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MFs' Hot Stock Holdings

Funds are eyeing an indirect high mark through their holding

While the no-business day ruling put-paid to chances of any mutual fund booking market gains on Monday, yet these funds had big holdings in numerous scrips that gained hugely.

We have taken these scrips and indicated the mutual funds that have major holding in them. Interestingly, these scrips are also the big movers on Tuesday, indicating a consistent interest in their future abilities to register gains.

There is no denial of the fact that Monday, May 18, 2009, was a historic day for the Indian stock markets, with both the Bombay Stock Exchange and the National Stock Exchange generating shock and awe in equal measure -- Nifty touched the 15 per cent circuit within 60 seconds of opening. At 11:55, when trading resumed, the index hit the 20 per cent mark (CNX S&P Dexty was the culprit -- S&P CNX Defty is S&P CNX Nifty, measured in dollars) to bring trading for the day to a halt. This was the first time that the Indian stock markets were shut down for hitting the upper circuit. Sensex jumped to a 17.74 per cent gain in tandem.

While most retail investors and all mutual funds could not take advantage of this run up in the few seconds for which the market was open, we set out to look for some trend in stocks that witnessed a sharp surge on Monday.

It is clearly evident from the data that most of the stocks that saw a rise in prices on Monday (May 18) as compared to Friday (May 15) were construction and financial services stocks. These two sectors were the ones traders bet the most on in the short span of trade possible yesterday. However, the surge in stock prices had come from over-crowded buy orders at very high prices while there were a few sellers in the market.

While yesterday’s gains to funds invested in these stocks would have been notional, today’s biggest gainers would have given funds a great opportunity to profit from the gush. Interestingly, the stocks and sectors that ran the most yesterday have also exhibited the same passion today (Tuesday). Construction and financial stocks have been leading the pack even today with the biggest gainers also including the ones that gained yesterday like Housing Development & Infrastructure, Reliance Capital, IVRCL Infrastructure & Projects, IFCI and DLF.

(See also: MFs Hot Stock Holdings)

Let us take a look at the funds that had these stocks in their portfolio as on April 30, 2009.

Housing Development & Infrastructure’s price rose 25 percent yesterday and another 24 per cent today. Funds invested in the stock are Birla Sun Life Mid Cap (Rs 7.03 crore), Sundaram BNP Paribas Capex Opportunities (Rs 5.26 crore), ICICI Prudential Blended Plan A (Rs 3.54 crore), Kotak Mid Cap (Rs 1.23 crore), ICICI Prudential Equity & Derivative Wealth Optimiser (Rs 0.64 crore) and Nifty Junior BeES (Rs 0.08 crore).

The stock price of Reliance Capital rose by 25 per cent yesterday and by 19 per cent today. It is held majorly by Reliance Banking (Rs 25.89 crore), Sundaram BNP Paribas Financial Services Opportunities (Rs 9.18 crore), Kotak Opportunities (Rs 7.59 crore), Birla Sun Life Equity (Rs 7.57 crore) and Birla Sun Life Frontline Equity (Rs 6.06 crore).

IVRCL Infrastructure’s stock surged 29 per cent yesterday and 21 per cent today. It is held by funds like DSP Black Rock T.I.G.E.R. (Rs 45.24 crore), Tata Infrastructure (Rs 30.08 crore), JM Basic (Rs 24.27 crore), Magnum Taxgain (Rs 20.06 crore), etc.

IFCI rose 28.63 per cent yesterday and 15 per cent today. This stock is mostly held by arbitrage funds like IDFC Arbitrage and IDFC Arbitrage Plus (both Plan A & Plan B), HDFC Arbitrage, Kotak Equity Arbitrage and SBI Opportunities.

DLF’s stock rose 24.85 per cent yesterday and 17.6 per cent today. This stock forms the major holding of funds like DSPBR T.I.G.E.R., UTI Nifty Index, Sundaram BNP Paribas Select Focus, Nifty Benchmark ETS and IDFC Enterprise Equity.