Bank stocks may take the lead in market revival Economic Times
29.08.11
The Bombay Stock Exchange's Bankex has fallen 24% year-to-date compared with 23% fall in benchmark Sensex. The country's largest lender State Bank of India has fallen 33% so far this calendar year. The BSE Auto index has declined 21% during the same period. Reddy is cautious on construction and infrastructure companies whose fortunes are dependent on long-gestation capital expenditure or project-related investment activity.
"These segments have seen a slowdown from last year long before inflation and interest became dominant concerns. They never really saw any meaningful revival from the previous downturn. The reasons include land issues, low business confidence and companies remaining conservative after the last shock, governance issues, among others," he said. As of July, ICICI Prudential has total assets of Rs 67,000 crore, of which equity comprises 60% (Rs 40,000 crore). On an aggregate level, it has about 21-22% of the assets in financials space, around 15% in energy, 7-8% each in auto and consumer.
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Chinese Bank ICBC Gains Access to bLife Insurance/b Sector b.../b
Industrial and Commercial Bank of China (ICBC) has agreed to buy a major stake in the French-Chinese joint venture AXA-Minmetals Assurance Company. The move by the Chinese Bank ICBC will make them the majority shareholder and add to its non-banking revenue stream.
The initiative by ICBC to acquire the 60 percent share in AXA-Minmetals Assurance comes as the Chinese bank announced that it gained a 27 percent increase in profits during the third-quarter of 2010 with net income of 42.6 billion yuan (US$ 6.4 billion) up from 33.6 billion yuan (US$ 5.05 billion) in the previous year.
ICBC – the world’s largest bank by market value – will invest 1.2 billion yuan (US$180 million) for a 60 percent stake in the French joint venture company AXA-Minmetals Assurance. The deal will subsequently mean the company being named ICBC-AXA Life Insurance Company. The general management of the business will headed by the AXA-appointed president.
The deal struck by ICBC and AXA-Minmentals will strengthen the company’s presence in an ever developing insurance market. Henri de Castries, Chief Executive of AXA said “AXA has full confidence in the business growth opportunities in the Chinese market and this cooperation with ICBC is ideal to increase our respective interests and presence in the Chinese insurance market.”
The link with AXA-Minmetals will facilitate ICBC’s entry into the Chinese life insurance market and add to its non-banking business, gaining access to the health, retirement, education, children and wealth insurance products.
ICBC chairman Jiang Jianqing said regarding the deal: “ICBC boasts a strong customer base, complete service network and increasingly expanding influence in both domestic and global markets. ICBC’s investment in AXA-Minmetals is an important initiative to promote the comprehensive operation strategy and build core competitiveness. ICBC will fully leverage our leading advantages in banking industry to fully promote this strategic cooperation. We believe this strategic cooperation of ICBC with AXA and Minmetals will bring sound investment returns to the shareholders as well as quality and all-round financial services to customers.”
