Vijaya Bank expects to close the year with a net profit of Rs 450 crore compared with Rs 331 crore in the last financial year.
It has already surpassed the current year’s business target of Rs 76,000 crore by achieving total business of Rs 71,607 crore in the nine-month period ended December 31, 2007.
The bank’s net profit for the nine-month period ended December 31, 2007, has surpassed last year’s figure of Rs 334 crore.
Disclosing this here on Wednesday, Chairman and Managing Director Prakash P Mallya said the bank had enough scope to set a higher target for business (which includes deposits plus loans) growth as it had recently raised Rs 200 crore Tier-I capital.
“We aim to touch the Rs 1-lakh-crore business target by 2010 and the bank sees no problem in meeting the additional requirement of funds since we can still raise up to Rs 1,900 crore capital from the market,” he said.
Citing cost of funds as a major factor in considering rate cuts in the bank’s portfolio, Mallya said the softening of interest rates — from a quarter to 0.5 per cent level — might happen in April or May.
“Clients have more options for investment such as mutual funds and they are not ready to keep all the eggs in one basket,” he said, while explaining the difficulties faced by banks in raising savings deposits.
Responding to a question on the bank’s lookout for possible acquisitions to increase its presence in northern and western parts of India, Mallya said that nothing concrete had been worked out so far.
He, however, said the consolidation in banking industry would pick up momentum in the next couple of years.
Credit offtake across public sector banks is expected to settle at a growth of between 23 per cent and 25 per cent in FY08 compared with 30 per cent until recently, according to him.
“We witnessed a fall in credit offtake last quarter, which could also be because industrialists and entrepreneurs were waiting for a reduction in interest rates before going for bank loans,” he said, while suggesting that the year may end up with a lower credit growth compared with the last financial year.
Understanding Short Term Trading
Before I begin, this blog is not for intraday traders. My definition of short term implies duration of around 2 to 3 months.
Short Term stock picking is no rocket science, but rather a visual interpretation of technical charts. A basic moving average on a time frame chart will show the direction of the securities movement.
Moving averages is a mathematical results calculated by averaging a number of past data points. Moving averages (MA) in it's basic form is calculated by taking the arithmetic mean of a given set of values on a rolling window of timeframe. Once the value of MA has been calculated, they are plotted onto a chart and then connected to create a moving average line. Typical moving averages used for short term trading are 50 MA and 100 MA.
Types of Moving Averages
1) Simple Moving Average (SMA)
SMA is calculated by taking the arithmetic mean of a given set of values on a rolling window of timeframe. The usefulness of the SMA is limited because each point in the data series is weighted the same, regardless of where it occurs in the sequence. Critics argue that the most recent data is more significant than the older data and should have a greater influence on the final result.
2) Exponential Moving Average (EMA)
EMA overcomes the limits of SMA, where more weight is given to the recent prices in an attempt to make it more responsive to new information. When calculating the first point of the EMA, we may notice that there is no value available to use as the previous EMA. This small problem can be solved by starting the calculation with a simple moving average and continuing on with calculating the EMA.
The primary functions of a moving average is to identify trends and reversals, measure the strength of an asset's momentum and determine potential areas where an asset will find support or resistance. Moving averages are lagging indicator, which means they do not predict new trend, but confirm trends once they have been established.
A stock is deemed to be in an uptrend when the price is above a moving average and the average is sloping upward. Conversely, a trader will use a price below a downward sloping average to confirm a downtrend. Many traders will only consider holding a long position in an asset when the price is trading above a moving average.
In general, short-term momentum can be gauged by looking at moving averages that focus on time periods of 50 days or less. Looking at moving averages that are created with a period of 50 to 100 days is generally regarded as a good measure of medium-term momentum. Finally, any moving average that uses 100 days or more in the calculation can be used as a measure of long-term momentum.
Support, resistence and stoploss can be infered by referring the closet MA below or above the market price. The other factor that is used in short term momentum is the trading volume. The moving averages along with the trading volume can provide a better insight to short term movement.
Markets are moved by their largest participants - I believe this is the single most important principle in short-term trading. Accordingly, I track the presence of large traders by determining how much volume is in the market and how that compares to average. Because volume correlates very highly with volatility, the market's relative volume helps you determine the amount of movement likely at any given time frame--and it helps you handicap the odds of trending vs. remaining slow and range bound.
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