Financial Daily from THE HINDU group of publications
Wednesday, Apr 21, 2004
Financial Daily from THE HINDU group of publications Wednesday, Apr 21, 2004 |
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Markets
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Stock Markets Money & Banking - Stocks Corporation Bank gains in strength Deeptha Rajkumar
THE last few trading sessions have seen the stock of Corporation Bank gather strength on the bourses. Market sources maintained that the counter generally follows any rally with a lag. "As such, given that the stock is relatively less liquid (16 per cent floating stock), its stock price movement is generally out of line with the rest of the sector stocks,'' sources said. Brokers also said that the recent interest in the counter could also be on account of the bank going to post its results by this weekend. "It will be the first PSU bank to report. Hence the interest could also be a run-up due to results,'' a broker said. Word on the street was that a major bull operator has been consolidating the portfolio at this counter. Analysts maintained that after a disappointing third quarter, there is expectation that the bank will report better numbers this time around. "Going forward, its stock performance depends on the bank's expansion of presence in the LIC premises and its credit growth. Given its very high capital adequacy, it will have to accelerate its credit growth to improve RoE (return on equity) and thereby, its valuations,'' said an analyst tracking the company. According to Mr Sailav Kaji, analyst with Pioneer Intermediaries, the bank's asset book portfolio is very good. "An improvement in credit offtake and a little more aggressiveness on the lending front could help the bank see 25-30 per cent growth in earnings annually.'' Yet, there are those who believe that if the bank's results do not live up to expectations, the stock is headed for a consolidation. The stock ended the day at Rs 347.40, up 4.47 per cent, with around 3.8 lakh shares traded on the NSE. On the BSE, it ended at Rs 345.65, up 3.64 per cent, with around 1.2 lakh shares traded.
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