GOLDEN RULES FOR TRADING

Bank Stocks Outlook for the week – 08 to 11.03.2016 Seen consolidation next week

Bank Stocks Outlook for the week – 08 to 11.03.2016

Bank stocks are expected to take cues next week from the outcome of the ongoing
bankers' retreat--'Gyan Sangam'--being held at Gurgaon in Haryana, although the
mood remains buoyant for lenders.

Yesterday, share price of public sector banks ended up 1-9% on expectations that the
government will announce measures on their recapitalisation, asset quality resolution,
and clarity on consolidation in the sector in the coming days.
Banks have had a stellar week, with Monday's 2016-17 (Apr-Mar) Budget which has
raised hopes of a repo rate cut from the central bank—followed by a revision in the
capital treatment norms for banks.

Under the revised norms, banks can now revalue reserves arising from a change in the
carrying amount of their property as common equity tier-I capital with a 55%
discount, among other amendments. The revision in the norms comes at a time when
Indian banks are facing stress on their tier-I capital levels, particularly in light of the
recent asset quality review by the central bank.

Next week, bank stocks are seen gaining further, with the Nifty Bank set to rise by
another 200-250 points. Yesterday, the Nifty Bank index ended up 1% at 15339.20
points, while Nifty PSU Bank closed up 3.3% at 2388.75.