Category: Excerpts

Categories
Excerpts

ICICI Lombard scores over HDFC Ergo

(Disclosure:I am market making in the shares of ICICI Lombard)
Given the stringent criteria set forth by national carrier Air India while inviting technical bids, a consortium of four state owned non-life insurers and private insurer ICICI Lombard General Insurance Company have qualified for providing insurance cover to it. Theseinsurers will have to submit financial bids by next month. Private insurer HDFC Ergo General Insurance failed to qualify for the technical bidding. The four state owned non-life insurers namely New India Assurance, Oriental Insurance, United India Insurance and National Insurance Company bid as a consortium. Unlike previous years where private and public sector general insurers formed separate groups to bid, and the overall group’s financial strength was evaluated, this time, the national carrier developed a detailed score system to evaluate each insurer’s financial strength.

“We were asked to submit details including networth, investments, assets under management, liquid assets, gross premium underwritten, market share, retention capacity, solvency margin. On every parameter, an insurer was given a score. Till last year, the overall score of a consortium (of insurers) was counted. But this year they said that the average score of a consortium would be counted. So the average score of ICICI Lombard would fall if another private insurer’s score is less. Therefore ICICI Lombard did not bid in a consortium with HDFC Ergo General Insurance but bid alone,” an industry official tod Financial Chronicle.

A senior official of HDFC Ergo General Insurance confirmed that the insurer has failed to qualify for the technical bidding. The airlines will now be sharing information on passenger growth they are projecting, growth in fleet size etc. Insurers would be appointing brokers to conduct road shows in the overseas reinsurance market. The financial bids have to be done by September said another insurance official.

Air India insurance policy is the country’s largest aviation policy and is due for renewal on October 1.-from DigitalFC

Categories
Excerpts

FII limit in Catholic Syrian Bank raised to 74%

(Disclosure:I am market making in the shares of Catholic Syrian Bank)

The government on Thursday said it has cleared 23 foreign investment proposals, including that of Catholic Syrian Bank and Bandhan Financial Services, amounting to Rs 10,378.92 crore.

The investment proposals were approved following the recommendation for the same by the Foreign Investment Promotion Board (FIPB), headed by Finance Secretary Rajiv Mehrishi.

Besides, private sector Catholic Syrian Bank has got clearance for raising foreign investment limit in the bank from 49% to 74%. The proposal is worth Rs 1,200 crore. The bank has recently got nod for IPO.-from DNA

And

Foreign investment in the bank is currently at 30 per cent—19 per cent with individuals and 11 per cent with FIIs. The move from the bank comes as it is preparing for an IPO worth about Rs400 crores.

The firm is expecting support from foreign investors as well as NRIs. The share of foreign companies would be a deciding factor with regard to share prices when the firm goes public.

Out of banks that are based in Kerala, Federal Bank was the first which was able to increase foreign investments to a majority level. The bank, which is now 49 per cent owned by foreign entities, wants to increase that investment level to 74 per cent. South Indian Bank is looking to increase foreign investments in it to 59 per cent and shareholders have approved the move.

Even after foreign investments are hiked in these banks, it would not mean that they would go into foreign hands because that would need foreign majority in the board of directors of the bank, which is a distant possibility.

However, analysts are of the opinion that such a situation could arise if foreign companies are allowed to increase their stake in local firms. In such a case, local small banks could be the first targets for board-level manipulations and subsequent takeovers.-from Manorama

Categories
Excerpts This is India !

God opens a demat account

Balaji, the world’s richest god at Tirupati, has now opened a demat account to enable devotees to donate shares and securities, after finding it a tedious task to get physical share certificates dropped in Hundi transferred on his name.

Considered the first globally for a shrine management, Tirumala Tirupati Devasthanams (TTD) has opened demat account (1601010000384828) with the Stock Holding Corporation of India.

PS Reddy, MD and CEO of Central Depositories Service (CDSL), told ET that the innovative move by TTD was primarily aimed at addressing the hassles pertaining to transferring the physical share certificates. “TTD has been receiving physical share certificates as donations by devotees in its open Hundi, which indicates that devotees are interested in donating shares. –from ET
Categories
Excerpts

Fearful China Investors look to India

With global emerging markets again under pressure, India might seem an unlikely port in the storm. Promises of far-reaching economic reforms under Prime Minister Narendra Modi are still to be delivered, while hopes of a rapid investment-led recovery under his leadership remain unfulfilled.

But with China’s equity market convulsed by a painful sell-off, India finds itself the happy recipient of investment searching for safety in the developing world.

The benchmark Sensex index has lost more than 2 per cent over the past two days, reflecting investor unease over much larger falls in China. But the index has eked out a 0.6 per cent increase over the past three months. Though not likely to set pulses racing, this makes India the only country in Asia to see markets rise over that period.

Since the Chinese sell-off began on July 15, the Shanghai index has dropped nearly 30 per cent. Indian stocks, meanwhile, are up around 5 per cent.

“There was some reallocation out of India and towards China earlier this summer. That has now stopped, and some of it seems to be coming back,” says Rashesh Shah, the founder of Edelweiss, a Mumbai financial services group. “Investors I speak to see China as a lot riskier now.”-from FT

Categories
Excerpts

Dreaming bigger

Source:James Crabtree

Just love the attitude of India’s NexGen