Financial Daily from THE HINDU group of publications
Saturday, Jan 11, 2003
Financial Daily from THE HINDU group of publications Saturday, Jan 11, 2003 |
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Markets
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Stock Markets Money & Banking - Stocks Value buying pushes up Canara Bank Jayanta Mallick
KOLKATA, Jan. 10 CANARA Bank today saw rise in volumes and scaled a new high on the Bombay Stock Exchange and National Stock Exchange on value buying. Analysts and brokers expect improved profits in the third quarter because of the bank's aggressive treasury operations during the period. The stock recorded its peak at Rs 54.90 on the BSE, highest since its listing on December 23, 2002. It closed at Rs 52.15 (Rs 51.10) on the BSE with a traded quantity of 34.07 lakh shares (27.51 lakh shares). On the NSE, the stock closed at Rs 52.40 (Rs 51.30) with volumes of 86.81 lakh shares (73.19 lakh shares), second highest since listing on the bourse. According to Ms Amy Sonpal of Anagram Stockbroking, based on annualised and diluted half yearly earning per share of Rs 20.44, the stock is currently trading at a price-earning multiple of 2.55 and today's closing price-to-book value is 0.6 times. Mr Mathew Easow of matheweasow.com said the stock is fundamentally strong and looking good on the charts. "The bank is understood to have booked a decent profit recently in its treasury operations in the government securities. Its security portfolio is one of the biggest among PSU banks," he added. Mr Easow also pointed out that the RBI's proposed move to bring down government equity in the PSU banks to 33 per cent has also cheered up market. Following the IPO in November, the Government stake in Canara Bank stood at 73.2 per cent. Canara bank is third largest in terms of assets. Its asset quality is also one of the best among the PSU banks. The bank's NPA is placed at just 3.9 per cent (next only to Corporation Bank). The net NPA stood at Rs 1,288 crore as on March 31, 2002 "The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, has provided the bank with larger possibility of reducing NPA further during the current fiscal," Ms Sonpal added. The bank has identified around 450 borrowers out of a total of 700, who have long outstanding loans. It expects to recover around Rs 400 crore, which would straightway add to its bottom line.
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