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India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
TOP STORIES
Rate rise cycle near its peak: Gokarn
India faces inflation of close to 10 per cent in the September-November period but
price pressure should moderate from December, meaning the peak of an 18-
month rate rise cycle is near, Reserve Bank of India Deputy Governor Subir Gokarn
said yesterday. The country raised interest rates last week for the 12th time in 18
months and signalled more was to come. “The main motivation for the hike was
that we are expecting headline inflation to remain above nine per cent and close to
10 pct for the next three months — September-October-November,” Subir Gokarn
told Reuters in an interview. “It would be fair to say we are near the peak.
Whether we are at the peak or not is not a judgment I can make.” (Business
Standard)
Banks scrap personal surety clause in MFI debt-recast
ICICI Bank, HDFC Bank and Axis Bank are among lenders that have scrapped
personal guarantee clause to bail out four microfinance companies, but they could
be on the hook in the Rs 70 bn debt restructuring if business prospects do not
improve dramatically. The lenders have agreed to waive the personal guarantee
since the deadline to finalise a rescue package was fast approaching, people
familiar with the development said. The deadline to complete the corporate debt
restructuring expires on September 30. (Economic Times)
Insurers' investment limit in bonds may be raised to 20%
To broaden the investment options of insurance companies, the IRDA (Insurance
Regulatory and Development Authority) is considering raising their investment
limit in bonds to 20 per cent provided they are exchange traded. The current
norms allow insurance companies to hold only 10 per cent of their total
investments in any company. If the regulator ups insurance companies'
investment limit in bond markets, then it will channelise long-term investment in
infrastructure projects and boost the bond market, say analysts. (Business Line)
DB RESEARCH
HDFC Company meeting takeaways: stable spreads & growth
The key takeaway from our meeting with HDFC management is that a well
diversified liabilities mix is its core strength; this continues to differentiate HDFC
from its peers. The company is confident in growing loans at 18-20% in FY12E,
with volumes in non-metro areas partly off-setting the moderation in metro areas.
HDFC carries excess provisions on its balance sheet; hence, there will not be any
material impact of the recent change in NPL provision norms by NHB. We
maintain a Buy rating with a target price of INR805.
Sector news
BoI seeks Rs 40 bn from Centre
Bank of India (BoI) has sought capital infusion of Rs 40 bn from the government to fund its
growth for the next two-three years. The government holds 65 per cent stake in Bank of
India. “We need Rs 40 bn over the next two-three years. Thus, we have requested the
government for funds, so that the capital adequacy ratio remains above nine per cent,” said a
senior Bank of India official. As on June 30, the bank’s capital adequacy ratio was 11.6 per
cent, with Tier -I capital at 8.02 per cent. The government had said it wanted to ensure public
sector banks remain well capitalised, with Tier-I capital of eight per cent. Banks have to
maintain six per cent Tier-I capital and a minimum capital adequacy ratio of nine per cent.
(Business Standard)
Irda relaxes persistency norms for insurance agents
The Insurance Regulatory and Development Authority (Irda) today relaxed norms for
insurance agents by removing certain riders at pegging the persistency ratio, which refers to
retention of clients, at 50%. "The average persistency rate is uniformly set as 50% which is to
be reckoned only on number of policies," Irda said in a circular. In February, the Irda had
pegged the persistency ratio, a measure of customer satisfaction, at 50% with a rider that it
should go up to 75% by 2015-16. Irda also clarified that policies which continue to provide
insurance cover to clients after the end of premium payment (auto cover policies) would be
included while computing the persistency ratio. (Business Standard)
Final IPO norms for life insurers within a week: Irda
The Insurance Regulatory and Development Authority (Irda) today said it would come out
with guidelines for initial public offering (IPO) of life insurance companies within a week. "We
will be approaching for the gazetting sometimes later this week," Irda Chairman J Hari
Narayan told reporters here on the sidelines of Assocham's Global Insurance Summit. For life
insurance companies, the clause mandating a three-year track record of profitability as a
precondition for tapping the capital markets has been removed in the draft guidelines on the
IPO. (Business Standard)
Banks want scope of ‘micro enterprise' expanded
Banks have requested the Reserve Bank of India to expand the scope of the definition of
‘micro enterprises' as fulfilling the lending target prescribed by the regulator for this segment
is proving to be a tall order. Bankers say that there are not enough micro enterprises in the
country with the requisite borrowing appetite for them to fulfill the lending targets prescribed
by the RBI. On the recommendations of a high level task force on MSME (micro, small and
medium enterprises), the RBI last year mandated that all scheduled commercial banks should
achieve a 20 per cent year-on-year growth in credit to micro and small enterprises (MSE) to
ensure enhanced credit flow. (Business Line)
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
TOP STORIES
Rate rise cycle near its peak: Gokarn
India faces inflation of close to 10 per cent in the September-November period but
price pressure should moderate from December, meaning the peak of an 18-
month rate rise cycle is near, Reserve Bank of India Deputy Governor Subir Gokarn
said yesterday. The country raised interest rates last week for the 12th time in 18
months and signalled more was to come. “The main motivation for the hike was
that we are expecting headline inflation to remain above nine per cent and close to
10 pct for the next three months — September-October-November,” Subir Gokarn
told Reuters in an interview. “It would be fair to say we are near the peak.
Whether we are at the peak or not is not a judgment I can make.” (Business
Standard)
Banks scrap personal surety clause in MFI debt-recast
ICICI Bank, HDFC Bank and Axis Bank are among lenders that have scrapped
personal guarantee clause to bail out four microfinance companies, but they could
be on the hook in the Rs 70 bn debt restructuring if business prospects do not
improve dramatically. The lenders have agreed to waive the personal guarantee
since the deadline to finalise a rescue package was fast approaching, people
familiar with the development said. The deadline to complete the corporate debt
restructuring expires on September 30. (Economic Times)
Insurers' investment limit in bonds may be raised to 20%
To broaden the investment options of insurance companies, the IRDA (Insurance
Regulatory and Development Authority) is considering raising their investment
limit in bonds to 20 per cent provided they are exchange traded. The current
norms allow insurance companies to hold only 10 per cent of their total
investments in any company. If the regulator ups insurance companies'
investment limit in bond markets, then it will channelise long-term investment in
infrastructure projects and boost the bond market, say analysts. (Business Line)
DB RESEARCH
HDFC Company meeting takeaways: stable spreads & growth
The key takeaway from our meeting with HDFC management is that a well
diversified liabilities mix is its core strength; this continues to differentiate HDFC
from its peers. The company is confident in growing loans at 18-20% in FY12E,
with volumes in non-metro areas partly off-setting the moderation in metro areas.
HDFC carries excess provisions on its balance sheet; hence, there will not be any
material impact of the recent change in NPL provision norms by NHB. We
maintain a Buy rating with a target price of INR805.
Sector news
BoI seeks Rs 40 bn from Centre
Bank of India (BoI) has sought capital infusion of Rs 40 bn from the government to fund its
growth for the next two-three years. The government holds 65 per cent stake in Bank of
India. “We need Rs 40 bn over the next two-three years. Thus, we have requested the
government for funds, so that the capital adequacy ratio remains above nine per cent,” said a
senior Bank of India official. As on June 30, the bank’s capital adequacy ratio was 11.6 per
cent, with Tier -I capital at 8.02 per cent. The government had said it wanted to ensure public
sector banks remain well capitalised, with Tier-I capital of eight per cent. Banks have to
maintain six per cent Tier-I capital and a minimum capital adequacy ratio of nine per cent.
(Business Standard)
Irda relaxes persistency norms for insurance agents
The Insurance Regulatory and Development Authority (Irda) today relaxed norms for
insurance agents by removing certain riders at pegging the persistency ratio, which refers to
retention of clients, at 50%. "The average persistency rate is uniformly set as 50% which is to
be reckoned only on number of policies," Irda said in a circular. In February, the Irda had
pegged the persistency ratio, a measure of customer satisfaction, at 50% with a rider that it
should go up to 75% by 2015-16. Irda also clarified that policies which continue to provide
insurance cover to clients after the end of premium payment (auto cover policies) would be
included while computing the persistency ratio. (Business Standard)
Final IPO norms for life insurers within a week: Irda
The Insurance Regulatory and Development Authority (Irda) today said it would come out
with guidelines for initial public offering (IPO) of life insurance companies within a week. "We
will be approaching for the gazetting sometimes later this week," Irda Chairman J Hari
Narayan told reporters here on the sidelines of Assocham's Global Insurance Summit. For life
insurance companies, the clause mandating a three-year track record of profitability as a
precondition for tapping the capital markets has been removed in the draft guidelines on the
IPO. (Business Standard)
Banks want scope of ‘micro enterprise' expanded
Banks have requested the Reserve Bank of India to expand the scope of the definition of
‘micro enterprises' as fulfilling the lending target prescribed by the regulator for this segment
is proving to be a tall order. Bankers say that there are not enough micro enterprises in the
country with the requisite borrowing appetite for them to fulfill the lending targets prescribed
by the RBI. On the recommendations of a high level task force on MSME (micro, small and
medium enterprises), the RBI last year mandated that all scheduled commercial banks should
achieve a 20 per cent year-on-year growth in credit to micro and small enterprises (MSE) to
ensure enhanced credit flow. (Business Line)
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