Bank Stocks Outlook for the week – 04 to 08.01.2015
(Seen
subdued next week on rise in short position)
Bank
stocks are likely to trade with a negative bias next week as
Underlying
problems of the sector such as lower credit growth and
stressed
assets have led to a significant built up in short positions in
January
futures.
However,
stocks of select banks may benefit from broader indices, which
are
likely to trade positive next week as investor participation in the
market
is expected to return without significant selling pressure.
Stocks
of public sector banks, which have seen buying interest this week,
may
extend gains, even though the gains are expected to be short-lived.
State-owned
banks are seen gaining from current levels, even though they
are
likely to remain in a downtrend over a longer period of time.
Large-cap
banks like State Bank of India and Punjab National Bank
added
significant shorts and these positions have been rolled too.
In
the latter part of the week, would also look for commentary
on
the agenda at Gyan Sangam, a bankers retreat arranged by the finance
ministry
between Jan 14-16.
In
previous year's retreat, heads of state-owned banks, senior officials
from
the Reserve Bank of India and the ministry had discussed number of
issues
including non-performing asset management, human resources,
usage
of technology, and financial inclusion.