17-05-2012, 05:10 PM
RBI New Credit Policy impacts profits of banking sector
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RBI raises statutory liquidity ratio (SLR) by 100 bps to 25 per cent. Other key rates and ratios like repo, reverse repo and cash reserve ratios remain unchanged.
This raises inflation projection to 6.5 per cent with an upside bias by this fiscal end from 5 per cent projected earlier and retains GDP growth projection for FY10 at 6 per cent with an upward bias.
As an impact, profits of Banks would be hurt after RBI raises the provision ratio for bad debts in its credit policy review. Top two banks - State Bank of India and ICICI Bank are supposed to be among the worst affected.
State Bank's pre-provision profits in the year to March 2010 could be hurt by nearly a fifth and ICICI's by 7.4 percent. RBI on Tuesday asked banks to increase the minimum provision ratio for bad debts to 70 percent from 10 percent by September 2010. Private sector lenders Axis Bank and HDFC Bank, which already have high provision coverage is to be least affected by the new regulation.
India going into Green Energy Revolution
The green energy revolution is not miles away from India. The country has emerged as the world’s number one, along with United States, in annual solar power generation. In windpower production, India ranks fifth in the world. And when it comes to space, scope and facilities for renewable energy expansion, India ranks fourth in the world. McKinsey & Company, in its survey ended in May 2009, has stated that India has one of the world’s highest solar intensities with an annual solar energy yield of 1,700 to 1,900 kilowatt hours per kilowatt peak (kWh/KWp) of the installed capacity. With this increase emphasis on solar energy, companies manufacturing photo-voltic cells like Bhel, Mose Baer will have high economic activity.
Tata BP Solar, a joint venture established in 1989 between Tata Power, the highest private sector power producer and BP Solar - one of the largest Solar Companies in the world, over the years may play an important role in this sector. Tata BP Solar uses state-of-the-art technology to offer high quality, innovative solar solutions that cater to the needs of individual customers, large institutions as well as entire communities.
Zee News giving away leading Regional Channels to Zee Entertainment
Zee News (ZNL) board has approved the scheme of arrangement for transfer / demerger of regional general entertainment business (R-GEC) undertaking. The aforesiad business comprises of 6 television channels of the company - Zee Marathi, Zee Talkies, Zee Bangla, Zee Telugu, Zee Kannada and Zee Cinemalu into Zee Entertainment Enterprises (ZEEL). The aforesiad approval would come into effect from Jan. 1, 2010. Swap ratio will be 4 equity shares of Re. 1 each to be issued by Zee Entertainment for every 19 shares of Zee news.
This means, Zee News would be giving away the key growth drivers of its business. Zee News generates over 79 per cent of revenues from advertising, which is driven mainly by its regional viewership, making it difficult to sustain revenue growth after the demerger of its regional channels. Of the six channels those are to be transferred to Zee Entertainment, at least four hold immense potential. Zee Marathi is a market leader in terms of viewership, while Zee Bangla is second in its market. Zee Telugu and Zee Kannada also figure among the top few viewed channels in the respective regions, according to data from TAM Media Research. As regional advertising in print and television media hold the key for most media companies, in driving revenue growth Zee Entertainment would benefit by the addition to its bouquet. Evidence to this fact is that Zee News has seen its advertising revenues grow by 26.4 per cent in the latest September quarter compared to a year ago, whereas Zee Entertainment with a pan-India reach has seen a fall of 13 per cent on this front.