 "Lower issuances of debt and equity by non-financial entities and lower investments by LIC in corporate debt, infrastructure and the social sector have also resulted in lower credit flow")
LIC’s Indiabulls Hsg buy raises eyebrows
Life Insurance Corporation's (LIC) investments in the beleaguered Indiabulls Housing Finance (IBHF) has raised eyebrows. The insurance giant had raised its stake in the housing finance firm from 1.13 per cent at the end of March 2017 to 10.74 by the end of September 2018. During this period, the stock hovered between Rs 1,000 and Rs 1,300. But, LIC’s peak shareholding coincided with a sharp fall in IBHF’s share price. Currently, it trades at Rs 242, only a fraction of LIC’s average buying price. And, LIC still holds 10.72 per cent in IBHF. Market players said the life insurer should be more nimble in exiting its investments in troubled firms to ensure policyholders’ losses are mitigated. - Sundar Sethuraman
Banking funds drive investor gains
Banking sector funds have delivered close to 10 per cent returns in one month, amid healthy set of results by some corporate lenders, thereby helping the funds lead the returns scorecard. "Corporate banks have reported strong numbers in September quarter. Though net profit was impacted by one-time tax adjustment, profit before tax and overall credit cost have improved on expected lines," said a fund manager. Experts say improvement in asset quality bodes well for corporate banks and should lead to increased earnings for these lenders. However, advisors say such funds would be suitable for savvy investors, as sector funds can be susceptible to bouts of higher volatility. - Jash Kriplani
No room for error in pricey stocks
Shares of Titan fell by over 11 per cent last week after its September quarter earnings missed expectations. Also, the jewellery and watch retailer sharply lowered the growth guidance for the second half of FY20. Given the weak economic conditions, companies missing estimates aren’t uncommon, but, experts say there is little room for disappointment when it comes to pricey stocks. “Investors have been piling on to high quality stocks, taking their valuations to exorbitant levels. As it is there are doubts if such valuations are justified. Therefore investors are quick to dump richly-valued stocks that disappoint,” said an analyst. - Samie Modak
