Ministry seeks lower home loan rates

India's urban development ministry has called for additional government measures, including cuts in home loan rates, to revive the country's crumbling real estate sector.

The government is scheduled to unveil a second stimulus package on Friday.

Trade Minister Kamal Nath had last month said the government was looking at more steps to boost liquidity, and mulling steps to help exporters and the real estate and infrastructure sectors as part of the fresh package.

In a letter to the prime minister, S. Jaipal Reddy, minister for urban development, said interest rates for home loans of up to 500,000 rupees should be kept at 6.5 percent, while loans between 500,000 rupees and 3 million rupees should be levied interest of 7.5 percent annually.

Domestic demand for real estate has fallen sharply amid high lending rates and tight liquidity.

In December, an industry lobby had said transactions had fallen 80 percent, pulling down prices, and that projects had failed to take off with banks not willing to lend to the sector.

Reddy also said that the ceiling for income tax rebates on interest paid on home loans be raised to 300,000 rupees from 150,000 rupees currently.

"Housing projects should be treated at par with the infrastructure sector for all purposes including bank funding," he said in the letter, a copy of which was made available to Reuters.

But Reddy also said the industry should match government measures by lowering house prices and investing more in affordable housing. - Reuters

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Mutual Funds to eye large cap stocks.

A Reuters poll says that mainly large caps stocks are a attraction of domestic Mutul Funds Companies.

Indian large caps and financial sector stocks are likely to attract them for next 3-4 months as they hope for stock market rebound.

Three-fourths of the respondents in the Reuters Asset Allocation Poll conducted between Nov. 21 and 25 said they would cut the amount of cash they hold because they expect local stocks will rise during the period. 

Three of the eight fund houses polled said Indian shares are fairly valued, while an equal number said they were undervalued. 

A fourth of bond fund managers are likely to cut cash levels as invest in bonds on hopes of more rate cuts, the poll showed.

Reading this I would eye on Banking and Financail stocks. The stocks which I would shop are SBI , Yes Bank , HDFC Bank , ICICI Bank and Indusind Bank.

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Buy Union Bank, target of Rs 194: Angel

Angel Broking has recommended a buy rating Union Bank of India with a target of Rs 194 in its November 21, 2008 research report. "We believe UNBK is amongst the more profitable, efficient and competitive PSU Banks. We have a positive outlook on the bank due to traction in CASA deposit growth driven by large branch expansion plans as well as cost-efficient operations. We expect the Bank to deliver 12% CAGR in Net Profit and 24% RoE over FY2008-10E."

"At Rs 144, the stock is trading at 4.2x FY2010E EPS of Rs 34.3 and 0.9x FY2010E ABV of Rs 161.9. The stock has been trading at a median one-year forward P/ABV multiple of 1.1x since April 2002. We value the stock at 1.2x FY2010E ABV to arrive at a 12-month Target Price of Rs 194, implying an upside of 35%. We recommend a Buy on the stock," says Angel Broking's research report.

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Buy PNB, target of Rs 625: Angel

Angel Broking has recommended a buy rating on (PNB) with a target of Rs 625 in its November 21, 2008 research report. "We believe PNB is amongst the more profitable and competitive PSBs, with relatively moderate Earnings growth and strong RoE prospects. We have a positive outlook on the Bank due to its superior CASA ratio and high core income component in Earnings, tempered by relatively moderate growth momentum. We expect the bank to deliver about 21% RoE over FY2008-10E and maintain high RoEs relative to peers over the longer term as well, underpinning higher valuation multiples."

"At Rs 451, the stock is trading at 4.9x FY2010E EPS of Rs 92.5 and 0.9x FY2010E Adjusted Book Value (ABV) of Rs 480.4. We value the stock at 1.3x FY2010E ABV to arrive at a 12-month Target Price of Rs 625,implying an upside of 39%. We recommend a Buy on the stock," says Angel Broking's research report.

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Buy Bank Of India, target of Rs 317: Angel

Angel Broking mantains a buy on Bank Of India with a price target of 317 Angel Broking has recommended a buy rating on BOI with a target price of Rs 317 in its November 21, 2008 research report. "We are positive on Bank of India (BOI) due to its balanced funding mix, moderate operating costs, efficient capital management and high core fee income. Consistent improvement in operating leverage and relatively higher resilience in NIMs have led to improvement in core RoE. Hence, we value the stock at 1.3x FY2010E ABV (above its median P/ABV of 1.0x since April 2002) to arrive at a 12-month target price of Rs 317. We recommend a Buy on the stock," says Angel's research report. - MC

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Weekly news letter and Stocks to watch now.

Indian Stock Markets have witnessed a worst hit. Indian markets are now down over 57% from its peak. Its almost at its 3 years low.

Markets need a good breath now. Traders are worried and even Investors.

Recession has covered the whole globe.

No one has been left out. No fundamentals in markets as of now.

When I look at NIFTY charts I see an uptrend to come till 2780 in short term.

Indian markets will be the first to recover says SEBI cheaf CB Bhave.

Stocks you should look out are.

LNT - Plans to add 10,000 staff by 2010 and the stock has good fundamentals so a reason to buy its Support is at 665 and 711 and a resistance for upmove at 791 and 825.

Unitech - This is one of the most beaten out scrip 52 week High of 600 odd and low of 27 odd. Makes sense in buying and booking profits at 40 odd levels.

SBI - Inflation has cooled and if RBI takes some action in reducing the CRR or Repo Rate it will benefit and then makes sense to buy for short term.

ICICI - The same above reason apples and even if you go to see its is one of the most beeten out blue chip after DLF and Hindalco.

Sectors I am bullish on -

Infrastructure and Banking and later Metals.

All of these sectors have witnessed the worst hit ever so chances are there for these sectors to recover very fast.

Happy Investing .

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SEBI finds no manipulation in ICICI stock prices.

Do you remember ICICI banks gtear fall.

It had many huge intraday falls , the one of 25% , who can afford to forget it.

ICICI was angry and approached SEBI for investigation.

The bank had in September sought an investigation by SEBI into its share price movement, alleging that rumours were being spread about the bank to deliberately bring down its stock price. The ICICI scrip had started to tank on news of its exposure to Lehman bonds, and although the bank’s CEO had announced that its fundamentals were sound, the fall was not arrested.

SEBI analysed the trading pattern of the shares of ICICI Bank for the period September 8 to October 10, 2008 when the scrip fell 49.52 per cent, from Rs 720 to Rs 363.65.

“SEBI did not find evidence of manipulative trading in the ICICI Bank shares during the period referred,” said the release.

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