Friday mayhem exposes chinks in non-banking financial firms’ armour
6 years, 3 months ago

Friday mayhem exposes chinks in non-banking financial firms’ armour

Live Mint  

Blame it on their funding model. Relying on the wholesale market for funds, non-banking financial companies are easily susceptible to liquidity disruptions in the money markets. A 17 September report by India Ratings & Research pointed out, “Liquidity Shocks could result in Refinancing Challenges: While most of the NBFCs have opted for matching assets to liabilities, some of the large entities carry sizeable mismatches in the short-term buckets. The report added that “NBFCs were the largest net borrowers of funds from the financial system with gross payables of around ₹ 7.17 trillion and gross receivables of around ₹ 419 billion in March 2018.” Housing finance companies were not far behind. The report pointed out, “HFCs were the second largest borrowers of funds from the financial system with gross payables of around ₹ 5,284 billion and gross receivables of only ₹ 312 billion in March 2018.” Banks and mutual funds were big lenders to NBFCs and HFCs.

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23 Nifty 50 stocks plunge up to 37% from one-year highs; IndusInd Bank, Tata Motors among the worst hit
2 months ago

23 Nifty 50 stocks plunge up to 37% from one-year highs; IndusInd Bank, Tata Motors among the worst hit

Live Mint  

November has so far not offered any relief for Indian markets, as the selloff that began in October has persisted well into the current month. Additionally, foreign portfolio investors have been steadily pulling out of Indian markets since late September, which has put sustained pressure on the Indian rupee, driving it to new record lows. Recent reports indicate that Foreign …

Why stock market has been falling? Experts list out triggers for trend reversal
1 year, 9 months ago

Why stock market has been falling? Experts list out triggers for trend reversal

Live Mint  

Stock market today extended its losing streak for sixth straight session as worries over banking contagion in the developed world continued to hurt sentiments, especially after the US' Silicon Valley Bank crisis reaching to the European leading bank Credit Suisse. Credit Suisse crisis doing the damage According to stock market experts, US bank crisis that began with bankruptcy news of …

Will Silicon Valley Bank crisis dictate Indian stock market this week?
1 year, 10 months ago

Will Silicon Valley Bank crisis dictate Indian stock market this week?

Live Mint  

Stock market of India witnessed heavy sell off during week off trade in the weak gone by on weak global cues caused by Silicon Valley Bank crisis. Banking stocks in focus Speaking on the Silicon Valley Bank crisis and its impact on Indian stock market, Avinash Gorakshkar, Head of Research at Profitmart Securities said, "From fundamental perspective, Indian banks have …

Stocks Tumble On Big Banks' Role In Money Laundering Report, Fears Of Relief Delay
4 years, 3 months ago

Stocks Tumble On Big Banks' Role In Money Laundering Report, Fears Of Relief Delay

NPR  

Stocks Tumble On Big Banks' Role In Money Laundering Report, Fears Of Relief Delay Enlarge this image toggle caption Bebeto Matthews/AP Bebeto Matthews/AP Updated at 4:14 p.m. ET The Dow Jones Industrial Average dropped 509 points Monday following a report that large global banks were involved in transactions flagged as possible money laundering. Bank stocks fell after a news report …

NBFCs will continue to face liquidity, asset quality risks: Fitch
4 years, 6 months ago

NBFCs will continue to face liquidity, asset quality risks: Fitch

Live Mint  

MUMBAI: India's non-bank financial companies will continue to face elevated liquidity and asset quality risks, even as economic activity picks up with the easing of the nationwide lockdown, according to global rating agency Fitch Ratings. Non-banks, facing a liquidity shortage ever since Infrastructure Leasing and Financial Services Ltd defaulted on its payment obligations, have been under renewed strain as banks …

Retail investors in India rush to buy beaten-down stocks
4 years, 6 months ago

Retail investors in India rush to buy beaten-down stocks

Live Mint  

The resurgence in Indian equities despite the economic impact from the still-spreading coronavirus has bewildered professional investors. They’re piling into beaten-down stocks such as financials, telecom and high-quality drugmakers amid expectations that Asia’s third-largest economy may recover faster than expected as it gradually unlocks from the world’s biggest lockdown. Mirroring the rush of first-time investors who drove record sign-ups at …

Fresh crisis looms for NBFCs after fund shuts
4 years, 8 months ago

Fresh crisis looms for NBFCs after fund shuts

Live Mint  

India’s shadow lenders are facing fresh turmoil after asset manager Franklin Templeton shut funds late last month, prompting other large investors to dump the financiers’ debt. Three other gauges of the sector’s health compiled by Bloomberg showed no improvement last month, with a measure of shares of 20 financial firms and other companies staying depressed. Government measures To help cash-starved …

A battered IndusInd Bank lays bare RBI’s financial stability challenge
4 years, 9 months ago

A battered IndusInd Bank lays bare RBI’s financial stability challenge

Live Mint  

India’s private sector banks are facing their toughest test yet with a virus outbreak putting their earnings at risk, even as the collapse of a peer bank raises questions on deposits. The bank’s stock dropped 15% on Tuesday after the lender revealed in an investor call that it has lost 10-11% of its deposits since Yes Bank Ltd crumbled earlier …

Market Ahead, March 6: Top factors that could guide markets today
4 years, 10 months ago

Market Ahead, March 6: Top factors that could guide markets today

Business Standard  

An overnight rout on the Wall Street is likely to heavily impact investor sentiment back home today with the SGX Nifty indicating almost a 300 point lower opening for the Indian markets. Following the Wall Street plunge, Asian shares also fell on Friday as disruptions to global business from the coronavirus beyond China worsened. Australian shares fell 1.86 per cent, …

Drop in borrowing costs shows India NBFC crisis may ease
4 years, 11 months ago

Drop in borrowing costs shows India NBFC crisis may ease

Live Mint  

Borrowing costs for India’s top-rated shadow financiers declined last month, indicating that the nation’s prolonged credit crisis may be seeing some improvement. Premiums that investors seek to buy AAA rated five-year bonds of non-bank lenders over government notes with similar maturities narrowed to a 16-month low in January, helping a gauge measuring bond spreads to strengthen. Supporting these financiers is …

Banks to face capital shortfall of Rs 3.5 lakh cr in event of systemic crisis in NBFC sector: Fitch Ratings
5 years, 2 months ago

Banks to face capital shortfall of Rs 3.5 lakh cr in event of systemic crisis in NBFC sector: Fitch Ratings

Firstpost  

New Delhi: Banks would face a capital shortfall of about $50 billion in the event of a systemic crisis in the non-banking financial company sector, according to a study by global rating agency Fitch. “The credit profiles of the state-owned banks would come under significant pressure, and the weakest – including those with Viability Ratings in the ‘b’ range – …

NBFC crisis may return to haunt Indian stock markets
5 years, 3 months ago

NBFC crisis may return to haunt Indian stock markets

Live Mint  

India’s shadow banking crisis has sucked in more financial firms this week, eroding a stock market rally that’s been driven by a surprise $20 billion tax cut package. Debt concerns at lenders including Indiabulls Housing Finance Ltd. and a co-operative bank, and worries a cleanup in corporate debt could be prolonged, have spooked the financial markets. The Reserve Bank of …

No need to panic, Indian banking system safe: RBI
5 years, 3 months ago

No need to panic, Indian banking system safe: RBI

India TV News  

The Reserve Bank on Tuesday assured the general public that the Indian banking system is safe and stable and there is no need for panic based on rumours. The RBI statement came on a day when the Nifty Bank index tanked by 1.30 per cent in intra-day trade amid a barrage of negative news from the sector, including a deepening …

No need to panic, Indian banking system safe: RBI
5 years, 3 months ago

No need to panic, Indian banking system safe: RBI

India Today  

The Reserve Bank on Tuesday assured the general public that the Indian banking system is safe and stable and there is no need for panic based on rumours. The RBI statement came on a day when the Nifty Bank index tanked by 1.30 per cent in intra-day trade amid a barrage of negative news from the sector, including a deepening …

DHFL demise imminent just like debt-ridden IL&FS: India’s regulators, raters failed to catch early signs of NBFC mess
5 years, 6 months ago

DHFL demise imminent just like debt-ridden IL&FS: India’s regulators, raters failed to catch early signs of NBFC mess

Firstpost  

In the case of both IL&FS and DHFL, rating agencies stepped in the last minute to call out the nature of stress in these firms and warn investors Dewan Housing Finance Ltd or DHFL—a well-known home loan lender in the country—fears that its days are numbered. DHFL’s near-death and the IL&FS crisis that preceded it exposes the weakness of India’s …

Long shadow of liquidity crunch looms over NBFCs in 2019
6 years ago

Long shadow of liquidity crunch looms over NBFCs in 2019

Live Mint  

What could have been the best year in terms of performance for non-banking financial companies quickly turned sour in just a few weeks in September. Investors have taken note of the impact on business growth and most NBFCs are likely to see modest credit growth, lower than previous expectations, as conserving liquidity and capital will take priority. Housing finance companies …

Opinion: NBFCs may need to suffer some pain
6 years, 2 months ago

Opinion: NBFCs may need to suffer some pain

Live Mint  

In India, crises move slowly. The country’s shadow banking sector -- dominated by what officials call “non-banking financial corporations” or NBFCs -- faces something of a reckoning over the next month. What’s more problematic, perhaps, is the government’s insistence that the Reserve Bank of India open up a special window to lend money to the sector as it has for …

Govt says some NBFCs face liquidity stress, puts pressure on RBI to ease
6 years, 2 months ago

Govt says some NBFCs face liquidity stress, puts pressure on RBI to ease

Live Mint  

New Delhi: A top Indian government official on Monday said the nation’s non-banking housing finance companies were facing liquidity stress, in comments that are likely to put more pressure on the Indian central bank to ease its policy towards the sector. The intervention by Corporate Affairs Secretary Injeti Srinivas came after Finance Minister Arun Jaitley and other government officials raised …

Banks turned wary of NBFCs months before IL&FS defaults
6 years, 3 months ago

Banks turned wary of NBFCs months before IL&FS defaults

Live Mint  

Indian banks seem to have turned wary of non-banking financial companies months before doubts on their liquidity position began to scare investors. The adjoining chart shows that bank loans to NBFCs fell by ₹ 6,000 crore during April-August. The series of defaults by Infrastructure Leasing and Financial Services Ltd over the last two months had hurt sentiments towards NBFCs, as …

IL&FS crisis a concern for investors abroad: Mobius
6 years, 3 months ago

IL&FS crisis a concern for investors abroad: Mobius

Live Mint  

Mumbai: The recent crisis at Infrastructure Leasing and Financial Services Ltd is a concern for investors in overseas markets, says veteran emerging markets investor Mark Mobius. In a phone interview from London, Mobius, 82, founding partner of Mobius Capital Partners Llp, believes the Indian rupee will eventually stabilize around 73 against the dollar. The problem with the infrastructure company —and …

Investors continue to dump NBFC, housing finance stocks tank up to 9% on persistent worries over liquidity constraints
6 years, 3 months ago

Investors continue to dump NBFC, housing finance stocks tank up to 9% on persistent worries over liquidity constraints

Firstpost  

Liquidity concerns in the NBFC space have hit investor sentiment of late, with shares of many of these companies tumbling sharply. New Delhi: Shares of NBFC and housing finance firms continued to witness selling pressure Friday, falling up to 9 percent on persistent worries over liquidity constraints. The scrip of Indiabulls Housing Finance plunged 8.91 percent, Reliance Home Finance 8.43 …

NBFC sector likely to face shake-up after IL&FS default
6 years, 3 months ago

NBFC sector likely to face shake-up after IL&FS default

Live Mint  

New Delhi: India’s burgeoning shadow finance sector is likely to face a shake-up after defaults at one major lender battered the nation’s financial markets in the past week and reinforced worries about credit risk. “The way things are unfolding, there is certainly cause for concern and the sector could see consolidation,” said Harun Rashid Khan, a former deputy governor at …

NBFC, housing finance stocks continue to slide on worries over liquidity constraints
6 years, 3 months ago

NBFC, housing finance stocks continue to slide on worries over liquidity constraints

Firstpost  

Shares of housing finance and NBFC companies had dropped as much as 23.5 percent on Tuesday, led by DHFL, on fears of a liquidity crisis. New Delhi: Shares of NBFC and housing finance firms continued to trade weak Thursday, plunging by up to 8.5 percent on worries over liquidity constraints. Can Fin Homes plunged 8.48 percent, PNB Housing Finance 7.29 …

What caused a rout in financial sector stocks
6 years, 3 months ago

What caused a rout in financial sector stocks

Live Mint  

The worst liquidity crunch in India’s banking system in more than two years is adding to refinancing risks for shadow banks shaken by a rare default in the country’s money markets. That’s making for a double whammy, as central bank steps to prop up a weakening rupee have sopped up liquidity and as recent corporate tax payments had already left …

How IL&FS default could impact Indian stock markets
6 years, 3 months ago

How IL&FS default could impact Indian stock markets

Live Mint  

Mumbai: The turmoil in India’s non-bank finance companies is deepening, with a troubled lender disclosing further missed debt payments late on Friday and panic seeping into what has been Asia’s best-performing stock market. “This has been done across issuers over last few days.” IL&FS missed interest payments again on Friday, it said in a filing to the stock exchange, causing …

IL&FS, DHFL shocks may be temporary triggers, but the bad news for Indian financial markets do not end there
6 years, 3 months ago

IL&FS, DHFL shocks may be temporary triggers, but the bad news for Indian financial markets do not end there

Firstpost  

The joint entry of the central government, regulators and the country’s top bank to the scene to calm the choppy markets post the IL&FS scare itself is a proof that there is more that meets the eye and it is not just rumour-mongering. According to Moody’s Investor Services, the firm’s outstanding debentures and commercial paper accounted for one percent and …

NBFCs lose over ₹ 75,000 crore in 2 sessions on liquidity fears
6 years, 3 months ago

NBFCs lose over ₹ 75,000 crore in 2 sessions on liquidity fears

Live Mint  

Mumbai: India’s top 15 non-banking finance companies have together lost over ₹ 75,000 crore in the last two trading sessions on fears of a financial crunch in the sector. Across Friday and Monday, Housing Development and Finance Corp. Ltd lost around ₹ 18,600 crore, Bajaj Finance Ltd around ₹ 13,800 crore and Bajaj Finserv Ltd ₹ 4,200 crore. The other …

Jaitley assures on liquidity to mutual funds, NBFCs
6 years, 3 months ago

Jaitley assures on liquidity to mutual funds, NBFCs

Live Mint  

The government will take all measures to ensure that adequate liquidity is provided to the NBFCs, the mutual funds and the SMEs, tweeted Finance Minister Arun Jaitley on Monday, reassuring the markets after stock and bond markets were rattled on Friday on concerns over defaults by IL&FS and fears of liquidity tightness in the financial system. India’s banking and markets …

Opinion | Debt market worries for the stock market
6 years, 3 months ago

Opinion | Debt market worries for the stock market

Live Mint  

The financial sector dominated the Indian stock market last week and is likely to remain in focus in the near term. Although the fund house and Dewan Housing Finance executives came out to explain their position, it was not enough to calm the market. Since NBFCs don’t have a sticky deposit base unlike banks, some of the highly leveraged entities …

Shares of housing finance firms crash sharply; DHFL tumbles 42% on massive selling over fears of a liquidity crisis
6 years, 3 months ago

Shares of housing finance firms crash sharply; DHFL tumbles 42% on massive selling over fears of a liquidity crisis

Firstpost  

New Delhi: Shares of housing finance firms came crashing sharply Friday, with Dewan Housing Finance tumbling up to 42 percent on massive selling over fears of a liquidity crisis, which had a cascading effect on the broader market as well. The scrip of Dewan Housing Finance Corporation went into a tailspin, nosediving 42.43 percent to end at Rs 351.55 on …

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