Can anyone plssss. explain why this stock trades at book value when other banks like icici,hdfc,kotak,axis and evel smaller banks like indusind , south indian, yes bank and even psu banks trade 2-3 times BV.....i would be thankful if anyone would come up with a satisfactory reply....
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...because apart from being a small bank it also has little presence outside Kerala. Most other banks that you have mentioned are fairly well spread out in multiple states.
While by all accounts this is a well managed bank there have always been some concerns over some of its activities. The rights issue done at what was a mysterious price did not help.
Today the best hope for this bank is that it is trying to takeover CSB (No idea why that is taking so long) and that one day it will be a perfect candidate for a larger bank to takeover.
Once this takes over CSB it will have a larger balance sheet and one can look forward to some upside but the real kicker is when a foreign bank tries to enter by investing heavily at first and then making an open offer.
Meanwhile the price movement of this bank is good enough for traders to make regular profits. Recently it has consolidated at the 215 level and moved up to nearly 270 before coming all the way back to 220. Lots of money to be made for traders since it is by no means a sluggish stock.
Some shares are quoted unneessarily more or less than what they deserve. It cannot be explained. Tata Motors has reported a better profits by selling TISCO shares and is quoted more than TISCO. One time concession by Govt will not continue long and Tata Motors profits are bound to suffer in time to come as over seas acuisiton is also bound to affect it . I am a holder in all these three shares and I am not able to under stand this. Again another banking share City Union was projected badly by Karvy that it will hit Rs 13 where as it is moving up and that is share market.
but will this ever go up...i have been holiding it for a long time and getting rattled now...is there any problem with the loan assets...or the reason is there is no promoter holding in it ??and wats the update on the merger...and a boarder had asked tat why did the rights issue take place so below the mp...??
Yes, this will go up. Remember this had touched a high of over 400 just before the rights issue.
Many shares quote at levels that cannot be justified. This is the fourth best private bank in terms of profits and sales (after ICICI HDFC and Axis). In terms of market capitalisation it comes in at 8th.
Investors should be patient and wait for their turn. The share price movement will be fantastic.
Till then keep trading the share, selling at higher levels and buying back at lower levels, without trying to catch the absolute top or absolute bottom.
thank you...so the bottom line is it is a stock to trade and not invest which i did....thrice it had come till 260 but i dint sell expecting better q2 results which disaapointed....cant expect better q3 results...the worst part is nifty is back to 5000 and dow is set for correction...so wat to do ?? should i remain invested..coz i dont trade ????and wat about the deteriorating assets and high provisions ???pls reply..
thank you...so the bottom line is it is a stock to trade and not invest which i did....thrice it had come till 260 but i dint sell expecting better q2 results which disaapointed....cant expect better q3 results...the worst part is nifty is back to 5000 and dow is set for correction...so wat to do ?? should i remain invested..coz i dont trade ????and wat about the deteriorating assets and high provisions ???pls reply..
You say you don`t trade that means you are an investor. This is not a stock to trade. This is an investment stock. However, if you are in the habit of watching its price on a daily basis, you might as well trade it.
Forget all about it for the next 6-8 months and you will find decent returns. I would recommend a longer term hold, its not a bad dividend payer and certaily has great potential.
If your investment horizon is shorter then wait till it reaches your target and sell out even if there are rumours of takeovers or great results.
When this stock goes over 250 there will be lots of recommendations and predictions that it will reach 285 or 300 or even higher.
My view is that it has a very good chance of touching 350 levels by the end of December and little downside upto 215 or so. At a price of 230 or thereabouts it is a damn good buy.
There is huge selling pressure above 250. Right issue price was 250. People are trying to cash profit. As we know lot of FII`s have taken position on this scrip. So whenever they feel to book profit above 250, the selling pressure arises
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