Mumbai:
High budget expectation and soft interest rates have pushed
the scrips of around 30 banks by between 4 and 21 per
cent during the week ended 21 February 2003.
Banks
such as Bank of Baroda, Bank of India, Andhra Bank, State
Bank of India, Oriental Bank of Commerce, Canara Bank,
J&K Bank and Vysya Bank are the majors gainers in
the rally, while the new generation banks like IDBI Bank,
HDFC Bank and ICICI Bank have recorded only marginal gains.
It
is expected that Union Budget 2003-04 is likely to hike
the foreign direct investment (FDI) in the public sector
(PSU) banks to 49 per cent from the existing 20 per cent
and the ceiling on FDI-holding in private sector banks
may be hiked to 100 per cent. Relaxation in banking regulations
and liberalisation of PSU banks to make them more efficient
are also on the cards.
Bank
of Baroda has been the biggest gainer, appreciating 21
per cent to close at over three-year highs of Rs 83. Andhra
Bank followed due to massive institutional buying and
gained 19 per cent to close at Rs 29.
SBI
spurted 4 per cent to Rs 311 on news that the government
may exclude its global depository receipts limit from
the total foreign institutional investor limit of 20 per
cent. It touched a six-year high of Rs 315.
Other
major gainers have been Oriental Bank of Commerce, Canara
Bank and Karur Vysya Bank which gained over 10 per cent.
According
to SBI officials, another factor that has been instrumental
in pushing up banking stocks is soft interest rates. In
the recent credit policy announcement, the Reserve Bank
of India slashed the benchmark bank rate by 25 basis points,
prompting other banks to follow suit.
The
bull-run in the banking stocks halted temporarily at the
beginning of February 2003 due to heavy profit booking.
They have bounced back into focus during the week started
14 February on expectations of some positive announcements
from the upcoming budget, according to a Canara Bank official.
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