Private mutual funds are buying low-value pivotals from the markets. The equity portfolio of most private funds for May 2003 shows that they have been net purchasers of 36 million shares over the last two months.
The data compiled by Crisil show mutual funds have mopped up 44.07 million shares and sold 8.08 million shares in April and May 2003.
The mutual funds purchased Bharti Tele-Ventures, IDBI, Zee Telefilms, Oriental Bank of Commerce, Tata Engineering, Hindustan Lever, Indian Petrochemicals, State Bank of India, Bharat Electronics, Bank of Baroda, ITC, Ashok Leyland, Gujarat Ambuja Cement, Tata Tea, Larsen & Toubro among others.
But the funds also resorted to profit booking in few bank, steel and auto stocks. Punjab National Bank, Tata Steel, Union Bank, Ranbaxy Laboratories, Apollo Tyres, MTNL and Bajaj Auto were the stocks which saw profit booking.
Business Standard had earlier reported that deliveries in May 2003 have soared by almost 100 per cent on the Bombay Stock Exchange and the National Stock Exchange.
The portfolio of mutual funds for May 2003 clearly indicates that foreign institutional investors and local mutual funds pursued delivery-based buying of Old Economy stocks in May 2003. The bull run in these stocks in the month was thus powered by mutual funds.
The funds were buying not only index-based stocks but also scrips which came out with strong quarterly performances. Low-value pivotals were also in the buying list.
Bharti Tele-Ventures of Sunil Bharti Mittal topped the fund's buying following its healthy quarterly profits.
The stock has almost doubled from its all-time low as Franklin India Blue Chip Fund turned bullish on Bharti Tele with fresh purchases of 3.64 million shares.
HSBC Equity fund bought around 500,000 shares, while Alliance Front-line Equity Fund booked profits with sales of over one lakh shares.
The recent price rise in IDBI was backed by buying of 3.40 million shares by Franklin India Prima Fund, HSBC Equity fund and Sun F & C Value Fund.
Zee Telefilms saw a buy call from as many as 10 funds, which together bought 2.78 million shares. Oriental Bank of Commerce, which rose over 50 per cent in May, saw net purchases of 2.24 million shares by five funds.
Hindustan Lever was picked up as many as 10 mutual funds after the stock sank to its four-year low. Around 1.95 million shares of HLL were bought by 10 funds with Franklin India Blue Chip buying 11 lakh (1.1 million) shares.
Tata Engineering was on the buying list of 20 mutual fund schemes. These schemes bought 1.97 million shares in two months.
Gujarat Ambuja Cement, which was in the selling list of almost all mutual funds, witnessed heavy buying from four schemes. They made fresh purchases of 1.60 million shares against nil in March 2003.
The funds purchased around 10 lakh (1 million) shares each of SBI, Larsen Toubro and Ashok Leyland, They purchased 700,000 shares of ITC, 900,000 shares of ICICI Bank, 600,000 shares of Tata Tea and 4 lakh shares of G E Shipping.
Punjab National Bank, the most fancied stock, saw profit booking from almost all mutual funds. The aggregate holding of private mutual funds in PNB declined by 11.67 lakh (1.2 million) shares from 66.59 lakh (6.7 million) shares in March to 53.92 lakh (5.4 million) shares in May.
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