Markets follow positive cues from Asia

Thu, 27 Jan 09:30 am

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Asian markets have opened the day in the green. Markets in China (up 1.1%), Indonesia (up 0.9%) and Hong Kong (up 0.5%) are the leading gainers. Indian markets have followed cues from their Asian peers and have opened the day on a positive note. Banking and energy stocks are leading the gains.

The BSE-Sensex is trading higher by around 7 points (0.04%), while the NSE-Nifty is up by 8 points (0.1%). Mid and small cap stocks are trading in the positive as well, with the BSE Midcap and BSE Small cap indices up by about 0.4% and 0.3% respectively. The rupee is trading at 45.63 to the US dollar.

The woes for telecom companies seem to be easing if the results of Idea Cellular are indicative of anything. The company registered a 26% YoY growth in revenues and a 43% YoY growth in net profits. The growth in revenues was driven by the 42% YoY growth in subscriber base. The ARPU (Average Revenue per User) declined by 10% YoY. However, on a sequential basis ARPU improved by 0.6% QoQ. The best part was that the rate of decline in rate per minute (RPM) has come down. The RPM was nearly flat at 42 paise per minute on a QoQ basis. This indicates that there is no aggressive pricing campaign by any of the operators at the moment. The minutes of usage (MOU) trended upwards at 401 minutes per user per month. The figures for the corresponding period last year as well as for the previous quarter were 385 and 395 respectively. The company's management has stated that while it does not expect MNP (mobile number portability) to be a major game changer, however, it expects companies like Idea Cellular to benefit in the long term from the same. The company expects 3G and data usage to be the future growth drivers. The stock is currently trading in the green along with its peers Bharti Airtel and Reliance Communications.

Banking stocks have opened the day in the positive zone. Indian Bank, PNB and SBI are leading the pack of gainers. Punjab National Bank (PNB) has recently declared its 3QFY11 results. The company has reported a 45% YoY increase in net interest income and an 8% YoY growth in net profits. On a 9 month basis, the bank's net interest income grew by 46% YoY. This was aided by the 30% YoY growth in advances during the same period. The net interest margins improved to 4% during 9MFY11 as compared to 3.4% in 9MFY10. This was mainly due to the stability in the CASA proportion and the re-pricing of assets. Treasury losses during the 9 month period led to a fall of 7% YoY during the period. Cost to income ratio remained stable at 42% YoY as compared to the same period last year. Higher provisioning led to a slower growth in net income during the same period. On a 9 month basis, the net income grew by 17% YoY. The bank's capital adequacy ratio stood at 11.9% while its net NPA stood at 0.7% as at the end of December 2010. PNB had restructured loans to the tune of Rs 144 bn at the end of 1HFY11, of which loans worth Rs 12 bn had slipped into NPAs