The Hindu Business Line : Stocks with Citigroup tag face selling pressure

Mumbai, Nov. 20 The shares of Indian companies in which Citigroup has holdings fell on Thursday on news of large job-cuts by the global company, the appointment of a new CEO and rumours of a stake sale by it in Polaris Software Lab.

The share price of these Indian companies, excepting two, fell between 0.82 per cent and 13.68 per cent. Among them, Educomp Solutions fell 9.15 per cent, Tanla Solutions 6.05 per cent, Shetron Ltd 13.68 per cent, Fedders Lloyd 7 per cent, Himadri Chemicals & Industries 4.97 per cent and Spentex Industries 5.44 per cent.

Citigroup has a stake of 5.48 per cent in Educomp, 8.75 per cent in Tanla Solutions, 12.62 per cent in Shetron Ltd, 9.53 per cent in Fedders Lloyd, 14.87 per cent in Himadri Chemicals & Industries and 26.94 per cent in Spentex Industries Ltd.

“Citigroup is planning to lay off a huge number of employees and cut costs, which indicates that they need money,” said an equity analyst. They might have started to shed their stake in these companies to get funds, he said.

This week Citigroup, the fourth biggest US bank by market value said that it has plans to cut more than 50,000 jobs, constituting 14 per cent of its work force, and to cut expenses by 20 per cent. Already close to 23000 employees had been laid off through job-cuts and sale of units.

News of the lay-off has already triggered off selling in these stocks, said market men.

Further the news that a new CEO has been appointed for Citi’s South Asia operations was also taken as a negative by the market, as an indication that all is not right with the firm, felt market men.

Citi’s selling further pushed other investors to shed their exposure in those stocks in which Citi has exposure, so that they are not affected if the stock prices fall, said Ms Anita Gandhi, Head of Institutional Business, Arihant Capital Markets Ltd.

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