The Hindu Business Line : Post-Bear Stearns’ sell off, select stocks recover

Mumbai, March 18 The Indian companies in which the beleaguered US securities firm Bear Stearns sold its holdings over the last week, appear to have fetched a mixed bag of reaction among investors.

Bear Stearns, which was bought out by JP Morgan Chase, sold shares worth more than Rs 2,700 crore during last week.

On Monday, the company sold its stake in companies such as KS Oils, S Kumars, Usha Martin, Lakshmi Energy, Opto Circuits and Jaiprakash Associates.

Jaiprakash Associates fell 3.56 per cent on Tuesday. It touched its 52-week low of Rs 189 during intra day. The other companies — in Bear Stearns’ portfolio — that took a beating on Tuesday were Aurobindo Pharma (4.06 per cent), Mahindra Lifespace Developers (4.13 per cent), ICSA (India) (7.86 per cent), SREI Infrastructure Finance (7.52 per cent), Royal Orchid Hotels (5.54 per cent) and Kamat Hotels (14.53 per cent).

ICSA (India) and Royal Orchid Hotels too touched their 52-week lows on Tuesday.

The stocks held by Bear Stearns that attracted investor interest and closed up on Tuesday were: KS Oils (9.84 per cent), Gitanjali Gems (5.16 per cent), Man Industries (11.67 per cent), Euro ceramics (5.66 per cent), and Oriental Hotels (5.45 per cent).

Good fundamentals

“Bear Stearns selling its stake in the Indian companies does not mean that it will bring about a change in the companies’ fundamentals. If the company has good fundamentals then this creates a good opportunity for investors to buy these stocks now,” said Hitesh Agrawal, Head of Research, Angel Broking.

There is some amount of recovery taking place in some of these shares held by Bear Stearns as they seem to have bottomed out, feels Shahina Mukadam, who heads the research function at IDBI Capital Markets.

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