Monday, October 22, 2007

Wall Street Stock Market

Its third quarter earnings before the market opens, and analysts are expecting to see the company show 64 cents per share. The Wall Street Company last reported earnings on July 23 when it beat estimates by reporting 60 cents a share, 4 cents higher than the 56 cents analysts were expecting to see. The stock fell over 5 percent last Friday in anticipation.
The Company obtained approximately 47% and 44% of its total revenue from the wafer testing and IC testing services, respectively. The Company distributes its products in the domestic market and to overseas market as the year 2006 ends.
Many folks put off buying life until they are older which could be considering it takes instance to feel confident about finances, an expert has claimed.
  1. banking
  2. finance
  3. finance
  4. credit card
  5. trust, insurance
  6. securities
  7. futures
  8. venture capital investment business.

Friday, October 19, 2007

Banks show signs of a rocking

What’s better than the Sensex at 19,000? Well. The Sensex at 25,000! The situation is similar when it comes to the results in the banking sector. Bumper profits last year have ignited hopes of strong results this year as well. This is despite the fact that growth in credit has slowed.

Early results from banks have not disappointed. Profits at private sector HDFC Bank and Axis Bank have risen an unprecedented 40% and 60%, respectively.

HDFC Bank’s rise in profits is more surprising as it comes on the back of a 34% rise in the first quarter. Moreover, the bank has posted a 45% rise in interest income at a time when banks are paying high rates for deposits and not getting enough customers owing to the high lending rates.

Axis Bank has benefited from a surge in non-interest income, or returns from selling insurance and mutual fund products.

banking analyst said, “Both these results are exceptional. HDFC Bank had been sluggish last year (FY07) but it has bounced back this year. Axis has always been doing well. And now with the busy season for loans kicking in, FY08 could be even better.”

Traditionally, the busy season starts with the festivals in October. Corporate India is also known to go into a borrowing overdrive in the last quarter, helping banks to accelerate loan growth and hence profits.
The growth in loan disbursals has been slow so far this year — at 21.9% compared with a 32% growth registered in the same period last year — as the Reserve Bank of India has stepped in with interest rate hikes to curb inflation.

Private sector banks have outperformed their public sector peers in terms of profits for the last few years. However, analysts said banking profits would be much better this year even if PSU banks continue record a modest 18-20% rise in profits.

Ashvin Parekh, partner and national leader, global financial services, Ernst & Young, expects public sector banks to continue the good work in this quarter. “Public sector banks will continue to do well, especially on the low-cost current account savings account (CASA) front. Banking margins will also get a lift because of treasury gains as international interest rates are moving southward after the recent US Federal Reserve interest rate cut.”

An analyst from a private brokerage firm is betting on public sector banks doing well due to treasury income.

“Public sector banks will see huge profits flowing in by way of their treasury income. On the core operations front, Union Bank of India and Bank of India will do well while OBC and Canara Bank may suffer. However, the banking sector as a whole looks positive.”

However, increasing bad loans are a worrying factor, especially for private sector banks.

High interest rates in retail loans have lead to some bad loans, which could take the wind out of the sector.

China Market Situation

China May Use More, Bigger Rate Moves to Curb Cash (Update1)
By Li Yanping and Zhang Dingmin
Oct. 18 (Bloomberg) — China will step up measures to curb excess cash in the economy and may use more or bigger rate increases to prevent overheating, central bank chief Zhou Xiaochuan said.
“We don’t rule out steeper or more frequent moves if necessary,” Zhou, governor of the People’s Bank of China, said during an interview with reporters today at the Communist Party Congress in Beijing. Controls so far “haven’t been very effective.”
The bank will keCommunist Partyep using a mix of policy tools including rate increases, higher reserve ratios and more bill sales, he said. The central bank is concerned with rising asset prices though that isn’t the sole driver of monetary policy, he said.
The world’s fastest-growing major economy has doubled in size since President Hu Jintao succeeded Jiang Zemin five years ago. A surge in exports that helped drive growth now threaten to derail the expansion by flooding the economy with cash, stoking inflation and a possible stock market bubble.
“The spike in headline inflation is hurting bank depositors, and this may encourage the People’s Bank to raise rates once more this year,” Mark Williams, an economist at Capital Economics Ltd. in London, said in a research report dated today. “However, the authorities are walking a tightrope.”
Gross domestic product grew 11.9 percent in the second quarter, the fastest pace in 12 years. Five benchmark interest rate increases by the central bank this year have failed to rein in inflation, which reached a 10-year high of 6.5 percent in August and prompted more households to pour money into stocks and property.
Multiple Targets
The National Development and Reform Commission, China’s top economic planning agency, said today at a separate briefing that fighting inflation remains a priority, and warned the rate will stay high “for a few months.” The September rate was 6.2 percent, the NDRC said today.
China isn’t ready to adopt an inflation target when setting interest rates, and places a higher priority on growth. The bank considers growth, inflation, employment and international balance of payments in setting monetary policy, Zhou said.
To soak up excess liquidity and limit loan growth, the central bank has instructed lenders to set aside larger reserves eight times this year, sold more bills to bigger banks, and this week required smaller lenders to put special deposits with the central bank.
The required reserve ratio on banks was raised to 13 percent on Oct. 13, the highest in a decade, and the benchmark one-year lending rate is at a nine-year high of 7.29 percent.
The bank has also raised interest rates on some mortgages and increased the minimum deposit on second homes to curb speculation and cool prices.
Yuan, Capital Account
Zhou, 59, as central bank governor since December 2002 presided over the nation’s first change in currency policy in a decade. He ended the yuan’s peg to the U.S. dollar and revalued it by 2.1 percent in 2005. The change was partly a response to major trading partners including the U.S., where politicians assert the currency is kept artificially low to boost exports.
“The yuan will eventually become a freely convertible currency and China will open its capital account, even if we haven’t set a clear timetable,” Zhou said. “China had agreed in principle to make the yuan convertible in the 1990s, but we halted the plan during the 1997 Asian Financial Crisis.”
China will discuss the currency with the European Union during the International Monetary Fund meeting, he added.
Separately Zhou reiterated that the government has agreed, in principle, to allow Chinese individual investors to trade Hong Kong stocks. There’s also no timetable for that.
“The direction is set” for the plan, known in China as a “through-train” to the Hong Kong market, he said without elaborating.
To contact the reporter on this story: Li Yanping in Beijing at

Random Market Thoughts

Here’s another asset class where you really don’t need a neural net to tell you the trend is up. All you need is an understanding on how governmental policy drives currency depreciation.

It’s old news now but the EURUSD currency pair traded above $1.43 for the first time (it’s at $1.4280 right now) yesterday. Weak earnings from Bank of America yesterday drove speculation that the Fed would cut interest rates one more time at their Oct 31st meeting.

A weak economic recovery (IMHO), massive deficits, an unpopular war, a misgiuded administration, and a former sellout of a Federal Reserve Chairman, have all contributed to a bleak outlook for the dollar. Sure we’ll have short term fluctuation’s where the USD might strengthen but in the longterm I would remain long the Euro and short the Dollar.

How can a previously low rate of 5.25% (now 4.75%) derail this fantastic economic expansion we are having?

Stock market sees new fever of securities company’s shares

As many securities investors are busy hunting bank shares, they do not realise that securities company’s share prices have soared considerably.

After saying goodbye to the Hanoi Securities Trading Centre on October 29 to list at the HCM City Stock Exchange, Saigon Securities Incorporated (SSI) saw its price increase for one month. SSI was traded at VND160,000/share in August, and the price rose to VND260,000/share on October 12.

Investors pay high for SSI because they believe the company can get high profit when the stock market bounces back at the end of the year. It reported the post tax profit of VND668bil in the first half of the year, though it was the gloomiest period of the stock market.

Bao Viet Securities Company’s share price (BVS) has nearly reached VND600,000/share, an increase of VND120,000/share over the October 2 trading session, remaining the most expensive share item on both Hanoi and HCM City trading floors.

BVS also had very high pre-tax profit in the first 8 months of the year: VND202bil/VND150bil of chartered capital.

Meanwhile, the price of Hai Phong Securities Company’s shares has also unexpectedly soared to VND140,000/share after a long time of staying below VND100,000/share.

The three share items all are the hottest securities items on official trading floors.

Dao Thi Xuan, a freelance securities broker on Nguyen Cong Tru securities market in district 1, HCM City, said that the price increases of securities companies’ shares had been anticipated. Investors well understand that securities companies can make high profit from the warmed up stock market, and it would be wise to bank on these companies.

The warm stock market will bring fat profit to securities companies, as an investor on the market. Moreover, the companies can also pocket big sums of money from transaction fees. SSI, for example, can collect VND2bil worth of fees every day, ACBS VND800mil, while VIS, which has just begun operating, can collect VND200mil.

According to Tran Ngoc Nam, an analyst, investors believe that securities companies’ prices now are very ‘soft’ if compared to the price levels in March 2007, just equal to 50-60%.

However, Bui Ngoc Tuoc, another analyst, has warned that investors should think carefully before injecting money in securities company’s shares. He recalled the story of the Chinese stock market in 2001-2005, when many securities companies went bankrupt when the securities index plunged from 2,245 to 998 points.

He said that only 10 of the 62 licenced securities companies had good business results. Those have earned attractive profit and hold 85% of the market share. It is understandable why some securities items are selling well, while Thien Viet, APEC’s, KBS’s are selling at VND30,000/share only, and APS cannot find investors to buy at VND25,000/share.