Canara HSBC Oriental Bank of Commerce Life Insurance appoints John Holden as CEO

Canara HSBC Oriental Bank of Commerce Life Insurance-a joint venture between Canara Bank and Oriental Bank of Commerce, and HSBC Insurance (Asia Pacific) Holdings Ltd, said it has appointed John Holden as the chief executive officer (CEO).

He succeeds Harpal Karlcut who was responsible for the successful launch and growth of business. Mr Karlcut has now moved back to HSBC Insurance on an overseas assignment.

Mr Holden is an internationally experienced executive with a track record of developing and implementing growth strategies across business areas, geographies and cultures. He has worked with HSBC for over 26 years in banking, marketing and insurance, spending the majority of his career in the group's life, pensions and investment businesses, supporting retail, commercial and private banking propositions.

Mr Holden has spent the last 13 years in Korea, Taiwan, Malaysia, and the Middle East and has been instrumental in creating extremely successful bancassurance distribution partnerships. Prior to joining Canara HSBC Oriental Bank of Commerce Life Insurance, he was deputy president & chief operating officer of Hana HSBC Life Insurance; a 50:50 joint venture between Hana Financial Holdings and HSBC Insurance.


Lavasa project: MoEF to submit affidavit and order to HC

Mumbai: The Union ministry of environment and forests (MoEF) today told the Bombay High Court that it would submit its affidavit and a copy of its order on the controversial Lavasa housing project near Pune, which allegedly violated green norms, reports PTI.

Additional Solicitor General Darius Khambata, appearing for the ministry, told a division bench of justices VC Daga and Rajesh Ketkar that the ministry would be submitting its affidavit and order to the court registrar later in the day.

Mr Khambata said the matter would be heard on 27th January.

The high court had on 22nd December last year directed the environment ministry to take a final decision on its show-cause notice to Lavasa Corporation (LC), the promoter of the project at the hill station (Lonavala).

According to reports, the environment ministry has pointed to "grave violations" in the Lavasa project and is mulling strong action against it.

The ministry had served notice to Lavasa Corporation on 25 November 2010 as to why it did not obtain environmental clearances as per notifications issued under the Environment Protection Act before commencing the project in 2004.

LC, a subsidiary of Hindustan Construction Company, challenged the notice before the high court. The corporation has claimed that it is a tourism project and was based on the state hill tourism policy, formulated by the Maharashtra government, allowing the Rs2,000 crore project to come up.


Q3FY11 analysis: HDFC registers good profit , SAIL disappoints on higher costs

HDFC’s loan growth is likely to moderate with withdrawal of dual-rate product and hike in lending rates. Rising coking coal prices will continue to dent SAIL’s margins

HDFC's December quarter results were good, but going forward it will face a higher base, moderating demand, and higher cost of funds. SAIL, however, disappointed as higher fuel and raw material expenses and lower realizations hurt its performance in the period.

Housing Development Finance Corporation (HDFC)

The net profit of housing finance company HDFC grew by 33% to about Rs891 crore in the December quarter, from Rs671 crore in the corresponding period a year ago. This was at the higher end of expectations. There is a capital gains element of Rs170 crore in these numbers (from the IL&FS stake sale), but this was expected.

Net interest income (NII) was up by 20% to Rs1,074 crore in the period under review, from Rs895 crore in the previous corresponding period. This came in much higher than expectations. At the upper end, this was expected to be Rs1,110 crore. Disbursements grew by 21% and loans by 20%, both in line with expectations.

The general opinion is that the mortgage lender is dealing with a higher base and moderating demand and that this will slow down incremental growth, at least slightly. Even while approval growth of 29% indicates a strong pipeline, it is likely that loan growth will moderate with the withdrawal of the dual-rate product and a hike in lending rates.

HDFC's cost of funds will probably rise further in the fourth quarter as it sees the full impact of a sharp rise in the cost of wholesale funds

Since the bribes-for-loans scam was revealed a couple of months ago, developers have been finding it challenging to raise loans from public sector banks. This has increased the pricing power of HDFC (and other companies that are funding developers), albeit at a higher risk.

Going forward, HDFC expects a loan book growth of 15-20% for the year.

The biggest problem for HDFC, according to market watchers, is valuations. At upwards of five times FY12 price-to-book, it is the most expensive non-banking financial institution. This makes it all the more vulnerable to a slowdown in mortgages and a spike in interest rates. Die-hard HDFC investors say its high quality will ensure that its valuation premium remains intact and that this will protect the downside even in a tough environment.

The HDFC stock is down about 7% in the past one month, most of the loss has happened in the past one week.

Steel Authority of India (SAIL)

SAIL's third quarter results were badly hit by higher coking coal costs and wage provisioning, which resulted in a sharp decline in earnings. There was a sharp drop in EBITDA per tonne from $178 to $112 in the period under review.

Imported coking coal contract prices nearly doubled to $209 per tonne, whereas SAIL used its higher-priced coking coal inventory (at $225 per tonne) during the quarter.

Realisations were up by 2.5% y-o-y, and yet disappointing, and saleable steel volumes were up by 12%. More disappointing was that even q-o-q realisations were down despite a price hike in December.

Coking coal prices are expected to rise to as much as $250-$260 a tonne in the next quarter and will probably continue to dent SAIL's margins.

However, rising steel prices would help to some extent. Domestic steel prices have risen by Rs1,000-1,500 a tonne over the past month and a further hike is expected soon.

But market players believe that the SAIL stock is at a risk as it is trading at above its historical average price-to-earnings multiple of 10 times. It has lost almost 10% in the past one week. The share is down 33% over the past one year.

(This article is based on secondary research. The report is for information only. None of the stock information, data and company information presented herein constitutes a recommendation or solicitation of any offer to buy or sell any securities. Investors must do their own research and due diligence before acting on any security. Some of the opinions expressed in this article are the author's own and may not necessarily represent those of Moneylife.)


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