Ridham Desai about reconstruction scheme on Yes Bank:
Ridham Desai: However, the stock market is making corrections in D-street. On the other side, foreign institutional investors (FII) are facing some corrections of their stocks in the market. So, they decided to sell their portfolios that are not performing well in the market, said by Ridham Desai, head of Indian equity research and India equity strategist at Morgan Stanley.
However, the long term stocks are falling the most in the stock market. As the report shows, the big companies are facing sell-offs by the investors. In my opinion, it is the right time to buy or pick stocks in some particular companies.
He also said a lot of Domestic investors invest their amounts into the market. Even though the February results are strong and get more profits to the investors. But, now the situation is quite the opposite, the investors are thinking to make any changes in their allocation. However, the changes will reflect on pricing and the fundamental environment.
However, in my opinion, the stock market will make some corrections up to next month. Nobody now’s how the coronavirus spread can reach, as the number of cases reached 82 in India with 2 people died. We don’t know how to cure this virus and it is spreading all parts of the world from China.
On the other side, Yes Bank Crisis hitting the banking system in danger. However, the RBI’s reconstruction scheme is a welcoming step and policymakers did well. “I think the financing for NBFCs, which is very difficult and available for only top rates, will open up a bit and they will get much better liquidity conditions.
On the other side, the ICICI Bank and HDFC decided to buy the stakes of Yes Bank for Rs 1,000 crores each. While Axis Bank to buy 60 crore equity shares worth Rs 600 crore of Yes Bank. Whereas, Kotak Mahindra Bank decided to buy 50 crore shares of Yes Bank that worths almost Rs 500 crore. Whereas, Bandhan Bank decided to invest Rs 300 crore in Yes Bank under reconstruction scheme.
Besides, he also speaks about some sectors that are trading bullish in the stock market. But, I will not give any suggestions or advice to invest because of the present stock market trading bearishly.
So it’s possible that India’s growth rate didn’t perform well in the market and therefore, IT or global material stocks need to avoid for now until the dust settles especially on the Western hemisphere,” Desai added.
On Friday, both Sensex and Nifty reported a bullish trend in the stock market. The Sensex gained 1,325.34 points with a 4.04% increase and reached 34,103.48 level. While the Nifty gained 365.05 points with a 3.81% increase and reached 9,955.20 level.