Problem in banking space and specially ICICI BANK

Discussion in 'Ask A Query About Your Stock Picks And Portfolio' started by shekhar, Dec 21, 2015.

  1. shekhar

    shekhar New Member

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    Hiii all,
    What extent banking space hurt investor. Is it adviseable to hold these stock now. Is npa issue is gonna to solve or the result of Q3,Q4 will show the actual colour of baking space.. i am holding icici bank at 275 leveld suggeste what to do??
     
  2. Parin Gala

    Parin Gala A long term investor

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    Banking sector will revive once the interest rate cycle goes down. It will take some time.

    NPA for banks is an issue right now. However I guess most of the price correction has been done with the banks. I don't think there is too much downside left for the banking stocks. Now they will have a "time correction" where they will consolidate for a very long time maybe a year or so.

    ICICI Bank is one of the best of the lot. You have chosen a good stock. Be invested in it and have some patience. The banking sector will surely turn around once economic recovery takes place.
     
  3. darth

    darth Active Member

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    @shekar,

    Priceless wisdom from our 'knowledgeable and now senior member'

    But in a recent interview the very revered Rakesh Jhunjhunwala had this to say

    On market is underestimating the problem with private banks

    Rakesh Jhunjhunwala: It depends. In certain private banks, such as HDFC and Kotak, they do not have any problem, others I do not know. I do not think HDFC and Kotak will have problems.

    And on being asked If the bad news is yet to come :

    Rakesh Jhunjhunwala: The bad has come, the worst is yet to come.
     
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  4. kharb

    kharb Well-Known Member

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    Banking sector is a sector where RJ has never been right in recent time When new generation Banks like HDFC bank,Axis bank,Kotak bank and more recent Yes bank and Indusind Bank were minting money for a average investers RJ was sitting behind KVB old generation bank in last decade.In one of his interviews he agreed to this mistake.More over if some one is hinting ICICI bank exposure to JP associates, it is backed by hard assets like huge Cement capacities, power plants,yamuna express way along with huge land bank.
     
    Last edited: Dec 22, 2015
    Srouta Mukherjee likes this.
  5. Srouta Mukherjee

    Srouta Mukherjee Well-Known Member

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    Banking sector is backbone for entire economy. It is proxy for economy. When eco does well banking does well first. It is the first to show signs of eco growth. However, you have to be careful with stock selection. If you buy banks/ NBFC with high NPA there is big problem. Best solution is to buy blue chip banks and NBFC like HDFC Bank, Sundaram finance, Shriram Credit, Cholamandalam. Even CAPF is good stock with low NPA and good prospects for growth. Avoid PSU Banks because NPA are high and still not discovered in price of stocks.

    See also advice of Saurabh of Ambit:

    Avoid Banking & Finance stocks in view of NPA problems:


    We have been sellers of ICICI Bank for the best part of 11 months now and with everything that we are hearing about the Q3-Q4 banking result season, all the discussion around 130-150 new non-performing assets (NPAs) our concerned around banks is heightened. So, ICICI I would say symptomatic of the challenges facing the Indian banking sector where barring a two or three banks everybody else has rotten apples in their balance sheet. It is just a matter of time when they announce the rotten apples to the rest of the world. My hunch is we are moving to an end game in the banking sector where the rotten apple will get announced over the next 3-5 months and hence my gun-shy attitude with regards to the banking sector.


    https://www.moneycontrol.com/news/m...market-unlikely-to-go-anywhere39_4598401.html

    So be careful of rotton apples and buy also good safe stocks with quality.
     
  6. w4wealth

    w4wealth Well-Known Member

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    right sir, icici bank at reasonable valuation is not a bad idea. keep holding for next 10 years.loooooong term.
     
  7. Parin Gala

    Parin Gala A long term investor

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    Private sector banks are in much better shape than PSU banks. Worst is over for the pvt banking sector and as I told, they will now enter a "time correction"

    So in my opinion it is best to hold the pvt sector banks and buy on dips if you are a long term investor.
     
  8. shekhar

    shekhar New Member

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    Thank u all for ur valuable inputs
     
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