Allahabad Bank

Allahabad bank down target=40....

Posted by : piyushbajpai1

Now Closing of below 49.75 is not good sign this stock can now go down to 42 or 40 . but whenever the market will bounce back the recovery from 40 levels to 53 levels will be fast so anyone buying in lower levels should try to exit at 53 . this move should be taken by traders only , long term investor might not like this move .

Allahabad bank down target=40....

Posted by : EMCEE

piyushbajpai1
Taking yr. advise I took possession of some additional qty. close to lower levels the stock traversed today:the value at which I bought today fitted with my way of analysing stocks: ofcourse, today anyone who bought anything should gain handsome rewards 1 year down the line.One did not need to do any thinking!
But then, it is possible that some one who would bought next week or the week after would gain grater rewards!
In this time of `shock and awe` dare devils will gain: But then very few whould be left with the resource to demonstrate their will, most should be broke/would have been fully invested!

Allahabad bank down target=40....

Posted by : piyushbajpai1

Yes you are right , but one problem for the short term is that, allahabad bank after breaking its support of 53 , might not fall to much below 50 and 42 will be the ultimate target in the worst case scenario , but one thing which might pan out is that it might not be able to outperform the market which it was doing for quite a time . that means it wont recover fast as other large cap stocks will .

Allahabad bank down target=40....

Posted by : EMCEE

Shri piyushbajpai1:you asked my why I should not switch to Bank Of India
I do have a holding in Bank Of India:after exiting-which I etered after IPO- PNB at reltively High Value I took pocession of Bank Of India, from there after pruning some holdings I enetered Allahbad Bank: Even though I hold both,in addition to some more PSU Banks, UCO, Bank for example, my conviction is that -I may turn out to be wrong, but as of now I strongly believe- that the Allahabd bank will Double from the present level much faster than Bank Of India and in the event of prolonged Bear Phase Allahabad Bank`s divident yield will act as cushioner. This conviction is based on operational paramenters which I value, divident payout being one.

While it withstood tha last pahse of crash-and even looking to cross the 62-64 band to reach 69- the present one it is not able to because of the 2nd Quarter results. As those who go beyond the final net profit will realise, it is due to one time provissioning: even Bank Of India, 4/5 quarter back came out with one such bad result. In fact the parliament has already passed the supplementry grants for farm waiver and a part of the provissining will be replenished in the next few days.

And, finally I am writting all this not to jack up the stock- I can`nt and no body can in this unfolding bear Market. My arguement has been against those people who have been articulting through this column that `something is terribly wrong with this bank`, `I told you so`, `go short`, `we have shorted at Rs40/ and so on` not based on Technicals but because as they claim `they have shorted`. The stock can go to 40 (and as an Investor I will even like that as I do not have compulsion to cash out in the next3/4 years atleast,wheras I can invese some surplus during that time) and my scribbles can not stop that.

My view is that if it goes to 40 it is an once in a life time opprotunity-there may be other stocks as well, say Bank Of India and Bank Of Baroda around Rs200- and do not miss it. As `Purohitji` called it, use the market imperfection to reap benifits and don`t panic doing all kind of things like selling qulity stocks and buying stocks based on day-to-day movements and be left with worthless stocks when the dust settles down: I did this during Harshad Mehatas time and lost quiet a good of my savings:my second innings starting form 1998 I was on my own and relatively better off than those who follow `experts`, `brokers advise` and market trends

And, about yr.views on technicals I repect and have been following.Like you mentioned that 53 is a level to watch-which in all probability will break going by Dow Crash to-day, as I write this around 9pm- I am watching for further investements. Please share yr. views as to where is the next level:it is possible that it may enter uncharted teritory which it has not seen in the recent past!

emcee

Allahabad bank down target=40....

Posted by : EMCEE

Shri piyushbajpai1:you asked my why I should not switch to Bank Of India
I do have a holding in Bank Of India:after exiting-which I etered after IPO- PNB at reltively High Value I took pocession of Bank Of India, from there after pruning some holdings I enetered Allahbad Bank: Even though I hold both,in addition to some more PSU Banks, UCO, Bank for example, my conviction is that -I may turn out to be wrong, but as of now I strongly believe- that the Allahabd bank will Double from the present level much faster than Bank Of India and in the event of prolonged Bear Phase Allahabad Bank`s divident yield will act as cushioner. This conviction is based on operational paramenters which I value, divident payout being one.

While it withstood tha last pahse of crash-and even looking to cross the 62-64 band to reach 69- the present one it is not able to because of the 2nd Quarter results. As those who go beyond the final net profit will realise, it is due to one time provissioning: even Bank Of India, 4/5 quarter back came out with one such bad result. In fact the parliament has already passed the supplementry grants for farm waiver and a part of the provissining will be replenished in the next few days.

And, finally I am writting all this not to jack up the stock- I can`nt and no body can in this unfolding bear Market. My arguement has been against those people who have been articulting through this column that `something is terribly wrong with this bank`, `I told you so`, `go short`, `we have shorted at Rs40/ and so on` not based on Technicals but because as they claim `they have shorted`. The stock can go to 40 (and as an Investor I will even like that as I do not have compulsion to cash out in the next3/4 years atleast,wheras I can invese some surplus during that time) and my scribbles can not stop that.

My view is that if it goes to 40 it is an once in a life time opprotunity-there may be other stocks as well, say Bank Of India and Bank Of Baroda around Rs200- and do not miss it. As `Purohitji` called it, use the market imperfection to reap benifits and don`t panic doing all kind of things like selling qulity stocks and buying stocks based on day-to-day movements and be left with worthless stocks when the dust settles down: I did this during Harshad Mehatas time and lost quiet a good of my savings:my second innings starting form 1998 I was on my own and relatively better off than those who follow `experts`, `brokers advise` and market trends

And, about yr.views on technicals I repect and have been following.Like you mentioned that 53 is a level to watch-which in all probability will break going by Dow Crash to-day, as I write this around 9pm- I am watching for further investements. Please share yr. views as to where is the next level:it is possible that it may enter uncharted teritory which it has not seen in the recent past!

emcee

Allahabad bank down target=40....

Posted by : piyushbajpai1

Yes Whatever You are Saying is true , PSU banking Had a good future , so why you are sticking to this bank only , there are lots of other Banks In the PSU banking space which are showing value and growth . like Bank Of India .

Allahabad bank down target=40....

Posted by : EMCEE

`Guest`, I agree dividents can not be only criteria and should be seen in the context of other factors such as the stability of the business.

I take the view that in Indian Context PSU banks are well regulated (means you can reasonably trust the Balance Sheet) and have a stable business model-it may not grow the way ICICI has grown, and you have seen what happens next-which can be sustained. And except for this year-in which EPS may be @15/- one should expect @Rs20/ plus on an avearge. And it is reasonable to expect a pay out of Rs3.5/ per share out of this Rs20/ plus earning, which should increase in the coming years: the Goverment which is the majority Share Holder through their nominees insist on such pay outs to meet its budgetory needs
About Economic Down Turn in the coming years: I feel the impact can even be positive for Banks: when the demand comes down inflation comes down,RBI relaeses all the Money held to combat Inflation in the form of CRR which can earn interest, RBI brings down the rate at which it lends to the Bank, reverse Repo comes down,Bond Value rises thereby ensuring Treasury Profit, People put their money in the Bank as the Stock Market `doeas not give returns`,which inturn drives interest down and the Companies use Banks as the intermediatry for assesing funds, with non existant Primary Market in such situations

The point is, impact for the Banks may not as much as for other sectors and it may be even be positive when the economy slows down

emcee

Allahabad bank down target=40....

Posted by : EMCEE

`Guest`, I agree dividents can not be only criteria and should be seen in the context of other factors such as the stability of the business.

I take the view that in Indian Context PSU banks are well regulated (means you can reasonably trust the Balance Sheet) and have a stable business model-it may not grow the way ICICI has grown, and you have seen what happens next-which can be sustained. And except for this year-in which EPS may be @15/- one should expect @Rs20/ plus on an avearge. And it is reasonable to expect a pay out of Rs3.5/ per share out of this Rs20/ plus earning, which should increase in the coming years: the Goverment which is the majority Share Holder through their nominees insist on such pay outs to meet its budgetory needs
About Economic Down Turn in the coming years: I feel the impact can even be positive for Banks: when the demand comes down inflation comes down,RBI relaeses all the Money held to combat Inflation in the form of CRR which can earn interest, RBI brings down the rate at which it lends to the Bank, reverse Repo comes down,Bond Value rises thereby ensuring Treasury Profit, People put their money in the Bank as the Stock Market `doeas not give returns`,which inturn drives interest down and the Companies use Banks as the intermediatry for assesing funds, with non existant Primary Market in such situations

The point is, impact for the Banks may not as much as for other sectors and it may be even be positive when the economy slows down

emcee

Sell Sell Sell

Posted by : EMCEE

Mr.Purohitjii
So well expressed:I was deeply impressed by the way you put across your views, so well articulated.You seem well qulified to share your views with the Boarders many of whom look for to informed/qualified messages
To support your view I want to detail as to how I have always taken the position opposite to what the market thinks, or as you have put it how by manipulating market imperfections I have stayed comfortable during this so called difficult times in the market place

Yes, I have taken tremendous advantage of this market ineffciencies,stupidity and the fear and the greed of day-tradres.If I say that I am making 100% of investement I made in 2000-2003 as dividents (yes,I am getting back what I started with in 2000 as dividents every year!)with many fold capital appreciation, people would not believe.
How did I do that:My initial investem was based purely on divivident yield and basic fundamentals like EPS,stability of the sector in which the Comany is in (Banking,Finacial& Fertlizer), book vlaue and more importanly, Market Perception. And by Market perception I mean taking the position opposite to what people like Mr.Realistic aways took!
What I did: When stocks like MNCS,FMCGS,AUTO etc. were in Vogue during 2001/02, I used buy kilos of PNB(AT @rS40,DIVIDENT 40%,)LIC HOUSING Finance (@rS30/ when they were paying Rs4.0 as divident)Bomaby dyeing (around Rs40, divident around Rs 4/) Can fin Homes (bought around Rs18 and divident Rs1.5) and so on
And, taking advanatge of the market inefficeincies which you so vividly described I offloaded most of the above shares at reasonably high vlaue (when I found divident yield was not commensurate with the Market value) and some of them at exhorbitant value-Bomaby Dyeing around Rs800/for example) I have again settled for High divident yiled stocks like Allhabad Bank, Deepak Fertlizer and I again I have re-entered LIC. Also, I added another grossly undervalued stock Zuari Agro

So if the Marketpushes stcoks like Allhabad Bank, UCO(with Goverment bringing down its stake by converting 250 crores equity EPS increases and by the time it is ready to Public it will have a minimum EPS of Rs10/-) down I feel it can be repeat of 2000!:yes in about 3 years you will realise what I am saying to-day

Think for moment: has any one talked about Zuari Agro.Look at the fundamentals:a good sector with high entry barrier,very low Equity-30Crores- Expected EPS of Rs60/-,plenty of investements in group companies like Chambal,Prdeep Phosphate, lot Land Holding.
The stock is avialble for PE less that 4. tke a view and share with People

With Best Wishes