GOLDEN RULES FOR TRADING

Telecom Stocks Outlook for the week – 19 to 23.09.2016 Seen down as auction nears, RJio impact weighs

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