The Zacks Analyst Blog Highlights: Citigroup, HSBC Holdings, ICICI Bank, HDFC Bank and Caterpillar

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Mar 08, 2012, 09:30 ET

CHICAGO, March 8, 2012 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Citigroup Inc. (NYSE: C), HSBC Holdings Plc. (NYSE: HBC), ICICI Bank Ltd. (NYSE: IBN), HDFC Bank Ltd. (NYSE: HDB) and Caterpillar Inc. (NYSE: CAT).

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Here are highlights from Wednesday's Analyst Blog:

Citi Growing Card Biz in Asia

Citigroup Inc. (NYSE: C) is boosting its business in Asia. The company plans to grow its card and personal loan business in India, according to a Reuters report.

Citi intends to augment its credit card customer figure by over 20% per year in the next two to three years. This comes as part of the company's effort to expand its portfolio of unsecured business in India. Moreover, Citi expects a 30% growth per year in personal loans in the next couple of years in the country.

The move is a strategic one for Citi given the fact that even with a vast population and rising income, the number of credit card users in India is significantly low. Therefore, opportunities lie in the market and Citi plans to lever on that to build its card business in that country.

Besides Citi, HSBC Holdings Plc. (NYSE: HBC) has a credit card business in India. Notably, the local lenders such as ICICI Bank Ltd. (NYSE: IBN) and HDFC Bank Ltd. (NYSE: HDB) have a leading presence in the card issuing market.

As a matter of fact, faced with a slowdown in the U.S. market, Citi is emphasizing on growth in the international markets. The company has an impressive overseas presence and is making every effort to expand and tap opportunities in the emerging markets.

Of late, Citi's Chinese subsidiary Citibank (China) Co. Ltd. received approval from the China Banking Regulatory Commission to launch its own credit card business in that country. The company will launch both retail and commercial cards before the end of this year. This marks a landmark for Citi, the first U.S.-based bank to introduce its own credit card in China.

Citi's efforts to expand its business in Asia are part of its strategy to explore its thriving economy and booming consumer and commercial market. Citi's global network will be enhanced and its revenue base is expected to benefit by leveraging on faster-growing economies, thereby increasing its market share internationally. We expect such efforts to bear fruit in future.

Caterpillar Sits on Record Backlog

Caterpillar Inc. (NYSE: CAT) revealed at the ISI Annual Industrial Conference that the company's backlog is at the highest level ever. Moreover, many products have long lead times, with some slated for 2014. This bodes well for Caterpillar's future performance.

Caterpillar's backlog has improved steadily throughout fiscal 2011 and attained record levels at fiscal 2011 end. At its earnings call, the company had reported an order backlog of $29.8 billion at the end of fiscal 2011.

The backlog had increased 59% from $18.7 billion at 2010 end 4% above the third-quarter end. Excluding synergies from Bucyrus, backlog at fiscal 2011 end was $25.7 billion, up 37% year over year and 5% sequentially.

The company also maintained its stand on its outlook for fiscal 2012. Revenues are envisioned in a range of $68.0 billion to $72.0 billion and earnings per share are expected to be around $9.25. Capital expenditures for 2012 are expected to be about $4.0 billion, with about half to be spent in the U.S.

World economy growth is projected at 3.3% in 2012, a marginal improvement from 2.8% in 2011. Mining is expected to remain strong and the company exited 2011 with a sizeable order backlog for mining equipment.

However, construction spending in U.S. and Europe – its two largest markets – is expected to remain lackluster. Replacement demand is expected to be a catalyst for machines in North America and Europe.

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