The Hindu Business Line : Lehman, Morgan Stanley among major sellers in May

“These institutions have now earned money in Indian markets and, to an extent, are shifting their investments to Japan, which they feel is an attractive option.”

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Mumbai, June 6 Leading foreign institutional investors (FIIs) such as Lehman Brothers, Merrill Lynch and Morgan Stanley have sold substantial quantity of shares in the past month on Indian bourses. “FIIs have been selling stocks left, right and centre for one reason or other. They see reasons such as bearish Indian markets, political uncertainty or possible deterioration in their own business,” said a fund manager with a mutual fund.

Lehman Brothers has sold its holdings in Aztecsoft Ltd and Lakshmi Energy & Foods. Just a few days back Standard & Poor’s, the international rating agency, had lowered its ratings on a number of top investment banks in the US. These included Lehman Brothers Inc, Merrill Lynch & Co Inc and Morgan Stanley.

Domestic problems

Merill Lynch reduced its exposure in the Indian markets by selling their stocks in CHI Investments Ltd, Rohit-Ferro Tech Ltd, Indiabulls Securities Ltd, Lloyd Electric & Engineering Ltd.

Morgan Stanley sold Webel-SL Energy Systems, Rohit Ferro Tech Ltd, Marico Ltd, CCL Products (I) Ltd, Arvind Mills Ltd, Oswal Chemicals & Fertilizers Ltd, Mahanagar Telephone Nigam Ltd, NIIT Technologies Ltd and Uniphos Enterprises Ltd.

“These investment banks are going through problems such as write-downs in their home country and it seems that they need the funds to sort out these troubles and for which they are booking profits here,” said an analyst with a rating agency.

BSMA Ltd (Bears Stearns), which collapsed in March, sold its shares of Aztecsoft Ltd and Prajay Engineers Syndicate. Citigroup Global too sold shares of Aztecsoft Ltd, Lakshmi Energy and Foods and SMS Pharmaceuticals.

Broking scenario

Many of the stocks, which these firms have sold, are fundamentally strong, said analysts. But there are some such as Indiabulls Securities, where more than 95-lakh shares have been sold in May itself. “Since overall broking space scenario is bad, these investment banks seem to be reducing their exposure in these sectors,” said the Head of Research of a broking firm.

Deutsche International has sold Hilton Metal Forging Ltd and Kohinoor Foods Ltd and Goldman Sachs Ltd has sold Dishman Pharmaceuticals & Chemicals Ltd, Gwalior Chemical Industries Ltd and Prajay Engineers Syndicate.

“These institutions have now earned money in Indian markets and to an extent are shifting their investments to Japan, which they feel is an attractive option,” said Ms Anita Gandhi, Head of Institutional Business, Arihant Capital Markets Ltd.

They are also investing in international markets such as Russia, Latin America and few African countries, say analysts.

Unattractive

Mr Vinod Mehta, Managing Director, Almondz Global Securities, said that while nothing decisive has happened to make Indian markets unattractive, the fact is that since January, the markets are awaiting a positive signal and in the absence of that there is choppiness in the markets.

In such scenarios, the investment decisions of these institutions are determined by the market movement or sometimes even their own need, he added.

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