Telecom Stocks
Outlook for the week – 19 to 23.09.2016
Seen down as auction
nears, RJio impact weighs
Stocks of mobile services providers are seen down next week
as the market begins to price in the
pressure of the upcoming spectrum auction and also the
impact of Reliance Jio Infocomm Ltd's free
services. The stock looks positive in the first part of the
week but selling will be there after the initial
rise. Both heavyweights will continue to remain under
pressure and investors will do well to exit on
the first bounce-back. All existing mobile services
operators barring Telenor India will compete for thespectrum auction that starts Oct 1.
This (the auction) will put further pressure on the balance
sheets of these companies. The capex
cycle for telecom companies never seems to end and hence it
is unlikely the shares will show any
significant gains in near future. Reliance Communications
share is falling next week as analysts
advise caution on its plan to merge its mobile services with
that of Aircel Ltd. Moody's Investor
Service has put the company under review for a possible
ratings downgrade
