Stocks
Nifty, Sensex could be under pressure - Thursday closing report
In Tuesday’s closing report we had mentioned that Nifty, Sensex may give up some gains. Today up to 2.00pm the benchmarks moved sideways near to Tuesday’s close. After that, the indices moved higher to hit the day’s high however could not sustain there for long and gave up the gains to close marginally higher.
 
 
The indices had risen for six consecutive trading days before falling on Tuesday. The markets were closed on Wednesday for Eid-ul-Fitr.
 
The 30-scrip Sensex of the BSE, which opened at 27,209.97 points, closed at 27,201.49 points - up 34.62 points or 0.13% from the previous close at 27,166.87 points.
 
The wider 51-scrip Nifty of the National Stock Exchange (NSE) rose by 1.95 points or 0.02%, at 8,337.90 points.
 
The Sensex touched a high of 27,288.22 points and a low of 27,146.95 points during the intra-day trade. 
 
Technology stocks, including those in media and entertainment space, came under selling pressure with their sectoral indices losing over 1.5%, even as the indices for fast-moving consumer goods, healthcare and banking sectors closed with gains.
 
Lupin was the top gainer among the Sensex stocks, with a rise of 6.25% at Rs 1,657.30, followed by Hindustan Lever (up 3.03% at Rs 917.35), Dr. Reddy (up 2.25% at Rs 3,525.15) and HDFC up 2.51% at Rs 1,290.95.
 
Tata Steel was the top loser, down 4.92% at Rs 317.65, followed by Tata Consultancy, down 2.16% at Rs 2,429.05, Coal India, down 1.96% at Rs 315.45 and Adani Ports, down 1.84% at Rs 210.40.
 
The top gainers and top losers of the major indices are given in the table below:
 
 
The closing values of the major Asian indices are given in the table below:
 

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Will Bandhan Bank move to the next level?
Bandhan Bank has transitioned well from a micro-finance institution to a bank after commencing banking operations in August 2015. Brokerage firm Religare has come up with some interesting insights on this unlisted Kolkata-based bank based on its annual report. 
 
Up to March 2016, it had garnered Rs121 billion of deposits. Out of these, current and savings account (CASA) deposits stand at Rs26 billion. Banks accounted for around 35% of its total deposits. Bandhan Bank has a stellar savings account (SA) deposit ratio of 20%. It has issued 77 lakh debit cards up to now. 
 
On the flip side, there is a concentration risk with respect to deposits as the top 20 depositors constituted 30% of the total deposits. Another problem for the bank is that the savings account balance per account is low. After doing some number-crunching, Religare estimates that the average balance per savings account for the bank is at a little more than Rs3,000. This low ratio impacts profitability as the operating costs of these accounts is high in comparison to the income generated.
 
Coming to the loan book, agriculture and allied loans constitute more than half of its total loans. Currently, its small and medium enterprises (SME) loans stand at Rs65 crore. These constitute merely 0.5% of the total loans. It intends to focus on SME loans with a ticket size of Rs1 lakh– Rs10 lakh and retail loans. Its retail loans stand at Rs60 crore i.e. 0.5% of the total loans. 
 
Its return on equity (RoE) stands at a around 17% on an annualised basis, while its return on assets (RoA) is at 3.8%. Currently, around 1/3rd of its total branches are situated in urban regions. Its future plans include opening of 180 new branches by March 2017. The majority of its new branches will be opened outside West Bengal. The management plans to brand the bank as a pan-India bank. The bank is experimenting with low-cost small format branches in parts of West Bengal and Bihar in order to reduce operational costs. These branches will have minimal staff and will largely restrict themselves to deposit-taking and withdrawal of money. 
 
Bandhan Bank, which was set up as a micro-finance company in 2001, received a banking license from the Reserve Bank of India (RBI) in 2014. Some of the investors in the Bandhan Bank include World Bank Group's International Finance Corporation (IFC) and Small Industries Development Bank of India (SIDBI). 

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COMMENTS

Ramesh Jaradhara

8 months ago

I view the Bandhan Bank as one of the promising banks in India because the business model it is adopting is low cost and within a couple of years the bank will grow in a large scale. Being evolve from a micro-finance level it has a strong customer base at the grass-root level and slowly the market segment will grow into other sectors. Judging a bank on the performance over one year is not sufficient. I see a bright future for Bandhan Bank.

RBI board discusses macroeconomic developments
Bengaluru: The Reserve Bank of India's (RBI) central board, which met here on Thursday after seven years, discussed macroeconomic developments, budget and setting up of Monetary Policy Committee, an official statement said.
 
"Besides macroeconomic developments, the board discussed its budget and constitution of the monetary policy committee at the meeting, chaired by (RBI) Governor Raghuram Rajan," the statement noted.
 
The board also reviewed its activities for payment and settlement system for the year ended March 2016 and discussed the draft annual report for last fiscal 2015-16.
 
The central bank's Deputy Governors Urjit R. Patel, R. Gandhi, S.S. Mundra and N.S. Vishwanathan were present at the meeting along with Directors Nachiket M. Mor, Damodar Acharya, Natarajan Chandrasekaran, Bharat N. Doshi and Sudhir Mankad.
 
"Government nominee director on the board and Economic Affairs Secretary Shaktikanta Das also attended the meeting," the statement added.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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