
Punjab National Bank, whose total advances to agriculture segment stood at over Rs 340 bn
in the first quarter of current financial year, is holding ‘Mega Recovery Camps’ all over India
aimed at small agricultural loans. The bank is reaching out to small agricultural borrowers in
distress and trying to help them repay the outstanding money by part waivers and
rescheduling of installments. Agricultural advances below Rs 1 mn taken qualify for being
taken up at these camps. (Business Standard)
Norms on new bank licences after bill amendment
The Reserve Bank of India is likely to issue the final guidelines for granting bank licences to
corporates only after Parliament approves the Banking Laws (Amendment) Bill, 2011. The
final guidelines on new banking licences would be released only after the necessary
amendments to the Banking Laws (Amendment) Bill, which seeks to give more power to the
regulatory powers of the RBI, sources said. (Business Standard)
India Financials – Are asset quality concerns overdone? (Manish Shukla)
Our asset quality and sensitivity analysis shows that the current pessimism on Indian
financials is excessive. As economic growth moderates, a rise in NPL levels is inevitable, but
we do not believe the increase will be sharp and overall NPLs should remain manageable.
While global uncertainties could lead to short-term volatility in stock prices, we believe that
recent correction provides select opportunities. Our preferred picks are HDFC Bank, Axis
Bank and HDFC Ltd among large caps and Yes Bank and SHTF among mid-caps.
Return of “special rate” mortgage products (Manish Shukla)HDFC has launched a new home loan product “Fixed First” under which interest rates would
be fixed for the initial duration of 3 or 5 years and floating thereafter. The floating rate will be
linked to the retail prime lending rate (RPLR). ICICI Bank had launched a similar product on
August 19, 2011 where the interest rates would be fixed for 1 year or 2 years. The launch of
these schemes does indicate that competitive intensity is returning to the mortgage lending
market. Given that we are close to the peak of interest rate cycle these products, if
successful, could prove to be profitable for the lenders.
Asia Economics Special – Inflation & rates forecast and growth, fiscal, FX update
(Taimur Baig, Kaushik Das)
We forecast WPI inflation to touch 9.6% in August, higher than June (9.4%) and July (9.2%).
The prevailing inflation trend is not comforting for the Reserve Bank of India. Our
longstanding view on the Indian rupee has been that the exchange rate is poised to display a
tendency toward medium term appreciation, as India’s high growth potential would allow it
to attract foreign capital and hence it would run an ample and steady BOP surplus. Latest
fiscal data (April-July 2011) suggest that both revenue and spending are at risk of slipping
from the budget targets. The fiscal deficit has already exceeded 55% of the budget estimate,
higher than the comparable trend of the past few years. Given robust core infrastructure
production outturn (7.8%yoy), we forecast industrial production to grow by 8.0%yoy in July.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Now, LIC Housing Fin launches teaser home loan
More lenders are joining the fixed-cum-floating interest rate home loan
bandwagon. LIC Housing Finance on Friday launched such a product. ICICI Bank
had introduced such a product last month and HDFC Ltd launched one last week.
Under the new home loan product, “New Advantage 5”, LICHF is offering home
loans at a fixed rate of interest for the first five years and floating rates thereafter.
For loans up to Rs 3 mn, LICHF will charge a fixed interest rate of 11.15 per cent in
the first five years; for loans above Rs 3 mn and less than Rs 7.5 mn, 11.40 per
cent; and for loans of Rs 7.5 mn and up to Rs 15 mn, 11.65 per cent. (Business
Line)
IRDA to slash exposure to promoter companies
Insurance companies promoted by corporate houses will not be allowed to invest
more than five per cent in group companies, the insurance regulator has
proposed. In its draft guidelines on investment norms, the Insurance Regulatory
and Development Authority (Irda) has recommended the overall exposure in
promoter group companies should be brought down to five per cent, from 25 per
cent. (Business Standard)
Banker hunt leads NBFCs to headhunters
The draft guidelines for licensing of new banks in the private sector released last
week, have set off a flurry of activity among stakeholders seeking to eye a number
of candidates with the help of headhunters. Non-banking finance companies
(NBFC) have given out mandates to recruiters to look for suitable candidates for
the corner offices. Business groups and enterprises who are seriously looking at a
banking foray have also engaged consulting firms for charting out a road map. This
involves looking at the existing competitive landscape; emerging opportunities and
business focus – corporate, retail and geographical coverage of banks. (Business
Standard)
DB RESEARCH
India Financials – Are asset quality concerns overdone? (Manish Shukla)
Our asset quality and sensitivity analysis shows that the current pessimism on
Indian financials is excessive. As economic growth moderates, a rise in NPL levels
is inevitable, but we do not believe the increase will be sharp and overall NPLs
should remain manageable. While global uncertainties could lead to short-term
volatility in stock prices, we believe that recent correction provides select
opportunities. Our preferred picks are HDFC Bank, Axis Bank and HDFC Ltd
among large caps and Yes Bank and SHTF among mid-caps.
Company news
ICICI Bank to hire 6,000 people this fiscal: Kochhar
The country's largest private lender ICICI Bank will recruit up to 6,000 people this fiscal to
cater to its business growth and expansion plans, a top official said. "Our business is growing
between 18 to 20% and we are also adding branches... It's expected that we would hire
between five to six thousand people in our workforce," the bank's managing director and
CEO Chanda Kochhar told reporters. Most of the recruitments will be at the entry-level and
will be done either directly or through institutes training graduates in banking and insurance
with which the bank has tie-ups, she said. (Business Standard)
IOB to increase repayment period for borrowers in retail, MSME sectors
Following directions from the Union Ministry of Finance to help borrowers in retail and
MSME (micro, small and medium enterprises) segments to tide over the problem of rising
interest rates, Indian Overseas Bank has decided to increase the repayment period for these
borrowers. Credit growth, CMD said, was subdued in the current economic situation.
However, there was no dearth in credit demand from MSME, retail and agriculture sectors.
Mr Narendra hoped that IOB would be able to achieve credit growth of 22 per cent against
the industry projection of 18 per cent this fiscal. (Business Line)
Compulsory annuity provision in unit-linked pension products may hurt policyholders
The insurance regulator's proposal requiring beneficiaries to compulsorily buy annuity from
the same insurer from whom the pension plan was bought may go against policyholders'
interest, say insurance industry experts. The Insurance Regulatory Development Authority
(IRDA) had released the draft guidelines on pension products offered by life insurance
companies for discussion on August 1. Earlier, pension plans allowed consumers to
commute one-third of the total amount and two-thirds were to be used to buy annuity from
any insurer. Under the present IRDA draft proposal on pension products, the investor will
have to buy the annuity from the same insurer. (Business Line)
PNB holds Mega Recovery Camps for small agricultural loans
Punjab National Bank, whose total advances to agriculture segment stood at over Rs 340 bn
in the first quarter of current financial year, is holding ‘Mega Recovery Camps’ all over India
aimed at small agricultural loans. The bank is reaching out to small agricultural borrowers in
distress and trying to help them repay the outstanding money by part waivers and
rescheduling of installments. Agricultural advances below Rs 1 mn taken qualify for being
taken up at these camps. (Business Standard)
Norms on new bank licences after bill amendment
The Reserve Bank of India is likely to issue the final guidelines for granting bank licences to
corporates only after Parliament approves the Banking Laws (Amendment) Bill, 2011. The
final guidelines on new banking licences would be released only after the necessary
amendments to the Banking Laws (Amendment) Bill, which seeks to give more power to the
regulatory powers of the RBI, sources said. (Business Standard)
India Financials – Are asset quality concerns overdone? (Manish Shukla)
Our asset quality and sensitivity analysis shows that the current pessimism on Indian
financials is excessive. As economic growth moderates, a rise in NPL levels is inevitable, but
we do not believe the increase will be sharp and overall NPLs should remain manageable.
While global uncertainties could lead to short-term volatility in stock prices, we believe that
recent correction provides select opportunities. Our preferred picks are HDFC Bank, Axis
Bank and HDFC Ltd among large caps and Yes Bank and SHTF among mid-caps.
Return of “special rate” mortgage products (Manish Shukla)HDFC has launched a new home loan product “Fixed First” under which interest rates would
be fixed for the initial duration of 3 or 5 years and floating thereafter. The floating rate will be
linked to the retail prime lending rate (RPLR). ICICI Bank had launched a similar product on
August 19, 2011 where the interest rates would be fixed for 1 year or 2 years. The launch of
these schemes does indicate that competitive intensity is returning to the mortgage lending
market. Given that we are close to the peak of interest rate cycle these products, if
successful, could prove to be profitable for the lenders.
Asia Economics Special – Inflation & rates forecast and growth, fiscal, FX update
(Taimur Baig, Kaushik Das)
We forecast WPI inflation to touch 9.6% in August, higher than June (9.4%) and July (9.2%).
The prevailing inflation trend is not comforting for the Reserve Bank of India. Our
longstanding view on the Indian rupee has been that the exchange rate is poised to display a
tendency toward medium term appreciation, as India’s high growth potential would allow it
to attract foreign capital and hence it would run an ample and steady BOP surplus. Latest
fiscal data (April-July 2011) suggest that both revenue and spending are at risk of slipping
from the budget targets. The fiscal deficit has already exceeded 55% of the budget estimate,
higher than the comparable trend of the past few years. Given robust core infrastructure
production outturn (7.8%yoy), we forecast industrial production to grow by 8.0%yoy in July.
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