Money on the markets

A maturing market amid the mayhem

SKS Microfinance shares rise

November 22, 2010

Shares in microlender SKS Microfinance rose 5.75 percent to close at 714.45 rupees on Monday.

Shares took a beating on Thursday and fell 20 percent after the lender said the new regulations could squeeze profit and revenue. However, SKS on Friday said its balance sheet was healthy.

Rating agency CRISIL on Monday put 12 microfinance institutions on rating watch with negative implications, saying recent events can damage the business models of these firms.

Since October, shares in the firm have fallen more than 18 percent. Will you take advantage of this fall and invest in SKS?

Comments

SKS Micro-finance has become a Proxy, Hammer it, Hammer the Whole Industry

Being highly volatile as demonstrated by last Friday’s wild swing of Rs 102 together with as much as 70 million in market depth that is rapidly growing, makes the SKS counter a trader’s delight. It is probably on its way to be the number one counter for equity traders in the country. This can’t be good news for the micro-finance industry, as this puts both SKS and Vikram Akula under constant media glare, becoming the proxy for continued debate on the social relevance of the industry. Hammer SKS, hammer the whole industry. We understand many in the micro-finance industry are actually appalled and squirming at this turn of events.

Read More: http://devconsultgroup.blogspot.com/2010  /11/sks-micro-finance-has-become-proxy. html

Posted by RajanAlexander | Report as abusive
 

Not alone SKS but the entire MFI is on a verge of collapse.It would be adviseable for banks to evaluate their own exposure to this industry.Andhra Pradesh micro borrowers are defaulting on interest and repayments for more than a month now and soon this malaise is going to spread into neighbouring states.Banks may have to report an increase in NPAs.Can this be India’s subprime?
Unfortunately this industry has come to a grinding halt.
SKS is becoming a high risk high return stock.

Posted by Bovespa | Report as abusive
 

SKS Stock started rising after JP Morgan gave a buy signal at Rs 700. Unfortunately JP Morgan did not disclose that they had holdings in SKS. The share price looks manipulated.

MICROCAPITAL

“When SKS Microfinance launched India’s first initial public offering (IPO) on July 28, 2010, the total share issue received bids for 13.55 times the overall shares on offer, with the institutional share offer oversubscribed by 20.3 times. The share bids were at the high end of the INR 850 to 985 (USD 18.42 to 20.04) price range. SKS Microfinance allocated 3.02 million shares at INR 985 (USD 20.04) per share to 36 anchor investors, including: ICICI Prudential, an Indian life insurance company; BNP Paribas, a French global banking group; Nomura, a Japanese global investment bank; Reliance Capital, an Indian non-banking financial company; and three U.S.-based financial institutions, JP MORGAN, Morgan Stanley and Goldman Sachs.”

Posted by RajanAlexander | Report as abusive
 

Post Your Comment

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
  •