The Hindu Business Line : FII picks beat the indices

The market return on stocks in which FIIs reduced their exposure, however, lagged behind. An analysis of the shareholding pattern of 382 stocks, which have FII holdings, during June 2004 vis-à-vis March 2004, reveals this.

FIIs have increased their exposure in as many as 131 stocks during the three-month period ending June 2004. Some of the prominent names in which FIIs have increased their stake include ICICI Bank, Cipla, Punjab National Bank, Petronet LNG and Zee Telefilms.

On an average, these 131 stocks returned a negative rate of 4.3 per cent.

Eighty-two stocks, in which FIIs increased their stake by more than one lakh shares, the average return is even lower (minus 4.6 per cent).

Despite the fall in return, on an average, these stocks have outperformed the index by a sizeable margin. For instance, during the period, the benchmark index - BSE Sensex declined by 14.2 per cent. The broad-based index BSE 500 also declined by 14.3 per cent during the period.

FIIs had cut exposures in as many as 125 stocks during the same period. The average return in these cases was much lower (minus 19.7 per cent) than the benchmark indices. In 69 companies, where FIIs have reduced their stake by more than one lakh shares, the average negative return is at 10 per cent. Some of the prominent names in the list include IPCL, Larsen & Toubro, Tata Steel, Tata Teleservices and Centurion Bank.

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FII picks beat the indices