Profit sales binge by mutual funds

Mutual funds have been booking profits even as the benchmark BSE Sensex has breached past the 7000 mark.

Net of purchases, mutual funds sold equity worth Rs 1,003 crore up to June 22, the highest net sale of equities in a single month in four years.

The last time they sold over Rs 1,000 crore worth of equities was in February 2001, at Rs 1,181 crore. In calendar 2005, for the first time, MFs turned net sellers in June.

"There is nothing abnormal about it. Domestic funds have always booked profits whenever foreign funds are buying," said a fund manager.

Mutual funds' selling in the current month began with the Sensex crossing 6900 on June 15, 2005. The funds sold Rs 14 crore worth equities and followed it up with a net sale of Rs 83 crore the very next day.

Thereafter, the selling stepped up to Rs 167 crore on June 17, Rs 228 crore on June 20 and Rs 305 crore on June 22.

According to the Securities and Exchange Board of India data, till June 22, mutual funds had purchased Rs 3,112 crore worth of shares and sold Rs 4,115 crore of shares.

Mutual funds purchased Rs 6,965 crore equity shares between January and May 2005. They lapped up Rs 3,322 crore of shares in May, Rs 1,457 crore shares in April 2005, Rs 1,603 crore shares in March Rs 103 crore shares in February and Rs 479 crore shares in January.

Foreign institutional investors, on the other hand, have been net buyers of Rs 2,997 crore in the current month, after being net seller of Rs 1,855 crore shares over April and May.