YES Bank's Binding Offer, Fed's Interest Rate Cut, and Top Cues in Focus Today

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On Thursday, Indian share markets traded on a positive note throughout the day and ended marginally higher. The BSE Sensex surged as much as 300 points intraday and scaled new record highs. The index surpassed its previous peak of 40,312 touched on June 4 this year.

Positive global cues, expectations of tax realignments on equities, and strategic stake sale in many PSU companies lifted investor sentiment.

At the closing bell on Thursday, the BSE Sensex stood higher by 77 points and the NSE Nifty closed up by 37 points.

On the sectoral front, gains were largely seen in the telecom sector and IT sector.

From the Results Corner...

Dhanlaxmi Bank share price posted good set of numbers for the quarter ended September 2019 results.

The lender reported 81.6% year-on-year (YoY) jump in its Q2FY20 net profit at Rs 221 million against Rs 121 million in the same quarter last year.

The net interest income (NII) of the company rose 15.1% at Rs 1,006 million versus Rs 874 million.

The company's gross NPA was down at 7.06%, while net NPA was down at 1.65% on a quarter-on-quarter (QoQ) basis.

In absolute terms, the gross NPA fell to Rs 4.76 billion from Rs 4.96 billion QoQ, while net NPA was down at Rs 1,053 million versus Rs 1,452 million, QoQ.

The loan growth of the bank for the quarter stood at 7.2% YoY.

In other news, United Bank of India share price reported a net profit of Rs 1.2 billion in the quarter ended September 30, on the back of substantially lower dud loans, leading to lower provisioning requirement. The bank had posted a net loss of Rs 8.8 billion in the July-September period of 2018-19.

The lender's total income rose to Rs 30.1 billion in the September 2019 quarter, compared with Rs 26 billion earned in the corresponding period of the previous financial year.

In the quarter under review, the lender reported slippages of around Rs 10 billion, out of which Rs 8 billion was from corporate accounts.

UBI brought down its net non-performing assets (NPAs) to 7.88% as on September 30, from 14.36% by the end of September 2018.

Gross NPAs or bad loans reduced to 15.51% of the gross advances by the end of September, compared with 22.69% in the year-ago period.

The lender said that it is awaiting resolutions to the tune of Rs 60 billion in the NCLT, out of which Rs 16 billion is from exposure to power and steel sectors alone.

On the proposed amalgamation between Punjab National Bank, Oriental Bank of Commerce and UBI, the management of the bank said that the process is progressing smoothly so far and the bank is giving prime attention to HR issues.

Tata Chemicals Q2FY20 consolidated net profit rose 6.9% to Rs 4.4 billion. This was seen on the back of 4.1% increase in net sales to Rs 30.8 billion in Q2 September 2019 over Q2 September 2018.

Consolidated EBITDA grew 5% to Rs 6.4 billion in Q2 September 2019 as against Rs 6 billion in Q2 September 2018.

Consolidated EBITDA margin improved to 21% in Q2 September 2019 over 20% in Q2 September 2018.

In consolidated books, the company's net borrowings (including lease liabilities) stood at Rs 22.6 billion and cash and cash equivalent was at Rs 37.9 billion.

To know more, you can read Tata Chemical's Q1FY20 result analysis and its 2018-19 Annual Report Analysis on our website.

Fed's Interest Rate Cut and Take on the US Economy

The US Federal Reserve lowered its key overnight lending rate by a quarter of percentage point to a target range of between 1.50% and 1.75%.

However, the central bank signaled there would be no further reductions unless the economy takes a turn for the worse.

In a news conference, Fed Chairman Jerome Powell said, "we believe that monetary policy is in a good place. We took this step to help keep the economy strong in the face of global developments and to provide some insurance against ongoing risks."

Powell also said that the US-China trade war was "a step closer" to resolution and it looked less likely that Britain would crash out of the European Union.

The outlook for the US economy continues to be for "moderate" growth, a strong labor market and inflation rising back to the Fed's 2% annual goal, he said, and only "a material reassessment" of that outlook could drive the central bank to cut rates further from here.

Yes Bank Receives Binding Offer for Stake Purchase

Yes Bank share price will be in focus today. The stock of the lender witnessed strong buying interest yesterday after it said it has received a binding offer for a stake purchase in the bank from a global investor.

The bank said that it would like to inform that it has now received a binding offer from a global investor for an investment of US$ 1.2 billion in the bank through fresh issuance of equity shares.

The bank added it continues to be in advanced discussions with other global and domestic investors.

Note that the bank has been trying to raise capital to fight off the liquidity issues.

In an earlier release, it had said it received strong interest from multiple foreign as well as domestic private equity and strategic investors for the capital raise and remains firmly on course to raising growth capital subject to necessary approvals.

In early October, a media report had claimed that Microsoft was among three investors, which were in talks for a stake in YES Bank. However, the bank had denied the reports.

The private lender clarified that it continues to explore various means of raising capital and funds through the issuance of securities to a diverse set of investors, in order to meet its business regulatory requirements.

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

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