Value investing: Vinit Sambre on where to hunt for value as broad-based rally looms
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Value investing: Vinit Sambre on where to hunt for value as broad-based rally looms
indiatimes.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from indiatimes.com Daily Mail and Mail on Sunday newspapers.
Mumbai: Most private banks have been perceived as bastions of stability for long by stock investors but that faith has been shaken of late after HDFC Bank’s June quarter results. Deterioration in asset quality of the private lender among the darlings on Dalal Street has raised concern among market participants that other stable banks may also be hit by weakening asset quality on account of the business disruptions caused by the second wave of Covid 19.
Shares of HDFC Bank ended down over 3 per cent at Rs 1,472.40 logging its biggest one-day fall in two months, leading the 1 per cent decline in the Sensex and Nifty. IndusInd Bank, IDFC First Bank,
“In strong cycles, they may seem reasonably valued, but on reversal of market conditions these stocks can have sharper drawdowns and earnings volatility can be high, said Sambre.
The number of demat accounts in India has risen to a record six crore as on June 30, from about four crore in February 2020. The surge began in March last year when individual investors started venturing directly into the stock market amid shutdowns on account of Covid and underperformance of equity mutual fund schemes. Brokerages have been direct beneficiaries of this retail investor rush. Given that pure broking is not a major earnings source for most of them, experts said these brokerage firms also benefited from cross-selling of products to these investors. IPOs of tech companies and other non-traditional sectors are also boosting retail interest.