Overseas investors seem to have turned bearish on bank stocks in the three months to December, preliminary data depicting the shareholding pattern of foreign institutional investors (FIIs) shows.
Analysis of 26 companies on BSE-500 universe that have disclosed their shareholding pattern for the quarter ended December shows FIIs have raised their holdings in 13 firms and reduced in 13 others. The quarter had seen net FII inflows to the tune of $6.5 billion.
Bank of India saw FII holding fall by 2.2 percentage points to 10.97% in the December quarter from 13.17% in the previous quarter. FIIs also cut their stake in Corporation Bank by 0.33 percentage points to 2.82% from 3.15% and in Punjab and Sind Bank by 0.29 percentage points to 3.22%.
Observers feel private banks are likely to outperform state-owned peers in terms of earnings. ?PSU banks may be worse hit due to concerns over asset quality,? said Gaurang Shah, assistant vice-president, Geojit BNP Paribas Financial Services. ?Although PSU banks are available at cheap valuations, private sector banks have better fundamentals,? said Alpesh Shah, banking analyst, Motilal Oswal Financial Securities.
Among the Sensex companies, FIIs have raised stake in BHEL to 15.63% in Q3FY14 from 15.25% in Q2FY14. Gail (India) has seen its FII holding climb to 17.03% from 16.74%, while HDFC Bank has seen its holding surge to 34.92% from 33.61% in the same period.
The biggest jump in FII holding was in Gillette India, where it rose by 6.13 percentage points to 7.81% from 1.68%. The company recently used the OFS route to comply with Sebi minimum shareholding norms after long-drawn negotiations with capital market watchdog Sebi.
FII holding in Housing Development Finance Corporation (HDFC) rose by 1.16 percentage points from 73.09% to 74.25% for quarter ended December. Tata Communications saw FII holding increase by 1.42 percentage points to 6.13% from 4.71%. FIIs reduced their holding in Glenmark Pharma by 0.36 percentage points from 33.49% to 33.13%.
Experts feel FII buying may continue in export-oriented sectors. ?The recovery in developed markets would have a positive impact on emerging markets. Beaten-down rate-sensi- tives could also regain FII interest,? said Vinay Khattar, vice-president, head (research), Edelweiss Capital Markets. In 2013, FIIs net bought about $20 billion worth of equities.
