Latest shareholding data for June 2008 shows a continued drop in foreign ownership of the Indian markets. FII (FIIs+ADR/GDR) share of the BSE-500 now stands at 17.4% (17.8% in March and 19.27% in June 2007). Foreign ownership levels are now back to Dec-2004 levels.
This time its not the company promoters who are increasing their stakes, but it is the Indian Insurance Companies who have raised their ownership level from 4.1% to 4.4% and to some extent retailers and HNIs have also bought seeing their stake go to 9.24% from 9.0%.
How have the Domestic Mutual Funds fared ?
Domestic Mutual Funds continue to see inflows into equity funds, but it’s now down to a trickle (US$690mn in 2Q vs. US$6.6bn in 1Q08). The Insurers continue to see inflows, now decisively a bigger driver than DMFs.
When it comes to BSE SENSEX, FIIs Hold 23.8%, Insurance Cos 6% and Mutual Funds at 4%.
FIIs have core of their holdings parked in Financials 27%, Energy 13%, Industrials 12%, IT and Commodities. Mutual Funds have parked their holdings in Industrials 25%, Financials 14%, Commodities 12% and Energy 10%. Insurance Companies have their holdings concentrated in Energy 18%, Financials 15%, Consumer Staples 13%, Commodities and Industrials.
You maybe wondering why there is so much of dispersion in holdings ? Well Mutual Funds are always under the pressure to perform in Short Term [QoQ] results are a must while the same doesn’t hold true for Insurance companies who can take a long gestation call and are hence really long on the energy sector. How will you own ?