Business Daily from THE HINDU group of publications
Tuesday, Jan 13, 2009
ePaper | Mobile/PDA Version | Audio | Blogs
Business Daily from THE HINDU group of publications Tuesday, Jan 13, 2009 ePaper | Mobile/PDA Version | Audio | Blogs |
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Markets
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Stocks
Our Bureau Mumbai, Jan. 12 Concerns over State Bank of India’s exposure to the Maytas group led to heavy selling in the banking stocks on Monday. Maytas Infra and Maytas Properties are promoted by the family of Mr Ramalinga Raju, the founder of Satyam Computers, who recently made a confessional statement admitting to financial fraud in the IT company. 
SBI, the country’s largest bank, has an exposure of Rs 500 crore in the Maytas firms, Mr O.P. Bhatt, Chairman of the Bank, told newspersons on Monday. ‘Miniscule’“This exposure is miniscule compared to SBI’s balance sheet. The fall in the SBI stock was largely due to market sentiment getting affected because of the news,” said Mr Ajay Parmar, Head of Research, Emkay Global Financial Services. The stock had fallen from its intra-day high of Rs 1,223 to its intra-day low of Rs 1,107 on the news of its exposure to the Maytas firms. Other banking stocks were affected as a general fear of banks’ exposure to companies of uncertain reputation, said the head of research at a brokerage. The BSE-Bankex was down by 3.62 per cent on Monday, while the Sensex fell 3.15 per cent. All the banking stocks in the index declined with ICICI Bank falling 3.7 per cent, HDFC Bank losing 0.78 per cent, SBI shedding 4.86 per cent, Axis Bank declining 6.83 per cent, PNB falling 2.30 per cent, Kotak Bank trailing 3.47 per cent, Bank of India shedding 5.98 per cent, Bank of Baroda losing 6.78 per cent and Union Bank tumbling 1.93 per cent. Under pressureBanking stocks are already under pressure as there are concerns over rising non-performing assets, the risk of credit growth showing more-than-expected slowdown and, for public sector banks, the pressure from Government to lend at cheaper rates, said Mr Vaibhav Agrawal, Analyst, Angel Broking. There will be concern about banks who have a large credit growth (loans given to companies) in the light of the Satyam debacle, said an analyst. Around a dozen banks, including SBI, IDBI Bank, ICICI Bank, Axis Bank, are bankers to Maytas Infra, which is listed on the NSE and BSE. More Stories on : Stocks | Public Sector Banks | Real Estate & Construction | State Bank of India
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