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SBI comes off highs to end flat

BL Research Bureau

THE State Bank of India share ended the week on a flat note at Rs. 236, off the high of Rs. 248 it touched earlier on Friday afternoon. The share was reacting to the results announced on Thursday -- it has doubled its net at Rs. 2,051 crores. The shar e gained Rs. 20 in the previous week.

Analysts expressed modest satisfaction and little surprise at the results. Most focussed on the lower base of the last year, which included one-time charges on account of the Resurgent India Bond issue as well as wage-hike provisions. Though the fee inco me has not shown much improvement, it was in line with past trends, and was offset by bond trading profits -- which was not surprising as all the banks were known to be booking profits last year.

Reacting to the bank's IT plans, Mr. Anand Vasudevan, Vice-President, SG Securities, said it was encouraging that the bank was finally treading the path it should have taken five years ago. He, however, cautioned that implementation of these initiatives would be difficult.

Another analyst working for a foreign brokerage was impressed with the change in the management attitude. The bank's IT plan was not a ``knee jerk'' reaction, but showed that some thought had gone into it, he said.

Gainers during the week included HDFC Bank and ICICI Bank. Both inched up slightly -- HDFC Bank rose Rs. 7 to close at Rs. 260, while ICICI Bank moved up by Rs. 5.75 to end at Rs. 213.75.

The ICICI stock, which was the major gainer last week, declined by Rs. 22 to close at Rs. 132.50. The institution announced a tie-up with Zee Telefilms for a financial services channel on Wednesday.

Corporation Bank moved up by Rs. 5 to end the week at Rs. 81, while Bank of Baroda remained flat at Rs. 42.

Technical View by B. Krishnakumar: The share price of State Bank of India has been on the uptrend in recent weeks. However, the bank is yet to recover from the bear trend that commenced back in October 1997. After hitting a bottom at around Rs. 146 in Ap ril 1999, the SBI stock has been stuck in the Rs. 146-Rs. 292 band.

The medium-term outlook, reflected by the weekly charts, indicates that the stock is on the verge of completing its current upward cycle.

The stock has upside potential to touch Rs. 260-270 level. This could probably push the stock to the top of the present weekly cycle. Existing shareholders could, therefore, hold on to their exposures in SBI. Profit booking may be contemplated once the p rice moves to or past the target price.