Bank Stocks Outlook for the week – 15 to 19.02.2016
(Seen
weak next week as Oct-Dec results weigh)
( www.rupeedesk.in )
Bank
stocks are likely to remain under pressure in the coming week,
weighed
down by the weak Oct-Dec earnings on account of the sharp rise
in
non-performing asset ratios for nearly all banks--private and stateowned.
The
wind has been taken out of the sails of the banking system and bank
stocks.
While the RBI (Reserve Bank of India) push to clean up bank
balance
sheets is positive in the long-term, it is disastrous for bank stocks
in
the near-term. Bank Nifty gave up over 1200 points in this week
tracking
the weak earnings announcements, including large losses for
many
banks and muted profits for others.
Bank
of Baroda and UCO Bank which will declare results on Saturday
will
take cues next week based on their Oct-Dec earnings showing.
Dhanlaxmi
Bank and Corporation Bank, which reported huge losses for
Oct-Dec
post market hours today will be under pressure in the coming
week.
The
Slippages of 200 bln rupees seems to have spooked the market, while
focus
on recoveries and tight liquidity seems to have slowed loan growth
to
13% year-on-year. SBI continues to be the best bet in the PSU (public
sector
undertaking) banking space with risk reward now deeply into
favour of investors.