Spark Capital: Banking Weekly – Update for the week ended Jun 14, 2013
Spark Capital Advisors(India) Private Limited
17 Jun 2013
Available for Immediate Download
Banking Weekly – Update for the week ended Jun 14, 2013 What's Inside BSE Bankex performance Spark NBFC index Performance Bond market update Key news flow during the week Fortnightly credit and deposit trends Key trend charts on bond yields, yield curve, CDS trends, AAA spreads, TED spreads, CD rates, money market trends, gold and forex market trends Valuation summary of the bank stocks and NBFCs in our coverage Key Takeaways The 10Y G-Sec yield was up 7bps wow ending at 7.31%, while the 5Y yield was up 10bps wow ending at 7.48%. Deposits have increased by Rs. 922 billion to register 13.41% yoy growth as of May 31, while Credit disbursements were up by Rs. 509 billion during the fortnight registering a growth of 14.32% yoy. Spread between 10Y and 6M G-sec yields was (9) bps compared to (8) bps last week. The change in spread was led by a 8bps increase in the 6M G-sec yields to 7.41% while the 10Y yield was up 7bps at 7.31% on a wow basis. The 10Y bond yields moved up in Brazil by 5bps wow, flat in China, and down in US by 4bps & UK by 1bp wow. The 10Y AAA spreads was up 1bp at 1.15% & 5Y AAA moved up 2bps to 1.04%. ICICIBC CDS rates moved higher wow by 42bps and SBIN CDS rates were up 23bps. CD rates moved higher across 3M, 6M & 12M tenors by 7bps for 3M and 8bps for 6M & 10bps for 12M wow. The CD rates for 3M, 6M and 12M tenors currently stand at 8.18%, 8.25% and 8.38% respectively. Spread between overnight rate and 12M OIS rate stood at (6) bps suggesting that the market is expecting rates to lower by ~6bps 12 months from now. The rupee depreciated wow against the dollar by ~0.5% across tenors, closing at 57.54. Gold was down wow in INR terms by 0.9% and in USD terms by 2.2%. Gold is up by 5% in INR terms and by 0.1% in USD terms over the last four weeks.