Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
In the backdrop of weak market sentiments, institutional flows for the second quarter came in at a tepid USD1.4bn, the weakest in last 10 quarters. Overall ownership holdings for BSE-100 remain largely unchanged with FIIs owning about 17% of BSE-100 and DIIs owning about 12%. From a portfolio perspective, FII ownership levels have hardly changed despite a 20% sell off in markets in the last 12 months. Our analysis also suggests that the street may be underreporting the extent of DII ownership given that some companies report holdings by pvt insurance players under the “Corporate Bodies” segment. On a sectoral basis, both FIIs and DIIs have increased their relative weights within the pharma sector while scaling back on cyclicals. We estimate FIIs to have added most to their positions in M&M and ITC while slashing in SBI and Axis Bank.
Domestic ownership: Street seems to be understating
As per the current reported data, DIIs hold about 12% in BSE-100. However, we observe
that it may be slightly understated given that some companies report the stake of
private insurance companies within “corporate bodies” which is not a part of the
institutional segment. Though we cannot pin down the precise amount of stake, our
calculations for the Sensex universe suggests that Street may be understating the
ownership of DIIs by at least 60bps.
FII ownership: Largely stable despite sell-off
Interestingly, between Q2FY11 and Q2FY12, BSE-100 index shed about 20% even as FII
ownership levels remained largely flattish (a trivial decline of ~50bps only) in contrast
to the trend in FY09 crisis period. We believe that the general risk-off environment has
not yet induced selling across the board and that there remains a continued appetite
for bottom up ideas. Interestingly, with the recent underperformance of India, FIIs have
been deviating from the benchmark BSE-100 index in search of higher returns.
FIIs, DIIs up relative weightage in pharma, but scale down cyclicals
Within both FII and DII portfolios, there was an increase in the share of pharma sector
relative to the benchmark BSE-100. FIIs have increased their underweight on global
cyclicals (materials and energy) while positioning themsel ves 300bps below the
benchmark within in that segment. DIIs have trimmed their relative position within
domestic cyclicals. On an overall basis, FIIs are overweight on BFSI and software while
DIIs are overweight on consumer and cap goods sector.
FIIs shed SBI, Axis, but stock up M&M, ITC
On an average price basis, we estimate that the highest FII selling in Q2FY12 took place
within BFSI followed by materials. The largest buying was seen in consumers and auto.
We estimate that SBI and Axis Bank within BFSI and Tata Steel and Hindalco within
materials sector were the most sold while M&M was among the most bought.
FII keep ownership levels intact despite sell-off, but scout for new ideas
Interestingly, between Q2FY11 and Q2FY12, the BSE-100 index shed about 20% while the FII
ownership levels remained largely flattish (a decline of ~50bps only). This trend is in sharp
contrast to the FY08-09 crisis period when FII ownership levels fell, aping the slide in BSE-100
index. Although data for subsequent quarters becomes imperative in assessing the overall
trend, it implies that the general risk-off environment has not yet induced selling across the
board and that there has been a continued appetite for bottom up ideas. Interestingly, with
the recent underperformance of India, FIIs have been deviating from the benchmark BSE-100
index in search of higher returns. During CY10, India was largely an outperformer hence FII
portfolios could follow the benchmark BSE-100 closely. However , during the recent sell-off
(when India was an underperformer), FIIs have been deviating from the benchmark index in
search of outperformance.
FIIs hold more in BFSI, software, auto; DIIs active in cap goods
Divergences in inter-sectoral holdings continue. For example, FIIs own about ~29.0% of the
BFSI sector vis-à-vis DIIs which hold just ~15.0%. Software is another sector where there is a
significant divergence—FIIs hold 19.4% vis-à-vis DIIs which hold ~8.1%. Auto, telecom and
real estate are some other sectors where ownership remains s kewed in favour of FIIs vs DIIs.
However, for capital goods, the reverse is true—DIIs hold a significantly larger chunk
(~21.3%) compared to FIIs (~13.9%).
DIIs hike FMCG share, overweight on cap goods
Sequentially, relative to the BSE-100, DIIs increased their sectoral exposure to the defensive
basket especially the pharma sector with a relative overweight of ~50bps while the relative
share of the domestic cyclicals declined. One may note that the reported DII portfolio does
not include pri vate insurance players in some cases and thus the extent of actual sectoral
overweight or underweight can differ. However, in its current form, key sectoral overweights
are consumer, capital goods and energy.
FIIs shed SBI, Axis, add M&M, ITC
On an average price basis, we estimate that the highest FII selling within the BSE-100
universe for Q2FY12 took place in BFSI followed by materials while the largest buying was
seen in autos and consumers. According to our estimates, within the BFSI space, SBI and Axis
Bank emerged as the most sold. This marks the second consecutive quarter wherein FIIs shed
their positions significantly within these stocks. Top buys meanwhile were key stocks such as
M&M, ITC and ONGC.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
In the backdrop of weak market sentiments, institutional flows for the second quarter came in at a tepid USD1.4bn, the weakest in last 10 quarters. Overall ownership holdings for BSE-100 remain largely unchanged with FIIs owning about 17% of BSE-100 and DIIs owning about 12%. From a portfolio perspective, FII ownership levels have hardly changed despite a 20% sell off in markets in the last 12 months. Our analysis also suggests that the street may be underreporting the extent of DII ownership given that some companies report holdings by pvt insurance players under the “Corporate Bodies” segment. On a sectoral basis, both FIIs and DIIs have increased their relative weights within the pharma sector while scaling back on cyclicals. We estimate FIIs to have added most to their positions in M&M and ITC while slashing in SBI and Axis Bank.
Domestic ownership: Street seems to be understating
As per the current reported data, DIIs hold about 12% in BSE-100. However, we observe
that it may be slightly understated given that some companies report the stake of
private insurance companies within “corporate bodies” which is not a part of the
institutional segment. Though we cannot pin down the precise amount of stake, our
calculations for the Sensex universe suggests that Street may be understating the
ownership of DIIs by at least 60bps.
FII ownership: Largely stable despite sell-off
Interestingly, between Q2FY11 and Q2FY12, BSE-100 index shed about 20% even as FII
ownership levels remained largely flattish (a trivial decline of ~50bps only) in contrast
to the trend in FY09 crisis period. We believe that the general risk-off environment has
not yet induced selling across the board and that there remains a continued appetite
for bottom up ideas. Interestingly, with the recent underperformance of India, FIIs have
been deviating from the benchmark BSE-100 index in search of higher returns.
FIIs, DIIs up relative weightage in pharma, but scale down cyclicals
Within both FII and DII portfolios, there was an increase in the share of pharma sector
relative to the benchmark BSE-100. FIIs have increased their underweight on global
cyclicals (materials and energy) while positioning themsel ves 300bps below the
benchmark within in that segment. DIIs have trimmed their relative position within
domestic cyclicals. On an overall basis, FIIs are overweight on BFSI and software while
DIIs are overweight on consumer and cap goods sector.
FIIs shed SBI, Axis, but stock up M&M, ITC
On an average price basis, we estimate that the highest FII selling in Q2FY12 took place
within BFSI followed by materials. The largest buying was seen in consumers and auto.
We estimate that SBI and Axis Bank within BFSI and Tata Steel and Hindalco within
materials sector were the most sold while M&M was among the most bought.
DII ownership: Street may be understating
As per the latest filing on Q2FY12 ownership data, FIIs hold about 17% in BSE-100 universe
and DIIs about 12%, implying an almost 500bps ownership differ ence between two key
institutional segments. However, our analysis suggests that the difference may not be that
high to begin with as many companies classify the ownership of private insurance players
under the “corporate bodies” which is not a part of the institutional segment. For such
companies , the ownership classification of “DIIs” consists only of mutual funds and state
owned insurance players. One immediate implication is the underreporting of the insurance
stake and by extension, the entire DII stake by the analyst community. We cannot precisely
measure the actual stake even though our calculations for the Sensex universe suggests that
we may be understating the ownership of DIIs by at least 60bps.
Meanwhile, after a not-so-dismal Q1FY12 when FIIs turned net buyers to the tune of
USD1.2bn, Q2FY12 was a weaker quarter with net FII outflows of USD0.7bn. Cummulative FII
flows for H1FY12 now amount to USD0.5bn in sharp contrast to a net inflow of USD14.9bn
clocked in H1 FY11. DIIs were net buyers to the tune of USD2.1bn but failed to prop up the
overall institutional flows which a t USD1.4bn was the lowest in the last ten quarters.
FII keep ownership levels intact despite sell-off, but scout for new ideas
Interestingly, between Q2FY11 and Q2FY12, the BSE-100 index shed about 20% while the FII
ownership levels remained largely flattish (a decline of ~50bps only). This trend is in sharp
contrast to the FY08-09 crisis period when FII ownership levels fell, aping the slide in BSE-100
index. Although data for subsequent quarters becomes imperative in assessing the overall
trend, it implies that the general risk-off environment has not yet induced selling across the
board and that there has been a continued appetite for bottom up ideas. Interestingly, with
the recent underperformance of India, FIIs have been deviating from the benchmark BSE-100
index in search of higher returns. During CY10, India was largely an outperformer hence FII
portfolios could follow the benchmark BSE-100 closely. However , during the recent sell-off
(when India was an underperformer), FIIs have been deviating from the benchmark index in
search of outperformance.
FIIs hold more in BFSI, software, auto; DIIs active in cap goods
Divergences in inter-sectoral holdings continue. For example, FIIs own about ~29.0% of the
BFSI sector vis-à-vis DIIs which hold just ~15.0%. Software is another sector where there is a
significant divergence—FIIs hold 19.4% vis-à-vis DIIs which hold ~8.1%. Auto, telecom and
real estate are some other sectors where ownership remains s kewed in favour of FIIs vs DIIs.
However, for capital goods, the reverse is true—DIIs hold a significantly larger chunk
(~21.3%) compared to FIIs (~13.9%).
FIIs hike relative position in defensives, sustain overweight in BFSI
Sequentially , within the FII portfolio, share of defensive sectors relative to the
benchmark BSE 100 saw a jump of 100bps led by a substantial `overweighting’ of the
pharma sector. Meanwhile, the share of global cyclicals (materials and energy) slipped
sharply relative to the benchmark. Overall, key sectoral overweights are BFSI , software
and telecom while capital goods, energy and consumer sector are the underweights.
DIIs hike FMCG share, overweight on cap goods
Sequentially, relative to the BSE-100, DIIs increased their sectoral exposure to the defensive
basket especially the pharma sector with a relative overweight of ~50bps while the relative
share of the domestic cyclicals declined. One may note that the reported DII portfolio does
not include pri vate insurance players in some cases and thus the extent of actual sectoral
overweight or underweight can differ. However, in its current form, key sectoral overweights
are consumer, capital goods and energy.
FIIs shed SBI, Axis, add M&M, ITC
On an average price basis, we estimate that the highest FII selling within the BSE-100
universe for Q2FY12 took place in BFSI followed by materials while the largest buying was
seen in autos and consumers. According to our estimates, within the BFSI space, SBI and Axis
Bank emerged as the most sold. This marks the second consecutive quarter wherein FIIs shed
their positions significantly within these stocks. Top buys meanwhile were key stocks such as
M&M, ITC and ONGC.
No comments:
Post a Comment