Yes Bank - Beggar and Ferrari

protrade

Active Member
#1
You know the story of the beggar who won a lottery? He immediately and got himself a Ferrari. When the salesman asked him what he would do in the Ferrari, the beggar told him, why, he would go begging in his new Ferrari, of course!

The market seems to be treating YesBank, in very much the same way. There have been many things wrong with Yes Bank, and the shares have been punished. And punished big time. Promoters were fighting. CMD was asked to step down by the RBI. Many directors quit. Many senior insiders quit when an outsider was appointed as CMD. And worries about divergence persisted.

Now, every single one of these negatives has been eliminated. Every single one. The only things that persist today, are the exposure to NBFC segment, particularly IL&FS and Dewan Housing. While IL&FS has been fully factored in long back, the impact of DHFL is still unknown. But chances are DHFL will not be an NPA immediately. And RBI's recent rate cut should help liquidity in NBFC space, preventing further contagion.

Yesterday's announcement from RBI about divergence being NIL, is probably the best news the market has seen from ANY bank, in last several years.

And predictably, the stock has rocketed at the open. However, this move isn't done yet. I believe when all of this is digested, Yes Bank will make a strong move up - closer to Rs 300.
 

primitivetrader

Well-Known Member
#2
You know the story of the beggar who won a lottery? He immediately and got himself a Ferrari. When the salesman asked him what he would do in the Ferrari, the beggar told him, why, he would go begging in his new Ferrari, of course!

The market seems to be treating YesBank, in very much the same way. There have been many things wrong with Yes Bank, and the shares have been punished. And punished big time. Promoters were fighting. CMD was asked to step down by the RBI. Many directors quit. Many senior insiders quit when an outsider was appointed as CMD. And worries about divergence persisted.

Now, every single one of these negatives has been eliminated. Every single one. The only things that persist today, are the exposure to NBFC segment, particularly IL&FS and Dewan Housing. While IL&FS has been fully factored in long back, the impact of DHFL is still unknown. But chances are DHFL will not be an NPA immediately. And RBI's recent rate cut should help liquidity in NBFC space, preventing further contagion.

Yesterday's announcement from RBI about divergence being NIL, is probably the best news the market has seen from ANY bank, in last several years.

And predictably, the stock has rocketed at the open. However, this move isn't done yet. I believe when all of this is digested, Yes Bank will make a strong move up - closer to Rs 300.
very interesting take, thanks. i was not aware of the above news in the counter. i dont trade long term or for investment but keep track of the things on the basis of ta. for me there lis ots of downside still pending in this counter as in nov'18 it has broken a very old bullish trend line (2009). current upmove upto 220-230 was restest of this broken trend line. for me coming tgts long term basis is some where around 100 in yesbank
 

protrade

Active Member
#4
The point about bad news in the stock market, is that once the bad news is factored in, it is over, finished. It doesnt have an impact after that.

Secondly, RBI saying Dispersion is NIL is very different from the company itself saying something, or Motilal Oswal or someone else feeling anything.

Thirdly, companies can turn the corner. Doesn't mean if something is messed up, it will forever be messed up.
 

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