Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Promoters, public, FIIs and MFs are the major equity stakeholders in a listed
corporate entity. Of the stakeholders, FIIs have been major investors in Indian
corporates as is evident from the accompanying chart (Exhibit 1) with their
holding in BSE 500 companies moving up from 10.9% in September 2009 to
12.6% in September 2011. The optimism displayed by FIIs in the Indian
corporate growth story arises from the fact that the Indian economy remained
relatively insulated from the global economic meltdown mostly on account of
the strong domestic consumption, thrust on infrastructure development and a
strong banking system. The resilience of the Indian economy reaffirmed the
faith of FII investors who have increased their holding in Indian companies.
After pulling out | 53,052 crore in CY08 during the global economic
meltdown, FIIs have invested | 85,368 crore in CY09 and | 1,34,294 crore in
CY10. In CY11, FII investments in equity have been volatile with a cumulative
net outflow of | 1709 crore till date. Q1CY11 was characterised by a preBudget sell-off with FIIs being net sellers to the tune of | 3100 crore while
Q2CY11 had seen positive inflows to the tune of | 5171 crore and Q3CY11 has
seen an outflow of | 2961 crore. FII holding has increased by 1.1% in Q3CY11
with the BSE 500 index correcting by 12.1% to 6386 level in September 2011
from 7265 levels in June 2011.
We have analysed the investment pattern of the stakeholders for BSE 500
companies and calculated the allocation (percentage) of their equity
investment portfolio in various business segments. We have reviewed the
sectoral allocation made by these players over the last nine quarters to
gauge their sectoral preferences. Banking, metals and construction have got
the maximum allocation from the various stakeholders. In Q3CY11, FIIs and
MFs have increased their exposure to the banking, power and auto sectors.
FIIs have reduced their exposure to the metals and real estate sector while
MFs have lowered their exposure to the oil & gas and real estate sector.
Most preferred sectors
• Banking
• Power
• Auto
Banking, undoubtedly, has been the most favoured
sector of various stakeholders. The allocation to the
banking sector by all stakeholders is still below its
earlier peak allocation before the global meltdown.
Stakeholders have shown their faith in the Indian
banking system and it still occupies a significant
chunk of stakeholder’s resources
Allocation to the power sector has seen an QoQ rise
from all stakeholders as the sector has seen pick up
in execution with 7500 MW of capacity added during
FY12 till date and further capacity addition of ~ 6500
MW is expected by March 2012. Cumulatively, this
would lead to total capacity addition of 14000 MW in
FY12, which would be all-time high annual capacity
addition for the sector.
The auto sector has been on the radar of all
stakeholders during Q2CY12 with all stakeholders
increasing their allocations to the sector. Though it is
an interest rate sensitive sector, it has performed
better than expectations despite multiple interest rate
hikes during the last fiscal. With the interest rate
cycle near its peak, the worst seems to be over for
the sector and the performance is likely to improve
further, going ahead
FII equity investments
Our analysis of the equity investment portfolio of FIIs reveals that banking
has been able to maintain its top allocation though the quantum has come
down from 13.2% in December 2008 to 10.6% in September 2011 after the
global meltdown in the second half of CY08. FIIs have shown faith in the
Indian consumption and infrastructure story as the FMCG and power sectors
have seen higher allocation during the period. The allocation to the scam
embroiled telecom sector declined for six consecutive quarters from a peak
allocation of 6.5% in Q3CY09 to 4.4% in Q1CY11. Though Q2CY11 had
shown a marginally higher allocation at 4.5%, the allocation has again
declined in Q3CY11 to 4.3%. The oil & gas sector has seen a QoQ decline in
allocation of 2.5%. Allocation to the power sector increased by 8% on a
QoQ basis in Q3CY11 to 8.5% and it displaced the metals sector to become
the second highest allocated sector. The metals sector allocation slid from
the second highest allocated sector to third highest allocated sector as
allocation declined by 11.2% from 8.8% in Q2CY11 to 7.8% in Q3CY11. The
IT sector, which has been most stable in terms of allocation, also saw a QoQ
decline of 6.6% to 3.8% in Q3CY11 while real estate, after the initial
euphoria, continues to see lower allocation.
For eight out of nine quarters, banking has maintained its
position as the top allocated sector. Metals, which had
risen to the top allocated sector in Q2CY10, slid to the No. 2
position from Q3CY10 to Q2CY11 and Q3CY11 saw power
sector rising to No. 2 position with allocation of 8.5% and
metal sector being relegated to No. 3 position with an
allocation of 7.8%. The banking sector had an allocation of
13.4% in Q3CY08. This has gradually come down to 10.6%
in Q3CY11
In Q4CY10, the power sector had seen a rise in allocation
from 6.5% to 8.2%. This was mainly due to investment
made in the PowerGrid FPO. In Q1CY11 and Q2CY11, the
allocation has marginally reduced to 8.1% and 7.9%
respectively. Q3CY11 has seen the allocation for the power
sector increase on a QoQ basis by 8% to 8.5%
The IT and pharma sectors have been the most stable in
terms of allocation
In the last nine quarters, FIIs have gradually reduced their
exposure to the real estate sector from a peak of 8.8% in
Q3CY09 to 5.5% in Q3CY11. The allocation to the sector is
still significantly higher compared to MFs, which have an
allocation of ~ 0.4% and public allocation of 2.7%
MF equity investments
Contrary to FIIs, MFs were unable to have a significant impact on the
market owing to liquidity concerns relating to limited inflows and
redemption pressure. MF holdings in BSE 500 companies have remained
within a narrow range of 3.1-3.6% for the last nine quarters.
Over the last nine quarters, banking, metals, construction & infrastructure
and oil & gas have had the highest allocation in the mutual fund portfolio.
Significant allocation has been made in regulated sectors like power and
oil & gas. Allocations to IT and FMCG and capital goods have remained
stable. On a QoQ basis, allocation to the power and telecom sectors has
increased in the range of ~ 18-24% while real estate and oil & gas have
seen a decline in the range of 7-16%. Exposure to the real estate sector,
which was 0.5% in Q2CY11, has further reduced to 0.4% inQ3CY11
Banking, construction & infrastructure have got the highest
allocation while real estate has got the lowest allocation
Regulated sectors like oil & gas and power have significant
allocation in the MF equity portfolio
Compared to FIIs, MFs have a significantly higher exposure to
the capital goods sector. Over the last nine quarters, FIIs have
maintained allocation to the capital good sector in the range of
5-6%, while FIIs have maintained their allocation in the range
of 2-2.5%
The IT and FMCG sector allocations have remained stable
The pharma sector allocation has remained in the range of 3-
4% during Q3CY10 to Q3CY11
Public equity investments
The Indian public investment pattern has been in line with institutional
investors like FIIs and MFs with regard to major portfolio allocation being
distributed between banking, power, metals and construction &
infrastructure. Regulated sectors like oil & gas have significant allocation.
Telecom, which earlier had higher allocation in the range of 7-8%, has
moderated to below 5%. Among major sectors, real estate has an allocation
of less than 3%. The top sectors, namely banks, power, metals and
construction & infrastructure account for ~ 35% of the allocation in
Q3CY11.
Banking, metals and construction constitute ~ 25% of
allocation
Allocation to the telecom sector has seen moderation
from 7-8% earlier to below 5%
Allocation for the real estate sector has been in the
range of 2.5-3%
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Promoters, public, FIIs and MFs are the major equity stakeholders in a listed
corporate entity. Of the stakeholders, FIIs have been major investors in Indian
corporates as is evident from the accompanying chart (Exhibit 1) with their
holding in BSE 500 companies moving up from 10.9% in September 2009 to
12.6% in September 2011. The optimism displayed by FIIs in the Indian
corporate growth story arises from the fact that the Indian economy remained
relatively insulated from the global economic meltdown mostly on account of
the strong domestic consumption, thrust on infrastructure development and a
strong banking system. The resilience of the Indian economy reaffirmed the
faith of FII investors who have increased their holding in Indian companies.
After pulling out | 53,052 crore in CY08 during the global economic
meltdown, FIIs have invested | 85,368 crore in CY09 and | 1,34,294 crore in
CY10. In CY11, FII investments in equity have been volatile with a cumulative
net outflow of | 1709 crore till date. Q1CY11 was characterised by a preBudget sell-off with FIIs being net sellers to the tune of | 3100 crore while
Q2CY11 had seen positive inflows to the tune of | 5171 crore and Q3CY11 has
seen an outflow of | 2961 crore. FII holding has increased by 1.1% in Q3CY11
with the BSE 500 index correcting by 12.1% to 6386 level in September 2011
from 7265 levels in June 2011.
We have analysed the investment pattern of the stakeholders for BSE 500
companies and calculated the allocation (percentage) of their equity
investment portfolio in various business segments. We have reviewed the
sectoral allocation made by these players over the last nine quarters to
gauge their sectoral preferences. Banking, metals and construction have got
the maximum allocation from the various stakeholders. In Q3CY11, FIIs and
MFs have increased their exposure to the banking, power and auto sectors.
FIIs have reduced their exposure to the metals and real estate sector while
MFs have lowered their exposure to the oil & gas and real estate sector.
Most preferred sectors
• Banking
• Power
• Auto
Banking, undoubtedly, has been the most favoured
sector of various stakeholders. The allocation to the
banking sector by all stakeholders is still below its
earlier peak allocation before the global meltdown.
Stakeholders have shown their faith in the Indian
banking system and it still occupies a significant
chunk of stakeholder’s resources
Allocation to the power sector has seen an QoQ rise
from all stakeholders as the sector has seen pick up
in execution with 7500 MW of capacity added during
FY12 till date and further capacity addition of ~ 6500
MW is expected by March 2012. Cumulatively, this
would lead to total capacity addition of 14000 MW in
FY12, which would be all-time high annual capacity
addition for the sector.
The auto sector has been on the radar of all
stakeholders during Q2CY12 with all stakeholders
increasing their allocations to the sector. Though it is
an interest rate sensitive sector, it has performed
better than expectations despite multiple interest rate
hikes during the last fiscal. With the interest rate
cycle near its peak, the worst seems to be over for
the sector and the performance is likely to improve
further, going ahead
FII equity investments
Our analysis of the equity investment portfolio of FIIs reveals that banking
has been able to maintain its top allocation though the quantum has come
down from 13.2% in December 2008 to 10.6% in September 2011 after the
global meltdown in the second half of CY08. FIIs have shown faith in the
Indian consumption and infrastructure story as the FMCG and power sectors
have seen higher allocation during the period. The allocation to the scam
embroiled telecom sector declined for six consecutive quarters from a peak
allocation of 6.5% in Q3CY09 to 4.4% in Q1CY11. Though Q2CY11 had
shown a marginally higher allocation at 4.5%, the allocation has again
declined in Q3CY11 to 4.3%. The oil & gas sector has seen a QoQ decline in
allocation of 2.5%. Allocation to the power sector increased by 8% on a
QoQ basis in Q3CY11 to 8.5% and it displaced the metals sector to become
the second highest allocated sector. The metals sector allocation slid from
the second highest allocated sector to third highest allocated sector as
allocation declined by 11.2% from 8.8% in Q2CY11 to 7.8% in Q3CY11. The
IT sector, which has been most stable in terms of allocation, also saw a QoQ
decline of 6.6% to 3.8% in Q3CY11 while real estate, after the initial
euphoria, continues to see lower allocation.
For eight out of nine quarters, banking has maintained its
position as the top allocated sector. Metals, which had
risen to the top allocated sector in Q2CY10, slid to the No. 2
position from Q3CY10 to Q2CY11 and Q3CY11 saw power
sector rising to No. 2 position with allocation of 8.5% and
metal sector being relegated to No. 3 position with an
allocation of 7.8%. The banking sector had an allocation of
13.4% in Q3CY08. This has gradually come down to 10.6%
in Q3CY11
In Q4CY10, the power sector had seen a rise in allocation
from 6.5% to 8.2%. This was mainly due to investment
made in the PowerGrid FPO. In Q1CY11 and Q2CY11, the
allocation has marginally reduced to 8.1% and 7.9%
respectively. Q3CY11 has seen the allocation for the power
sector increase on a QoQ basis by 8% to 8.5%
The IT and pharma sectors have been the most stable in
terms of allocation
In the last nine quarters, FIIs have gradually reduced their
exposure to the real estate sector from a peak of 8.8% in
Q3CY09 to 5.5% in Q3CY11. The allocation to the sector is
still significantly higher compared to MFs, which have an
allocation of ~ 0.4% and public allocation of 2.7%
MF equity investments
Contrary to FIIs, MFs were unable to have a significant impact on the
market owing to liquidity concerns relating to limited inflows and
redemption pressure. MF holdings in BSE 500 companies have remained
within a narrow range of 3.1-3.6% for the last nine quarters.
Over the last nine quarters, banking, metals, construction & infrastructure
and oil & gas have had the highest allocation in the mutual fund portfolio.
Significant allocation has been made in regulated sectors like power and
oil & gas. Allocations to IT and FMCG and capital goods have remained
stable. On a QoQ basis, allocation to the power and telecom sectors has
increased in the range of ~ 18-24% while real estate and oil & gas have
seen a decline in the range of 7-16%. Exposure to the real estate sector,
which was 0.5% in Q2CY11, has further reduced to 0.4% inQ3CY11
Banking, construction & infrastructure have got the highest
allocation while real estate has got the lowest allocation
Regulated sectors like oil & gas and power have significant
allocation in the MF equity portfolio
Compared to FIIs, MFs have a significantly higher exposure to
the capital goods sector. Over the last nine quarters, FIIs have
maintained allocation to the capital good sector in the range of
5-6%, while FIIs have maintained their allocation in the range
of 2-2.5%
The IT and FMCG sector allocations have remained stable
The pharma sector allocation has remained in the range of 3-
4% during Q3CY10 to Q3CY11
Public equity investments
The Indian public investment pattern has been in line with institutional
investors like FIIs and MFs with regard to major portfolio allocation being
distributed between banking, power, metals and construction &
infrastructure. Regulated sectors like oil & gas have significant allocation.
Telecom, which earlier had higher allocation in the range of 7-8%, has
moderated to below 5%. Among major sectors, real estate has an allocation
of less than 3%. The top sectors, namely banks, power, metals and
construction & infrastructure account for ~ 35% of the allocation in
Q3CY11.
Banking, metals and construction constitute ~ 25% of
allocation
Allocation to the telecom sector has seen moderation
from 7-8% earlier to below 5%
Allocation for the real estate sector has been in the
range of 2.5-3%
No comments:
Post a Comment