Investors are viewing the banking stocks with optimism after months of prolonged uncertainty surrounding the economy. All eyes are firmly on how well lenders have fared in terms of their net interest margins (NIM) which gives a fair indication of how well they have been handling the rise in interest rates. Banks have been able to boost their NIM in the past few quarters by charging their borrowers higher but now depositors too need to be given better returns.
Capri Global Capital, which was Money Matters Financials before, has been in the news for dramatic swings in its stock price lately. The stock had first crashed from Rs 727 in early February to a low of Rs 570 in late March and then picked up again to close at Rs 661 on the last trading day of the FY2023. The week of 2021 opened with the stock slipping 7 percent. LIC, the major shareholder in the company, would definitely be having heartburns over the news. LIC has been consistently accumulating its stake in the company since December 2020.
Marico’s Q4 business update has been a mixed bag with low single digit growth in revenue, but volumes inching up. There seems to be some lack of trust in the stock even during the bull market of the present, which could be attributed to mixed signals around the rural market.
A worrisome sign for the real estate market has been the slowing down of rental apartment sales in the US. Sales suffered a severe blow in 1Q of 2023, at a scale not seen since the subprime-mortgage crisis a decade ago. The US needs to address these issues soon, if it is wants to save the real estate industry from collapse.
Jamie Dimon, the CEO of JP Morgan has issued warnings that the banking sector is far from over the worst and it’s been proving true in many parts of the world like in Australia and Pakistan, who have kept their rates steady, and Sri Lanka, who raised their benchmark rate to 16.5 percent.
Morgan Stanley is expecting a decrease in crude oil prices during the coming months. The bank has dropped its Brent crude prediction for the 2Q of 2023 from $90 a barrel to $85. Looks like OPEC is also in agreement, considering their current production cuts- a sign of their concern about the slowing down of demand.
Irina Slav, journalist for oilprice.com is of the opinion that crude prices could remain high-for-longer. She points out the rising demand from India, falling investment in exploration and production, as well as manufacturing. If her outlook is right, oil prices may remain high for a while to come.
Overall, the outlook over the financial landscape is still uneven, with pockets of threats and successes. Investors need to take extra caution while investing in stocks, considering these discrepancies and also be mindful of their own financial needs and risk appetite.