Nbfcs See Opportunities Opening Up, Prepare to Give Fresh Loans in June

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Nbfcs See Opportunities Opening Up, Prepare to Give Fresh Loans in June CCI NG 3.7 Product: ETMumbaiBS PubDate: 19-05-2020 Zone: MumbaiCity Edition: 1 Page: ETMCPG7 User: sandesh.pingale Time: 05-18-2020 23:42 Color: CMYK SMART INVESTING Countering Covid: SBI Suggests Omnibus Pact for Fast Loan Rejig MarketsWWW.ETMARKETS.COM ET Beating Volatility MUMBAI, TUESDAY, 19 MAY 2020 STIMULUS PACKAGE, EASING OF LOCKDOWN likely to bring demand, especially from rural and semi-urban areas ON BOND STREET F&O PLAY HFCs Raise Nifty Likely `` 5,475 crore to Face Selling NBFCs See Opportunities Opening Up, on Improving Pressure, FIIs Sentiment Add Shorts Prepare to Give Fresh Loans in June Our Bureau Nifty 50 help grassroots borrowers tide over sanctioning new loans from June as Mumbai: Housing finance com- 9500 Saikat Das & Atmadip Ray BRIGHTENING UP the immediate crisis. Edelweiss, one-fourth of its customers are back panies (HFCs) dominated pri- 9293.50 “We will resume our new loan Mahindra Finance, in action. It will reopen 20% of its mary bond sales on Monday as 9300 Mumbai | Kolkata: Top non-ban- sanctions beginning June,” said IIFL Finance and branches in smaller towns by this the government’s stimulus king finance companies are set to re- Umesh Revankar, chief executive of- Shriram Transport month end. package helped lift the mood of 9100 sume sanctioning fresh loans in Ju- ficer at Shriram Transport Finance. Fin have started Credit and refinance facilities debt investors. ne with sentiment boosted by the go- “We see opportunities opening up in disbursing loans from Small Industries Development Tata Housing Finance, HDFC 8900 vernment stimulus and easing of rural and semi-urban areas that are Bank of India (Sidbi) and National and ICICI Home Finance led the the lockdown, even as they tread not hard hit by Covid-19. Truck mo- NBFCs expect Bank for Agriculture and Rural De- primary market bond sale, rai- 8823.25 cautiously, aware that repayment vements are going to rise, aided by double-digit loan velopment (Nabard) have been ope- sing `` 5,475 crore collectively. 8700 May 4, 2020 May 18, 2020 capacities may have weakened with the government’s stimulus package growth in Sept rational, bridging the liquidity gap The spread or differential betwe- job losses and income declines. and easing of the lockdown.” quarter or that was creating a mismatch betwe- en top-rated corporate bonds and The Edelweiss Group, Mahindra The economy had come to a early Dec en demand and supply till April, cap- government papers — a barome- Finance, IIFL Finance and Shriram standstill following a nationwide quarter tains of the sector said. ter of calmness — narrowed to 80- [email protected] Transport Finance have started dis- lockdown that started on March 25. “We all have to build confidence 90 basis points immediately after bursing loans with their clients de- Shriram funds purchases of se- first and turn sentiment to positive,” the government had announced Mumbai: With Indian markets manding to draw down the limits cond-hand vehicles and expects ove- VINCENT VAN GOGH said Ramesh Iyer, managing direc- the relief package, compared getting into a “sell on rise” mode, sanctioned in March. Companies rall loan expansion at below 5%, alt- tor at M&M Financial. “Govern- with 90-100 bps a analysts are advising their cli- expect double-digit loan growth in hough the pace is expected to pick up ught Shriram’s business activities Edelweiss group. “Our clients are ment stimulus helped in that direc- few days earlier. ents to initiate a bear put spread the September quarter or early in with double-digit credit growth in to a halt. gradually coming back to work, tion. We are also reinvesting pro- Cos are also The gauge was on month-end Nifty options in the the December quarter. the September quarter. Closure of “We aim to attain 8-10% credit which results in resumption of loan duct designs and services.” increasingly little changed event of a bounce in the index. Microfinance firms have also star- regional transport offices during growth by the September quarter,” demand.” tapping the Monday. If the market bounces to or abo- ted disbursing emergency loans to first two phases of the lockdown bro- said Rashesh Shah, chairman at Edelweiss Finance plans to start Continued on Smart Investing commercial HDFC bonds ve 9,000 from Monday’s close of paper with two-year 8,823, they advise buying a 9000 market, maturity fet- put and simultaneously selling SHARES SURGE UP TO 5% reflecting ched 7% as it rai- an 8,500 put to reduce the debit. BROKERAGES SAY VERY FEW INCENTIVES in package for urban issues, corporates demand for sed `` 5,000 crore. All options expire on May 28. to mitigate near-term problems; also cite lack of schemes to boost demand working “Non-banking The strategy is safer than buy- Defence Stocks Shine capital finance compani- ing a naked put as the client could es are slowly co- lose the entire premium if the After Hike in FDI Limit ming back to primary bond sales Nifty expired or traded above 9,000. While the strategy reduces Mumbai: Shares of select Indian de- with number of queries rising,” Why Even 20 Lakh Cr Was the debit, it also caps the profit. `` said Ajay Manglunia, managing fence sector-linked companies surged on Derivatives experts like Rajesh Monday after the government raised director at JM Financial. “Market Palviya of Axis Securities and foreign direct investment (FDI) limit to appetite is gradually going up for Chandan Taparia of Motilal Os- 74% from 49% under the automatic NBFC papers although we have wal suggest a bear put spread in Not Enough to Cheer Up D-St route. Shares of Hindustan Aeronautics ended up not yet spotted any significant the event of a bounce. 4.2% at `` 545.30 after touching a high of `` 576 during contraction in yield spread.” The negative sentiment was un- vestors after the recent 30% market ral- the day. Shares of Taneja Aerospace ended up 5% at Market awaits more clarifica- [email protected] derscored by foreign institutio- ly, the brokerage said. There are almost `` 20.30. Astra Microwave Products ended up 5% at tion on NBFC package, he said. nal investors (FIIs) raising their no measures (like tax cuts) to create a `` 66.95. Walchandnagar Industries gained 4.15% to Tata Housing mopped up `` 200 outstanding short index futures Mumbai: Brokerages are disappoin- meaningful rise in personal disposable close at `` 36.40. “The government raised the FDI limit crore, paying 9.1% to raise the positions Monday along with sel- ted that the economic package announ- income and provide a more immediate which is a positive news. It won’t happen immediate- three-year money. ling shares worth a provisional ced by the government in five tranches and much-needed boost to demand, sa- ly but it is a positive step,” said AK Prabhakar, head Indiabulls Housing Finance ra- `` 2,513 crore. They were cumulati- in order to mitigate the fallout of the id CLSA. of research at IDBI Cap. Bharat Electronics is Prab- ised `` 1,030 crore, offering 9.1% vely net short index futures — coronavirus pandemic lacks sector- hakar’s preferred pick in the defence space from a with three-year maturity. The HSBC Nifty and Bank Nifty — by 45,470 specific measures and no measures to three-year perspective. – Our Bureau bond sale came up for bidding boost consumption or promote infrast- HSBC said the overall package focused last Friday. contracts on Monday. ructure. Brokerages said there is little more on medium-term supply-side me- of urban-focused incentives or for cor- asures, and funding via future public- porates. Industries such as hotels and sector liabilities. As such, the central aviation still have to bear the operatio- government’s fiscal cost is likely to be nal costs amid the lack of government sumption, promote manufacturing contained at 1% of GDP, said HSBC. intervention, said brokerages. ET ta- and even the broader reforms lacked The brokerage has estimated general kes a look at what brokerages did not the spark; while urban and corporates government fiscal deficit at 10% of liking about the package: were ignored, said Bernstein. GDP and expects growth to contract 3% in 2020 over the previous year. BERNSTEIN CLSA In a report titled “Dear Finance Mini- A large part of this package is made up NOMURA ster - Is the aim to revive GDP, or to re- of monetary measures by the RBI, gua- Nomura said the government has ai- ach the 20,000,000,000,000 number?”, rantees by the government and fun- med for maximum bang for minimum Bernstein said the package started on ding by other means with the actual im- buck, with most of the relief being eit- important aspects but the need to an- pact on the FY21fiscal deficit limited to her regulatory in nature or reflecting nounce measures that add up to this only 0.8% of GDP, said CLSA. While in its contingent liabilities rather than top-down number made the entire these measures show long-term promi- explicit budgetary support. package aimless. The package lacked se, a lack of schemes to boost demand substantive decisions to support con- may be seen as a disappointment by in- Continued on Smart Investing BIGGEST PULL FROM FERTILISER PLANTS Market Trends Natural Gas Demand STOCK INDICES % CHANGE Nifty 50 8823.25 3.43 Sensex 30028.98 3.44 Starts to Rebound MSCI India 647.84 3.33 GAIL executive, who did not wish to be [email protected] identified. The biggest jump in demand MSCI EM 2096.68 0.22 has come from fertiliser plants, which had MSCI BRIC 570.74 0.07 New Delhi: Natural gas demand has risen slowed at the beginning of the lockdown MSCI World 8639.61 0.69 by a third from its recent lows as factory ac- but are now operating at full capacity or tivity expanded and more gas-driven vehi- more to quickly deliver supplies to far- Nikkei 20133.73 0.48 cles came on the roads following the easing mers for the current sowing season.
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