Bank stocks in the past 2 weeks have lost anywhere between 25 % (yes bank) to 7 % (SBI) .
Private banks like ICICI (down 15%) and HDFC bank (down 9%) .
The bank Nifty has lost substantially in July - down from 11500 to 10500.- (around 10%).
The bank Nifty also went down last month in June by around 7% (12400 to 10500).
Most of the Banks are trading around 15 % to 35 % below their peak prices recorded in the last 2 months.
Yes there is going to be a lot of pain - and all the Banks are likely to loose further from these levels.
But the level to which a Bank stock would depend on son many factors including the FII holding , apart from its own performance.
Banks would necessarily have to face the prospect of higher NPA , higher interest cost for deposits and general liquidity squeeze.
In these circumstances - I personally think that one is better off buying the Bank Nifty (equivalent to the value of divested amount) and selling the existing Bank stocks from the portfolio. By this the surplus cash of around 75% ( 11% margin + say another 9% for MoM losses) may be placed in deposit Account or debt fund to earn some definite income .
If the Banking stocks recover then selective buying can be made in individual banking stock (by selling the bank nifty slowly) after actual results for the 3rd quarter is published by the banks .
Yeah , sounds too much of work Right ?? -
I just might as well hold the existing bank stocks in the portfolio and keep wondering as to how come SBI and BOB have lost less than 5% in the last 15 days and the Private banks stocks have depreciated anywhere from 11% to 25%.
I might as well rationalise and keep saying to myself that my core portfolio is for long term and so not really worried about short-term continuous fall in stock prices.
Who am I kidding ??
Private banks like ICICI (down 15%) and HDFC bank (down 9%) .
The bank Nifty has lost substantially in July - down from 11500 to 10500.- (around 10%).
The bank Nifty also went down last month in June by around 7% (12400 to 10500).
Most of the Banks are trading around 15 % to 35 % below their peak prices recorded in the last 2 months.
Yes there is going to be a lot of pain - and all the Banks are likely to loose further from these levels.
But the level to which a Bank stock would depend on son many factors including the FII holding , apart from its own performance.
Banks would necessarily have to face the prospect of higher NPA , higher interest cost for deposits and general liquidity squeeze.
In these circumstances - I personally think that one is better off buying the Bank Nifty (equivalent to the value of divested amount) and selling the existing Bank stocks from the portfolio. By this the surplus cash of around 75% ( 11% margin + say another 9% for MoM losses) may be placed in deposit Account or debt fund to earn some definite income .
If the Banking stocks recover then selective buying can be made in individual banking stock (by selling the bank nifty slowly) after actual results for the 3rd quarter is published by the banks .
Yeah , sounds too much of work Right ?? -
I just might as well hold the existing bank stocks in the portfolio and keep wondering as to how come SBI and BOB have lost less than 5% in the last 15 days and the Private banks stocks have depreciated anywhere from 11% to 25%.
I might as well rationalise and keep saying to myself that my core portfolio is for long term and so not really worried about short-term continuous fall in stock prices.
Who am I kidding ??
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