GOLDEN RULES FOR TRADING

Bank Stocks Outlook for the week – 20 to 24.07.2015

Bank Stocks Outlook for the week – 20 to 24.07.2015
(Expected to trade with a positive bias next week)

Bank stocks are expected to trade with a positive bias next week tracking the overall broad market.
Action is expected to be stock specific with top private sector banks like HDFC Bank and Axis Bank,
among others scheduled to declare their Apr-Jun earnings next week. Much of the focus will
continue to be on asset quality, which has experienced pressure, dragging down bottomlines for
banks.

Stocks of private sector banks had surged on Thursday after the Cabinet had approved the merger
of foreign direct investment and foreign institutional investment limits to form a composite foreign
investment limit. According to source based media reports, however, foreign investment in
banking sector is likely to continue having separate caps for FIIs and FDIs.

Clarification on the composite foreign investment cap will be closely watched by both banks and
investors alike. Currently, foreign shareholding in private sector banks is capped at 74%, with
foreign institutional investors' holding capped at 49%.