Syndicate Bank

Syndicate Bank

Syndicate Bank, CESC

Syndicate Bank, CESC

Syndicate Bank

Syndicate Bank

Syndicate Bank

Syndicate Bank

Syndicate Bank

Syndicate Bank

Syndicate Bank

Syndicate Bank

Syndicate Bank

We recommend a sell in the stock Syndicate Bank from a short-term perspective. It is evident from the charts that the stock was on an intermediate-term uptrend from March 2009 low to October 2009, from Rs 37 to Rs 105. However, experiencing long-term resistance in the band between Rs 100 and Rs 105, the stock started to decline. Though it tried to breach the resistance in December, it failed as it lost bullish momentum. Since October 2009, the stock has been on a medium-term downtrend. Last week the stock fell, penetrating its 21 and 50-day moving averages conclusively. Moreover, it broke through an intermediate-term support level at Rs 85 on January 27, by plunging 4 per cent. The daily and weekly moving average convergence and divergence indicators have signalled a sell. The daily relative strength index (RSI) is hovering in the bearish zone and weekly RSI is slipping towards this zone in the neutral region. Considering the stock's recent breakthrough of key support level we are bearish on it from a short-term perspective. We anticipate it to decline until it hits our price target of Rs 74.5. Traders with short-term perspective can consider selling the stock while maintaining stop-loss at Rs 87.5.

via BL

Syndicate Bank

We recommend a buy in Syndicate Bank from a short-term perspective. It is evident from the charts of the stock that after recording a multi-year low of Rs 37.6 in March, the stock has been on an intermediate term uptrend. However, it has been consolidating sideways in the range of Rs 76-84 over the past month. On September 11, the stock gained almost 4 per cent, accompanied with good volume. The stock is trading well above its 21- and 50-day moving averages. Both the daily and weekly relative strength index (RSI) have re-entered the bullish zone from the neutral region. The daily moving average convergence and divergence indicator is signalling a buy. Considering that the intermediate-term up trendline is intact, we are positively biased on this stock from a short-term perspective. We expect the stock to move up further until it hits our price target of Rs 92 in the approaching trading sessions. Traders with a short-term perspective can buy the stock while maintaining a stop-loss at Rs 79.

via BL

Syndicate Bank

We recommend a sell in Syndicate Bank from a short-term trading standpoint. It is evident from the charts of Syndicate Bank that after forming a multi-year low at Rs 37.6 in early March it bottomed out. Since then the stock was on an intermediate-term uptrend till it encountered resistance at Rs 100 on June 5.The stock reversed direction from this resistance level and has been on a short-term down trend. A negative divergence displayed in the daily relative strength index (RSI) backs the stock’s trend reversal. Moreover, we notice formation of a bearish engulfing candlestick pattern in the weekly chart signalling a short-term reversal. Recently, the stock breached its intermediate-term up trendline and is trading well below the 21-day moving average. The momentum indicators are heading towards the negative territory. We are bearish on the counter from a short-term perspective. We expect the stock’s decline to prolong until it hits our price target of Rs 63 in the approaching trading sessions. Traders with a short-term perspective can sell the stock while maintaining a stop-loss at Rs 73.

via BL

Syndicate Bank

We recommend a buy of Syndicate Bank’s stocks from a short-term trading perspective. It is evident from the charts that after encountering resistance around Rs 70 in early January, the stock began to trend downward. This downtrend accelerated in late February and the stock witnessed a sharp fall penetrating the key support level at Rs 48.5. It finally halted at Rs 37.6 that is also its 52-week low. The stock reversed direction forming a bullish reversal candlestick pattern, namely bullish harami candlestick pattern.

Subsequently, the stock gained 8 per cent on March 16. This trend reversal has been backed by positive divergence in the daily relative strength index (RSI), which recovered from oversold region. We are bullish on the stock from a short-term perspective.We expect the current rally to continue until it hits our price target of Rs 48.5 in the forthcoming trading sessions. Traders with short-term perspective can buy the stock while maintaining a stop-loss at Rs 41.50.

Syndicate Bank - Jan 14 2008

We recommend a buy in Syndicate Bank. From the weekly chart of Syndicate Bank we note that it has been on a long-term uptrend since April 2007 low of Rs 57. From the daily chart, we note that the stock’s uptrend began to accelerate in October 2007 and has been on a medium-term uptrend since then. However, after marking an all-time high of Rs 131 on January 2, the stock began to decline and is currently finding support at the 21-day moving average line as well as the uptrend line at around Rs 115. The weekly momentum indicator is featuring in the bullish region. The weekly moving average convergence divergence lines are steadily rising in the positive territory, indicating bullishness. The immediate support for the stock is at Rs 105 and the next support is at Rs 95 levels. Considering the intactness of the medium-term up trendline, we expect the stock to resume its uptrend and move up further to the immediate resistance level of Rs 131 level in the short-term. The short-term investors can buy the stock while keeping the stop-loss at Rs 107 level.

Via Businessline

Deepak Fertilizers, Simplex Infra, Syndicate Bank

Deepak Fertilizers, Simplex Infra, Syndicate Bank

TCS, ABG Shipyard, DCW Ltd, Syndicate Bank, McNally Bharat Engineering

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Syndicate Bank: Hold

Investors can consider retaining their holdings in the Syndicate Bank stock. Though the bank appears comfortably placed in terms of capital adequacy, and valuations appear undemanding, concerns about resource mobilisation and quality of earnings compel us to take a cautious view on the stock.

Pressure on margins

Syndicate Bank's performance in the September quarter was rather disappointing. That the bank has been struggling to contain cost of funds is clearly reflected in the margins. The bank's balance-sheet, which has been growing at a scorching pace over the last 18-20 months, is putting pressure on margins. For the quarter ended September, Syndicate Bank's advances rose by 49 per cent and deposits by 51 per cent. These numbers are way above-the-average growth rate seen by the banking sector. Typically, in such a situation, rising yields on advances would contribute to improvement in net interest margins for banks. However, for Syndicate Bank, this has not been the case. While yields on advances have improved by 45 basis points to 9.07 per cent on a Y-o-Y basis, the benefit of this has been more than offset by declining yields on investment and the rising cost of deposits. Its net interest margins for the quarter have contracted by about 85 basis points to 2.55 per cent.

There has been a clear sign of deterioration in the bank's deposit mix. In this regard, two issues that need to be looked at are, the proportion of low-cost deposits and incremental deposit mix. The share of low-cost deposits has recorded a sharp decline from 41 per cent a year ago to about 30 per cent now. Further, more than 90 per cent of the incremental addition to deposits in the September quarter has come from term deposits.

This clearly shows that a high growth in balance-sheet has come at a higher cost. While the bank management has indicated that it is finding attractive opportunities, mobilising low-cost resources is likely to remain a key challenge over the medium term.

In the near term, we expect the cost of funds to remain high as the scramble among banks to raise short-term deposits is likely to intensify on concerns of liquidity constraint. However, the excess SLR of five per cent that the bank has, eases the concern to some extent as it can deploy the same in funding fresh advances.

Yield on investments also recorded a dip of 25 basis points in the quarter to 7.4 per cent as the bank sold off high-coupon investments and deployed the proceeds in low-yielding investments to take care of liquidity requirements. However, as about 15 per cent of the bank's high-cost deposits are set to mature by December 2006, we expect pressure on NIMs to ease off to come extent.

Key variable

Another key variable that needs to be watched out over the next few quarters is the non-performing assets (NPAs). For the quarter-ended September, the bank's level of net NPAs has remained stable at 0.9 per cent. However, absolute level of gross NPAs has gone up with increase in asset base to about Rs 1,700 crore from Rs 1,590 crore a quarter ago.

That recoveries are taking place at a faster rate is also a positive. However, with assets being added at such a scorching rate, the bank's ability to check fresh NPAs holds great significance from an earnings perspective.

With a capital adequacy ratio of about 11.7 per cent (Tier-1 at 6.5 per cent), the bank is likely to require additional capital to fund growth. The government's holding at about 66 per cent, leaves room for raising fresh equity. The bank is most likely to go for a hybrid capital issue next year before exercising the equity option.

From a valuation perspective, the stock of Syndicate Bank is quoting at a price-to-book multiple of 1.3 as against the peer-group average of 1.5. Even a profit growth of 10 per cent, which appears attainable over the next year, is likely to generate return on net worth of about 20 per cent. This appears healthy.

However, considering the challenges over the medium term, remaining invested appears the appropriate strategy.