UPDATE 1-RESEARCH ALERT-Nomura starts five banks

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Nomura Securities started Komercni Banka , OTP Bank and Raiffeisen International with "buy" ratings, saying it is positive on these stocks, despite recent sharp share price rises.

It also initiated Pekao and PKO with "reduce" ratings and said the stocks are overvalued in spite of their strong domestic franchises, among other reasons.

The brokerage said the best growth opportunities are in the less developed markets like Russia and Ukraine, adding that OTP and Raiffeisen stand to benefit the most among the five banks.

Nomura said Komercni, Pekao and PKO boast of strong domestic franchises, good distribution networks and broad product ranges to take advantage of strong economic conditions.

The brokerage said markets most vulnerable to a decline in profitability are Hungary and, to a lesser extent, Poland but added that margins and profitability are likely to be more resilient in the Commonwealth of Independent States (CIS) region. (Reporting by Debojyoti Ghosh in Bangalore)

Keywords: KOMERCNI/RESEARCH NOMURA

[Reuters/Finance.cz]