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FINANCIAL CHRONICLE™ » FINANCIAL CHRONICLE™ » Bank rally

Bank rally

Go down  Message [Page 1 of 1]

1Bank rally Empty Bank rally Tue Dec 06, 2011 5:58 pm

insidertrader


Manager - Equity Analytics
Manager - Equity Analytics
Check this out and other material available.

Why Are Bank P/Es So Low?
http://contrarianedge.com/2006/02/16/why-are-bank-pes-so-low/

For banks and finance companies to make profits they have to get money (from the depositors, loans etc.) and lend them (as loans, leasing...) and make a profit from the difference. They're not like the companies in manufacturing or something. They can't just go on making more and more items. To make money they need to have more money so they can loan them out. So their growth is limited. One way to make more business is to take more money as loans, debentures, etc.

So they're banks with a PE ratio under 10 that's probably fairly valued, whether it's a emerging market, frontier market, or has any other flashy names if they want to make money they have to some how get more money from depositors, loans, more shares what ever, pay interest and lend that money making a small profit. Because interest rates are low, the difference is now thinning out. Banks can't grow like some businesses.

So don't expect rallies.

2Bank rally Empty Re: Bank rally Tue Dec 06, 2011 6:06 pm

opfdo

opfdo
Vice President - Equity Analytics
Vice President - Equity Analytics
@insidertrader wrote:Check this out and other material available.

Why Are Bank P/Es So Low?
http://contrarianedge.com/2006/02/16/why-are-bank-pes-so-low/

For banks and finance companies to make profits they have to get money (from the depositors, loans etc.) and lend them (as loans, leasing...) and make a profit from the difference. They're not like the companies in manufacturing or something. They can't just go on making more and more items. To make money they need to have more money so they can loan them out. So their growth is limited. One way to make more business is to take more money as loans, debentures, etc.

So they're banks with a PE ratio under 10 that's probably fairly valued, whether it's a emerging market, frontier market, or has any other flashy names if they want to make money they have to some how get more money from depositors, loans, more shares what ever, pay interest and lend that money making a small profit. Because interest rates are low, the difference is now thinning out. Banks can't grow like some businesses.

So don't expect rallies.


bullshit

3Bank rally Empty Re: Bank rally Tue Dec 06, 2011 8:07 pm

MarketW


Manager - Equity Analytics
Manager - Equity Analytics
osmand wrote:
@insidertrader wrote:Check this out and other material available.

Why Are Bank P/Es So Low?
http://contrarianedge.com/2006/02/16/why-are-bank-pes-so-low/

For banks and finance companies to make profits they have to get money (from the depositors, loans etc.) and lend them (as loans, leasing...) and make a profit from the difference. They're not like the companies in manufacturing or something. They can't just go on making more and more items. To make money they need to have more money so they can loan them out. So their growth is limited. One way to make more business is to take more money as loans, debentures, etc.

So they're banks with a PE ratio under 10 that's probably fairly valued, whether it's a emerging market, frontier market, or has any other flashy names if they want to make money they have to some how get more money from depositors, loans, more shares what ever, pay interest and lend that money making a small profit. Because interest rates are low, the difference is now thinning out. Banks can't grow like some businesses.

So don't expect rallies.


bullshit

I also AGREE THIS IS CRAP.....BULL SHIT

4Bank rally Empty Re: Bank rally Tue Dec 06, 2011 8:31 pm

illuminati


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
If so go ahead and buy and wait until the bull shit falls on your lap

5Bank rally Empty Re: Bank rally Tue Dec 06, 2011 8:57 pm

mono

mono
Vice President - Equity Analytics
Vice President - Equity Analytics
@MarketW wrote:
osmand wrote:
@insidertrader wrote:Check this out and other material available.

Why Are Bank P/Es So Low?
http://contrarianedge.com/2006/02/16/why-are-bank-pes-so-low/

For banks and finance companies to make profits they have to get money (from the depositors, loans etc.) and lend them (as loans, leasing...) and make a profit from the difference. They're not like the companies in manufacturing or something. They can't just go on making more and more items. To make money they need to have more money so they can loan them out. So their growth is limited. One way to make more business is to take more money as loans, debentures, etc.

So they're banks with a PE ratio under 10 that's probably fairly valued, whether it's a emerging market, frontier market, or has any other flashy names if they want to make money they have to some how get more money from depositors, loans, more shares what ever, pay interest and lend that money making a small profit. Because interest rates are low, the difference is now thinning out. Banks can't grow like some businesses.

So don't expect rallies.


bullshit

I also AGREE THIS IS CRAP.....BULL SHIT

it's not bullshit. I explained this sometime ago. Banks are valued based on their NAV historically banks have been around 3.5 times their navps

6Bank rally Empty Re: Bank rally Tue Dec 06, 2011 11:00 pm

CSE.SAS

CSE.SAS
Global Moderator
@mono wrote:
@MarketW wrote:
osmand wrote:
@insidertrader wrote:Check this out and other material available.

Why Are Bank P/Es So Low?
http://contrarianedge.com/2006/02/16/why-are-bank-pes-so-low/

For banks and finance companies to make profits they have to get money (from the depositors, loans etc.) and lend them (as loans, leasing...) and make a profit from the difference. They're not like the companies in manufacturing or something. They can't just go on making more and more items. To make money they need to have more money so they can loan them out. So their growth is limited. One way to make more business is to take more money as loans, debentures, etc.

So they're banks with a PE ratio under 10 that's probably fairly valued, whether it's a emerging market, frontier market, or has any other flashy names if they want to make money they have to some how get more money from depositors, loans, more shares what ever, pay interest and lend that money making a small profit. Because interest rates are low, the difference is now thinning out. Banks can't grow like some businesses.

So don't expect rallies.


bullshit

I also AGREE THIS IS CRAP.....BULL SHIT

it's not bullshit. I explained this sometime ago. Banks are valued based on their NAV historically banks have been around 3.5 times their navps

mono ur correct ppl not in mood to read these kind of article....

they need info about crap n bullshit shares...

7Bank rally Empty Re: Bank rally Wed Dec 07, 2011 12:25 am

anubis


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
[quote="mono"]
it's not bullshit. I explained this sometime ago. Banks are valued based on their NAV historically banks have been around 3.5 times their navps [/quote]

Hi mono,

even based on this valuation, some of the banking shares are undervalued isn't it?

http://www.cse.lk/companyprofile/home.htm?id=208
http://www.cse.lk/companyprofile/home.htm?id=266

according to this both SAMP & COMB should be around 300/- or am I reading this wrong? (i'm a bit of a n00b)

Another observation:
http://forum.srilankaequity.com/t13620-banking-sector-valuation-guide
Sort of promotes banking shares and now this post sort of say "don't fall into that trap", is it coincidence or just me? scratch

(either someone is collecting banking shares or someone wants to dump some of them Cool)

Cheers!

8Bank rally Empty Re: Bank rally Wed Dec 07, 2011 12:32 am

mono

mono
Vice President - Equity Analytics
Vice President - Equity Analytics
bank shares have been declining since September last year. So most of the banks are undervalued. We might see a sector rally if the market picks up again and large investors start investing again.

9Bank rally Empty Re: Bank rally Wed Dec 07, 2011 12:44 am

Quibit


Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
I like NDB Bank. Let's watch from a fundamental point if view....

10Bank rally Empty Re: Bank rally Wed Dec 07, 2011 2:34 am

bePositive

bePositive
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
@Quibit wrote:I like NDB Bank. Let's watch from a fundamental point if view....
I like Nations trust Bank (NTB) as well.

http://www.viabletraffic.com

11Bank rally Empty Re: Bank rally Wed Dec 07, 2011 9:05 am

Kithsiri

Kithsiri
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
@mono wrote:most of the banks are undervalued.
According to one of the previous posting only Three (03 ) Banks were undervalued and others either neutral or overvalued.
Isn't this confusing to many.

12Bank rally Empty Re: Bank rally Wed Dec 07, 2011 9:21 am

aj


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
We have to see how banks manage to grow in this low interest rates and with more and more competition.
Banks and finance houses can't print money. They have to find more money somehow. Otherwise they can't make profits.
Didn't the government specifically told financial houses and banks to find money out of country and don't hope to raise funds inland? Why is that?

13Bank rally Empty Re: Bank rally Wed Dec 07, 2011 10:12 am

Rapaport

Rapaport
Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
Some interest in Banks & Finance seen this morning with big chunks traded in SAMP, COMB, LOLC, DFCC. Looks like a single buyer is collecting.

EPF? Instituitional buy? Malayasia/Singapore /foreigner Buying???? cyclops Razz

Cheers!

14Bank rally Empty Re: Bank rally Wed Dec 07, 2011 10:33 am

deep


Senior Equity Analytic
Senior Equity Analytic
@Rapaport wrote:Some interest in Banks & Finance seen this morning with big chunks traded in SAMP, COMB, LOLC, DFCC. Looks like a single buyer is collecting.

EPF? Instituitional buy? Malayasia/Singapore /foreigner Buying???? cyclops Razz

Cheers!

If foreign buyer, there shd be f inflows..

15Bank rally Empty Re: Bank rally Wed Dec 07, 2011 10:43 am

yellow knife


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
Banking rally is expected ..soon..

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