The Hindu Business Line : `FIIs are here to stay'

EVEN though there is concern in a section of the stock market that the year-end may see a spate of selling from foreign institutional investors (FIIs), many analysts believe that they will stay invested awhile.

They say that FIIs may not resort to large-scale selling in Indian equities as usually happens towards the year-end. The grapevine suggests that FIIs will increase their allocation for India by about 25 per cent, though absolute numbers are hard to guess.

Inflows from abroad have topped $6 billion this year, unprecedented since the country opened its markets to foreign investors. A large team comprising fund managers at top funds such as Capital International, Fidelity, Janus and Putnam, are currently on a visit here.

After site visits in Delhi they are now said to be visiting companies in Mumbai. They are expected to travel to Hyderabad, spend a couple of days in Bangalore, then head for Chennai and finally for Kolkata by the end of the week. Sources said that so far they seemed to be bullish on Indian firms.

FMCGs warm up for bull run

AFTER remaining on the sidelines of the recent bull rally, FMCG stocks appear to be warming up for a roll. Market men said that another rally is round the corner, which would be spearheaded by FMCG stocks.

Several funds, domestic as well as overseas, are said to be mopping up FMCG stocks in large numbers. A couple of them are said to have placed orders to buy anything available.

Analysts said that these companies usually do well in the post-monsoon months as rural demand goes up then. The stocks in demand today included HLL, Colgate Palmolive, Gillette India, Procter and Gamble, Nestle and Henkel SPIC.

Gillette is enjoying the success of its newly-launched razor, Vector. The company is said to have developed the blade specifically to suit Indian shaving habits.

Trading volumes surged on the counters of HLL and Colgate. While HLL settled at Rs 183.20, it had gone above Rs 185 during the day. Dealers spotted some hits of about one lakh shares between Rs 183 and Rs 184 but no deals were struck. About 11.54 lakh shares were traded on the BSE and nearly 27 lakh shares changed hands on the NSE.

Volumes surged on the Colgate counter also with the two exchanges witnessing trades of nearly five lakh. The stock closed the day a shade below Rs 140, about 4.65 per cent higher than its previous close on the BSE.

Dinesh Narayanan

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