The RBI has hiked the repo, reverse repo and CRR rates by 25bps each, below market expectations where 50basis point hike was widely anticipated. Now there is a probability of an inter-policy rate hike before the next policy meet in July. Infrastructure stock would be the major beneficiary in this credit policy.
Non-SLR bonds linked to infrastructure activities can be included under the held-to-maturity (HTM) category of a bank if the residual holding period is more than seven years. This is expected to boost the demand for infrastructure loans as banks can now park the extra liquidity in higher yielding bonds without worrying about their interest rate sensitivity and rates also can drop by 50basis point.
The minimum provisioning requirement for unsecured substandard infrastructure loans has been reduced to 15% from 20%. Bank credit will soon flow to build infrastructure in the country The central bank’s decision to treat annuities and toll collection rights under build-operate-transfer (BOT) road and highway projects as tangible securities has also come as a major relief to infrastructure companies.
Stock like IRB, GMRINFRA, GVKPIL, LITL, HCC, IVRCL, NOIDATOLL, NCC, LT, RELINACE INFRA, MANINFRA, ARSSINFRA, SREI, PATELENG can benefit in long term I doubt a short term reaction.
http://www.mydigitalfc.com/banking/infrastructure-sector-set-receive-291 Infrastructure sector set to receive
RBI set in motion the process of allotting bank licences to private sector players and non-banking finance companies (NBFCs). http://www.business-standard.com/india/news/rbi-setsball-rollingnew-branch-licences/392552/
http://www.boston.com/bigpicture/2010/04/more_from_eyjafjallajokull.html Pictures of ash from Iceland's Eyjafjallajokull volcano which continued to keep European airspace shut down over the weekend
http://in.reuters.com/article/businessNews/idINIndia-47818720100419 Volcano market impact moves far beyond airlines
http://in.reuters.com/article/worldNews/idINIndia-47857820100420 North Korea is preparing for a third atomic test that may come in May or June, South Korean broadcaster YTN reported on Tuesday
Some Paulson clients mull withdrawing money – WSJ http://in.reuters.com/article/businessNews/idINIndia-47862020100421
http://www.livemint.com/2010/04/20183327/IMF-warns-sovereign-risk-could.html IMF warns sovereign risk could prolong crisis, the concern is that investors will demand higher interest rates to buy government debt, driving up borrowing costs for both the public and private sector
CHART OF THE DAY: Now YOU Can Understand How The Goldman Abacus Deal Worked http://www.businessinsider.com/chart-of-the-day-abacus-2007-ac1-structure-2010-4?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+clusterstock+%28ClusterStock%29
