Financial Daily from THE HINDU group of publications
Tuesday, May 23, 2006
Financial Daily from THE HINDU group of publications Tuesday, May 23, 2006 |
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Markets
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Stock Markets Money & Banking - Life Insurance Our Bureau
Mumbai , May 22 Institutions likeLIC appear to have come to the rescue of the stock markets when it suffered its steepest fall on Monday. According to LIC officials, the PSU insurer bought stocks in excess of Rs 100 crore on Monday and around Rs 180 crore on Friday. In fact, last week, the corporation bought stocks worth Rs 700 crore. "We have been buying oil, IT and banking stocks in the past week. If there are favourable infrastructure-related stocks, we will buy them as well," said the official. However, he denied reports on buying equities under pressure from the Finance Ministry. "The market was overvalued and a correction was due. After this fall, there will emerge a market that rests on strong fundamentals," said the official. In the last week, when the BSE shed 1346 points or 11 per cent, LIC purchased stocks worth Rs 700 crore. On an average, the corporation buys around Rs 60 crore everyday, said a source. LIC's gross investment in the equity market, including ULIPs in the recently concluded fiscal was around Rs 14,867 crore. The book value of LIC's equity investment is around Rs 44,000 crore. The LIC official said that the investment in equities this fiscal would be in the vicinity of last year's figure. In the last fiscal, the corporation had pared down the share of unit-linked policies in favour of traditional policies. The ratio between unit linked and traditional plans moved to 42:58 in 2005-06 against the previous year's 65:35.
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