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FINANCIAL CHRONICLE™ » CORPORATE CHRONICLE™ » Shares in demand on Friday

Shares in demand on Friday

+4
K.Haputantri
TortoizePlus
greedy007
hariesha
8 posters

Go down  Message [Page 1 of 1]

1Shares in demand on Friday Empty Shares in demand on Friday Sun Jan 29, 2012 3:22 pm

hariesha


Vice President - Equity Analytics
Vice President - Equity Analytics

When market recovers from a major crash, in last few months the trend was a popular share rally. But this time it was different. Major Price movements and turnover were reported in value stocks, which are actually undervalued. Will this healthy trend continue?

Friday’s trading session was much interesting though we had a foreign outflow. Look at the figures bellow.

Total Turnover : 1,717,195,442.00
Banks, Finance & Insurance Sector : 995,199,310.00
As a % of Total Turnover : 58%

Actual participation from Insurance sector shares was negligible, and it’s totally a banks and finance run., and it’s totally a banks and finance run.

So I thought to have a re-visit to banking sector valuations.

• Most of the shares are trading at attractive valuations.

• Though Seylan bank is the leased valued share as per reported earnings, it also includes the VRS cost. So actual valuation is much higher. Further last rights issue was done at Rs.75/- for voting and Rs.35/- for nonvoting. On net asset basis Seylan is the most valued share. Its NV share is trading almost at 50% of the NAV.


• In the case of NTB both major shareholders have to trim their positions up to 15% within next three months. So there can be price movements when these strategic stakes are transferred.

• Union Bank may report additional 250 M net profit on account of capital gains of The Finance & Guarantee Ltd share transfer, subject to all shares on offer for transfer, were totally accepted.


• COMB and all major banks may report additional earnings, if they transfer their general provisions to P & L, as general provisions are not allowed in the IFRS, that they have to follow from 1st Jan. 2012.

• The fact to monitor is how rupee depreciation was affected to the banks. But most probably it will have a positive impact, as the depreciation was highly anticipated and banks may have taken care of their foreign currency transactions and positions.

********************************************************************************
This is anyhow not a promotion of shares or a particular sector. I am just sharing some facts and information. Even if we published an analysis some think it as a promotion and blame the publishers when the prices go down. Ie : Criticism on the thread titled “Last Chance to buy Good shares at Highly Discounted Price by Rajaraam.” Investors must understand that share prices and valuations are two different things and relative to market conditions. When the sentiments are high we pay even above the valuations. But when the sentiments are poor, sometimes it’s hard to find a buyer even at a 50% discount. But those who collect when sentiments are low, will gain the maximum.
********************************************************************************

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2Shares in demand on Friday Empty Re: Shares in demand on Friday Sun Jan 29, 2012 3:28 pm

greedy007


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

Most of the COMB shares were acquired by JKH director after disposing his shares in JKH.
We need to wait and see the trend of this sector.
No doubt Shares are undervalued, that doesn't mean investors will flock in to buy.

3Shares in demand on Friday Empty Re: Shares in demand on Friday Sun Jan 29, 2012 3:38 pm

hariesha


Vice President - Equity Analytics
Vice President - Equity Analytics

greedy007 wrote:Most of the COMB shares were acquired by JKH director after disposing his shares in JKH.
We need to wait and see the trend of this sector.
No doubt Shares are undervalued, that doesn't mean investors will flock in to buy.

It's not by a director of JKH, but a major shareholder, Captans familiy. They try to get the control of JKH, but now they are leaving.

4Shares in demand on Friday Empty Re: Shares in demand on Friday Sun Jan 29, 2012 3:40 pm

TortoizePlus

TortoizePlus
Manager - Equity Analytics
Manager - Equity Analytics

Thanks.
Hareisha, what is your view on SAMP. It is comming down.. I don't think it is due to valuations. It shows very good healthy figures..Is it due to new director board?. Other than being related to top shareholder and it's related parties I am bit worried about their exposure to the B&F sector..

5Shares in demand on Friday Empty Re: Shares in demand on Friday Sun Jan 29, 2012 3:44 pm

greedy007


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

@hariesha
You are correct major share holder.
Thanks for the clarification.

6Shares in demand on Friday Empty Re: Shares in demand on Friday Sun Jan 29, 2012 4:00 pm

hariesha


Vice President - Equity Analytics
Vice President - Equity Analytics

TortoizePlus wrote:Thanks.
Hareisha, what is your view on SAMP. It is comming down.. I don't think it is due to valuations. It shows very good healthy figures..Is it due to new director board?. Other than being related to top shareholder and it's related parties I am bit worried about their exposure to the B&F sector..

Sampath down trend started by some sr. employees who got the shares on ESOP plan @ low prices sold. The share came down from Rs.230/- to Rs.200/- on a single day. It went back to Rs.220/-s and continued to drop. All is depend on sentiments. If market activity restored back to early 2011 levels, people will buy even at 400/-. If Friday’s momentum is genuine, I think SAMP will bounce back to 200/- levels within two days.

7Shares in demand on Friday Empty Re: Shares in demand on Friday Sun Jan 29, 2012 4:18 pm

TortoizePlus

TortoizePlus
Manager - Equity Analytics
Manager - Equity Analytics

hariesha,

Thats is true. Sometimes this employee shares kill the trend. By the way, what is your view on director board. Did you analyse their profile..It is not very impressive to me.. We saw a deputy chairmen from apperal industry(Orit)?.. Who knows, they can do better than previous board.. Anyway I am expecting around 30 EPS for 2011 reports and much better from next four quarters.. Some of their new braches opened during late 2010 and 2011 are expected to show profits this year...

8Shares in demand on Friday Empty Re: Shares in demand on Friday Sun Jan 29, 2012 6:49 pm

K.Haputantri

K.Haputantri
Co-Admin

Hariesha, thank you for the nice analysis of the Banks. Its very usefull.

9Shares in demand on Friday Empty Re: Shares in demand on Friday Sun Jan 29, 2012 7:19 pm

jonta999

jonta999
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

sampath would give a minimum of 20/- gain with the upcoming results due to be released on 2012-02-10.....better to watch guys

10Shares in demand on Friday Empty Re: Shares in demand on Friday Sun Jan 29, 2012 7:34 pm

cseguide

cseguide
Vice President - Equity Analytics
Vice President - Equity Analytics

jonta999 wrote:sampath would give a minimum of 20/- gain with the upcoming results due to be released on 2012-02-10.....better to watch guys
HOW you got this date? , anyway it is a holiday

11Shares in demand on Friday Empty Re: Shares in demand on Friday Sun Jan 29, 2012 8:23 pm

viper123

viper123
Manager - Equity Analytics
Manager - Equity Analytics

Ohh. Whats going on

12Shares in demand on Friday Empty Re: Shares in demand on Friday Sun Jan 29, 2012 8:47 pm

soileconomy

soileconomy
Vice President - Equity Analytics
Vice President - Equity Analytics

Rising interest cost and devaluation of rupee will affect banks' profits.
Based on valuation and potential room for capital gain attracts SEYB-X to me.

13Shares in demand on Friday Empty Re: Shares in demand on Friday Sun Jan 29, 2012 9:18 pm

hariesha


Vice President - Equity Analytics
Vice President - Equity Analytics

soileconomy wrote:Rising interest cost and devaluation of rupee will affect banks' profits.
Based on valuation and potential room for capital gain attracts SEYB-X to me.

Normally banks report better results during high inflation. In 2011 most analysts were in the selling side of the banks, expecting low NIMs (Net Interest Margins) in reducing interest rates. In rising interest rate scenarios banks are increasing their lending rates at a higher margin, resulting improved NIMs. During the last week of Dec. NTB informed me that they are increasing my OD rate by 1.25%.
With regards to SEYB.X I am agree with you. I am already holding considerable amount of SEYB.X and also collected some during the last week at much cheaper prices. I am investing in SEYB as a medium term investment. I think it will offer better growth rates in 2012 than other banks.

14Shares in demand on Friday Empty Re: Shares in demand on Friday Sun Jan 29, 2012 9:32 pm

soileconomy

soileconomy
Vice President - Equity Analytics
Vice President - Equity Analytics

But hariesha ,demand for credit will come down since the rates are high and previously contracted rates will remain same in some loans .Non performing advances may go up.Central bank may re introduce risk mitigating methods again
.Since we are net importer , banks will have less business in trade business.

But what you said correct and observed by me last 5-6 years.It was the known method by us ,but whom can say that will be the same ?I just gave my opinion differently .

15Shares in demand on Friday Empty Re: Shares in demand on Friday Sun Jan 29, 2012 9:45 pm

jonta999

jonta999
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

cseguide wrote:
jonta999 wrote:sampath would give a minimum of 20/- gain with the upcoming results due to be released on 2012-02-10.....better to watch guys
HOW you got this date? , anyway it is a holiday

bloomberg.com/quote/SAMP:SL/key-statistics

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