SBI, associate banks surge after Cabinet okays merger

NEW DELHI: Shares of SBI and its associates rose sharply by as much as 13.5 per cent today after the Cabinet approved their merger, a step aimed at strengthening the sector through consolidation of public banks.

The scrip of State Bank of Mysore soared 13.54 per cent, State Bank of Bikaner and Jaipur zoomed 10.86 per cent, State Bank of Travancore jumped 10.54 per cent while SBI gained 3.10 per cent on BSE.

Seeking to create a global-sized bank, the Cabinet yesterday gave the go-ahead to the merger plan of SBI and its five associates.

However, no decision was taken on the proposal to merge the Bharatiya Mahila Bank with SBI.

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Excellent news for banks. Now time to merge all small and loss making banks into BOB and PNB for cost cutting.RaMa Rajya

The merger of associate banks is likely to result in recurring savings, estimated at more than Rs 1,000 crore in the first year, through a combination of enhanced operational efficiency and reduced cost of funds, an official statement said.

The two unlisted associate banks which will be merged with SBI are State Bank of Patiala (SBP) and State Bank of Hyderabad (SBH).


Even as stocks surge, half of Americans are losing out

Day Trader

Even as stocks surge, half of Americans are losing out  Friday, 9 Dec 2016 | 10:32 AM ET | 01:07

We’ve been making a lot about the fabulous stock market rally. It is fabulous, but now investors crowing over the fabulous market are starting to wonder if something almost unthinkable could happen in 2017: the return of the average investor.

Everyone knows we lost a vast swath of the investing public after the 2008 financial crisis, and for the most part they have not come back, even as the stock market has come back.

How bad is it?

A Gallup poll conducted in April of this year stated that 52 percent of Americans say they invest in stocks, matching a record low, after hitting a record high of 65 percent in 2007.

It’s much worse than this. Stock ownership is increasingly concentrated in the hands of the wealthy. New York University economist Edward Wolff estimated that in 2013 about 90 percent of all stocks were owned by the wealthiest 10 percent of households.

This is the great tragedy: The S&P 500 is up over 200 percent since bottoming in 2009, but stock ownership has become concentrated in fewer and fewer hands.

Confidence in owning stocks is also poor compared to other investments. A Gallup poll of American households in April of this year indicated that only 22 percent of Americans believe that owning stocks are the best long-term investment, a figure that has been declining for several years:

A full 35 percent of Americans think real estate is the best investment for the long run, while 17 percent say gold and 15 percent think it is savings accounts. Another 7 percent think the best investment is bonds, according to the poll.

Look at those numbers! Nearly as many Americans in April thought gold was the best long-term investment as think stocks are. And one in seven still think savings accounts are the best long term investments!

The 2008 financial crisis was a defining moment for investments. Americans shifted from higher risk to lower-risk investments like savings accounts. What’s remarkable is that nearly 10 years after the financial crisis, and even after one of the great bull markets of all time, Americans still have not notably changed their diminished view of the stock market.

What would it take to get more households to own stock?

I say that because we know that the old answer–new highs dragging in investors–doesn’t work any more. Every rally we have had in the last several years–every new high–has been met with open hostility and derision. People just doesn’t believe it, and aren’t buying it. Some don’t trust the markets. Some think it’s phony or rigged. Some are just afraid of losing money. We have joked for years that the public mistrust of the market is the best friend the rally has had, because it’s kept so many people away.

So, could this rally be different? There’s a couple reasons for optimism:

1) The most recent leg of this rally — the Trump rally — has been accompanied by the one element the other rallies have lacked: investor enthusiasm. Investor sentiment gauges have shot up. Consumer confidence is at a 9 year high.

CNBC’s All-America Economic Survey, released this morning, has indicated that 40 percent of respondents now say this is a good time to invest, up 10 points from before the election. While real estate is again the top choice for best investment right now, stocks gained the most ground at the expense of gold, real estate and treasuries. That is encouraging.

2) We are starting to see real revenue growth. Professional stock watchers tend to be dismissive of polls and sentiment indicators. But they do pay attention when earnings start to turn positive — as they have in the third quarter, after four quarters of declines. And they especially pay attention when revenues begin to turn positive, as it did in the third quarter.

But the gain — 2.6 percent after six quarters of declines — is still small. The underlying premise of the “Trump rally” has been that the economic expansion will translate into a major turn in revenue growth. There will be less reliance on “manufactured earnings”, that is, earnings that are propped up by little more than cost cutting.

“The average investor should feel better about the markets, and that will be even more evident when you see a genuine improvement in earnings,” Kenny Polcari of O’Neil Securities told me. He noted that if we got real revenue growth it would it go a long way toward convincing average investors that the stock market is not phony or rigged.

Wouldn’t it be something if the largest source of demand for stocks in 2017 weren’t corporations buying back stock, but individuals trying to catch up on a decade of indifference and hostility?


US housing starts surge to 9-year high in October

U.S. housing starts surged to a more than nine-year high in October as builders ramped up construction of both single and multifamily homes, offering hope that housing will contribute to economic growth in the fourth quarter.

Groundbreaking jumped 25.5 percent to a seasonally adjusted annual pace of 1.32 million units, the highest level since August 2007, the Commerce Department said on Thursday. The percent increase was the biggest since July 1982. Starts increased in all four regions last month.

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September’s starts were unrevised at a 1.05 million-unit rate. Economists polled by Reuters had forecast housing starts rising to a 1.16 million-unit pace in October. Residential construction has been a drag on gross domestic product for two straight quarters.

Single-family home building, which accounts for the largest share of the residential housing market, jumped 10.7 percent to an 869,000-unit pace in October, the highest since October 2007.

The housing market is being driven by a tightening labor market, which is starting to drive up wages.

Housing starts for the volatile multi-family segment soared 68.8 percent to a 454,000-unit pace. Starts for buildings with five units or more hit their highest level since June 2015.

Permits for future construction edged up 0.3 percent in October. Single-family permits rose 2.7 percent last month, while building permits for multi-family units fell 3.3 percent.


Chromebooks surge beyond Macs in the U.S. for the primary time


t may also have taken nearly five years, but it’s finally professional: Chromebooks aren’t any funny story.

more Google-powered laptops shipped than Macs within the U.S. for the duration of the primary threemonths of 2016, IDC marketplace analyst Linn Huang recently informed The Verge. (Disclosure: IDC and PCWorld are both owned by using global statistics group, but have no editorial ties.) this is the primarytime Chromebooks have out-shipped a competing laptop platform.

Chromebooks beating Macs can be a stunning statistic, however in reality, it’s just that—a statistic. It’sunlikely that Chromebooks are approximately to grow to be the second one most essential computerplatform inside the u.s., because this first Chromebook victory comes with two big caveats.

Macs were off their game
Apple’s income at some point of the primary three months of 2016 (the business enterprise’s 2ndquarter of the 12 months) had been vulnerable. Mac sales fell by way of 9 percent global in comparisonto the year previous.

If Mac income hold to say no, Chromebooks may additionally beat out OS X-powered machines in futurequarters as well, but that’s now not a guess I’d placed cash on every time soon.

Chromebooks are nonetheless a younger man or woman’s sport
the alternative problem is that Chromebooks aren’t getting the majority of their sales from customersheading to excellent purchase or ordering laptops from the Google save. alternatively, as Huang informedThe Verge, “Chromebooks are still in large part a U.S. okay-12 story.”

Chromebooks had been carving out a large niche in schools for several years, which is why we seecomputer makers catering to training and commercial enterprise use instances with gadgets like Dell’s Chromebook eleven for training, Chromebits, and Acer’s new Chromebase.

windows issues
despite the fact that, the gradual-burn boom of Chromebooks is something that has to situationMicrosoft, an awful lot extra so than Apple, which focuses on promoting excessivequit computers. There’s little chance that Chromebooks just like the Pixel will overtake the top rate pc marketplace, but thelow-quit market is some other tale.

Chromebooks are easy to use and offer the fundamentals that students need, consisting of a browser for online studies and a productiveness suite (in net app shape). they may be also getting less expensive and can simplest end up extra popular if Android apps land on the platform, as expected.

home windows 10 laptops, meanwhile, are comparatively complex and at risk of more troubles than Google-powered laptops. A low-powered home windows laptop can regularly be slower than a low-powered Chromebook. That simplicity in software and aid alike make Chromebooks inherently extra compelling forlarge academic deployments.

That said, Chromebooks have an extended way to head earlier than they’ll genuinely venture home windows machines. promoting in bulk to the training market is one component, but attractive to the tastes and dreams of man or woman clients is a completely extraordinary game. thus far, Chromebookshave not had a whole lot fulfillment with customers, and it’s all people’s bet if they ever will.

What’s in the back of the facebook surge?

Space shuttle lifting off

fb continued to leave its competition in the dust as the social media giant published spectacular profitsnumbers that despatched the inventory flying Thursday.

fb has benefited from the structural shift in how corporations spend their ad bucks,” Gina Sanchez, founder of Chantico worldwide, said Thursday on CNBC’s “strength Lunch.” “So at this factor even as otherorganizations are suffering in sales, they nevertheless find social media, and fb in particular, an importantad spend.”

The social network‘s competition were hurt via what Sanchez sees as a slowing sales surroundings. Microsoft’s income plummeted eight.5 percent from final June and whilst Apple and Google did see incomeboom, the numbers from this year don’t match up to their preceding increase.

fb, alternatively, has seen its sales bounce always through more than forty to 50 percent each year, which Sanchez attributes to the significant store of statistics on the agency‘s fingertips.

fb also has an remarkable database that no different social media platform has,” brought Sanchez. “Theydon’t even recognize what the value of that facts is but, so that you can say that there’s a variety of optionprice there as nicely.”

read MoreThe massive ‘if’ for purchasing facebook stocks

but Sanchez also cautions that fb‘s boom might also see a slowdown if cutting-edge trends keep.

the bigger shift that i am concerned approximately is that we continue to enter a slowing surroundings forincome, for earnings,” she said. “i am no longer pronouncing that that is going to be the case all the time,but it’s clearly going to be the case for a few greater years. and that is going to be the venture, is to compete for a dwindling advert spend.”

fb delivered $30 billion in marketplace capitalization Thursday, as the inventory hit a document excessive.

meanwhile, Lou Kerner, a associate at Flight VC and a holder of facebook from earlier than it went public, says that he has no intention to sell.

“A employer like facebook comes once every generation, and also you maintain it and run with it for aslengthy as it goes,” he said Thursday on “power Lunch.” “I assume it is nonetheless, via a variety of people, underappreciated in phrases of the effect it’ll have.”

GM, Ford stocks should surge at least 25%: Barron’s

A General Motors worker puts the finishing touches on a new 2016 Chevrolet Camaro at the Lansing Grand River Assembly Plant October 26, 2015 in Lansing, Michigan.

stocks of popular cars and Ford Motor ought to rise as a minimum 25 percent within the subsequent yr, with U.S. automobile sales possibly to are available in stronger than many traders fear, in step with a fileon Sunday in Barron’s financial newspaper.

both agenciesstocks look reasonably-priced, Barron’s said. Ford and popular automobiles exchange at 6.6 times and five.6 times expected 2016 profits, respectively. the broader S&P 500 has a forward fee-to-profits ratio of 17.

stocks of both businesses have been beneath stress due to investor worry of a downturn within the U.S.vehicle marketplace as well as economic weak spot in China. however buyers are forgetting severalpositives, Barron’s said. For one thing, the automakers are much leaner than in previous years, that may helpprofitability.

also, even as united states of americasales ought to slip from the first quarter‘s pace of 17 million-plus unitsa yr, they are likely to plateau at 16.five million to 17 million automobiles annually, the publication stated.both GM and Ford have stated they could still ruin although annual sales fell to approximately elevenmillion.
Healthcare fees for retired unionized workers are not an duty, Barron’s added. The fees had been shifted to abelieve fund run with the aid of the United car workers that the automakers paid billions to create.
GM shares closed at $30.fifty six on Friday, and Ford shares at $12.ninety four.