Sub-prime hit FIIs on selling spree

A clutch of foreign institutional investors (FIIs) "� led by sub-prime-hit Citigroup, Morgan Stanley and Bear Stearns "� sold a record Rs 1,881 crore worth of stocks through block deals during the first two weeks of March. This was the highest net sales in the last four months.

The trend indicates that the offshore funds may be monetising some of their investments in India to offset losses in the US sub-prime credit markets. 

WHO SOLD WHAT
FIIs	Million  shares
Citigroup Global-Mauritius
Ruchi Soya	2.50
Jet Airways	0.50
Goldman Sachs
Indian Overseas Bk	18.96
Punjab National Bk	15.26
Merrill Lynch Cap-Espana
Reliance Energy	3.40
Jai Corp	2.65
Morgan Stanley Mauritius
SRF	0.75
Strides Arcolab	0.39
BSMA
Sonata Software	2.10
Dabur Pharma	1.31

FIIs, which hold equity worth over $200 billion (Rs 8,00,000 crore) in Indian markets, have been net sellers this calendar. They sold a net of over Rs 34,000 crore in the cash markets this calendar.

Thanks to heavy FII selling, the Bombay Stock Exchange's Sensex declined by 10.34 per cent, or 1,818.20 points, to 15,760.52 so far in the current month.

According to data available from the BSE, Citigroup Global Markets, Credit Suisse Singapore, ABN Amro Bank, Barclays Capital Mauritius, BNP Paribas, BSMA, Goldman Sachs Investments and Morgan Stanley sold a combined 100.2 million equity shares amounting Rs 3,343 crore through block deals in the last 15 days.

FIIs also purchased 44 million equity shares worth of Rs 1,462 crore on the bourses in the same period, making the total net sales figure Rs 1,881 crore.

In January 2008, FIIs sold a net amount of Rs 681 crore equity shares when the Sensex fell by 13 per cent (2,638.28 points).

They offloaded Rs 204 crore equity shares in February when the Sensex fell marginally by 0.40 per cent (70 points). In December 2007, the index appreciated by 5 per cent (924 points) even though the foreign entities sold a net amount of Rs 1,252 crore equity shares via block deals.

The mid-cap and small-cap companies that have been battered by the big FIIs sales include Bajaj Hindustan, Bank of India, Ceat, Clutch Auto, Dabur Pharma, EID Parry, HEG, Hindustan Oil Explorations, Ipca Lab, Jai Corp, Saregama and Rain Commodities.

The total writedowns in the sub-prime mess in the US is estimated at $195 billion, which has seen most of the top Wall Street firms announcing write-offs due to their exposure to this segment.

The BSE mid-cap index fell by 14.28 per cent to 6,583.45, while the small-cap index fell by 16 per cent to 8,079.50 in the last two weeks.

Goldman Sachs Investment (Mauritius) sold 48.3 million equity shares worth Rs 1,655 crore via block deals.

The FIIs sold most of the banking stocks such as Indian Overseas Bank (19 million), Punjab National Bank (15 million) and Bank of India (8.6 million) after the sub-prime crisis hit the market. The FIIs also offloaded equity shares of HDIL (3.9 million) and EID Parry (1.7 million) in the current month.