 "FIIs sell cement, metals stocks in Sept quarter")
Metals and cement stocks have not been popular with foreign institutional investors (FIIs) in the September quarter. Foreign ownership in most metals and cement companies declined for the first time in many quarters. Interestingly, mutual funds (MFs) were buyers of the sector, even as FIIs cut their holdings. The only exception is Hindalco, where foreign ownership increased sharply to a 13-quarter high.
By the ownership pattern, the preferred picks of foreign investors happen to be Coal India, Jindal Steel and Power (JSPL), Sesa Sterlite, Hindalco and Tata Steel. Together, these stocks account for 80 per cent of the metals and mining portfolio of foreign investors. MFs also have a similar preference in the sector and are owners of Tata Steel, NMDC, Sesa Sterlite, Coal India and Hindalco. Tata Steel accounts for 27 per cent of the metals and mining portfolio of MFs.
Interestingly, domestic funds and FIIs have sharply diverging views on Hindalco. While FIIs have been buyers of the stock, domestic mutual funds have been sellers (230 bps). According to JPMorgan, there is a sharp divergence between domestic institutions and FIIs on Hindalco. With many of Hindalco's global peers falling sharply, domestic institutional investors are bearish on the stock. Domestic holding in Hindalco (MFs and insurance) fell sharply by 230 bps sequentially to 11.9 per cent.
During the quarter, FIIs also remained sellers of cement stocks. Foreign holding in cement companies declined across the board, except in Shree Cement, which saw FII ownership rise by 100 bps to 10.6 per cent. Foreign ownership dropped in India Cements (170 bps), Ramco Cements (150 bps), ACC (100 bps), Ambuja Cement (100 bps) and UltraTech Cement (60 bps). Domestic institutions remained buyers in the very same companies where FIIs turned sellers. With further selling in October, analysts believe the foreign ownership levels are not at elevated levels. However, the sell-off also shows cyclicals have run up and FIIs are booking profits.
By the ownership pattern, the preferred picks of foreign investors happen to be Coal India, Jindal Steel and Power (JSPL), Sesa Sterlite, Hindalco and Tata Steel. Together, these stocks account for 80 per cent of the metals and mining portfolio of foreign investors. MFs also have a similar preference in the sector and are owners of Tata Steel, NMDC, Sesa Sterlite, Coal India and Hindalco. Tata Steel accounts for 27 per cent of the metals and mining portfolio of MFs.
Interestingly, domestic funds and FIIs have sharply diverging views on Hindalco. While FIIs have been buyers of the stock, domestic mutual funds have been sellers (230 bps). According to JPMorgan, there is a sharp divergence between domestic institutions and FIIs on Hindalco. With many of Hindalco's global peers falling sharply, domestic institutional investors are bearish on the stock. Domestic holding in Hindalco (MFs and insurance) fell sharply by 230 bps sequentially to 11.9 per cent.
During the quarter, FIIs also remained sellers of cement stocks. Foreign holding in cement companies declined across the board, except in Shree Cement, which saw FII ownership rise by 100 bps to 10.6 per cent. Foreign ownership dropped in India Cements (170 bps), Ramco Cements (150 bps), ACC (100 bps), Ambuja Cement (100 bps) and UltraTech Cement (60 bps). Domestic institutions remained buyers in the very same companies where FIIs turned sellers. With further selling in October, analysts believe the foreign ownership levels are not at elevated levels. However, the sell-off also shows cyclicals have run up and FIIs are booking profits.