Financial Daily from THE HINDU group of publications
Saturday, Mar 20, 2004
Financial Daily from THE HINDU group of publications Saturday, Mar 20, 2004 |
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Markets
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Stock Markets Money & Banking - Stocks Growth prospects prop up PNB Deeptha Rajkumar
GOOD growth prospects has shored up market interest in Punjab National Bank (PNB) with the stock appreciating by more than 10 per cent over the past one month. According to market sources, the company is attractively valued at these levels. "Fundamentally PNB looks more attractive than say Oriental Bank of Commerce," an alternative research analyst with a domestic broking house said. According to the market grapevine, a leading broking house has taken the bank management on a road show to the US. This also has added to the interest at the counter on Friday. Analysts remain bullish on the stock, deeming it a good growth story with `decent' valuations. They maintain that uncertainty over IFCI's merger with PNB have been assuaged. "It is learnt that all the high-cost liability is to be restructured, with the unprovided NPAs being transferred to an asset restructuring company (ARC)," an analyst tracking the company said. Reiterating this, analyst Mr Rajesh Malani of P-Sec said that there had been concern that if IFCI is merged with PNB, it would add to the burden on PNB's balance sheet, in view of the former's huge debt burden. "However, given that the bad debts are being moved to an ARC, it essentially means that a cleaner IFCI will come to PNB. This is no longer a negative but will prove to be a positive in the long term," Mr Malani said. According to him on a standalone basis, PNB is a good bank with aggressive proactive management. PNB has been servicing its customers by offering a gamut of financial products in retail and corporate banking, industrial finance, agricultural finance, financing of trade and international banking. It has widened its product portfolio by venturing into new business areas like gold dealing, insurance and credit cards. Its subsidiaries provide services relating to capital market, housing finance, asset management and government securities. The stock ended the day at around Rs 292.60, up 3.70 per cent, with around 5.04 lakh shares traded on the BSE. On the NSE, it ended at around Rs 291.50, up 3.26 per cent, with around 17.43 lakh shares traded.
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