Bank Stocks Outlook for the Outlook – 29.05.2017 to 02.06.2017
Bank Stocks Outlook for the Outlook – 29.05.2017 to 02.06.2017
( www.rupeedesk.in )
Private Banks to have upward bias, PSU banks seen down Trade in bank stocks is expected to be a mixed bag in the coming week, with private banks seen extending this week's gains, whereas public sector banks are seen down, continued to be weighed down by concerns of capital constraint and weak asset quality. The largest hit this week was taken by IDBI Bank, stocks of which fell 8.87% during the week. The bank's debt papers were downgraded by several rating agencies such as CRISIL and ICRA. On Thursday, Moody's Investors Service also downgraded the bank's rating to Ba2 from Baa3, minutes after which the lender announced a 'turnaround plan' to control and manage the bad loan book, and measures to improve the capital adequacy. The bank was one of the 10 public sector lenders asked by the government to submit a turnaround plan, before further capital infusion into them. On May 9, the RBI had initiated prompt corrective action on IDBI Bank, citing a high net non-performing asset ratio and negative return on assets, subsequent to which the bank reported that its net loss for 2016-17 (Apr-Mar) widened to 51.58 bln rupees from 36.65 bln rupees the previous year. However, analysts remain positive on the overall sector, especially private sector banks, given the strong rollover demand at the time of expiry of the May derivative contracts. The Nifty Bank ended the May series on an optimistic note. The move was largely supported by private sector leaders whereas follow-up buying was also seen in the June series. Rollover spreads continued to remain muted which will support the broader move going forward as short traders will cover their positions in case of selling.
Source : Cogencis Information Services Ltd.
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Bank Stocks Outlook for the Outlook – 29.05.2017 to 02.06.2017
( www.rupeedesk.in )
Private Banks to have upward bias, PSU banks seen down Trade in bank stocks is expected to be a mixed bag in the coming week, with private banks seen extending this week's gains, whereas public sector banks are seen down, continued to be weighed down by concerns of capital constraint and weak asset quality. The largest hit this week was taken by IDBI Bank, stocks of which fell 8.87% during the week. The bank's debt papers were downgraded by several rating agencies such as CRISIL and ICRA. On Thursday, Moody's Investors Service also downgraded the bank's rating to Ba2 from Baa3, minutes after which the lender announced a 'turnaround plan' to control and manage the bad loan book, and measures to improve the capital adequacy. The bank was one of the 10 public sector lenders asked by the government to submit a turnaround plan, before further capital infusion into them. On May 9, the RBI had initiated prompt corrective action on IDBI Bank, citing a high net non-performing asset ratio and negative return on assets, subsequent to which the bank reported that its net loss for 2016-17 (Apr-Mar) widened to 51.58 bln rupees from 36.65 bln rupees the previous year. However, analysts remain positive on the overall sector, especially private sector banks, given the strong rollover demand at the time of expiry of the May derivative contracts. The Nifty Bank ended the May series on an optimistic note. The move was largely supported by private sector leaders whereas follow-up buying was also seen in the June series. Rollover spreads continued to remain muted which will support the broader move going forward as short traders will cover their positions in case of selling.
Source : Cogencis Information Services Ltd.