New bank licences to lift market mood; 8 NBFC stocks in focus - Economic Times

NEW DELHI: The Reserve Bank of India (RBI) released the much-awaited guidelines on the licensing for new banks in the private sector just ahead of the Budget 2012-14, which are likely to infuse optimism in the markets. The release of the guidelines will get the large industrial houses in action as the applications have to be made by July 1, 2013. Private corporates, public sector entities as well as NBFCs with strong track record of at least 10 years can apply. According to analysts, the new guidelines will also lead to increased interest in likely takeover targets, i.e. smaller regional banks. "The RBI has announced new banking norms, paving way for private and public sector entities and NBFCs such as LIC Housing, IFCI, Sundaram Finance, M&M Finance, Reliance Capital, Tata Finance, L&T Finance, IDFC, AB Nuvo, and Bajaj Finance, to name few," said A.K Prabhakar, Senior Vice President - Equity Research at Anand Rathi. "A few brokering companies like MOSL and IIFL and big corporate house like Reliance Capital and Godrej Industries may also apply be fore the deadline of July 1," he added. Dropping of restrictive clauses w.r.t. entities with income or assets of 10 per cent or more from real estate construction and broking activities taken together in the past three years is very beneficial for leading brokerages and players with sizeable real estate operations. "These guidelines we believe will also lead to increased interest in likely takeover targets, i.e. smaller regional banks like Karnataka Bank, City Union Bank, Lakshami Vilas Bank among others, given the stringent priority sector norms and the ready branch network that comes with an acquisition," Edelweiss said in a report. "Overall, the broad contours of the final guidelines are similar to that of the draft one with the exception of dropping of restrictive clauses with respect to nature of business activity, thereby proving to be incrementally positive for leading brokerages," said the report. Dinesh Thakkar, Chairman & Managing Director, Angel Broking, is of the view that this is a game changing event for the banking sector. With corporates prima facie being allowed, "I would expect at least 8-10 very serious players with very deep pockets to enter the sector," he said. "Clearly, looking at strong ROEs of existing private banks, there is good pricing power in the sector, indicating the need for more competition," said Thakkar. We have compiled technical views on eight stocks which are likely front runners in banking licence and are likely to be in focus in the coming week: Kunal Bot hra, Manager at LKP Advisory L&T Finance Holding: We have been bullish on the stock since levels of Rs 52, where we anticipated a strong technical breakout. I think after this much-needed correction/ consolidation in the stock since the last 3 months, the stock now looks set to resume its strong uptrend. According to analysts, the new guidelines will also lead to increased interest in likely takeover targets, i.e. smaller regional banks. via Business - Google News http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNHcFhN3rhmsBR-EXP-B0bBAhRJN2A&url=http://economictimes.indiatimes.com/markets/stocks/stocks-in-news/new-bank-licences-to-lift-market-mood-8-nbfc-stocks-in-focus/articleshow/18657140.cms

Put the internet to work for you. via Personal Recipe 2910127