Barclays downgrades Bank of Baroda, Bank of India, PNB shares to 'underweight'

Aug 30 2013, 12:11 IST
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SummaryResearch house downgrades select PSU banks and finance companies citing slowing economy.

Barclays downgrades select state-owned banks and finance companies, citing a slowing economy and unpredictable monetary policy responses.

The brokerage expects asset quality to remain problematic as the stress in economy is seen extending beyond the SME and mid-corporate segments to the large corporate segment.

"We are negative on PSU stocks on concerns that they not only have stressed exposures, but are likely to be constrained in taking risk mitigation actions," Barclays said in a report on Thursday.

The research house downgrades Bank of Baroda, Bank of India and Punjab National Bank to "underweight" from "equal weight".

Bank of Baroda gains 3 per cent, while Bank of India is up 4 percent and Punjab National Bank rises 2 per cent.

Among non-banking finance companies, LIC Housing Finance Ltd was cut to "equal weight" from "overweight", while Rural Electrification Corporation Ltd was downgraded to "underweight" from "equal weight".

LIC Housing is up 2.1 per cent, while REC is down 1.1 per cent.

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