Irani negative on banking sector: Irani

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Irani negative on banking sector: Irani

Mehraboon Irani of Centrum Broking is negative on banking space as the sector seems to be a bit over owned.

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Excerpts from Your Stocks on CNBC-TV18 Watch the full show » ALSO READ See previous views by Mehraboon Irani See what other Experts & Brokerages are saying about Dena Bank See messages about Dena Bank Dena Bank BSE | NSE 10/02/12 Are Mutual Funds betting on Dena Bank?

Mehraboon Irani of Centrum Broking is negative on banking space as the sector seems to be a bit over owned.

Irani told CNBC-TV18, "I would negative if any as far as the banking space goes, is the fact that it has become a bit over owned. While I remain positive on the market in the shorter run, definitely banks could possibly go up a little bit more; we need to understand that as and when the market reacts sharply, I think the bank stocks could also suffer."

He further added, "As far as selection for trading pick goes, I don't have too many comments to offer except stating that fundamentals of Dena Bank were not all that interesting because its capital adequacy ratio was quite low. But with the government committing to pump in Rs 6 billion and Rs 7 billion in FY09-10 and FY10-11, I think that should improve the capital adequacy ratio which was a big negative for Dena Bank till recently. Secondly its CASA is quite high around 33-34% which should possibly help the bank take care of its margins. Its book value is near to the present price which is another positive. As and when the deposit rates goes for repricing, I think the bank could possibly improve its margins. At the present price there is nothing wrong with the script."