STOCK MARKET EXPECTATIONS

,Stamp Duty ,TOT Charges ,S.Tax

In the past financial year, about 819 stock brokers called it quits, driven by declining profitability and the dominance of low-yielding options volumes, according to figures made available by the Securities and Exchange Board of India (Sebi) in its monthly bulletin.

Volumes in the options segment rose further, after accounting for about three quarters of the trading volume in FY13. The proportion of options, as percentage of overall market volumes, has risen from 9.33 per cent in FY08 to 77.43 per cent in FY14. Trades in the derivatives segment earn lower brokerage than those in the cash segment. Within the derivatives space, options earn the least.

“The trend of the business has been more towards the derivatives segment,” said Alok Churiwala, vice-chairman, BSE Brokers’ Forum. “The business of stock broking has not been good through the last few years. So, for brokers to have shut shop was expected…at current levels, the economies of business don’t bear out. Costs have also been rising; some brokers who exited could be from regional exchanges, which have been on their way out.”

A total of 913 brokers exited the cash market, while 94 were added to the derivatives segment.

The number of brokers in the cash segment rose from 13,969 in FY10 to 15,241 at the end of FY13, before falling to 14,328 at the end of FY14. Volumes in the cash segment, the most profitable for brokerages, have fell from Rs 20,370 crore in FY08 crore to Rs 13,214 crore in FY14.

Derivatives accounted for 93.48 per cent of the total turnover in FY14. The larger proportion of derivative trades translates into lower profitability for brokerages, with about 17,000 brokers fighting for a revenue pie of less than Rs 10,000 crore.

At the end of FY14, the total number of stock brokers, in the cash and derivatives segments, was 17,379; the lowest since 2011 (17,088).

THOUGHT FOR THE DAY

MARKETS FOR 12-5-14

   Market Review for 12th May 2014     

Nifty (6859) we said ‘technically no sign of strength but a breach below 6650 could bring it down to around 6550’ the  market never breached 6650 and turned around trapping the shorts and closing massively in the green and making a new all time high…technically the uptrend is still intact and the next logical targets in the days to come would be 7056, crucial  support still would be 6650

The support for Nifty is it 6760-6650 and the resistance to the up move at 7056

THOUGHT FOR THE DAY

POSITIVES & NEGATIVES OF THE WEEK

Positives:

1. Despite some trouble in select areas of the market, the Dow made new all-time highs this week.
2. Initial jobless claims came in at 319k, less than expected and down from last week.
3. Total exports increased 2.1% m/o/m in March, up from a 1.3% decline in February
4. Purchase applications jumped .9% w/o/w as 30 yr mortgage rates hit a 26 week low.
5. The trade deficit narrowed to $40.4B in March, down from $41.9B in February.
6. ISM non-manufacturing increase to 55.2 in April, up from 53.1 in March.
7. EU PMI services index came in at 53.1, the highest level since June 2011.

Negatives:

1. Japan April PMI services index fell to 46.4, the lowest level since September 2011.
2. Productivity fell 1.7% annualized in Q1 v exoectations of a 1.2% fall.
3. The Russell 2000 closed below its 200 day moving average for the first time since 2012.
4. China services PMI fell to 51.4 from 51.9.

HORRIBLE RESULTS FROM ANDHRA BANK

Andhra Bank Q4 Net down 74.4% to Rs 88 crore,Gross NPA rose to 5.29 per cent -One of the highest in the industry

09 May 2014 - 22:16 pm

State-run Andhra Bank today reported 74 per cent decline in net profit at Rs 88.08 crore for the quarter ended March 31 on higher provisioning for Non-Performing Assets (NPA). 

The bank’s net profit for the corresponding quarter last year stood at Rs 344.58 crore. 

The total income for the quarter under review grew by 9.29 per cent to Rs 4,057.89 crore, as compared to Rs 3,713.06 crore in the corresponding previous quarter, the bank’s Executive Director S K Kalra said. 

“There has been an increase in NPAs and so is provisioning. The macro economic situation was also not in favour. But the revival has started. We can see positive results in the coming quarters,” Kalra said in a press conference after announcing the results. 

“The state of affairs in Andhra Pradesh also impacted the performance of the bank as our branches could not properly function for almost 4-5 months last year due to various agitations,” Kalra said. 

The provisioning towards bad loans had gone up by 255.85 per cent to Rs 666.65 crore in the quarter under review from Rs 187.36 crore in the year-ago period. 

Gross NPA of the bank as at March 2014 rose to 5.29 per cent as compared to 3.71 per cent, one of the highest in the industry. 

Replying to a query, he said the credit and deposit growth for the current year is expected to be between 18 to 20 per cent. 

Credit growth for the full year ending March 2014 was only 10.5 per cent and deposits grew by 14 per cent, said Kalra. 

The bank is expected to open between 400 to 500 branches in the current year and majority of them will be in Andhra Pradesh. 

“Of this, we will open more branches in Telangana State as our presence is less when compared to Andhra Pradesh,” he added. 

Net Interest Margin, which was pegged at 2.76 per cent during FY14 will remain at the same level and Gross NPAs to be in the range of 4 per cent, he added.