After the announcement of privatization of banks by the government, new confidence in banking sector has shown. The effect of this is visible on the shares of PSU bank.
In this phase of the Corona transition, the position of the public sector bank has strengthened. Its effect is visible. The shares of PSU banks have steadily strengthened. Over the past few times, the shares of Bank of Maharashtra, Central Bank of India, Indian Bank Indian, Indian Overseas Bank and Bank of India have rallied more than 50 percent. In such a situation, the question is whether investors should take advantage of this rally and increase investment in their shares.
Confidence in banking sector due to government’s privatization announcement
The PSU bank index saw a 30 per cent fall last year, but PSU banks saw a sharp jump in the budget, with the government announcing its disinvestment decision and the intention of privatization of two public sector banks and re-capitalization of some banks.
Investors in most PSU banks have made purchases after the budget. After the budget, shares of UCO Bank have increased by 12 percent and Canara Bank shares by 20 percent. Bank of Maharashtra, Central Bank of India, Indian Bank Indian, Indian Overseas Bank and Bank of India have rallied more than 50 percent.
What should be the strategy for investing in PSU bank shares
Analysts say that the government’s privatization announcement has given new confidence to the banking sector. Because of this, investor confidence in the banking sector, especially the shares of PSU banks, has increased. Investors are feeling that this move of the government will improve the functioning of banks and their NPA will decline.
However, analysts have advised investors to be cautious in investing in PSU bank shares for the present. Investment advisors say that at this time investors should be a little careful about PSU banks. From here these shares can go down fast. Investors may incur losses.
Nidhi Malviya is fun loving girl. She writes at NoobFeeds about various topics related to Finance, Technology, Business etc.