Bank Stocks Outlook for the week – 08 to 12.05.2017
Bank Stocks Outlook for the week – 08 to 12.05.2017
( www.rupeedesk.in )
Investors are likely to be cautious on bank stocks, especially public sector banks, next
week, and the sentiment remains negative despite two major announcements regarding
resolution of asset quality issues in the banking industry. PSU bank stocks fell yesterday
after the government detailed an ordinance on tackling non-performing assets, due to lack
of clarity regarding the Reserve Bank of India's role in speeding up the resolution process.
After President Pranab Mukherjee's assent on Thursday, the government yesterday notified
The Banking Regulation (Amendment) Ordinance, 2017, which allows the Reserve Bank
of India to order lenders to initiate insolvency proceedings in case of a default under the
provisions of the Insolvency and Bankruptcy Code, 2016.
Further, the RBI can also issue orders to banks for the resolution of stressed assets, and it
can appoint committees to advise banks in their effort to find a solution to dispose off their
stressed assets. The announcement faced a mixed reaction from market participants, with
some supporting the need for central bank's intervention, while some arguing that the
regulator should not be allowed to meddle in banks' commercial operations.
In the second notification later during the day, RBI's directed banks to adhere to timelines
given in various schemes for resolving stressed loans, and said that banks not doing so will
be penalised. This is seen weighing on bank stocks as most public sector banks continue
to struggle with huge piles of bad loans.
Additionally, with most public sector banks starting to detail their Jan-Mar earnings, from
the next week onwards, reports of worsening asset quality is seen weighing on the sector.
Canara Bank, Union Bank of India, Syndicate Bank, Vijaya Bank, Dena Bank and UCO
Bank are scheduled to detail their results in the coming week.
However, some counter-activity could be seen on positive guidance by these banks, or as
and when any further clarification regarding the ordinance is announced.
Source : Cogencis Information Services Ltd.
Free Intraday Tips : Join Our Whatsapp No : 9841986753
Free Commodity Tips : Join our Whatsapp No : 9094047040
Bank Stocks Outlook for the week – 08 to 12.05.2017
( www.rupeedesk.in )
Source : Cogencis Information Services Ltd.
