10:51 am Fitch on banks:
Banks in China and India will continue to remain under pressure next year due to mounting bad loans, even though earnings and capital buffers are strong enough to withstand any serious threat, Fitch warned.
“Our 2017 outlook on more than three-quarters of the banks in the region is negative. Though earnings and capital buffers are generally strong enough to withstand these trends, we expect viability ratings to remain under pressure in China and India,” Fitch said in a report.
In the 2017 outlook on Asia-Pacific banks, Fitch said, “most of Asia-Pacific’s banks are facing a cyclical deterioration in asset quality in 2017, as a challenging economic environment continues to put pressure on borrowers.
Noting that there has been a rapid build-up of private sector debt–both corporates as well as households– in a number of APAC economies since 2009, the report said the resultant vulnerabilities will continue to be tested in 2017.
10:38 am Buzzing: Banco Products shares rallied more than 7 percent intraday after the company dropped its share buyback proposal.
“After detailed deliberations and discussions, the board of directors decided to drop the proposal of buyback of equity shares of the company and decided not to further proceed with the proposal,” the company said in its filing.
Banco is engaged in the business of manufacturing of original equipment for commercial vehicles, passenger vehicles and industrial products. It is also India’s largest exporter of aftermarket radiators to the Europe.
Company’s consolidated profit in the quarter ended September 2016 increased 28.3 percent year-on-year to Rs 31.98 crore and revenue grew by 9 percent to Rs 374.71 crore compared with year-ago period.
10:22 am IPO:
The Rs 1,332-crore initial public offering of drug maker Laurus Labs was subscribed over four times on the final day of the bidding. The IPO received bids for over 10.01 crore shares as against the total issue size of over 2.19 crore scrips, drawing a subscription of 4.57 times as per NSE data.
The portion set aside for qualified institutional buyers (QIBs) was oversubscribed 10.54 times, while HNIs quota received 3.58 times subscription. The quota for retail investors was oversubscribed 1.67 times.
“We take this opportunity to thank all the investors who have shown trust in our business and helped make our maiden IPO a successful one. I assure them of keeping their trust in us justified in the future as well,” Laurus Labs Founder Promoter and CEO Satyanarayana Chava said.
10:15 am FII View:
The global rally still has legs left, believes Herald Van Der Linde, Head of Equity Strategist, Asia-Pacific at HSBC. Once Donald Trump comes in, his policies will become clearer.
HSBC also expects inflation expectations in the Eurozone and the US to come down.
In the Asian basket, HSBC is overweight on India. The domonetisation scheme, Van Der Linde said, is getting priced in by the markets now. In India, pockets like banks are looking interesting.
10:00 am Market Check
Equity benchmarks as well as broader markets entered into consolidation phase with the Nifty hovering around 8250 after yesterday’s sharp rally.
The 30-share BSE Sensex was up 41.16 points at 26735.44 and the 50-share NSE Nifty gained 0.95 points at 8247.80. The market breadth was positive as about 1081 shares advanced against 704 declining shares on the BSE.
Analysts expect the consolidation to continue till the outcome of Federal Reserve’s two-day meeting that will start on December 13.
Globally analysts expect the Fed chair Janet Yellen to hike interest rate in this meeting but the commentary is very important to watch out for.
Sheela Foam started off trade on a strong note, rising more than 39 percent to hit an intraday high of Rs 1,018 in early trade. The stock opened at Rs 860 on the National Stocchange against issue price of Rs 730.
Infosys, ITC, Tata Motors, ONGC, ICICI Bank, Reliance Industries and TCS continued to gain, up 0.6-1.8 percent while HDFC Bank, HDFC, Bajaj Auto, Hero Motocorp, Lupin, HUL, Sun Pharma and Coal India fell 0.4-1.2 percent.
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