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Home > Business > Stock Market News > Hot Pursuits

Bank of Punjab at new 52-wk high

June 11, 2003 14:57 IST

Bank of Punjab was the subject of merger and acquisition rumours today and, consequently, the scrip moved up. In fact, it spiraled to a new 52-week high of Rs 23.35. At 14:25 IST, it was still near that high at Rs 23, up 15%. Volumes on the counter on BSE reached over 15 lakh shares . The scrip of Bank of Punjab (BoP) has risen 90% from Rs 12.15 on 1 October 2002.

BoP has been garnering interest on the bourses of late on expectations that it could be subject of acquisition . The market sees it as a veritable takeover target. Operators have been keenly pursuing second-rung private banks of late after Bank of Muscat acquired a 26% stake in Centurion Bank for Rs 75 crore. The move set off expectations that large multinational banks may expand base in India through acquisition of private sector banks.

As per market talk, the promoter has already appointed Morgan Stanley as advisor over a proposal for sale of stake. Some talk is on in the market that ABN Amro has shown interest in acquiring stake in BoP.

As on 31 March 2003, promoters held 38.32% stake in BoP, while the public and institutions held 43.63% and 3.28% stake, respectively.

M&A activity in the banking sector got a boost after the government hiked foreign direct investment limit in private sector banks to 74% from 49% . This may have prompted solid interest in Indian private sector banks by MNCs eager to expand.

The banking sector, as it is, is in the limelight following the impressive performance registered by most banks and the bright prospects seen for these. Also, the weak tech sector has prompted investors to shift portfolio to banking stocks.

The Securitisation Act has acted as a major trigger for banking stocks in the form of allowing easy recovery of non-performing assets by banks. The cheap valuation of banking stocks has further brought investor interest in the banking sector.

For the third quarter ended 31 December 2002, BoP earned a 3.82% rise in net profit to Rs 11.97 crore (Rs 11.53 crore) on a 3.14% increase in total income to Rs 130.21 crore (Rs 126.24 crore).



Source: www.capitalmarket.com

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