MFs reduce stake in engineering firms in Q3

Mutual funds have reduced their holdings in several engineering companies in the December 2007 quarter on a sequential basis, and that's despite the strong growth expected from players in this sector in Q3 FY08.

Analysts at domestic brokerage houses point out that several engineering stocks have risen sharply over the past few months and mutual funds may be keen to leverage this opportunity, and selectively book profits.

For instance, Siemens has risen 41 per cent over the past three months as compared to a 11 per cent rise in the Sensex. Larsen & Toubro had also appreciated 20 per cent during this period on the Street.

In the case of foreign institutional investors (FII), there is no definitive trend "" they have reduced their stake in some engineering companies in Q3 FY08 on a sequential basis, while in others they have hiked their stake.

Meanwhile, in the case of Siemens, mutual fund holding in this engineering company was 8.05 per cent at the end of the December 2007 quarter, as compared to 8.4 per cent at the end of the September 2007 quarter, according to data compiled from the BSE.

Foreign institutional investor holding in this company also declined, it was 7.53 per cent at the end of the December 2007 quarter, as compared to 8.35 per cent at the end of Q2 FY 08.

Also, in the case of Larsen & Toubro, mutual fund holding in this company was 15.43 per cent at the end of Q3 FY08, as compared to 15.77 per cent at the end of Q2 FY08.

In contrast, FII holding in L & T was 19.46 per cent at the end of the December 2007 quarter, as compared to 19.42 per cent at the end of Q2 FY08.

Mutual fund holding in Thermax had also declined 100 basis points on a sequential basis to 13.02 per cent at the end of December 2007 quarter.