Tuesday, March 8, 2011


United Phosphorus to buy 50% stake in Sipcam Isagro Brazil: Support – 133,131; Resistance -139,142 United Phosphorus Limited on Monday said it will acquire a 50% stake in Sipcam Isagro Brazil for an undisclosed amount. It will buy the stake from Isagro that currently holds 50% in Sipcam's Brazil arm. The deal size is being pegged around $600 million or 2,700 crore.

Shyamadvisory financial plans to raise Rs 450 cr thru IPO: Support -88,85.50; Resistance -92,95
Shyamadvisory financial Services (SAFS), the non-banking finance subsidiary of Shyamadvisory, is planning to raise around Rs 450 crore through an initial public offering later this month. The NBFC, which is classified as an infrastructure finance company, will be mopping up the funds by issuing 12.75 crore fresh equity shares.

Govt to infuse Rs 1,740 cr in Oriental Bank of Commerce: Support –334,329; Resistance -345,349 The government will infuse Rs 1,740 crore in Oriental Bank of Commerce as recapitalisation package to shore up the bank's equity capital. The bank at its board meeting held on March 5 has approved raising capital by offering or issuing up to 4.12 crore shares of Rs 10 each for cash at a issue price of Rs 422.11 per share aggregating up to Rs 1,740 crore to government.

NTPC starts trial run of Farakka plant's 500 Mw unit: Support -177,175; Resistance -184,187 NTPC has started the trial run of the 500 Mw Unit-VI of the Farakka thermal power station in West Bengal. The Farakka Super Thermal Power Station, located in Murshidabad, West Bengal, has an installed capacity of 1,600 Mw.

Mortgage lending to gain steam
The recently announced Union Budget for 2011-12 increased the eligibility for mortgage loans for “priority sector” status from Rs20 lakh to Rs25 lakh; this is likely to benefit HDFC Bank. In Q3FY2011 the bank had approximately Rs11,000 crore of mortgage loans in its book and almost everything comes under priority status. In addition, the bank plans to retain 50-55% of the mortgage loans originated for parent company HDFC which will help it to meet the priority sector commitments.

Asset quality, no significant pressures
According to the management, the asset quality pressures have come down significantly and the bank is comfortable with a high provision coverage ratio (81% in Q3FY2011). The management believes there could be restructuring for the microfinance loans (0.6% of total loans) against
which the bank has already made a provision of Rs100  crore in Q3FY2011.

Steady branch expansion
After the acquisition of erstwhile Centurion Bank of Punjab (CBoP), the bank’s branch network has expanded significantly and it had 1,780 branches in Q3FY2011. Going forward, the management plans to add about 150 branches every year, mainly in the tier-2 and tier- 3 cities.
Cost to income ratio is likely to be maintained at 47% over the next two years.

Stable investment portfolio
The bank’s investment portfolio is quite stable and unlikely to face pressure on account of the rising rates. About 20% of the investments are in the available for sale category with duration of 1.2 years. This minimises the possibility of marked-to-market losses to increase in benchmark yields.

For now 5600 is a very stiff resistance as a lot of writing has happened. On the downside 5400 is a minor support.
The PCR ratio was at 1 v/s 136, which signifies neutral sentiment and I.V’s were between the lev-els of 20%-24%.

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