Sharekhan cautious on banking sector
Sharekhan maintains its cautious view on banking stocks in the near term and believes that investors would get better entry levels in banking stocks for medium- to long-term gains.
Sharekhan’s report
Evidently, the G-Sec yields have inched up of late due to the sizeable borrowing programme announced by the RBI; however, the quantitative easing measures announced along side by the central bank may keep the yields capped. There is consensus building over a likely range of 6.0-7.5% for the ten-year G-Secs going forward. From the perspective of banks, the closing of Q4FY2009 with higher yields implies significantly lower treasury gains, if any, for the quarter. Moreover, the push and pull of the huge borrowing programme and the quantitative easing may result in periods of tight liquidity and keep the bond markets highly volatile in the coming months. Consequently, we maintain a cautious view on banking stocks in the near term and believe that investors would get better entry levels in banking stocks for medium- to long-term gains.
Tags: banking sector, sharekhan
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