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YES Bank share rises 18% in a week, here's why

Share of the private sector lender has risen over 18% in one week. However, the stock has fallen 68% since the beginning of the year

twitter-logoBusinessToday.In | November 16, 2020 | Updated 16:20 IST
YES Bank share rises 18% in a week, here's why
Last week, shares of the private sector lender traded higher with benchmarks Sensex and Nifty hitting fresh lifetime highs and backed by news of YES Bank's inclusion in the MSCI India Inde.

YES Bank shares have given 18% returns to its investors in the last one week. On Friday, shares of YES Bank gained for the seventh straight session to settle at  Rs 14.55, up by 0.14% on BSE.

Share of the private sector lender has risen over 18% in one week an 12% in one month. However, the stock has fallen 68% since the beginning of the year. YES Bank stock stands higher than 5, 20, and 50-day moving averages but lower than 100 and 200-day moving averages. Market capitalisation of the lender has risen in the last week to Rs 36,655 crore.

Last week, shares of the private sector lender traded higher with benchmarks Sensex and Nifty hitting fresh lifetime highs and backed by news of YES Bank's inclusion in the MSCI India Index.

As many as 12 companies, including Yes Bank, were added to the MSCI India Index, as per the latest MSCI Global Standard Index rejig announcement. This helped the stock gain momentum as inclusion in the MSCI Global Standard Index, widely used by international fund houses for benchmarking global equities portfolios, could attract fresh inflows of capital from overseas into the private lender. All changes in constituents for the MSCI global standard indices will be implemented at the close of November 30, 2020.

Further, the stock of the troubled lender also rose after CARE Ratings revised its rating on the lender's debt instruments. The rating agency revised the bank's infrastructure bonds rating to 'CARE BBB' from the previous 'CARE B'. Also, the brokerage revised YES Bank's outlook to 'Stable' from the previous "Under Credit watch with Developing Implications" on the above-mentioned instruments. It has also given 'CARE BB+' rating each on YES Bank's Upper Tier II Bonds and Perpetual Bonds (Basel II) from previous 'CARE D'.

In the second week of November, the lender's shares rose after it denied media allegations suggesting that the private sector lender was gearing up to sell its non-performing assets (NPAs) worth Rs 32,344 crore to asset reconstruction companies (ARCs) or other potential investors.

YES Bank, said in a clarification note said, "Certain news articles reported by media carries a reference to pricing of the said stressed portfolio and specific structure, which is speculative and has no bona fide reference. The Bank at this point is not part of such specific discussions."

It had added,"The Bank would like to clarify that, the Bank in its normal course of business explores options of selling NPAs to ARCs as it may deem necessary."

The stock price of the troubled private sector lender, was on a decline in the first week of November after it reported its June-Sept quarter earnings.

The lender posted a net profit of Rs 129.37 crore for the September quarter compared with a Rs 600.08-crore loss posted in the corresponding period last year. On a quarter-on-quarter (QoQ) basis, profit jumped 183% against Rs 45.44 crore in Q1 of the current fiscal. Asset quality improved amid a decline in provisions during the September quarter of the current fiscal.

Sequentially, YES Bank's net interest income (NII) rose 3.4% to Rs 1,973 crore in Q2 from Rs 1,908 crore in the previous quarter. On a yearly basis, NII was down by 9.7% from Rs 2,186 crore.

Meanwhile, BNP Paribas as well as Geojit Financial Services assigned a 'reduce' rating to the YES Bank stock, with a target price of Rs 61 apiece. In terms of shareholdings, domestic investors have also decreased holdings in the lender by 7.43% in Sept 20.

Further, there has been no bulk or block deal in the stock in the last 1 week. Shares of the private lender that have been trading in single digits this year hit a 52-week high of Rs 87.95 and a 52-week low of Rs 5.55.

Rakesh Jhunjhunwala earned Rs 2.71 crore per day with this stock for 100 sessions

Five factors that may affect market movement next week

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