- Summary:
- Yes Bank share price spiked by nearly 10%, riding on speculation over a majority stake takeover by Japan's second-largest commercial bank.
Yes Bank share price rose to three-month highs of Rs 19.44 on Tuesday, propelled by news of an imminent majority share takeover by Japan’s SMBC Bank. The stock was up by nearly 10% at some point during the session, but the momentum cooled down after Yes Bank (NSE: YESBANK) clarified that negotiations with SMBC were yet to reach a deal.
A deal could bring to an end one of the most protracted negotiations in India’s banking sector, calming the nerves of investors. Multiple news outlets in India reported on Tuesday that Reserve Bank of India (RBI) has given Japan’s Sumitomo Mitsui Banking Corporation (SMBC) a verbal approval to proceed with the deal.
The central bank has ben dragging its feet in approving majority ownership of the bank by a foreign entity, and is yet to confirm or deny the latest speculations. SMBC has also been negotiating with government-owned State Bank of India (SBI), which holds a 24% stake of Yes Bank.
While SBI’s board is yet to approve the deal, the odds of a refusal are substantially low if RBI formally okays the transaction. Meanwhile, the underlying momentum on Yes Bank share price is still bearish-leaning, having lost 8.5% of its value year-to date and down by 1.8% in the last five sessions.
Yes Bank Share Price Prediction
The momentum on Yes Bank share price favours it tpo stay above the pivot mark at Rs 17.85. The first hurdle will likely be at Rs 18.10. However, a stronger momentum will breach that barrier and test the second one at Rs 18.30.
On the other hand, the momentum could shift to the downside if the price breaks below Rs 17.85. If that happens, the first support will likely be at Rs 17.70. Braking below that level will invalidate the upside narrative. Also, a stronger downward momentum could take the action lower and test Rs 17.50.
