GOLDEN RULES FOR TRADING

Telecom Stocks Outlook for the week – 13 to 17.06.2016 (Subdued next week; Bharti Airtel may fall more)

Telecom Stocks Outlook for the week – 13 to 17.06.2016
(Subdued next week; Bharti Airtel may fall more)

The shares of telecom services companies are seen weak next week as profit booking, which dragged the market down on Thursday and Friday, is seen continuing. Shares of telecom major Bharti Airtel Ltd, Idea Cellular Ltd and Reliance Communications Ltd rose 1-2% intraday on Wednesday, a day after the Telecom Commission fixed the spectrum usage charge at 3% of the adjusted gross revenue for all spectrum bands to be sold in future auctions.

Though operators will have to pay a combination of the weighted spectrum user charge on the bands currently held and 3% charge on the spectrum acquired in future, the new policy is expected to bring down the spectrum user charge outgo for most companies. According to a Jan 8 report in a leading business daily, the merger, which is likely to conclude by July-end, will see both the companies transferring 140 bln rupees of debt each to the merged entity.