One of the big benefits that Citigroup has in India is its brand name that comes from being a global behemoth. All the sub-prime news and cost cutting could affect it’s brand name negatively in India. Moving away from expensive locations certainly will also affect Citi’s brand.

Now this could be a good opportunity for domestics banks such as ICICI Bank (IBN) and HDFC Bank (HDB). It sort of levels the playing field for domestic banks a little when competing with foreign banks. The move also coincides with ICICI Bank opening a branch in New York in Citi’s home turf.
HSBC (HBC) seems to have already moved their ATM’s to less expensive locations. Check out the following excerpt from a blog by John Elliott at Fortune (July, 07):

HSBC seems to be finding it hard to survive in India’s increasingly costly bazaars. Almost unbelievably, the world’s fourth-largest bank has closed its ATM booth in central Delhi’s prestigious Khan Market because, senior executives tell me, it does not consider it economically viable to pay the admittedly astronomical six lakhs of rupees ($15,000) rent a month that its landlord wants for the 150 square feet of potential retail space. It is moving its money machine, and its usually sleepy guard, to cheaper location, possibly in a nearby gas station that will be far less accessible for local shoppers and tourists who used the old ATM. The bank’s customers can still use their cards to withdraw cash at a (rather luxurious) Citibank ATM just a few yards away from the former HSBC location, at no extra cost.

Can’t blame Citigroup for not paying these crazy prices during struggling times.

On a side note, Citigroup has a 9.27% stake in HDFC. Also, HDFC has a 21.99% stake in HDFC Bank (HDB). There have also been claims in the past that Citigroup will eventually buyout both HDFC and HDFC Bank after 2009, once liberalization occurs in the banking sector.

Full Disclosure: No position in any of the above listed stocks.

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Note: Videsh Sanchar Nigam Ltd. (VSL) is now called Tata Communications (TCL)

As far as I am concerned the only Indian ADR worth looking at this point is Sterlite (SLT). ICICI Bank (IBN) and HDFC Bank (HDB) are also worth considering but I would wait for a little better entry point.

As far as other ADR’s are concerned, I don’t see anything exciting at this moment. Let me know if you think otherwise. Any ideas would be welcome.

ETF’s/ETN’s/CEF’s

The recent launch of Wisdomtree India ETF (EPI) looks better than the India IPATH ETN (INP). Energy plays a bigger role in EPI and technology plays a bigger role in INP.

The Powershares India ETF (PIN) is about to launch as well. The ETF pick might end up being between Powershares India ETF vs. Wisdomtree India ETF.

Although the Indian markets have been hit by the turmoil here in the United States, India still remains an attractive investment destination. It’s certainly good to see the launch India ETF’s to give people more choices to invest in India.

Full Disclosure: I am long Sterlite (SLT)

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Following are the key points from the article:

• Indian Banks have minimal exposure to subprime debt. 
• The recent curbs by the government on overseas funding will drive growth in the current fiscal year.
• “With companies forced to seek more funding at home, banks will be able to keep interest rates firm and improve asset quality by booking more blue-chip corporate loans — allaying worries about an upturn in bad consumer loans”
• Analysts and fund manager believe Indian Banks could see 20% upside in the next 12 months. 
• Indian companies can only borrow up to $20 million from the overseas markets in one financial year.  Also, they will need permission from the Central Bank and show they require funds for expenditure needs.
• ICICI Banks (IBN) was mentioned as a pick by one of the analysts. 

I have been recommending both US listed Indian Banks, ICICI Bank (IBN) and HDFC Bank (HDB) for a long time and see no reason to stop now.  These should be part of your key long term holdings and provide international exposure to your portfolio.  The key right now is to find a good entry point with the way the market is acting right now.  Any major downside should be considered an opportunity to start building a position small portions at a time.  I myself plan to do the same.

* No position in HDB or IBN

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The best way to invest in the Indian economy is via the two India banks HDFC Bank (HDB) and ICICI Bank (IBN) and the India based ETF (INP).  All three have roared back along with the Sensex after going down with the overall market.  Being patient and finding a good entry point is the key here. 

* No position in HDB, IBN and INP.  Subject to change anytime. 

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Let’s look at the performance of Indian stocks from last week:

The thing is that you can expect the Sensex to go down just as swiftly as it went up last week. 

The stocks and Funds I am targeting for now are:   

• ICICI Bank (NYSE: IBN)
• HDFC Bank (NYSE: HDB)
• Indian Fund (NYSE: IFN)
• MS India Fund (NYSE: IIF)
• IPATH ETNS (NYSE: INP)

I also like:

• Tata Motors (NYSE: TTM)
• Infosys (NYSE: INFY)

I consider all of above mentioned companies to be blue chip stocks and would love to invest in them for the long term. 

I am definitely going to keep an eye on both the Indian banks IBN and HDB and also INP which is an ETF. 

* I don’t own any of the stocks mentioned above. 

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Here’s my list of Indian Stocks (in no particular order): 

• HDFC Bank (NYSE: HDB) and ICICI Bank (NYSE: IBN) are two of India’s largest private banks and have been on a tremendous run for a while now.  They have both taken a small hit not only due to the market downturn but also because of the Indian Budget which was just released.  After my recent visit to India I am convinced that this is one sector I definitely want to be part of during these booming times.  I am planning to write a separate column about my trip and the banking sector.   I recommended both of these stocks last May but for some odd reason didn’t but them myself.  Trust me, I am still kicking myself for it.   
• Infosys Technologies (Nasdaq: INFY): I don’t think Infosys needs any introduction.  Another stock that has taken a big hit this week. 

Click here to go to the original article

* Full Disclosure: I am long STP, FTEK, UA, AMSC.  I don’t have positions in BA, HDB, IBN, INFY or SIRF.

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The two Indian Banks, ICICI (NYSE: IBN) and HDFC (NYSE: HDB), continue to be one of the best way to invest in the booming Indian economy. 

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Business-Standard:  According to a report in Business-Standard, The Monetary Authority of Singapore (MAS) is now willing to open the doors for two Indian banks — State Bank of India and ICICI Bank (NYSE: IBN) — and offer them the status of qualifying full bank (QFB), which can raise retail deposits and operate at 25 centres in Singapore. 

This will no doubt continue to help ICICI gain international footprints. 

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Following are the highlights from the quarter ending June 30th 2006:

• Operating profit (excluding treasury income) increased 45% YoY to Rs. 1,144 crore (US$ 248 million).
• Operating profit increased 27% YoY to Rs. 1,231 crore (US$ 267 million).
• Profit after tax increased 17% YoY to Rs. 620 crore (US$ 135 million).
• Net interest income increased 52% YoY to Rs. 1,475 crore (US$ 320 million).
• Deposits increased 61% YoY to Rs. 183,006 crore (US$ 39.7 billion).
• The Bank now operates in 13 countries through branches, representative offices and wholly-owned subsidiaries.

I am going to keep a close eye on ICICI and might start buying small chunks on any downside.

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The article also mentioned ICICI’s international presence which currently spans 14 countries and includes three wholly-owned subsidiaries in the UK, Russia and Canada, offshore banking units in Singapore and Bahrain, an advisory branch in Dubai, branches in Sri Lanka, Hong Kong and Belgium and representative offices in the US, China, UAE, Bangladesh and South Africa.

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