Telecom Stocks Outlook for the week (18-22.06.2012)
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RUPEEDESK: Telecom Stocks Outlook for the week (18-22.06.2012)
In the initial sessions next week, shares of telecommunications companies will track the broad market, which will take cues from the outcome of the Reserve Bank of India's mid-quarter policy review on Monday. The market expects the central bank to announce a 25-50 basis point cut in the repo rate at which the central bank lends to banks which is likely to lift investor sentiment.
In the latter half of the week, telecom stocks will eye the meet of the empowered
group of ministers on spectrum auction norms. The panel is likely to meet
Friday to finalise spectrum auction norms.
Telecom Regulatory Authority of India, in its recommendations dated Apr 23, had
proposed a reserve price of 36.22 bln rupees per 1 MHz of spectrum in
the 1800 MHz band at a pan-India level. The reserve price set by the regulator
has been termed as exorbitantly high by the industry. The regulator had also
given its recommendations on spectrum mortgage, spectrum liberalisation and
deferred payment.
Investor sentiment has been subdued in the sector due to the ongoing regulatory
uncertainties, We expect that a 25-50 bps cut on Monday by the RBI, may
lead to some buying in the stocks.
Shares of Idea Cellular are expected to be under slight selling pressure, as
most investors have created short positions. Bias for the stock is seen
positive if it trades above 82 rupees in the coming sessions.
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