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Will the housing scam impact long term investor outlook for PSU Banking stocks?

Created by : Esha Johar, Risk Analyst, Irevna  | 11 25 2010 09:44:58 +0000
Industry : Equity Research/AnalyticsFunctional Area : India(Markets)
Keywords : banking scam 2g telecom scam housing scam long term investor outlook psu banking stocks
Activity:  562 views;  last activity : 12 27 2010 04:17:43 +0000

India's reputation as a place to do business took another hit after the scandal-tainted government charged top public sector bankers of accepting bribes worth hundreds of millions of dollars. Nearly 5 officials from state-run listed companies, including the chief executive of LIC Housing Finance, for taking bribes to facilitate large corporate loans.

Will the housing scam impact long term investor outlook for PSU banking stocks?

  
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yes, the news which broke during the closing hours of trade, hit stocks of some of the companies involved. Shares in Money Matters led the tumble, losing 20%, while LIC Housing Finance and DB Realty lost 19% and 17%, respectively. Central Bank of India lost 8.1% and Bank of India fell 5.3%. Not only that now the longterm investor outlook would have taken a tremendous hit and people will try avoid such stocks for longterm investment..
By Esha Johar, Risk Analyst, Irevna  11 25 2010 09:44:58 +0000
 
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No, the Indian people are the struggling people so, this type of schemes are not able to Indian people's mind sets.
By Ajudiya Mayur C., MBA/PGDM student, Banglore University  | 12 27 2010 04:17:43 +0000
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When the entire political and bureaucratic instution of this country is in neck deep in one or other scams how long the financial institutions can be left untouched. i`ve only one word-it is sad but it will not have any impact on the performance of financial institutions.
By Biplov Kumar Ghosh, Senior Manager-Region, State Bank Of India  | 12 20 2010 15:33:29 +0000
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I agree with Esha. It will impact as it is now clear that other players also may have corrupt officials who may be funding the Housing Sector for bribes.
By Ravindra Patil, Director - Marketing, Ultraliant Infotech Pvt Ltd  | 12 11 2010 12:47:55 +0000
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This kind of scams won’t affect the mentality of people in buying the properties, because it’s the time people always think of buying properties and investing somewhere else.

And once they make the decision to invest they will , no matter how much big land scams occur – counter to scams they will just do deep inquiry but they will buy because the whole society runs by seeing each other and status quo.
By Neerav Galathia, Sales Engineer, Aerzen Machines (India) Pvt. Ltd.  | 12 14 2010 09:28:39 +0000
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I support no, as public memory is short.
By SHRIKANT MANOHAR DANKE, Project Manager, Phadnis Infrastructur Ltd  | 12 14 2010 09:18:34 +0000
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i do not agree with Esha.the scam is not going to affect investors confidence since the assets created is still available for realisation of dues. creating assets through unfair means may be over valued but the same would be good enough for the principal amount.
By Biplov Kumar Ghosh, Senior Manager-Region, State Bank Of India  | 12 12 2010 14:16:30 +0000
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The scam would not impact the growth of this sector. There are other players who are doing well. The financial instituations have to lend... however the top officials have to see to it that they are more responsible....
By Sridhar S, Business Technologist  | 12 05 2010 03:52:04 +0000
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Market was on a high and it needed a reason to come down but this type of Scams have become a part and parcel of our life.
By Tarun Kumar Bhansali, Senior Accountant, Arctern Consulting Private Limited  | 11 29 2010 11:25:29 +0000
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India is a large country and the scams somehow or the other creeps at odd times in different sector. It may be in banks or in the securities scam or the government papers scam or the allotment scam and so on. All these are temporary as India has withstood all these scams over the period of time and even to that extent the great meltdown of the world economy. Hence its all  temporary symptoms.We are used to all these.Good that all these are coming out to the surface with the modern technology and its access to fraud information.What about the Wiki leaks its more serious about relations of the superpowers and the countries. When they are not spared i think the people at any level cannot go unnoticed.The Shares would tumble as a short time effects and one should not give up hope and should invest only during these opportune times to make the hay while the sun shines.Peoples power is the greatest.one cannot over ride it. regards Major M Rajedran
By Rajendran Mariagnanam Mariagnanam, Founder and managing partner, Braintrain consultancy services LLP  | 11 29 2010 04:43:41 +0000
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it is too early to predict if this will tumble investor confidence. but on the face of it looks like a corruption scam which has little effect on the stocks of psu banks in the lonterm.
By Kiran Sethumadhavan, Partner, Sunrise Associates  | 11 26 2010 12:56:48 +0000
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NO, whatever the reaction of markets would be for temporary .As explained in media by LIC , it is a Case of Bribery and not a scam, The financial losses may not be there as of now the reports are in . It is too early to predict what will happen, and more over these advanced projects involve very high amounts so this will go on and hopefully there will be no big financial loss
By sanjeevinagasai , Development Officer , Life Insurance Corporation Of India  | 11 25 2010 14:08:17 +0000
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