New Delhi: The shares of State bank of India (SBI) and Bank of Baroda rises as the stocks upgraded by Goldman Sachs.
Goldman Sachs upgraded SBI and BOB to “buy” from “neutral” and Punjab National Bank to “neutral” from “sell” and said neglected PSUs are poised for a rally on emerging macroeconomic and political clarity.
In a note to the clients on Thursday, The Wall Street bank said, “We believe Indian banks, especially high-beta PSU banks, could be at the cusp of re-rating given improving macro and likely political clarity post the upcoming elections.”
It stated that macro recovery and potential for post-election reforms could lead to a gradual reduction in stressed loans.
Shares in SBI were up 1.7 per cent, Bank of Baroda was up 1.2 per cent and Punjab National Bank was up 1.5 per cent in early trade on Thursday.
The bank said that significant reforms under a stable government could lead to valuation re-rating in particular for PSU banks, that could provide a 66 per cent average upside in our view as stressed loans could fall sharply to 4.7 per cent from 10.5 per cent by FY18.
Bureau Report
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