MARKET EYE-BofA Merrill turns positive on Indian state-owned banks

Tue Jan 8, 2013 1:54pm IST

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* Bank of America Merrill Lynch upgraded State Bank of India
, Bank of Baroda, and Oriental Bank of Commerce
Ltd to 'buy'.
* The investment bank says upgrades come on the back of a
steepening bond yield curve in the anticipation of RBI rate
cuts, stronger-than-expected loan recoveries, and reduced
quality pressures.
* BofA Merrill also upgrades its price objectives for private
banks, retaining ICICI Bank Ltd as its top pick, and
HDFC Bank Ltd and Axis Bank Ltd as its
"preferred" names. All three banks have 'buy' ratings.
* "Private banks will likely continue to deliver structurally
superior earnings and RoEs, especially over the medium term,"
BofA Merrill says in a note dated Tuesday.

 (abhishek.vishnoi@thomsonreuters.com /;
abhishek.vishnoi.thomsonreuters.com@reuters.net)
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