Friday, April 1, 2011

>The Banking Laws (Amendment) Bill, 2011

On 22 March 2011, the government tabled the banking laws (Amendment) Bill, 2011 in Lok Sabha. The bill proposes a number of amendments to the existing regulation of banking sector. The overarching theme is to allow banks more flexibility in strengthening their capital and empower the watchdog role of Reserve Bank of India (RBI).

# SOE banks to have additional tools and flexibility for raising capital

# Proposal to remove 10% restriction on voying rights

# Proposal to impose restriction on holding 5% or more in a banking company without prior approval of RBI.

# Empowering RBI's role as regulator

To read the full report: BANKING LAWS

>CEMENT SECTOR: Earnings and target price upgrades

The cement sector has witnessed strong recovery in prices as rationality has prevailed. We believe
that the worst is behind us, with trough operating performance witnessed in 2HCY10. Long-term
demand drivers are intact, which would ensure return of normal growth. We are upgrading our
FY12 estimates by 2-18% to partly factor in for current prices. However, sustenance of discipline and current prices in FY12 could drive further upgrades of 9-33%. Valuations are attractive and offer a good entry point for the next upcycle. We prefer Ambuja Cements, JP Associates and Grasim among large-caps, and Birla Corp and India Cements among mid-caps

To read the full report: CEMENT SECTOR

>NTPC: fixed return on equity

NTPC is the largest power producer in India with 28.6% share in generation.
The company has a stable business model earning fixed return on equity along
with efficiency incentives based on normative parameters. We maintain our
fundamental grade of ‘5/5’, indicating that its fundamentals are ‘excellent’
relative to other listed securities in India.

To read the full report: NTPC