Why Yes Bank Share Is Growing?

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The price of Yes Bank trades at Rs.12.25 for quite a few time. However, its share price has started rising from here, the three sessions touched the upper circuit and on the day of Muhurat trading, its price was Rs.14.70. The question in investors' minds is about the reasons that led to a spike in Yes Bank's share price and another important question is whether there is any fundamental change in the company or is it because of some news? As we are fundamental investors seeking long-term investment, we need to know about the company's fundamental effect. 

Firstly I will talk about the two reasons that led to a spike in Yes Banks's share price. But before going ahead, let's talk about the last few days when Yes Bank got its quarterly result, investors confidence was seen in the gain side as there were some positive things in the quarterly results. For instance, the company booked profit, made provisions, and had great asset quality. After this, the Yes bank share started performing well, but this investor confidence started to increase and its share price touched Rs.12.25. Yes Bank's share price traded at this price for a few days and a lot of trade has been witnessed because of its high liquidity but after this news emerged in the market which spiked the price of Yes Bank's share.

WHAT CARE RATINGS SAID?

This news comes from a rating agency- CARE Ratings, which depicts that the Debt ratings have been upgraded and this is very positive news for Yes Bank. Here, CARE Ratings has upgraded its ratings for different debt instruments. So let's talk of the different debt instruments on which CARE Ratings has made an upgrade. So from here, you can understand the news where a positive impact was seen for Yes Bank Here. I wish to tell the investors that CARE is not the sole rating agency in India but the other Rating agencies are CRISIL and ICRA. Here investors should see that CARE Ratings has upgraded the ratings. However, in the future, one should watch whether other rating agencies upgrade the bonds or not. Hence it is a bit risky to trade only based on this news but still, this news is surely a positive one that has increased Yes Bank's investors' confidence, buying of the share and price.


NIFTY 50

But an investor should look at how other agencies react to upgrading the debt instruments in the near future. Now I will talk about the second incident after which Yes Bank's share price rose high but before talking about the news, I will talk about a concept. You might know that Nifty 50 is quite important, many passive mutual funds make a portfolio like it by making an investment in the companies of Nifty 50. As a company enters Nifty 50, the passive mutual funds buy that one. Hence, if a company enters the index, the mutual funds mimic its performance as a passive investment. Here you might have understood the idea that once there is a change in the index the mutual funds' houses that track it continue buying the stock. Hence a capital inflow is seen through such passive investments.


MSCI NEWS

Readers, Like Nifty, there is an MSCI index, which is a benchmark and tracks India's performance MSCI- Morgan Stanley Capital International investment makes indexes for different countries by tracking the performance of stocks. Passive mutual funds all over the world track and mimic this index. This means that if any stock enters this index, then passive investment flows towards it. Here an interesting thing is that Yes Bank was included in the MSCI index. This inclusion in the MSCI index will be around November 30. All the world's fund houses tracking the index's performance will have to make an investment as they continue to mimic it. Hence, the passive investment will flow towards Yes Bank, and the amount will be known in the coming days. Also, the inclusion will be effective from November 30. By the end of the month, a virtuous cash flow will be seen, as a fact of this Yes Bank's share price has started to spike up from now itself.


CONCLUSION

So these were the two detailed news because of which Yes Bank's investors have seen positivity as the stock price spiked up. Now another question is regarding the fundamental change in Yes Bank after this two news, CARE Ratings and passive investment under the MSCI index are considered as positive news for YES bank, but fundamentals improve when assets quality, net interest margin, and retail portion of loan book are enhanced. The next quarter results of the bank need to be studied for the fundamental changes. In the last quarter, the positive news has been seen. I would suggest you do research if you have made an investment or thinking about it over here. Besides research, if you have made an investment, then this news is quite important for you to follow. You should know about the views of rating agencies and indexes in which the company is included where you have an investment stake or thinking to have one. Do your own fundamental research and then decide whether to make an investment or not. 




AbhishekRawat
ConentWriter
@DayLightMedia