dear everyone what does this mean, the India story is not yet totally gone?
193 cos across sectors see FIIs raising stake in Sept quarter.
K.S. Badri Narayanan
Chennai, Oct. 26 If you think that foreign institutional investors are pressing
only the 'sell' button in panic, think twice.
Although a majority of companies in the BSE-500 index companies saw a fall in
FII shareholding, at least every third stock saw a hike too. This was despite
the Securities and Exchange Board of India data showing FIIs have pulled out a
massive $13 billion from the Indian market so far in 2008.
Of the BSE-500, 463 companies have disclosed their shareholding pattern for the
September quarter. Of these, 193 have witnessed a hike in FII shareholding
while 259 companies saw a reduction.
Interestingly, the hike in stake has been across sectors and in companies
belonging to various index segments (large-, mid- & small-cap).
Some of the companies that saw a hike in FII holding are Vijaya Bank, Kirloskar
Oil Engine, India Cements, United Spirits, Bharat Bijlee, Berger Paints, Tata
Chemicals, Emco, Mahindra LifeSpace, EIH, Gateway Distriparks and HDIL.
Conversion of preferential allotment of warrants into equities during the
quarter, picking up stake through open offers, and churning of portfolios are
some of the reasons for the hike, according to brokers.
Tough year
BNP Paribas, in its Alpha Strategy report September 2008, said: "The market
likely to suffer the most from a withdrawal of liquidity is India. The economy
has a current account and investment deficit. Plugging this gap was not a
problem during the go-go years of 2003-07; however, 2008-09 will be far more
challenging in terms of access to funding and it is better to be a lender than
a borrower in such an environment.
"Policymakers urgently need to slash interest rates to prevent a sharp downturn
in growth, putting aside concerns about inflation."
Non-US shift
According to Mr Gul Teckchandani, Equity Strategist, FIIs had held $218 billion
worth equities in January, which have whittled down to $60 billion currently
due to value erosion (in stock prices) and a massive exit by them. But those
FIIs that preferred to stay have churned their portfolios, identifying value
picks that could have pushed up the stake in some of the companies.
Brokers also said that while some US-based financial institutions have been
offloading Indian equities, a large proportion of what they were offloading had
been picked up by non-US-based financial institutions resulting in overall
increase in FII stake in some of the companies.
Companies such as Ranbaxy, Dabur Pharma, Gujarat NRE Coke, Aptech, Hindustan
Oil Exploration, Development Corporation Bank, IDFC, Zee News, BASF, Mercator
Lines have shown reduction in FII holding.
http://www.thehindubusinessline.com/2008/10/27/stories/2008102751670100.htm
Sweet is the remembrance of troubles when you are in safety.
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