Stock market today: Following an upgrade by the global rating agency Moody's, Yes Bank's share price witnessed a strong uptrend in early morning deals. Yes Bank shares opened with an upside gap at ₹26.10 apiece on the NSE and touched an intraday high of ₹27.09 per share within a few minutes of the opening bell.
On why are Yes Bank shares rising today, stock market experts said that the global rating agency Moody's upgraded its outlook on the private lender from ‘stable’ to positive, which triggered strong buying in the early morning session.
Speaking on the immediate trigger for soaring Yes Bank share price, Avinash Gorakshkar, Head of Research at Profitmart Securities, said, “Global rating agency Moody's has upgraded its outlook on Yes Bank from stable to positive. This triggered buying Yes Bank shares in the early morning session.”
On what this outlook change means for Yes Bank, Gorakshkar said, “This change in outlook means global brokerage's expectations of a potential rise in the depositors' base of the private lender. There's also a strong anticipation for significant improvement in the asset quality of Yes Bank, which could lead to a healthier financial position. However, one should not forget that Moody's is still not confident about the profitability of Yes Bank as the brokerage has maintained that Yes Bank's profitability will remain weak against its Indian peers.”
The Profitmart Securities expert said the recent buzz about Yes Bank's $5 billion stake sale could also be a reason for skyrocketing shares during morning deals but the First Abu Dhabi Bank has refuted the stake buying news. He advised investors to look at what Moody's has said on Yes Bank as there has been no official announcement from the private lender or other parties regarding stake sale news.
Asked about the top 5 things said by the global brokerage on Yes Bank, which the Indian stock market investors must look at, Avinash Gorakshkar said, "Change of outlook, improvement in Yes Bank's asset quality and capitalization, improvement in pre-provisioning profits to total assets, reduction in operating expenses by meeting the RBI's PSL rules through new lending, and weak profitability against the Indian peers are the top 5 takeaways from the Moody's outlook on Yes Bank."
With a positive outlook for Yes Bank shares, Sumeet Bagadia, Executive Director at Choice Broking, stated, “Yes Bank shares are currently facing a challenge at the ₹28 per share level. However, once this hurdle is crossed, Yes Bank's share price could potentially reach the ₹32 per share mark. Therefore, Yes Bank shareholders can maintain their position, with a stop loss at ₹24.50 per share, to benefit from the potential growth.”
When it comes to fresh investors and Yes Bank stocks, Bagadia had a clear strategy in mind. He advised, “Fresh investors can consider buying and holding Yes Bank stocks, with a focus on the buy-on-dips strategy. This means buying more shares when the price dips, until the stock sustains above ₹24.50. With this strategy, they can aim for the ₹28 and ₹32 per share targets.”
Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and individual circumstances may vary.
