Ex-Banker; SBI (1981-1994); IndusInd Bank (1994-1999 & 2003-2013); Centurion Bank (1999-2002); SREI Infra Finance Ltd (2013-2015); SBMH Mauritius (2016-2018)
YES Bank’s near-collapse triggered trust deficit on most private banks (barring the Big4) and the reconstruction helped to avoid liquidity crisis for the rest; can’t afford to open up this risk again! It’s worse when “bail-in” process is set to be introduced for resolutions!
IndusInd Bank back & forth at zoom-in 450-550 since 8th June (444-548-456-527) is big (with either way volatility of >20%) and in alignment with index lift from 19500 to >22500; when index in last mile at 22500-24500, good to stay tuned at 415/450-550/585 with ST worst at 368-418
#Nifty resilience above make or break intermediate zone 10500-10650 is good absorbing traders profit-booking & investors portfolio-light urge and #banknifty relatively better at upper half of zoom-in 21000/21650-22500/23150 on run upto banking sector news from @FinMinIndia
Most look for #Nifty collapse to 9544 (if not into 7511-8055) having missed >40% rally (7511-10811) and all wish for #banknifty drag down below 19507 (into 16611-17105); don’t see that far in Q3/2020, but anything possible in Q4/2020 and wish it’s not hard landing for 2020!
It’s possible that (stripping model of both financial & non-financial assets) formula for “bail-in” adoption would emerge from this reconstruction deal! Don’t think merger is a good option for (non-state) SBI shareholders! Good that “bail-out” option will come to an end soon!
I remember to have mentioned this as one of good opportunity for @TheOfficialSBI as win-win proposition (top-line loan book for SBI as replacement of lending at R/R counter and liquidity for #YESBank); worry for investors is into value push down mode at 10-35!
All-time & 2020 high on #Nifty at 12430 & #banknifty at 32613 is out of focus (to get better visibility in Q4/2020) and so is 2020 low 7511 (16116); #Nifty Q3/2020 sustainability at upper half (above 9965) is positive despite absence of #banknifty momentum (below 22500-24500)
#banknifty stability at 21000-22500 is preferred short term scenario, up from 16000-19500 to 20000-22500 and need big-bang measures to shift focus into 22500-23500/24350, including opening up banking license to cash-rich & well-run (on C&G) non-bank Financial institutions!
#Nifty last-mile focus set at 10650-11350 but not sure of reversal point as yet when major risk event is 3 months away to trigger selling “ahead of event” winding up “buy on run upto event” mode! Great that value got pulled up from around ~10K (9650-10350) to ~11K (10650-11350)
#banknifty close at 22150-22500 (upper half of 21650-22500) is good, riding on overall tailwind momentum when undertone is mixed between lack of confidence (on value sustainability) on the sector and expectation of reforms (C-19 loans one-time restructuring, Bad Bank and bail-in)
It’s good luck for India equities (from higher speed of external tailwind) to set #Nifty sustainability above 10500-10650, shifting the zone from risk-unwind urge to intermediate zone, building momentum for 11000-11350 with lift of base from 9500-9650 to 10000-10150; good!
It’s win for Jio from SBI trust & credibility! Will SBI outsource its “payment & transaction banking” products to Jio (white-labelled & fee sharing model)? I am sure it’s not for value investment? What SBI would get from 30% stake will mean nothing to overall market value!
#Nifty last-mile momentum extends into 10650-11000 shifting big picture from 9500/9650-10500/10650 to 10350/10500-11200/11350, while #banknifty looks better at 21650/22000-22500/22850 but too fatigue & heavy towards target 23500-24350; risk below 10350 (20850) for 10000 (19500)
Rightly so when #Nifty stocks get the most benefit of ultra-dovish monetary policy (specially investment grade listed stocks) while most #banknifty stocks struggle across all parameters - capital, productivity, profitability, efficiency and EPS (BV status-quo from no dividend)!
If Agriculture sector remains least impacted from #lockdown, feel that food inflation will get benign (from lower consumption from livelihood impact) and lower demand for power & fuel from capacity squeeze will moderate fuel! Ideally, don’t see significant risk of stag(de)flation
When the economy is stuck between capacity & supply squeeze and consumption & demand compression, inflation targeting gets least priority from both Treasury & Central Bank! If growth & unemployment could get better at cost inflation, so be it for the time being!
Signs of contraction is visible on low QoQ top-line growth and higher CASA is no more relevant when time deposits are cheaper adjusted for acquisition & operating cost! If way forward for HDFC is not going to be as before, less said the better on rest of the banks!
Can’t ask for better on India equities at start of Q2/FY21 (despite extension of #lockdown to 31st July) for weekly #Nifty close at 10607 (at higher end of big picture 9500/9650-10500/10650), while #banknifty clinging on to risk-off urge zone 21850-22350 (with close at 21852)
#Nifty intra-week shift of play from 10200/10275-10350 to 10500/10575-10650 is good while #banknifty struggle for hold at 21850-22350/22500; while NIFTY weekly close above 10302-10383 is comfort, need super-drive momentum for shift into 10650-11000, and banks continue to be heavy
Good to be cotent with start of Q2/FY21 #Nifty weekly close at 10500-10650 (lifting play from around 10275 (of 10200-10350) and #banknifty at steep up-hill zone 21650-22350/22500 when news around C-19 is not encouraging building fear of extended #lockdown through Q3/2020