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I have bought Andhra Bank at Rs 10 at Initial Offering few years back. Now it's around 90+ and has been around that price for sometime now. What would be the best rate to dispose it off or any suggestions to still hold on to it.
This problem is not just with Andhra Bank - most PSU banks have similar stories. They are constantly losing market share and business to private banks.
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Valuations are fair. The stock is trading at 7 times forward earnings and not much upside is expected because of valuations.
The credit policy reviewed tomorrow. If there is a rate cut, banking stocks may have some upside.
Inflation is a big issue still and I do not expect any rate cut in the near future.
If CRR is increased, banking stocks may go down a bit.
I would prefer to sell this stock and enter some private bank - where long term prospects are better.
Private banks are richly valued right now and it would be better to wait for a correction before buying them.
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This is the chart for Andhra Bank for last six years.
- The overall trend is Down. Channel is shown for downtrend!
- Buying now is really a bad idea.
- I would wait for trend to reverse before entering.
- From Volume you can see rise has no interest.
- It is purely a retrace back to 50 EMA at 61.
I cannot predict bottom price. As per chart price are suppose to go further down in coming months.
Once it clears price range between 53-54, it will go back below 48.
great alchemist u r almost there.so now after the hike what should be your stand in banking sector,will you accumulate from tomorrow in samll qty or wait for few months or completely switch down the sector
Price has made strong memory between range of 49 and 51, since july it has been trading near it.
Near 65 is channel trendline and a very strong resistance. But before that checkpost of 50 EMA = 61 needs clearance. I think Price will test both soon!
CASA - Current and Savings Account, more they have, more they can lend and earn Profit!
NIM - There profit Margin
Asset Quality (Non performing Asset- NPA) - How many bad loans?
CASA: 33.3 %
NIM:2.76%
NPA: 0.10%
HDFC as compared to this
CASA: 44.9%
NIM: 4.1%
NPA: 0.5%
I think HDFC is still a better bet and better placed to weather this Credit Storm!
Alchemist can input his thoughts!
Last edited by man4urheart : 28th August 2008 at 09:40 PM.
Hello mr.man i am optimistic about banking sector bcoz of
there is no dead end for this sector,
future looks bright bcoz of asset management services,
interest rates @ peak,
going forward RBI may not increase (worst case 2 times) for some good time except crr hike
in china after the kind of fall we have seen for these past days, i think their banks are trading at 2 times of their book value.
coming to the SBI vs AB it's like 10 aliens vs 1 predator (if compare their strength)i mean no match.
still why i am choosing AB is
I want to accumulate the stock below 45 rs (if i am lucky to get that score on cards) to lower bound of 30 (bcoz i know that for ab it is not at all possible) to enjoy a good amount of dividend as i am not going to sell it at any cost unless iam sure that i can get it
again at lower price
I think AB has lot of head room to grow going into the future may be after 12 to15 years i think.so keeping in mind this time
we may not have to compare their fundamental strength right now.
eg: if sbi @ 1500 gives 40 rs dividend
ab @ 50 gives 4 rs dividend at current price if accumulated at 1000 multiples we can enjoy a big dividend amount
for long long period of time 12- 15 years if every thing goes right.
I think govt. looks to merge several banks with lower profitability or losses with SBI
Generally to take a stock i look into their fundamentals(p/s,net profit,DIVIDEND) and rsi from technicals.Correct me if i am
thinking in wrong direction considering i can play both as very long term player and also as a day trader depending on situation.
I have a doubt about private sector banks, they literally kills people who are not able to pay back their credit card balances
and if some one who does not care for money and does not fear the local police,goes to supreme court and wins the case
i think the GAME IS OVER for that PRIVATE GIANT.
dear man andhra bank has completed the price range of 54 and now it is at 57+ currently.
what may be ur idea now will it go to 65 from here is there any chance left for this to go to below 48 now.
why i am behind the stock is it has given a 4 rs/- div
thanks and regards
ram
I don't know how you arrived at price target of 65, but it did went to 64.7.
Finally I have to re draw trendlines due to that....
- Checkout the MACD and RSI divergence!
- We should hit lower end of new drawn channel trendlines in Green Lines!
- Pink lines were earlier channel trendlines!
- 20 EMA in pink is nicely supporting the price. Anybody already long should keep a stop loss at 20 EMA.
- 70 is Fibonacci 38.2% target for rise!
-67.5 is 24 mar 2008 base where price took support, so would now be a resistance
Some valid points about Andhra Bank... I would rather invest in HDFC or ICICI bank than this PSU's
Quote:
So far, banks have been compensated only for 32 per cent of the farm loans they have already waived, the rest is receivable over the next two years. Implementation of yet another waiver before they are compensated for the previous one, will constrain funds for lending and adversely hit the bank balance sheets. Banks with larger agri loan portfolios such as Andhra Bank (15 per cent), Allahabad Bank (16 per cent) and Central Bank of India (16 per cent) appear to be the most vulnerable to these risks.
Further you can read
Quote:
The Congress party has made it clear that public sector undertakings in financial sector will remain with the government, implying a minimum 51 per cent stake in PSU banks will be retained. Dena Bank, IDBI Bank, Oriental Bank of Commerce and Andhra Bank are few banks in which the government’s stake is close to 51 per cent and these can expect status quo.
However, PSB's such as Central Bank of India (80 per cent), Canara Bank (73 per cent), Indian Bank (80 per cent), Bank of Maharashtra (76 per cent), may be free to raise capital through dilution of stake.
For the banks which are at or close to a 51 per cent government holding, expanding their balance sheet may become more difficult due to constraints to capital raising. These may be forced to explore the rights offer route, to which the government also subscribes. The Government’s recently announced re-capitalisation package for the banks through instruments like perpetual bonds or preference shares, may prop up capital but these options are limited.
Andhra Bank has seen some considerable movement in the last few days by going up 20 points or so.. Any specific reason this scrip is doing good and we can expect it to go further up..
Now almost at 52 wk high..
I have shares of Andhra bank (1000) which i bought at 90 at the IPO reissue.. So should i sell them at current levels of 91-92 and even out or wait for it to go up further..
The net profit from last Q (Dec' 09) and this Q (Mar' 10) is down. EPS is also went down from last quarter to this quarter.
I did not understand how it is compared and saying that Q4 net profit is up 19%?
OR it is YoY profit?
Can anyone please justify this and correct me? Thanks.
It is not comparing last quarter (Dec'09) with this one (Mar'10). Comparison is for Mar'10 with Mar'09.
Quote:
The Bank has posted a net profit of Rs 2402.645 million for the quarter ended March 31, 2010 as compared to Rs 2012.105 million for the quarter ended March 31, 2009
Andhra Bank
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(eying 35-40% return)
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Linear Mode
