The Hindu Business Line : Private bank stocks lose sheen

EVEN as the Bankex, which comprises key banking stocks on the Bombay Stock Exchange (BSE), has gone up by about 30 points during January 2004, the smaller private banks have lost steam and moved in the opposite direction.

So, even as the share prices of State Bank of India (SBI), Punjab National Bank (PNB), Corporation Bank and ING Vysya Bank went up during the month, prices of key takeover targets in the private sector such as Federal Bank, Global Trust Bank (GTB) and Karur Vysya have declined.

The steepest decline was witnessed in GTB, which fell by 14 per cent to Rs 26.95 while Bank of Rajasthan gained marginally from Rs 39 to Rs 39.75 during the same period. IndusInd Bank remained unchanged.

According to a senior broker, while there are several interested parties for taking over these banks, the fall in their stock prices over the month could probably indicate that the Reserve Bank of India (RBI) is unlikely to change the existing guidelines which bar corporate takeovers of banks.

Analysts added that though these banks are good take-over targets, their prices have inflated over a period of time. Foreign banks such as ABN Amro and Standard Chartered, which were looking for inorganic growth in the Indian market through acquisitions, have decided to postpone their plans for the time being.

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