FIIs, DIIs stayed away from PSU lenders in Dec quarter
Lakshmi Vilas Bank saw sharpest drop in holdings by foreign institutional investors, who sold Rs 3,241 cr worth equities in Q3 FY16.
By Amit Mudgill, ET Online | Updated:
NEW DELHI: Large institutional investors such as LIC, domestic mutual funds and foreign portfolio investors (FPIs) largely stayed away from public sector lenders during the December quarter despite a sharp drop in these stocks, latest shareholding data showed. The BSE bankex tumbled over 17 per cent during the quarter.
Foreign investors cut stakes in public sector lenders Canara Bank, IDBI Bank and Bank of Baroda by 0.50 per cent, 0.40 per cent and 0.16 per cent, respectively, on a sequential basis during the quarter.
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On the flipside, the institutional category raised stake in Syndicate Bank by 148 basis points, Karnataka Bank by 43 basis points and UCO Bank by 28 basis points.
Mutual funds, which infused nearly Rs 70,000 crore into equities, also stayed away from public banking stocks. Domestic fund managers were seen cutting stakes between 10 basis points and 30 basis points in five of the seven lenders, whose shareholding data was available so far.
The state-run insurance company raised stake in IDBI Bank to 7.25 per cent in the third quarter from 7 per cent. It also cut stake in Bank of Baroda by 14 basis points to 10.92 per cent from 11.06 per cent. It stayed put in other banks.
The price-to-book ratios of Canara Bank (0.25), Uco Bank (0.31), IDBI Bank (0.37), Karnataka Bank (0.54) and Bank of Baroda (0.64) among others, are ruling below 1.
A P/B ratio of less than one is generally seen as a signal that the stock is trading at a value lesser than its assets. Sentiment on the sector has been hurt by asset quality woes.
On Wednesday, as many as 17 banking stocks were trading at their 52-week lows.
Foreign investors cut stakes in public sector lenders Canara Bank, IDBI Bank and Bank of Baroda by 0.50 per cent, 0.40 per cent and 0.16 per cent, respectively, on a sequential basis during the quarter.
For minute-by-minute market/stock updates, follow our Twitter handle @ETMarkets
On the flipside, the institutional category raised stake in Syndicate Bank by 148 basis points, Karnataka Bank by 43 basis points and UCO Bank by 28 basis points.
Mutual funds, which infused nearly Rs 70,000 crore into equities, also stayed away from public banking stocks. Domestic fund managers were seen cutting stakes between 10 basis points and 30 basis points in five of the seven lenders, whose shareholding data was available so far.
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LIC, which has over 5 per cent stake in six of the seven lenders, too did not look enthused by the fact that many of these lenders were trading below their price-to-book values.The state-run insurance company raised stake in IDBI Bank to 7.25 per cent in the third quarter from 7 per cent. It also cut stake in Bank of Baroda by 14 basis points to 10.92 per cent from 11.06 per cent. It stayed put in other banks.
The price-to-book ratios of Canara Bank (0.25), Uco Bank (0.31), IDBI Bank (0.37), Karnataka Bank (0.54) and Bank of Baroda (0.64) among others, are ruling below 1.
A P/B ratio of less than one is generally seen as a signal that the stock is trading at a value lesser than its assets. Sentiment on the sector has been hurt by asset quality woes.
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Meanwhile, private lender Lakshmi Vilas Bank saw a rise in holdings by foreign institutional investors, who sold Rs 3,241 crore worth of equities in Q3 of FY16. FII stake in the bank rose to 11.64 per cent from 9.10 per cent, data available on the BSE website showed.On Wednesday, as many as 17 banking stocks were trading at their 52-week lows.
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