 "SBI hits over three-month high, surges 37% from October lows")
Shares of State Bank of India (SBI) hit an over three-month high of Rs 335, up 2 per cent on the BSE on Monday. The stock of the state-owned bank was trading at its highest level since July 30, 2019.
In the past nine trading days, SBI has outperformed the market by gaining 9 per cent after the Supreme Court judgement on Essar Steel resolution came in favor of financial creditors on November 15, 2019. In comparison, the S&P BSE Sensex has gained 1 per cent during the same period.
With today’s gain, SBI has rallied 37 per cent from its recent low of Rs 244 on October 9, 2019. It touched an all-time high of Rs 374 on July 18, in the intra-day trade.
The recent Supreme Court ruling in Essar Steel case should pave the way for a lumpy recovery for banks in October-December quarter (Q3FY20), apart from some non- National Company Law Tribunal (NCLT) resolutions in the power sector, according to analysts.
“Q3 could be an eventful quarter with lumpy non-performing assets (NPA) recognitions (incl. DHFL) if not resolved, and also resolutions within NCLT (incl. long-hoped Essar Steel) and some power stress outside the NCLT,” as per Emkay Global Financial Services.
Analysts believe the worst in terms of asset quality is behind SBI. They expect meaningful reduction in NPA and strong earnings growth in FY2020-21.
Meanwhile, SBI announced the approval for divestment of up to 4 per cent in SBI Cards through an initial public offering (IPO). The country's second largest credit card provider is likely to file its draft red herring prospectus (DRHP) this week.
In the past nine trading days, SBI has outperformed the market by gaining 9 per cent after the Supreme Court judgement on Essar Steel resolution came in favor of financial creditors on November 15, 2019. In comparison, the S&P BSE Sensex has gained 1 per cent during the same period.
With today’s gain, SBI has rallied 37 per cent from its recent low of Rs 244 on October 9, 2019. It touched an all-time high of Rs 374 on July 18, in the intra-day trade.
The recent Supreme Court ruling in Essar Steel case should pave the way for a lumpy recovery for banks in October-December quarter (Q3FY20), apart from some non- National Company Law Tribunal (NCLT) resolutions in the power sector, according to analysts.
“Q3 could be an eventful quarter with lumpy non-performing assets (NPA) recognitions (incl. DHFL) if not resolved, and also resolutions within NCLT (incl. long-hoped Essar Steel) and some power stress outside the NCLT,” as per Emkay Global Financial Services.
Analysts believe the worst in terms of asset quality is behind SBI. They expect meaningful reduction in NPA and strong earnings growth in FY2020-21.
Meanwhile, SBI announced the approval for divestment of up to 4 per cent in SBI Cards through an initial public offering (IPO). The country's second largest credit card provider is likely to file its draft red herring prospectus (DRHP) this week.
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