morning thoughts...
Today is an important day as we await the union budget
The Indian stock markets continue to be dominated by Foreign Institutional Investors (FIIs).Of the top 75 listed companies in India, FIIs own about 25% stake in each of them.
Amidst buoyant market sentiments, their stake in Indian equities increased and hit record high in the last quarter. Even domestic institutional investors (DIIs) followed FIIs and increased their stake in Indian equities.
However, the only category of investors that saw their stake decline in the recent past is promoters. Needless to say, the retail category witnessed this rally from the stands being a silent spectator.
For one, it indicates the optimism of FIIs and DIIs towards Indian stocks. Modi factor coupled with expectations that the new finance minister will bid farewell to populism has cheered investors alike. And the promoter community has taken advantage of this euphoria to offload stakes in their companies.
Of course, buying by FIIs is likely to entice a herd mentality amongst naive investors. The reason is simple. One would like to emulate more informed or sophisticated investor pool while building or replicating portfolios. However, this could be fatal. For one, money is not made by replicating. Moreover, since the FIIs are largely short term fair-weather investors, investing based on the FII trends could expose investors to undue risks.
Secondly, stocks with high FII ownership could be very volatile. For instance, stocks in banking and financial sector are amongst the most favoured by FIIs currently. FII holdings in these stocks itself has hit about 8 year high. However, if the expectations surrounding the sector do not materialize, and budget will be one event which these investors will generally look forward to in order to assess that, the stocks in the sector could correct. And result in losses for investors.
This is the time when investors who felt left out in the initial leg should ideally look for bargains. Finding buying opportunities during weakness would mean they will be better off than their replicating counterparts.
However, one should also remember that money is not made by simply being a contrarian. Just because you buy when everyone is selling does not assure guaranteed returns. One should assess the fundamental strength and valuation of companies which he/she is trying to bottom fish during correction. This is a better approach to investing rather than basing your decisions on the change in FII ownership.
Budget day wealth creation oppurtunities
Buy Gold , silver , copper
Buy aia engeenering , bharat forge , asian hotels
Buy petronet 180 ca , idfc 140 ca , dlf 200 ca
Today is an important day as we await the union budget
The Indian stock markets continue to be dominated by Foreign Institutional Investors (FIIs).Of the top 75 listed companies in India, FIIs own about 25% stake in each of them.
Amidst buoyant market sentiments, their stake in Indian equities increased and hit record high in the last quarter. Even domestic institutional investors (DIIs) followed FIIs and increased their stake in Indian equities.
However, the only category of investors that saw their stake decline in the recent past is promoters. Needless to say, the retail category witnessed this rally from the stands being a silent spectator.
For one, it indicates the optimism of FIIs and DIIs towards Indian stocks. Modi factor coupled with expectations that the new finance minister will bid farewell to populism has cheered investors alike. And the promoter community has taken advantage of this euphoria to offload stakes in their companies.
Of course, buying by FIIs is likely to entice a herd mentality amongst naive investors. The reason is simple. One would like to emulate more informed or sophisticated investor pool while building or replicating portfolios. However, this could be fatal. For one, money is not made by replicating. Moreover, since the FIIs are largely short term fair-weather investors, investing based on the FII trends could expose investors to undue risks.
Secondly, stocks with high FII ownership could be very volatile. For instance, stocks in banking and financial sector are amongst the most favoured by FIIs currently. FII holdings in these stocks itself has hit about 8 year high. However, if the expectations surrounding the sector do not materialize, and budget will be one event which these investors will generally look forward to in order to assess that, the stocks in the sector could correct. And result in losses for investors.
This is the time when investors who felt left out in the initial leg should ideally look for bargains. Finding buying opportunities during weakness would mean they will be better off than their replicating counterparts.
However, one should also remember that money is not made by simply being a contrarian. Just because you buy when everyone is selling does not assure guaranteed returns. One should assess the fundamental strength and valuation of companies which he/she is trying to bottom fish during correction. This is a better approach to investing rather than basing your decisions on the change in FII ownership.
Budget day wealth creation oppurtunities
Buy Gold , silver , copper
Buy aia engeenering , bharat forge , asian hotels
Buy petronet 180 ca , idfc 140 ca , dlf 200 ca
