Tuesday, April 16, 2013

UCO Bank Ltd: Riding on the Rate Cut Story
After the moderate rise in February, the Wholesale price index (WPI) inflation fell to 5.96% in March 2013. This is the lowest recorded figure in 40 months. After declining for four months straight, the WPI inflation had risen from 6.62% in January 2013 to 6.84% in February 2013, according to the data released by the Central Statistical Organisation (CSO), the Ministry of statistics and program implementation.
This fall in the inflation numbers is expected to give legs to the stocks in the Banking and Construction Sectors. The RBI could go in for a 25 bps cut in the interest rate and at the same might think of cutting the CRR to boost the liquidity in the system. I am not sure about the real estate sector, as there is a huge inventory built up and at the same time, the cost of the apartments have shot up beyond the reach of the common man in most of the metro cities. The UCO Bank Ltd will slowly drift towards Rs.71-72 in the coming days.