)
History may repeat itself, but past performance is rarely an indication for the future when it comes to equities. So there is no guarantee that institutional investors will behave in a manner similar to the way they did in the June quarter.
But having said that, the June quarter has been positive for equities, as foreign institutional investors have continued to increase their stakes in the BSE 200 companies.
On the other hand, individuals and mutual funds continue to pare their stakes. In the June quarter, FIIs bought net equities worth Rs 16,600 crore over April and June this year. Their share I in the overall BSE 200 companies rose from 22.2 per cent in March 2013 to 22.6 at the end of the June quarter.
So what did they buy? In sharp contrast to the carnage banking stocks have seen in August, in the quarter ending June, According to Kotak Institutional Equities, which has done a detailed research on the ownership pattern in the June quarter, FIIs bought in the banking, pharmaceuticals and utilities sectors.
The specific stocks that saw FII buying include ICICI Bank, DLF, Adani Ports, Purvankara Projects, Strides Arcolab and Oracle Financial Services. They sold Hindustan Unilever, TCS and Reliance Industries. Large stakes were also sold in United Spirits, HDIL and Suzlon Energy.
While several promoters reduced their stakes in to comply with the Securities and Exchange Board of India’s (SEBI) norms, by and large overall promoter shareholding (non-government) went up from 26.29 per cent at the end of the March quarter to 26.48 per cent in June. Foreign promoters hiked their stakes from 6.92 per cent in March to 7.32 per cent in June. Both individuals and mutual funds saw their shareholding come down marginally sequentially.
Mutual funds remained net sellers during the quarter and sold banking, consumer and pharmaceutical stocks. In terms of specific stocks, MFs bought Reliance Industries, HDFC and L&T, while they sold ICICI Bank, Hindustan Unilever and SBI.
Hindustan Unilever seems to have lost the confidence of fund managers across the board, not just domestic mutual funds, as slowing consumption does not justify its premium valuations. Both FIIs and mutual funds are also underweight on ITC.
Mutual funds were overweight on industrials, banking and pharmaceuticals stocks, underweight on consumer products and automobiles stocks. Domestic banks and institutions bought automobile and technology stocks.
Going by the previous quarter’s overweight positions, FIIs were overweight on the banking and technology sectors and underweight on energy, consumer products and industrials sectors. However, things look significantly different now with the currency falling to new levels and investors turning jittery.
Who bought what
Foreign Institutional Investors
Banking, consumer products and technology account for 58% of FII holdings in the June quarter
FIIs were overweight on banking and technology stocks, while they were underweight on energy, consumer products and industrials
In the June quarter, FIIs bought FII ICICI Bank, DLF, Adani Ports, Purvankara Projects, Strides Arcolab and Oracle Financial Services
Sold Hindustan Unilever, TCS and Reliance Industries. Large stakes were also sold in United Spirits, HDIL and Suzlon Energy.
Mutual Funds
40 stocks accounted for 67% of equity portfolio of mutual funds
MF sold banking, consumer and pharmaceutical stocks
MFs bought Reliance Industries, HDFC and L&T
Sold ICICI Bank, Hindustan Unilever and SBI
