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FINANCIAL CHRONICLE™ » FINANCIAL CHRONICLE™ » Impact of Gold price on Banks

Impact of Gold price on Banks

Go down  Message [Page 1 of 1]

1Impact of Gold price on Banks Empty Impact of Gold price on Banks Mon Apr 15, 2013 3:48 pm

salt

salt
Vice President - Equity Analytics
Vice President - Equity Analytics
Guys,

If the Gold price moves this way, it will have chaotic effect on some SL banks.
Sampath and PB are the riskiest among banks
LB Finance is riskiest among finance Companies


If market moves adversely ,
There will be huge pull out from Gold ETFs, it might speed up the process
Margin call on futures will cause forced selling

2Impact of Gold price on Banks Empty Re: Impact of Gold price on Banks Mon Apr 15, 2013 4:09 pm

Light of Hope


Vice President - Equity Analytics
Vice President - Equity Analytics
True. there was a news in the papers few weeks back. Well, LB Finance offered 55,555 for a 24K ounce last year. who's gonna pay this back with interest when they can buy cheaper form the market now. They are in a crisis

@salt wrote:Guys,

If the Gold price moves this way, it will have chaotic effect on some SL banks.
Sampath and PB are the riskiest among banks
LB Finance is riskiest among finance Companies


If market moves adversely ,
There will be huge pull out from Gold ETFs, it might speed up the process
Margin call on futures will cause forced selling

3Impact of Gold price on Banks Empty Re: Impact of Gold price on Banks Mon Apr 15, 2013 4:12 pm

salt

salt
Vice President - Equity Analytics
Vice President - Equity Analytics
Twin effects from currency appreciation & gold price decline on gold holdings of banks/ finance companies

4Impact of Gold price on Banks Empty Re: Impact of Gold price on Banks Mon Apr 15, 2013 4:42 pm

OnlyGuru


Stock Analytic
Stock Analytic
@Light of Hope wrote:True. there was a news in the papers few weeks back. Well, LB Finance offered 55,555 for a 24K ounce last year. who's gonna pay this back with interest when they can buy cheaper form the market now. They are in a crisis

Are you sure they offered 55,555 for an ounce.. if so they are still safe as an ounce is more than 30 grams and market price is more than 180,000!

@salt wrote:Guys,

If the Gold price moves this way, it will have chaotic effect on some SL banks.
Sampath and PB are the riskiest among banks
LB Finance is riskiest among finance Companies


If market moves adversely ,
There will be huge pull out from Gold ETFs, it might speed up the process
Margin call on futures will cause forced selling

5Impact of Gold price on Banks Empty Re: Impact of Gold price on Banks Mon Apr 15, 2013 4:50 pm

glad


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
A small percentage of the borrowers will want their jewels back for sentimental reasons. What steps will the Banks & Fin. cos take to handle this?

6Impact of Gold price on Banks Empty Re: Impact of Gold price on Banks Mon Apr 15, 2013 5:13 pm

Rocky

Rocky
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
@glad wrote:A small percentage of the borrowers will want their jewels back for sentimental reasons. What steps will the Banks & Fin. cos take to handle this?



Banks are like Jews and Managers are stoics.
If people can pawn their GOLD to make a deal and ultimately make money, the banks have no feelings for the borrower.

So sentimentality and business do not go well.
Just as business and pleasure is not such a good idea.

7Impact of Gold price on Banks Empty Re: Impact of Gold price on Banks Mon Apr 15, 2013 7:49 pm

dineshfernando


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
As far as I know the lending houses lend only 80% of the value of the gold. The value determined by them is also less than the market value. They are protected anyway.

The lending houses are very smart and they are prepared for such market cycles. The decline in Bullion market is temporary and it is an opportunity for some investors to make some money.

Present price for an ounce is US$ 1,398.

8Impact of Gold price on Banks Empty Re: Impact of Gold price on Banks Mon Apr 15, 2013 8:08 pm

csetrader


Stock Trader
agree with dinesh. this is a temporary set back. some of the foreign bank (SCB) heads were very confident in gold price will reach to US$1700 per ounce.

9Impact of Gold price on Banks Empty Re: Impact of Gold price on Banks Mon Apr 15, 2013 8:22 pm

Redbulls

Redbulls
Director - Equity Analytics
Director - Equity Analytics
@csetrader wrote:agree with dinesh. this is a temporary set back. some of the foreign bank (SCB) heads were very confident in gold price will reach to US$1700 per ounce.
http://forum.srilankaequity.com/t27420-socgen-gold-is-going-to-crash-to-1265-in-the-next-3-months

10Impact of Gold price on Banks Empty Re: Impact of Gold price on Banks Mon Apr 15, 2013 8:32 pm

Rapaport

Rapaport
Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
It is interesting to note stagnation of the commodities and gold and on the other hand slow rise of the stock indices.

Looks like tables are turning.

If you think of the worst which can impact CSE are tea and rubber plantations, which can lose out in a commodity crash.

Interesting developments.

http://www.goldpricerate.com/english/gold-price-in-sri_lanka.php

Cheers!

11Impact of Gold price on Banks Empty Re: Impact of Gold price on Banks Mon Apr 15, 2013 8:34 pm

Rapaport

Rapaport
Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
LFIN will get a big blow.

When it comes to money in these hard times, sentimental value will be neglected over gold available in the market at half price.

Not a good sign, entering murky waters

Cheers

12Impact of Gold price on Banks Empty Re: Impact of Gold price on Banks Tue Apr 16, 2013 6:04 am

worthiness


Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
As per above, present price of gold per ounce is US$ 1398. In the future, it shall reach to US$ 1700.
Anyone got forecast for the bottom line of gold demand & price before reaching to $ 1700 level.

13Impact of Gold price on Banks Empty Re: Impact of Gold price on Banks Tue Apr 16, 2013 7:15 am

Light of Hope


Vice President - Equity Analytics
Vice President - Equity Analytics
Thanks for pointing this out. It should be for a Sovereign. They offered 55,555 for 24k Sovereign.

@OnlyGuru wrote:
@Light of Hope wrote:True. there was a news in the papers few weeks back. Well, LB Finance offered 55,555 for a 24K ounce last year. who's gonna pay this back with interest when they can buy cheaper form the market now. They are in a crisis

Are you sure they offered 55,555 for an ounce.. if so they are still safe as an ounce is more than 30 grams and market price is more than 180,000!

@salt wrote:Guys,

If the Gold price moves this way, it will have chaotic effect on some SL banks.
Sampath and PB are the riskiest among banks
LB Finance is riskiest among finance Companies


If market moves adversely ,
There will be huge pull out from Gold ETFs, it might speed up the process
Margin call on futures will cause forced selling

14Impact of Gold price on Banks Empty Re: Impact of Gold price on Banks Tue Apr 16, 2013 7:24 am

Light of Hope


Vice President - Equity Analytics
Vice President - Equity Analytics
How can we be sure it's temporary. Gold entered the bear phase, I think after about 8 years, my wild guess is that it could last years. Today in Bloomberg an expert said it could even reach USD 800 (I can't prove this). Nobody predicted a such a drop so fast

I got 47,500 for a gold(1 Sovereign) coin in January, when I add the high interest rate, I could buy a 1 Sovereign gold coin for a lesser price from the market soon. I might as well do it.

@dineshfernando wrote:As far as I know the lending houses lend only 80% of the value of the gold. The value determined by them is also less than the market value. They are protected anyway.

The lending houses are very smart and they are prepared for such market cycles. The decline in Bullion market is temporary and it is an opportunity for some investors to make some money.

Present price for an ounce is US$ 1,398.

15Impact of Gold price on Banks Empty Re: Impact of Gold price on Banks Tue Apr 16, 2013 8:33 am

smallville

smallville
Associate Director - Equity Analytics
Associate Director - Equity Analytics
This is what Commodities guru Jim Rogers has to say abt Gold;

He told Business Insider there were four key things driving the sell-off.

1. India - The country hiked its gold import tax rate by 50% to 6% at the start of the year. This has curbed gold demand.

2. Chartists - Technical analysts that have warned that gold prices will continue to fall.

3. Cyprus - "Ms. Merkel is seeking re-election so she has told Cyprus and others that they should sell some of their gold to pay their debts. The Germans are tired of bailing people out and she needs to be tough."

4. Bitcoins - "The collapse of Bitcoin since most of them also own gold."

http://finance.yahoo.com/news/jim-rogers-said-expect-gold-180550281.html

16Impact of Gold price on Banks Empty Re: Impact of Gold price on Banks Tue Apr 16, 2013 8:40 am

smallville

smallville
Associate Director - Equity Analytics
Associate Director - Equity Analytics
OMG.. GOLD is a big selllllllllllllllllll

Impact of Gold price on Banks 5yr__210

17Impact of Gold price on Banks Empty Re: Impact of Gold price on Banks Tue Apr 16, 2013 6:39 pm

Slstock

Slstock
Director - Equity Analytics
Director - Equity Analytics
The gold loans are given for short term only ( mostly 3 months) . They usually use some risk management schemes as they know the volatility of it. Also interest is high while loan given is usually 10-20% less than market price. It might not be bad as we think if the management have studied and done their jobs correctly.

@Rapaport wrote:LFIN will get a big blow.

When it comes to money in these hard times, sentimental value will be neglected over gold available in the market at half price.

Not a good sign, entering murky waters

Cheers

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