POSTED BY January 30, 2014 9:22 am COMMENTS (5)
ONSo we have Standard Chartered trading at Rs 120 in India when its EPS is Rs 123 and BVPS is Rs 640
Doesn’t seem like a killer price? Why is the stock price so low? Even the 52 week h/l is 135/96.
Other banks trade around P/E of 4
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Dear Rokhan, nothing wrong in your thinking but be ready to wait for a very long time to reap the benefits of your hard work.
Thanks
Ashal
Thanks Ashal .. appreciate your advice.
I think, STAN could be a very good value pick, but the holding period should be very long.
Thanks for the reply Ashal.
In Nov 2013, RBI released new norms for foreign banks that if they set up wholly owned subsidiaries in India, they will be treated like “near national” banks when it comes to opening branches.
Please see this: http://www.livemint.com/Politics/jwKt9QvETehG9bJVZ2tKrJ/Citibank-StanChart-HSBC-may-have-to-become-wholly-owned-su.html
Worldwide, I think StanChart is a pretty good bank to own, and they already have the most number of branches in India (compared to other foreign banks). So I think for value investing, its a good stock to own. What are your thoughts?
Dear Rokhan, there are restrictions in branch extensions (new branch opening), other issues from RBI, that’s the reason the IDR of STAN are listed with a discounted PE in comparision to pure Indian banks.
Thanks
Ashal