The panic selling at technology counters now seems to have very little with fundamentals. Just year back, old economy stocks were getting the same treatment as if they were going to down shutters. And the way that old economy stocks are being pampered currently, it seems as if they are going to post even better growth rates than some of the best software companies. The market seems to be swinging between two extremes of irrationalism before settling into a balance. Lack of buying support at technology counters more than the genuine selling seems to be causing the damage. With the smarter among market makers have washed their hands off tech stocks the ordinary punter refuses to switch loyalties, still entertaining hopes that he may see those dizzying heights once again. Oblivious to fact that fund managers have been aggressively buying into old economy counters for quite some time now.Rate cut sparks interest
After Reliance and HLL, it is the under-rated SBI that seems to have become the late darling of fund managers. After the announcement of the VRS to improve efficiency, the lowering of interest rates and the freedom for PSU banks to decide their recruitment policy are seen as major positives. Over the last few trading sessions, banking stocks have caught the fancy of value investors though many others are sitting on the fence waiting for a chance to jump in. And just like you cannot be bullish on software without Infosys Technologies in the portfolio, SBI now has become a must buy for fund managers upbeat on the banking sector. On Thursday, close to 22 million shares were reported to have been picked up by Uncle Sam, Picket Fund and the Abu Dubai Investment Trust. On Friday also close to 6 lakh shares are reported to have been picked up though the identity of the fund is yet to be confirmed.
Long live Lever?
The queue of fund managers at the counter just seems to be getting longer by the day. And interestingly, many fund managers who had written off the scrip just before latest annual results have been spotted making hectic purchases at the counter. On Thursday, close to 1.7 million shares are reported to have been picked up between Uncle Sam, Cap-It-All and Open Hammer, apart from a few hedge funds. The buying spree continued on Friday also with close to 1.2 million shares reported to have been picked up.
Hurry up please
After the finance minister announced increasing FII limit in a company from 40 to 49 per cent, Singapoori sarkar, US-based Merreel Fund and the Stitcher Fund are reported to have mopped up a little over 2 lakh shares of HDFC between them over the last two days. But they seem to have been put off by the management's statement that a board meeting would be convened only in May to approve the hiking of FII limit. Their decision to go slow on follow up purchases triggered off a crash at the counter as the scrip joined the bandwagon of losers.
Trivia
While he may have smashed Aptech and NIIT out of shape by way of his aggressive sales, the Savvy Fund Manager has not given on buying altogether.
He is reported to be accumulating Glaxo, despite disappointing earnings numbers for calendar 2000. And also Smithkiline Pharma, whose latest quarterly numbers were better than market expectations. The Genesus Fund is reported to be a big buyer at the Bank of Baroda counter, Inter Seles Fund at the Punjab Tractor counter, Picket Fund at the Telco counter, all over the the last few trading sessions. Mr Solo Smith is still aggressively pushing the M&M scrip, having picked up close to 1.3 million shares over the last two days.
Santosh Nairsantoshnair@myiris.com
Copyright © 2001 Indian Express Newspapers (Bombay) Ltd.
