The Hindu Business Line : FIIs help in realty stocks’ resilience

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FIIs help in realty stocks’ resilience

Unitech, Sobha Developers facilitate realty index end in green

Somasroy Chakraborty
Jayanta Mallick

Kolkata, Aug.17 Among the 19 equity indices of the BSE, the 12-stock Realty Index was the only one to survive today’s volatile session and finish in the green, courtesy gains in the index heavyweight Unitech (index weight 28.36), as also Sobha Developers ( weightage 2.05 per cent and Ansal Properties & Infrastructure ( weightage 2.09 per cent).

According to analysts and industry insiders, local buying and relatively lower selling by the foreign players helped the sector stocks stand out somewhat.

Mr Shailesh Kanani of Angel Broking said that over the last 15 days the real estate stocks have been under a sledgehammer.

Vis-À-vis the Sensex, the price fall of the realty counters have been pretty significant.

The stocks on average have already witnessed over 15 per cent correction.

Value buying

“I feel that some value buying had come in today which has helped the Realty index to stay in the green”.

In the first flush of sell-offs by the likes of hedge funds and certain FIIs in the past fortnight, property related stocks were not spared in their effort to partly make up for the losses in other markets and a liquidity crunch.

FIIs holding on to them

Mr Ashish Gupta, Senior Manager of the international property consultancy firm, Jones Lang LaSalle Meghraj, told Business Line that one of the obvious reasons for realty stocks faring relatively well today was FII restraint towards selling of the sector stocks.

“The Foreign Institutional Investors generally held on to their positions”.

The overseas institutional investors, who have made equity investments in emerging markets including in India, have generally been sellers in the last couple of weeks, Mr Gupta said.

But, in the case of local realty stocks, which are fairly recent (only a few months of listed life) phenomena, the value appreciation potentials have not really played out in full in a short span of time.

“Thus, as part of a sensible market strategy, foreign investors seem to have adopted a measured unloading strategy keeping long-term interest in view”, he explained.