Market Ownership Trends Dec ’10: Institutional ownership dips: Anand Rathi

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Market Ownership Trends
Dec ’10: Institutional ownership dips
All three types of institutions were net sellers in the Dec ’10
quarter. Overall ownership was 26.6% (FIIs: 17.9%; insurance:
5.1%; MFs: 3.6%) as against 27.2% in Sep ’10 and 25.5% in
Dec ’09. FII ownership dipped 13bps and DII ownership 46bps.

 FIIs reduce Overweight position in Financials. In the past
quarter, FIIs reduced their Overweight (OW) position in
Financials by 129bps to 716bps at present. Their OW stance on
IT Services has increased 60bps and is now at 374bps. On the
other hand, FIIs were Underweight (UW) in Energy, Materials,
Industrials, Staples and Utilities, among others.

 Little change in domestic institutions’ sector positioning. In
the Dec ’10 quarter, MFs and Insurance did not meaningfully
change their sector positioning. Both are OW on Staples and
Utilities, and UW on Energy and IT Services. They have a
contrary view and positioning on Discretionary, Financials,
Healthcare, Industrials and Materials.

 Key takeaways. In the Dec ’10 quarter, FII ownership in the free
float was 40.67% compared with 40% in Sep ’10 and 38.7% in
Dec ’09. FII share declining in the overall market cap and
increasing in the free float market cap in the quarter ending
Dec ’10 (over previous quarter) is mainly on account of change in
the constituents of the BSE500. The strong divergence in the FII
and DII ownership pattern continued in Dec ’10. Energy is the
only sector where all institutions are negative.