The Fixed Income markets are still spiralling yields, esp in India where liquidity is going to come back in a while, but what the %X is the matter with the equities business. It seems the buyers are actually going from door to door nulling previous transactions and creating fresh new ones generating nothing but brokerage( if there is such charged to them) while 2009 was wasted on issuers who raised rnearly INR 40,000 Crores for public coffers and a similar amount for retail businesses from tourism to gymnasiums and pizza, the secondary markets are rather taking all the jumps and starts on the way to the elusive 20k ( the new 22k targets will now start appearing on research billboards, 18K having come and stayed. The hiccups have traded me out of the market and quite a few others as volumes tank after a rather happy open in July. As you can see from the previous post July was a very happy event with everyone buying, but this month has already witnessed scaling down of almost all positions in leading infra stockk like RELINFRA and GMR Infra ( who has just sold a $200m stake in subsidiary GMR airports) IDFC produced some sterling results, midcap infra got a big boost in July from FII build ups and similar things happened in much of Pharma, Auto and now in a week the cable stocks that are rising would come undone. Seems markets just bother aboout when buyers have completed their upticking and tank back to the day that Jehova made his dictum for the world to move it@!
Friday, August 6, 2010
Saturday, July 31, 2010
The Indian Media & Entertainment Slices: Advertising
Advertising business in the country moved up a few quick climbs up the ladder, with Tv revenues moving to $10.6 billion in 2010 and Publishing moving into its place at $5 billion based on E&Y/PWC estimates that do a scan of the observable media at any point Radio is finally becoming a viable medium with $347 million in advertising revenues alone and Outdoor to $456 million.
IL&FS gets big shoes | Advantage zyaada
IL&FS started its media friendly notations early in 2010 with news of it getting its infrastructure portfolios into active play and getting ready for supporting the India fund and other drives to run PE into infrastructure and the larger deals that are now happening inthe PE spacee. Today's mint also mentions its new acquisition of $440 million or INR 2068 Crore Saffron PE fund. While larger funds mean lower values being ind emand instead of the 2-20 regime much in focus always in the industry. IIMl is also a listed providing it the option to access retail equity.
IL&FS Investment Managers currently run $1.6 billion in real estate out of its $2.8 billion corpus and only $700 million in infrastructure and current conversations around the industry continue to focus on construction and related stocks in the midcap space like IRB and IVRCL. The mint story mentions the earlier pruning in no. of funds in 1998 and the 2001 dot bust but PE consolidation is much a function of changing administrative structures outside the running funds and the onl change will be in the quantum of funds available and the number of deals taking place.
While banks also face curbs in real estate lending real estate PE has also found very few sponsors till date because of the lack of exit esp in a downturn.
Tuesday, May 18, 2010
Tayal manages to import bailout economics | Advantage zyaada
Or, How the economic valuation at market prices has thrown the markets in disarray
It's very satisfying, though a little strangely, to note the market reaction to Bank of Rajasthan's final pricing for purchase by ICICI Bank. First let me get some mint writers and other acknowledgements out of the way. You will soon note that Chanda Kochchar would be asked and will reply in much the same manner on Television soon when she makes her whistlestop tour of the CNBC, NDTV and the rest of the dog and pony show.
Frankly, despite a very casual approach to accounting rules and a general laxity in willingness to enforce the law was , much to sadden my other banking colleagues, not the bete noire of the Bank of Rajasthan way of doing business. It was just another thing they did for the ethos and wealth saving strategies they lived by and there are a lot of these reasons why these old pvt sector banks have never been admitted to the 'main street' in Indian Finance. I would stop short at romanticising them however and just stop at the fact that their 500 branches bring a high amount of business to ICICI Bank's book of INR 3.6 Trillion. BoR's assets of INR 17k crores or $4.25 billion are rich in value with a low NPA of 1% and thus most Financial Analysts have given the valuation of 4.22 BOR shares for 1 ICICI share the green signal.
SEBI maintains that Tayals hold 55% in the bank and that would make them owners of nearly 1.87 crore ICICI Bank shares from new dilution by ICICI Bank, amounting to around 1.75% stake in the bank. ICICI Bank found it economic as always ( i can venture, they have it penned down in the guidelines) to invest in this deal on a 100% stock swap basis.
The rest is rather tiring and much will unfurl on its own in the next few days as the Tayals vie for media attention with Greece in the Indian context. Behold however, that the market, and much rightly, tries to bring down the ICICI Bank valuation to the paper terms of around $11 per share that is the value imputed from the ratio and thus 50% lower than the prices on BSE, NSE and the NYSE.
Monday, April 26, 2010
Kotak Bank: These are a few of our favorite scams
It is supposedly results season, Financial reforms have been on in this country for almost 20 years and Kotak is announcing results on May 12. Just when will people appreciate the capacity of the Indian public, Indian managers and indian investors to absorb and run an entire scam along the same parameter, that has been successfully charted for the same two decades..IPO Applications, the second coming of benami investors and non existent demat accounts, the Ketan Parikh phenomenon and much more.
Then why are we complaining? We managed to create a futures market in a 1000 Cr MCap MindTree for which we even caught the perps in small town dominant Rajasthan, we played with fire on online brokerages till ASBA came back and now when we list IPOs in seven days and don't have to pay commissions on our mutual funds, we seem to have frozen up completely in keeping markets liquidity.
And in that environment, Kotak is well within its rights ( to find the right scam, the right spoon ) to cover its losses in all this free market lafda and sleep over results for 8 weeks since the year closing. Not surprisingly the only other big banking and finance corp taking its time to report results is HDFC that is reporting on May 5, almost doing a favor by telling you about itself, Kotak deciding to take the lead to be the supreme last one to report results on May 12. It's a shame.
And the lack of buzz and action in Kotak and ICICI bang on from where we put the ball a year and six months back here. Also the next scam will be in "over the counter" banking or the good old relationship manager - teller - customer triangulation. And there is another one unearthed today as the proud owner of Investmart, the HSBC let its MF change its scheme map and name midway thru the live scheme's 'life' ( i's an open ended scheme) SEBI of course is busy finding out if we can count funds collected under ULIP investment schemes under Funds management with the INR 8 trillion from MFs, IRDA is busy with the Ministry of Finance, who is busy with IPL, we got done a whole lot without a single dime in salary and someone else is busy with an earlier edition of Corp law amendments with no time to look at results calendar stretching to an extreme..why would Kotak bother to report results quickly, as if it was running its franchise in a growth market. You can't fule the Mumbaikar, he knows India is dead and dying everyday.
Saturday, April 24, 2010
ICICI BANK vs HDFC Bank - The biggies report on jam night
Both the private sector efforts that have taen the last decade of India's growth in almost their ownership having influenced governments and banks and slipped on roughshod retail portfolios without rhyme or reason, have reported they are still banks, pulling out their entire March 15 bag of tricks to report 33% jump for the Quarter for ICICI Bank and 33% jump for the full year for HDFC Bank.
India's overall credit targets have been met with AAA borrowers getting the feed in the last fortnight of the year, aking up for a trillion INr in gap in credit disbursal targets. As earlier, HDFC has touted its cohesive leadership and people skills for a better performance in retail lifestyle segments, continuing with INR 50 B in the last quarter in unsecured loans and mortgages. ICICI has dropped in interest income in the 4th Quarter while HDFC Bank reported a jump of 27% for the full year to INR 23.5B. ICICI Bank also showed results of its blocking of retail disbursals with NPAs staying at 2.12%
HDFC Bank's leadership in retail is hindered by its coyness in increasing its ATM presence while it leads in non metro markets with 32% of deposits and 47% of loans from its 2000 branches outside the metros, supported by only 3000 ATMs NIM is floating at 4.2% dspite the significantly higher CASA ratio ( >45%) ICICI Bank has reported the latest CASA of 34%
HDFC Banks cost of deposit s has been significantly higher at almost 6% compared to SBI which has reported 5.2% as abnormally high for 2010
Interesting tidbits streaming in..Unscrewing the IPL Jam | Local Deal notes..Advantage zyaada
Did IPL team offer Sunanda Pushkar and Kochi cash to back down. Will IT peg a valuation to the 70 crores sweat equity? Not only $80 million for WSG ( which may be due, as they were managing the bid winners vs MSM contract anyway) and KKr also flies in to lobby for the intermediate cash payments.. Lalit Modi's list of Private Jets and other fun assets from the last three years - Bettin gnexus or gratification for winning bids or both. 3 teams and 27 players already under ACU probe
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