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We estimate foreign institutional investors' (FII) equity holdings in India at US$219bn as of 31
March 2011, representing 15.1% of the market. This is up from 14.2% a year earlier but down
from 15.3% at the end of 2010. The qoq ownership decline reflects FII net sales of
US$657mn in the March quarter
Key sector weightings versus BSE 500 weighting
Key sector overweights for FIIs at the end of the March 2011 quarter were financials, telecom
services, and IT, while key sector underweights were utilities, consumer staples, and
industrials. For domestic institutional investors (DIIs), key sector overweights at the end of the
March 2011 quarter were utilities, consumer staples and industrials, while financials and IT
were the key underweight sectors.
FIIs reduced their banks exposure in the March quarter
FIIs ownership in the banks declined to 26.6% in March from 27.5% in December, but was
higher than the year-earlier level of 25.9%. We believe SBI and HDFC Bank were among the
top five estimated net sales by FIIs in the March quarter. That said, banks continue to be a
significant overweight in FII portfolios with a ~400 bp overweight as of 31 March 2011.
FII ownership in Bharat Heavy Electricals (BHEL IN) at multi-year lows
FII ownership in BHEL declined to 12.9% from 14% in the March quarter, and is down
significantly from its 23% peak in December 2004. Concerns regarding declining order
inflows, competitive pressures and state electricity board losses are well recognized now; as
such, BHEL (rated Buy by RBS analyst Vinod Chari) could be a contrarian buy now.
Coal India was the most sought after stock by FIIs in the March quarter
FIIs increased their stake by almost 10% in Coal India during the quarter, and Coal India was
a significant overweight (73% on a relative basis) in FII portfolios at the end of March. Coal
India has since outperformed the BSE500 by 14%, which suggests that most of the positives
are priced in the stock. Coal India is rated Sell by RBS analyst Rahul Jain.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
We estimate foreign institutional investors' (FII) equity holdings in India at US$219bn as of 31
March 2011, representing 15.1% of the market. This is up from 14.2% a year earlier but down
from 15.3% at the end of 2010. The qoq ownership decline reflects FII net sales of
US$657mn in the March quarter
Key sector weightings versus BSE 500 weighting
Key sector overweights for FIIs at the end of the March 2011 quarter were financials, telecom
services, and IT, while key sector underweights were utilities, consumer staples, and
industrials. For domestic institutional investors (DIIs), key sector overweights at the end of the
March 2011 quarter were utilities, consumer staples and industrials, while financials and IT
were the key underweight sectors.
FIIs reduced their banks exposure in the March quarter
FIIs ownership in the banks declined to 26.6% in March from 27.5% in December, but was
higher than the year-earlier level of 25.9%. We believe SBI and HDFC Bank were among the
top five estimated net sales by FIIs in the March quarter. That said, banks continue to be a
significant overweight in FII portfolios with a ~400 bp overweight as of 31 March 2011.
FII ownership in Bharat Heavy Electricals (BHEL IN) at multi-year lows
FII ownership in BHEL declined to 12.9% from 14% in the March quarter, and is down
significantly from its 23% peak in December 2004. Concerns regarding declining order
inflows, competitive pressures and state electricity board losses are well recognized now; as
such, BHEL (rated Buy by RBS analyst Vinod Chari) could be a contrarian buy now.
Coal India was the most sought after stock by FIIs in the March quarter
FIIs increased their stake by almost 10% in Coal India during the quarter, and Coal India was
a significant overweight (73% on a relative basis) in FII portfolios at the end of March. Coal
India has since outperformed the BSE500 by 14%, which suggests that most of the positives
are priced in the stock. Coal India is rated Sell by RBS analyst Rahul Jain.
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