The Hindu Business Line : When NRIs waited to buy...

1111. It is a kind of number one would give one's right arm to get on one's car. But on Monday - yet another Black Monday on Indian bourses - when the TV screens flashed the 1111-point fall in the Sensex, which led to a one-hour shut down in trading at both the NSE and the BSE, it was a number that sent shock waves down the spine of the investor/trading community.

But even as the crash left the traders and the speculators gasping and the small investors dazed at the 10 to 15 per cent hit in their portfolios, HNIs and long-term investors saw in the fall a great buying opportunity.

Mr Motilal Oswal, Chairman of Motilal Oswal Securities, summed up the mood on Dalal Street when he said: "Investors bought, traders sold; that, in brief, is the summary of the day." There was "some anxiety" among the brokerage's investors and some of its PMS (Portfolio Management Service) clients, "who called to ask the reason for the sharp fall. Even though we did not witness any panic, investors needed some reassurance," he said.

The next request was: `Give us three stocks we can buy'! "And we recommended banking, cement and auto stocks," he said, adding, "we told them that the correction was overdue, and now that market has already corrected 15 to 20 per cent and seems to have stabilised, they can start buying by putting one third of their money immediately, and the rest later if it corrects more." Mr Oswal confirmed that many of their HNI investors picked up blue chips today.

An interesting scene at the offices of the Kerala-headquartered Geojit Financial Services, which caters to a large segment of Gulf NRI investors, pertained to "many NRIs wanting to buy today," said its Managing Director, Mr C.J. George. "But since we had laid down the strict ground rule from Friday itself that only clients who brought in money upfront would be allowed to buy, they could not buy today."

Mr George said compared to Black Mondy, May 17, 2004, there was not much panic this time around. "Most people knew that the market was overheated and a correction would come; only they did not expect it to be so sudden and so sharp. But in 2004 many people were taken by surprise." Those of the brokerage's investors who had already brought in money bought fundamentally sound companies. "Many top brokerages took the same stand as we did on clients first paying the money upfront and then buying. So buying was restricted, whereas selling got accelerated as positions were closed and that made the fall sharper."

On the Mutual Fund front too, there seems to be no panic, at least not yet. In fact, said Mr T.P. Raman, Managing Director of Sundaram BNP Paribans Asset Management Company, "we find that investors have understood that this time around this volatility is not because of anything going wrong with the fundamentals, such as earnings or GDP growth. In many ways this market movement is out of whack and related to certain perceptions, including global factors."

He said his company had faced no redemption pressure of any sort: "in fact, with the mid-cap index having fallen so much, we're getting inquiries on whether this is the right time to invest in mid-cap funds. I think investors have understood that this is not a very normal movement, so it's better to wait and watch. And on our part too, we've been proactive and talked to our distributors and sales people that nothing has changed on the fundamentals."