Markets turn deaf to Cobrapost allegations on money laundering

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Mkts turn deaf to Cobrapost allegations on money laundering
Even as the Cobrapost allegations on money laundering against HDFC Bank, ICICI Bank and Axis Bank gathers steam, one analyst who came on television recommended buying private sector bank as their asset quality was much better than PSU banks. Ironically, the shares of all three banks were trading higher, despite the allegations, with investors turning deaf to the Cobrapost allegations.

The analyst in question would certainly have known the allegations of money laundering levelled against HDFC Bank, ICICI Bank and Axis Bank by online portal Cobrapost, but still chose to recommend private sector banking names.

Today, the shares of these private sector banks at least at 1.13 pm are rocking despite allegations. ICICI Bank is currently up up 2 per cent at Rs 1107, just shy of its 52 week high. Axis Bank is up nearly 1 per cent and HDFC Bank is up 2 per cent.

Investors do not seem to have taken the allegations seriously, even if they are true. Such has been the credibility of these banks, markets are not ready to believe or are deciding to plainly ignore the allegations of money laundering.

There's also another reason for this. At the moment the private sector banks are the only one's doing well in terms of asset who cares a damn about money laundering. Some of the banks like HDFC Bank have an impeccable and unblemished track record.

In fact, HDFC Bank recently was among the top banks to have generated maximum returns globally from amongst banking stocks, not to mention the women CEO's of Axis and ICICI Bank which have a very iconic image.

Markets and investors have a mind of their own, they certainly do not want the bad news to sink in. Perhaps, had it come from a more established media house, they would have taken the allegations more seriously.

Read more about: cobrapost, axis bank, icici bank, hdfc bank
Story first published: Thursday, March 14, 2013, 13:36 [IST]
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