-------- Forwarded Message --------
Subject: Bank Nifty Fut(May): 17150-350 & 16500-300 Zone Is Vital;
Confirmed Break Out Or Break Down Can Lead It To Either 20950 Or 12500
By FY-17
Date: Wed, 18 May 2016 09:17:53 +0530
From: Asis Ghosh <asis...@gmail.com>
Reply-To: asis...@gmail.com
*BNF (May): 16795 (LTP)*
*
*
*Either sell around 16960-17060 or 17150-17250 or on rise around
17350-17450; *
*
*
*TGT: 16650-16430-16300*-16195-16040-15890-15715-15500-15250*-15100 *
*(5-15 days)*
*
*
*TSL> 17600*
*Note:* Consecutive closing (3 days) above 17600 zone, BNF may further
rally up to 17825-18075* and 18150-18600 zone in the near term
(alternative bullish case scenario from the present trading level).
Except new age private banking space (Yes/IIB/Kotak & HDFC Bk) there is
not so much ray of hopes on the present NPA mess(specially for the PSBS)
and even ICICI & Axis banks are also badly affected.
As par some estimates, the present stressed assets in the Indian banking
system may be around Rs.8 lakh cr and by FY-17, it may reach around
11-15 lakh cr (15% of the total loan book may be termed as NPL).
Normally, the present NPA mess may be termed as "Full Banking Crisis",
specially for the PSBS and except SBI, which is "too big to fall" and
strong balance sheet or support of the Govt, all the other PSBS are
literally are on the Govt sponsored "ventilator".
Now apart form Govt sponsored recapitalization, recovery of NPA is vital
for the banks. But as par the Q4FY16 trend (usually higher seasonal
recovery for financial year ending pressure), for BOB, actual recovery
was around Rs.1492 cr against NPL/Watch list of Rs.42000 cr (i.e. around
3.5% in Q4). At the same quarter, there is fresh addition of Rs.4400 cr
NPL (cumulative addition 8515 & recovery 4130). Thus at this rate, it
will be very difficult for the stressed PSBS to sustain themselves and
only other income (treasury/trading/FX/cross sales) may not be
sufficient for their survival.
In a country like India, its not possible to close down these PSBS and
thus merger among various 27 listed PSBS to less than 10 large PSBS may
be the viable alternative for operational synergy. But this merger among
various PSBS will take time (at least 3-5 years) among various
regulatory hurdles and oppositions of banking unions.
Moreover, initially, this type of merger may put more pressure on the
principal bank and may be EPS dilutive (for example, recent merger
proposal of SBI may be negative for its bottom line for the first 1-2
years) and the benefit of the same may be felt only after 4-5 years.
As historically, real rate of interest and other regulatory charges are
quite high in India, in comparison to other parts of the developed
economy, it may be one of the prime reason for today's NPA mess, where
cost of doing business is quite high and not viable (under financing
from Indian Banks).
Apart from some policy paralysis, project approval delays, tepid global
growth and export demand, FX volatility (competitive devaluation),
reckless lending & borrowings by banks and some corporates, another
reason may be RBI is always "behind the curve" (which may be good for
yield hungry bond investors but not good for our real economy).
*Analytical Charts:*
<https://2.bp.blogspot.com/-sxcK79VBx2Y/VzvjPgyB8MI/AAAAAAAAHKo/2nAI13E4l6omfTQs2_OENODn8NiNyb_7wCLcB/s1600/BNF-17-05-2016.png>
<https://2.bp.blogspot.com/-1K6-T8zIVDw/VzvjRyWp76I/AAAAAAAAHKs/0J5z0ROPhko5c7pmUArdPOg3EriXF6C0QCLcB/s1600/BNF-FIBB-17-05-2016.png>
<https://4.bp.blogspot.com/-F6URU21bUc4/VzvjVl-sKOI/AAAAAAAAHKw/XgIjC6DlP_c0smVY7uDgYvJgVzF2f5HlgCLcB/s1600/BNF-WK-17-05-2016.png>
<https://3.bp.blogspot.com/-CqwcXvxeRqQ/VzvjXm0CjqI/AAAAAAAAHK0/cXL-GjA5VpAji0o6FJrLdGgMh5sSY3HyQCLcB/s1600/BNF-TL-17-05-2016.png>
<https://3.bp.blogspot.com/-CgOesos1ObA/Vzvje83iUoI/AAAAAAAAHK4/UbA9YcFh3NI9iDGPsrUV-Y0PkT3DwhngwCLcB/s1600/BNF-PATTERN-17-05-2016.png>
<https://3.bp.blogspot.com/-rTS856AZVcY/Vzvjgo0T9RI/AAAAAAAAHK8/lyP6bBIABZEb8DFc9jEYNvkl6zDe7RkmwCLcB/s1600/BNF-EW-17-05-2016.png>
--
Thanks & Regards,
Asis Ghosh
(asisghosh.blogspot.com)
NCFM-TA Certified
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