Topline Securities Ltd’s Post

Topline Market Review (Nov 29, 2024): Another positive session was observed at the exchange as KSE 100 Index gained 1,275 points (1.27%) to close at 101,357 level, this positivity in market can be attributed to news that SBP has received US$500mn from the Asian Development Bank as proceeds of a loan to the government of Pakistan for the Climate Change and Disaster Resilience Enhancement Program (CDREP), this disbursement will most likely enable SBP to end the month November 2024 around $12bn mark. Banking sector extended its gain as it closed 1.8%; where removal of the Minimum Deposit Rate (MDR) requirement for corporate deposit continue to attract investor interest in the sector. Traded value wise PPL (Rs.1.93bn), PSO (Rs.1.88bn), SEARL (Rs.1.63bn), OGDC (Rs.1.53bn) and ATRL (Rs.1.29) dominated market activity. Point wise top contribution to the index came from PPL, SRVI, BAFL, ENGRO and SEARL, as they cumulatively contributed 400 points to the index. BOP was today`s volume leader with 95mn shares. Topline Weekly Review (Nov 29, 2024): KSE 100 Index increased by 3.64% on WoW basis, this gain was largely led by heavy weight banking sector on development on Minimum Deposit Rate (MDR) front, where the sector rallied after SBP removed the Minimum Deposit Rate (MDR) requirement for all conventional banks on deposits from financial institutions, public sector enterprises, and public limited companies. Other development during the outgoing week were: 1) in T Bill auction held during the week huge participation of Rs2,494bn was seen with government raising Rs616bn as against target of Rs800bn and maturity of Rs918bn, yields declined in the range of 61-85bps across different tenors and 2) disbursement of  US$500mn loan from ADP to Pakistan under Climate Change and Disaster Resilience Enhancement Program (CDREP). Investor participation increased during the outgoing week as average traded volume and value stood at 979mn shares and Rs.36.84bn respectively. Regards Topline Sales Desk

New Post: Live RBI News : Highlights of the RBI MPC Meeting 2024 - https://lnkd.in/d9PsnrBr Live RBI News : Highlights of the RBI MPC Meeting 2024 Shaktikanta Das, the governor of the Reserve Bank of India (RBI), declared the first monetary policy for the 2024–25 fiscal year on Friday. The Monetary Policy Committee (MPC) of the RBI, which sets interest rates, held a two-day review meeting that ended Thursday, April 5. For the sixth time in a row, the RBI chose to maintain the 6.5% key policy repo rate. The governor Das-led six-member MPC also agreed to keep the policy at "withdrawal of accommodation." For FY25, the RBI has estimated that India's real GDP growth rate will be 7%. The anticipated CPI inflation rate for FY25 is 4.5%. Follow along for live updates from the RBI MPC Meeting 2024 here Highlights of the RBI MPC Meeting 2024: The major features of RBI policy are as follows Highlights of the RBI MPC Meeting 2024: The first monetary policy of FY25 was announced by RBI Governor Shaktikanta Das. The main points of the RBI's April policy are as follows: Policy Actions: Live RBI News The repo rate remained at 6.5% The "withdrawal of accommodation" policy stance kept the GDP growth estimate for FY25 at 7%. The forecasts are as follows: 7.1% for Q1, 6.9% for Q2, 7% for Q3, and 7% for Q4. 4.5% CPI inflation is projected for FY25. The following is a thorough inflation forecast: 4.9% in Q1, 3.8% in Q2, 4.6% in Q3, and 4.5% in Q4. Non-political actions: To be disclosed is the plan for trading sovereign green bonds at the IFSC. launch of a mobile application to use RBI's Retail Direct Scheme for GSec market participation A draft circular for banks' LCR framework will soon be released. handling products derived from the rupee interest rate for all small finance institutions Activating UPI for the Cash Deposit Service Prepaid Payment Instruments (PPIs) can access UPI via third-party applications. CBDC distribution via non-bank payment system providers What are the new guidelines of RBI? The decision on which network to use for a customer's card is made by the card issuer, whether a bank or a non-bank institution. RBI guidelines change: The Reserve Bank of India (RBI) said on March 6, 2024, that card issuers should not enter into any agreement with card networks. What is the RBI Monetary Policy Committee? The Governor of the Reserve Bank of India (RBI) chairs the Monetary Policy Committee (MPC). The objective of the Monetary Policy Committee (MPC) was to set the benchmark policy interest rate (repo rate) to keep inflation under control. monetary policy instruments : Live RBI News Reverse Repo Rate: The interest rate at which the Reserve Bank absorbs liquidity overnight from banks against the collateral of eligible government securities under the LAF. Accommodation Facility (LAF) : Live RBI News LAF includes overnight accommod

Summary and Key Points from HSBC Report on Turkish Private Banks (29 May 2024) Turkish Private Banks Overview: 1. Economic Environment and Expectations: • Disinflation path anticipated next year. • Selective approach remains due to price normalization. • Garanti is favored for strong Q1 earnings and low PE ratio. • Upgrades Garanti to Buy, downgrades Akbank to Hold, retains Hold on YKB and İşbank with adjusted target prices. 2. Revenue and Earnings: • Lower exposure to swaps and CPI linkers benefits Garanti. • 2024 earnings for banks are expected to decline but improve significantly in 2025. • YKB’s potential catalyst could be a premium over P/B. 3. Valuations and Comparisons: • Turkish banks’ share prices increased by 75% YTD. • Valuations are stretched, but Garanti’s NIM dynamics and better earnings control are highlighted. • YKB’s valuation remains moderate. 4. Investment Strategy: • Favor banks with lower wholesale funding and CPI linker exposure. • Remain cautious of Akbank’s overperformance leading to stretched valuations. 5. Risks and Challenges: • High real rates impacting NIMs and earnings. • NPL (non-performing loan) rates and cost of risk expected to normalize, impacting future provisions. • Potential headwinds from high funding costs. 6. Key Metrics: • PE (Price-Earnings) ratios and PB (Price-Book) ratios compared among Turkish banks. • Target prices and expected upsides provided for major banks like Akbank, Garanti, YKB, and İşbank.

The Cash Reserve Ratio (CRR) is a regulatory requirement mandated by the Reserve Bank of India (RBI) under the Reserve Bank of India Act, 1934. It is the proportion of a commercial bank’s net demand and time liabilities (NDTL) that must be held as reserves with the RBI. Banks are required to maintain this reserve in cash, and it is not available for lending or investment purposes. Key Points About CRR: 1. Purpose: • CRR is primarily used to regulate liquidity in the banking system. • It ensures that a portion of the banks’ funds remains secure with the RBI, enhancing monetary stability. 2. Current CRR Rate: • As of December 2024, the CRR rate is 4.5% of NDTL, though this is subject to periodic changes by the RBI depending on monetary policy objectives. 3. Impact on Banks: • A higher CRR reduces the funds available for banks to lend, thus tightening liquidity in the market. • A lower CRR increases available liquidity, potentially boosting credit growth. 4. Exemptions: • CRR is calculated on a bank’s NDTL, which includes demand deposits, savings deposits, and fixed deposits. Certain liabilities like inter-bank deposits and specific types of savings accounts may be exempt from CRR calculation. 5. Frequency of Maintenance: • Banks must maintain CRR on a daily basis, ensuring compliance with the average prescribed levels over a fortnightly reporting period. 6. Penalties: • Non-compliance with CRR requirements can result in penalties from the RBI, including higher interest rates on shortfall amounts. The CRR is a critical tool in the RBI’s monetary policy arsenal, used to manage inflation, control liquidity, and ensure financial system stability. For official updates, refer to the RBI’s website or its monetary policy circulars. Circular references- https://lnkd.in/dH7qmAWZ

There is a silent trend brewing in the shadows for the banking sector as they are facing great pressure on building the liability side which is deposits. As per the S&P Global Banking report - It is expected that the credit rate will be stable falling from growth to moderate to 14 per cent in FY25, from 16 per cent in FY24, if deposit growth, especially retail deposits, remain tepid. Here are a few problems the banks might face if the problem continues 😥 : 1. Tapping Capital Markets 📈 : Debt market and Bond issues have become quite active from the previous year's end. These funds are a little more costly than deposits so eventually, this might eat into Net interest Margins. 2. Increasing Interest Rate on Deposits 🤔 : This move is better but has many regulatory hurdles! Also, RBI has become quite watchful after the YES Bank saga on attractive interest rates. 3. RBI Increasing Interest Rate 😦 : The final move is the regulator playing with the Repo rate. RBI can increase the interest rates so that the rate at which the loans are growing will eventually stabilize. Due to huge tailwinds in the real estate sector and unchanged interest rates home buyers till now have been happy. Thus, Deposits will only grow if taking loans becomes less attractive. Report link: https://lnkd.in/gkfWXZRW 📒 Note : Views are personal & Image is taken from Google 📒

MPR rate 😂 Just like I said in my last post that we expect an hawkish stance from MPC and now we have that • MPR: +400bps to 22.75% MPR (Monetary Policy Rate): This is the benchmark interest rate at which the CBN lends money to commercial banks. +400bps: Means an increase by 400 basis points (or 4 percentage points). Impact: Banks will now borrow money from the CBN at a significantly higher rate, which is likely to make loans more expensive for businesses and individuals. This aims to slow down spending and curb inflation. • Adjustment of asymmetric corridor to +100/-700bps from +100/-300bpns Asymmetric Corridor: This refers to the band around the MPR. It sets the limits within which overnight market interest rates can fluctuate. +100/-700bps: The new limits are +100 basis points above the MPR and -700 basis points below. Impact: This makes it more expensive for banks to hold excess cash reserves with the CBN, and somewhat cheaper for banks needing to borrow short-term funds. This is designed to encourage banks to lend more to the real economy. • Increase CRR from 32.5% to 45.0% CRR (Cash Reserve Ratio): This is the percentage of customer deposits that banks must keep with the CBN as reserves. Increase to 45.0%: Banks now have to hold a much larger portion of their deposits with the CBN. Impact: This significantly reduces the amount of money banks have available to lend. It's a strong measure to tighten the money supply and reduce the amount of currency in circulation, further targeting inflation.

HEMANTH LINGAMGUNTA Weighted Average Call Rate:- The Weighted Average Call Rate (WACR) is a key indicator in the overnight money market, reflecting the rate at which short-term funds are borrowed and lent. It plays a crucial role in the monetary policy framework, particularly in India, where it is used as an operating target to align with the central bank's policy repo rate through active liquidity management[1][3][5]. Key Features of WACR: - Overnight Money Market: WACR represents the unsecured segment of the overnight money market, where banks and financial institutions borrow and lend funds for very short durations, typically one day[1][4]. - Monetary Policy Target: The Reserve Bank of India (RBI) uses WACR as an operating target to manage systemic liquidity. The aim is to keep WACR closely aligned with the repo rate, which is the rate at which the RBI lends to commercial banks[1][5]. - Liquidity Indicator: Changes in WACR reflect liquidity conditions in the banking system. A tight liquidity condition often results in a higher WACR, indicating a higher cost of borrowing in the short-term money market[1][3]. - Impact on Economy: WACR influences the pricing of credit products across the economy. When WACR is higher than the repo rate, it suggests tighter monetary conditions, which can affect borrowing costs for businesses and consumers[3][5]. Recent Trends: - As of recent data, the WACR has often exceeded the repo rate, reflecting tight liquidity conditions. This has been observed in several months where the WACR was higher by 20 basis points or more than the repo rate[3]. - The RBI conducts various liquidity management operations, such as variable rate repos, to ensure that WACR remains aligned with the repo rate. This is part of the broader liquidity adjustment framework aimed at supporting inflation targeting and economic stability[5]. In summary, the WACR is a vital tool in the monetary policy arsenal, influencing short-term interest rates and providing insights into the liquidity dynamics of the banking sector. Citations: [1] Weighted average call rate - Optimize IAS https://lnkd.in/gwxGfRQ2 [2] India Call Money Rate: Major Commercial Bank: Weighted Average https://lnkd.in/g8kCUSa6 [3] Effective rates now largely higher than repo rate - The Economic Times https://lnkd.in/gFU-mige [4] Credit in the Economy | IASbaba https://lnkd.in/g9DuPg7s [5] Measures to ensure that the call money rate largely stays at the repo ... https://lnkd.in/gy6Kfs27

Extending its journey of continuous success, the banking sector has wrapped the financial year 2023 with remarkable resilience, as majority of the banks witnessed record-high profits and dividend payouts. The 14 banks that account for the banking sector of the KSE-100 index cumulatively generated a net profit of Rs544.43 billion, reflecting a massive 81.95% YoY growth compared to their total earnings last year. The robust victory this year is driven by a massive 84.81% YoY spark observed in the sector's interest earnings on account of higher interest rates. Read the full story at: https://lnkd.in/dyGkFCHa

PSU BANKING INDEX WEEKLY CHART GANN ANALYSIS Nifty PSU Bank Index (NSE:CNXPSUBANK) 7,302.60 −104.65 −1.41% kbr9121965(Use my Handle of Trading View Platform to Like and boost my ideas. If you like them share to Fellow traders for their benefits.) PSU Banking Index important level to be watched as per our system would be 7144.45. The election results week saw a nearly 50% swing and the weekly low was a good opportunity to bu in it. We have hit the high of 7569.25 nearly 20 points above the price cycle level. Thereafter we are seeing a 4 weeks consolidating below it. 25 July 2024 is the pressure date for Indices. Have a cautious approach with strict stop loss in the next few weeks coming hereafter. Happy Trading !!! N.B. Not a financial advice to buy or sell.With usual disclaimers as applicable within the reach of this beautiful trading analysis platform. Thanks to the developers of the program for this opportunity to use it freely to express our ideas to the community of traders.

According to recent study by SBI regarding efficiency for the period 2006-23, PSU banks operated at an efficiency level of 82.8% compared to 81.2% for all scheduled commercial banks, 79.6% for all pvt sector banks and 78.2% for foreign banks. The combined net profit of all 12 PSU banks has risen over to Rs1.4 lakh crores in 2023-24 which is four times compared with 2020-21 in which three PSU banks reported losses. The profits of second and third tier PSU banks are increasing continuously which is positive sign for setting up the broader base. Nifty PSU bank index has risen 83% in the last year, compared with 9% rise in Nifty pvt bank index and 22% increase in BSE sensex . Valuation of the Public sector Banks is lower in terms of PE ratio than that of pvt banks there by making the PSBs still lucrative catches in the market.