RBI may hike rate by 25 bps in credit policy: JP Morgan

Mumbai: The Reserve Bank of India (RBI) is expected to hike rate by 25 basis points (bps) in the next credit policy, reports PTI quoting a top market strategist of JP Morgan.

"Currently the RBI is being very considerate in its response to monetary policy, in its response to the high level of cost-push inflation. We do expect the repo rate to go up by 25 bps at the next meeting but that is a very modest increase, relative to India's nominal gross domestic product (GDP) growth," JP Morgan's chief Asian and emerging market strategist Adrian Mowat told reporters here.

Mr Mowat said that the Indian economy should see robust growth and given this, its premium valuations are justified.

"India offers a good growth story. We need to put India's valuations into a global context. I find Indian valuations look perfectly appropriate relative to the growth opportunities within the markets," Mr Mowat said.

We are also seeing strong foreign institutional inflows (FII) inflows because they find Indian market offers good growth and the valuations are acceptable, he said.

Mr Mowat pointed out that stocks of banks, real estate, IT sector and capital goods sector will perform better.

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Bajaj Finserv hikes stake in Bajaj Auto Finance to 54.79%

Bajaj Finserv, the financial services arm of the Bajaj Group, has picked up a further 4.37% stake in its group firm Bajaj Auto Finance for Rs111.33 crore through open market transactions.

As per the bulk deal data available with the National Stock Exchange, Bajaj Finserv yesterday bought 16,01,900 shares, representing 4.37% stake of Bajaj Auto Finance at a price of Rs695 per piece.

After the latest deal, Bajaj Finserv now holds 54.79% stake in Bajaj Auto Finance. Bajaj Finserv is engaged in life and general insurance and consumer finance businesses.

Bajaj Auto Finance has recently got shareholder approval for change in name of the company from Bajaj Auto Finance Ltd to Bajaj Finance Ltd.

Bajaj Auto Finance, a non-banking financial company, offers various consumer finance products like auto loans, personal loans, loans for consumer durables and computers and SME finance.

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M&A activity slows down in August to $4.2 billion

India Inc's merger and acquisition activity seems to be fading as the month of August was the leanest since September 2009 with total deal volume of $4.2 billion.

According to research firm VCCEdge, August saw the lowest deals in the last 11 months which could be much better if "Vedanta's proposed $9.6-billion deal for Cairn India would have gone through."

"March and June 2010 had seen some large deals which resulted in deal value greater than $14 billion during these two months. August was much lower in comparison," it added.

In July this year, the total value of M&A deals was about $5.4 billion.

However, merger and acquisition activity in August this year zoomed over seven fold compared to the same month last year when only deals worth $629 million took place, the report noted. For the year so far, total merger and acquisition deal value stands at $54 billion.
 

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