The Well Known Bear On India-Morgan Stanley (Which has a December 2008 target of
11000 for the Sensex), and Near Bankrupt Lehman Are Selling-Off India, as Money
moves to Resource Rich Nations of Middle East, Africa, Brazil, Russia, South
America and a now inflationary Japan.
The Industrial Demand leaders of China and India, are being punished for
Growing on imported Resources.
Leading foreign institutional investors (FIIs) such as Lehman Brothers,
Merrill Lynch and Morgan Stanley have sold substantial quantity of shares in the
past month on Indian bourses. “FIIs have been selling stocks left, right and
centre for one reason or other. They see reasons such as bearish Indian markets,
political uncertainty or possible deterioration in their own business,” said a
fund manager with a mutual fund.
Lehman Brothers has sold its holdings in Aztecsoft Ltd and Lakshmi Energy &
Foods. Just a few days back Standard & Poor’s, the international rating agency,
had lowered its ratings on a number of top investment banks in the US. These
included Lehman Brothers Inc, Merrill Lynch & Co Inc and Morgan Stanley.
Domestic problems
Merill Lynch reduced its exposure in the Indian markets by selling their
stocks in CHI Investments Ltd, Rohit-Ferro Tech Ltd, Indiabulls Securities Ltd,
Lloyd Electric & Engineering Ltd.
Morgan Stanley sold Webel-SL Energy Systems, Rohit Ferro Tech Ltd, Marico Ltd,
CCL Products (I) Ltd, Arvind Mills Ltd, Oswal Chemicals & Fertilizers Ltd,
Mahanagar Telephone Nigam Ltd, NIIT Technologies Ltd and Uniphos Enterprises
Ltd.
“These investment banks are going through problems such as write-downs in
their home country and it seems that they need the funds to sort out these
troubles and for which they are booking profits here,” said an analyst with a
rating agency.
BSMA Ltd (Bears Stearns), which collapsed in March, sold its shares of
Aztecsoft Ltd and Prajay Engineers Syndicate. Citigroup Global too sold shares
of Aztecsoft Ltd, Lakshmi Energy and Foods and SMS Pharmaceuticals.
Broking scenario
Many of the stocks, which these firms have sold, are fundamentally strong,
said analysts. But there are some such as Indiabulls Securities, where more than
95-lakh shares have been sold in May itself. “Since overall broking space
scenario is bad, these investment banks seem to be reducing their exposure in
these sectors,” said the Head of Research of a broking firm.
Deutsche International has sold Hilton Metal Forging Ltd and Kohinoor Foods
Ltd and Goldman Sachs Ltd has sold Dishman Pharmaceuticals & Chemicals Ltd,
Gwalior Chemical Industries Ltd and Prajay Engineers Syndicate.
“These institutions have now earned money in Indian markets and to an extent
are shifting their investments to Japan, which they feel is an attractive
option,” said Ms Anita Gandhi, Head of Institutional Business, Arihant Capital
Markets Ltd.
They are also investing in international markets such as Russia, Latin America
and few African countries, say analysts.
Unattractive
Mr Vinod Mehta, Managing Director, Almondz Global Securities, said that while
nothing decisive has happened to make Indian markets unattractive, the fact is
that since January, the markets are awaiting a positive signal and in the
absence of that there is choppiness in the markets.
In such scenarios, the investment decisions of these institutions are
determined by the market movement or sometimes even their own need, he added.
Nothing in this article is, or should be construed as, investment advice.
Rohit
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