Bank Stocks Outlook for the week - 28.11.2016 to 02.12.2016
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Bank stocks are seen trading with a positive bias next week, with gains made by public sector banks weighing over the losses made by their private peers. The Public sector banks will benefit from the recent demonetisation of high-value currency notes as they will be able to earn spread on deposits of the now-invalid notes which will flow into the banks till the end of the year. The Banks will post gains from profit booking in the sale of government securities as the yields are at lowest levels. Lower credit off take during Jul-Sep was mostly on account of deleveraging of corporate and lower funding requirements. However, loan growth is expected to rise in a gradual manner in the coming months. The Rate action is expected from the Reserve Bank of India in its upcoming RBI (Reserve Bank of India) meeting as demonetisation has opened scope for substantial rate cuts. The Monetary Policy Committee will meet for the Fifth Bi-Monthly Monetary Policy meeting on Dec 6-7. It is better to wait at the sidelines, let things stabilise as a lot is going on within the banking and finance space at the moment. Among individual stocks, ICICI Bank, which fell 1.7% during the week, may see further correction as there were many positions added on the short side in the rollover in the previous week. Bank of Baroda, a major gainer during the week, is expected to rise further in the coming week as several long positions added in the rollover. YES Bank will be a major beneficiary of the currency withdrawal as it has significant bulk deposits, which are likely to come down further as deposits in banks rises.
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Bank stocks are seen trading with a positive bias next week, with gains made by public sector banks weighing over the losses made by their private peers. The Public sector banks will benefit from the recent demonetisation of high-value currency notes as they will be able to earn spread on deposits of the now-invalid notes which will flow into the banks till the end of the year. The Banks will post gains from profit booking in the sale of government securities as the yields are at lowest levels. Lower credit off take during Jul-Sep was mostly on account of deleveraging of corporate and lower funding requirements. However, loan growth is expected to rise in a gradual manner in the coming months. The Rate action is expected from the Reserve Bank of India in its upcoming RBI (Reserve Bank of India) meeting as demonetisation has opened scope for substantial rate cuts. The Monetary Policy Committee will meet for the Fifth Bi-Monthly Monetary Policy meeting on Dec 6-7. It is better to wait at the sidelines, let things stabilise as a lot is going on within the banking and finance space at the moment. Among individual stocks, ICICI Bank, which fell 1.7% during the week, may see further correction as there were many positions added on the short side in the rollover in the previous week. Bank of Baroda, a major gainer during the week, is expected to rise further in the coming week as several long positions added in the rollover. YES Bank will be a major beneficiary of the currency withdrawal as it has significant bulk deposits, which are likely to come down further as deposits in banks rises.
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