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Investors are expected to be positive on Bharti Airtel Ltd and Idea Cellular Ltd next week, with the fundamentals of the companies showing signs of improvement and regulatory uncertainty abating. But, any gains could be limited due to new measures taken by the Reserve Bank of India. Liquidity in the broad market next week will face repression as the Reserve Bank of India will start auctioning 220 bln rupees of cash management bills every Monday in order to check liquidity and contain foreign exchange volatility. The action of the RBI will lead to a rise in short-term interest rates. Bharti Airtel yesterday ended up 3.4% at 337.30 rupees after Cogencis reported that the company will undertake tariff hike in select post-paid plans effective Sep 8. Idea Cellular also got a sentimental boost from the news, ending the day's trade 3.3% higher at 157.90 rupees.
The worst is over for Bharti Airtel. In the current year, stocks of the company fell to a low of 270.25 rupees in April. Stocks of Bharti Airtel are not expected to go below the 300-rupee mark in the medium-term and going ahead, it is expected to enter into a consolidation phase at around the prevailing levels. The chart for Idea Cellular is expected to resemble to that of Bharti Airtel, and the stock is expected to hold on firmly onto the gains made so far.
If the stock is able to close above 160 rupees at the end of next week's trading, then 170-rupee-level may also be touched. Investors may buy both Bharti Airtel and Idea Cellular on decline and accumulate. However, the underlying sentiment on Reliance Communications is bearish, as the momentum in the stock has run out and it is now expected to see reversal from the peak achieved so far in the year. Aided by infrastructure sharing agreements entered with Reliance Jio Infocomm and on talks of possible stake sale in subsidiaries.
Investors are expected to be positive on Bharti Airtel Ltd and Idea Cellular Ltd next week, with the fundamentals of the companies showing signs of improvement and regulatory uncertainty abating. But, any gains could be limited due to new measures taken by the Reserve Bank of India. Liquidity in the broad market next week will face repression as the Reserve Bank of India will start auctioning 220 bln rupees of cash management bills every Monday in order to check liquidity and contain foreign exchange volatility. The action of the RBI will lead to a rise in short-term interest rates. Bharti Airtel yesterday ended up 3.4% at 337.30 rupees after Cogencis reported that the company will undertake tariff hike in select post-paid plans effective Sep 8. Idea Cellular also got a sentimental boost from the news, ending the day's trade 3.3% higher at 157.90 rupees.
The worst is over for Bharti Airtel. In the current year, stocks of the company fell to a low of 270.25 rupees in April. Stocks of Bharti Airtel are not expected to go below the 300-rupee mark in the medium-term and going ahead, it is expected to enter into a consolidation phase at around the prevailing levels. The chart for Idea Cellular is expected to resemble to that of Bharti Airtel, and the stock is expected to hold on firmly onto the gains made so far.
If the stock is able to close above 160 rupees at the end of next week's trading, then 170-rupee-level may also be touched. Investors may buy both Bharti Airtel and Idea Cellular on decline and accumulate. However, the underlying sentiment on Reliance Communications is bearish, as the momentum in the stock has run out and it is now expected to see reversal from the peak achieved so far in the year. Aided by infrastructure sharing agreements entered with Reliance Jio Infocomm and on talks of possible stake sale in subsidiaries.
