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Realty Stocks Lead the Gains
Thu, 5 May 01:30 pm

Indian equity markets continue to trade well above the dotted line in the noon session amid strong Asian markets. Sectoral indices are trading on a mixed note with stocks from the realty and capital goods sectors leading the gains. Oil & Gas and metal stocks are leading the losses.

The BSE Sensex is trading higher by 74 points and the NSE Nifty is trading higher by 10 points. The BSE Mid Cap index is trading lower by 0.3% and while the BSE Small Cap index is trading flat. The rupee is trading at 66.54 to the US$.

Automobile stocks are trading on a firm note with Tata motors and TVS Motors leading the gains. According to a leading financial daily, Tata Motors' wholly-owned subsidiary Jaguar Land Rover (JLR) reported 2% fall in US sales in April 2016. Jaguar Land Rover North America April US sales for both brands hit 6,275 units, a 2% decrease from 6,390 units in April 2015. However, on a year-to-date basis in 2016, JLR US sales stood at 32,077 units, up 16% from 2015.

Meanwhile, rating agency Fitch affirmed Tata Motors' long-term foreign currency issuer default rating at a speculative grade 'BB' with a stable outlook. The company's small size in relation to global auto majors and its subsidiary Jaguar Land Rover is a key rating driver (Subscription Required). Fitch said the company's robust passenger vehicle lineup and strong commercial vehicle sales contributed to the profile.

Reportedly, it would be launching three new cars in 2016 - the Kite 5 compact sedan, the Nexon utility vehicle and the Hexa sports utility vehicle. Further, the company also plans to come up with an electric car and may be working with firms outside the group for the finished product. The script of Tata Motors is currently trading up by 2.5% on the BSE.

FY16 turned out to be a tepid year for the Indian auto industry. The only segment that managed to grow in double digits was commercial vehicles (CVs). But this was largely led by medium & heavy CVs . Growth for light CVs remained sluggish as strict financing options remained an issue for this segment and hampered demand.

Moving on to news from banking sector. According to a leading financial daily, Yes Bank has been granted an in-principle approval by Securities and Exchange Board of India (SEBI) for acting as custodian of securities. Yes Bank shall now invest in developing Operations, Technology and Human Capital capabilities and seek registration with SEBI as a Custodian of Securities. As per the in- principle approval, Yes Bank shall establish this business within 12 months of this approval. The approval from SEBI is subsequent to the Reserve Bank of India's approval granted to Yes Bank for the Custodian of Securities Business.

Custodian of Securities' is a license granted by SEBI to eligible entities allowing them to offer custodial services to financial market participants including Foreign Institutional Investors (FIIs) and Foreign Portfolio Investors (FPIs).

In the six months to April, Yes Bank has reportedly raised and lent US$225 million of foreign currency loans to foreign subsidiaries of Indian companies and their joint ventures abroad and expects to more than double it in the full fiscal year ending March 2017.

Yes Bank reported its results for the quarter ended March 2016 . The company's net profit grew by 27.4% YoY during the quarter to Rs 7 billion. Reportedly, the healthy growth was on account of improving loan demand, higher net interest and other income. However, there was a slight slippage in the asset quality owing to Reserve Bank of India's (RBI) directive to recognize visible stressed assets. At an absolute level, gross non-performing assets (NPAs) grew by 139% to Rs 7.4 billion. As a percentage of total loans, gross NPAs stood at 0.76%. The script of Yes Bank is currently down by 0.1%.

Banking stocks are trading below the dotted line with Indian Bank and IDBI Bank leading the losses.

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Jan 22, 2018 (Close)