A quarter is a three-month period of the company’s financial calendar that acts as a basis for the company’s periodic financial reports and paying off dividends for the shareholders. As a steady raise in COVID 19 count, the markets continues its range-bound movement with intermittent hiccups, as the hopes for early vaccines that manage to keep the momentum neutral with an upward bias. Many of the banks in the US are staring at a hole in the quality of their asset which is estimated to be in the upwards of $30 billion, so they did not participate in March-June recovery which Dow and Nasdaq witnessed.
Going through the case of India, many banks are in the same fear which is raising buffer capital as there is no tomorrow. In the coming weeks, investors will be facing a strange scenario of bunched-up FPOs, QIPs, IPOs, and other models of capital raising. Everyone from YES Bank to Axis Bank to ICICI Bank to SBI is expected to rush to their market to raise capital. To shore up capital, recently RBI Governor sends out a clear signal to the banking system. They all expected it to be by September when the relaxed NPA disclosure norms expire. In India, the financial service sectors are going to face challenges in raising a huge amount of capital, as the helicopter money from the Fed makes it easier for the banks to get funding.
As the Mahindra &Mahindra Financial Services posted robust from the first quarter of fiscal 2020 and its board approved the right issue, the company jumped almost 10% in the early trade. The directors of the company accepted the conditions of an earlier approved right issue and paid-up equity shares of the face value of Rs.2 each. To determine the shareholders who are eligible to receive the right entitlements in the issue, the board of directors of the company had fixed the record date. the Company also fixed the right entitlement ratio to determine eligible equity shareholders as on the record data.
In the banking sector investors are requested to stay away and keep negative stands and accumulate only on panics for their longterm investment portfolio. India’s retail inflations unexpectedly rose to 6.9% in June as measured by the consumer price index. This is due to the temporary dent on the supply side. It will force RBI to rethink its stands on a rate cut at the August policy review. Most of the Indian population invests in bank’s fixed deposits and reduces interest rates that may indirectly impact consumption from a large. The problem is not RBI’s stands on the interest rate, but the willingness to banks for advance loans. Investors are advised to stay on the sidelines and wait for market dips before Investing.
