Ruling out market manipulation or a scam behind the recent market meltdown, regulator SEBI said only those FIIs who have borrowed huge amounts are leaving the markets, while long-term investors like pension funds and retail investors are picking up stocks.
“We have not found anything in the market that would give us suspicion that something had seriously gone wrong with the market itself,” SEBI Chairman C B Bhave said.
When observed by the discussion moderator that the regulator is giving assurance that scams, which took place in bull runs in the past, are non-existent or negligible this time, Bhave said, “So far we have not seen anything.”
Only leveraged FIIs like hedge funds are going out of the market, he said, adding that long-term investors like pension funds and university funds are buying stocks.
“Equity is going into the hands of people who have patience,” he said, pointing out that many people who stayed away from the market last year have now started buying stocks.
Bhave said if four FIIs sold stocks, three others bought them during the period from September 1 to November 14, 2008.
He said FIIs net sold stocks worth Rs 22,000 crore, while brokers sold stocks worth Rs 700 crore on proprietary accounts in this period.
On the other hand, the net buying of stocks by mutual funds was worth Rs 1,000 crore, domestic institutional investors Rs 16,000 crore, and other investors including retail Rs 5,600 crore.
The market watchdog’s analysis shows that there was minimal net-selling from September 1 to November 14.