The global economic slowdown, layoffs across all industries and sectors and the hurt sentiments that the previous year left behind meant that 2009 might not have an auspicious start as far as the Indian capital markets were concerned. Add to that the Satyam fiasco and you get a dismal first month of the new year.
Despite gains in December 2008, the domestic markets returned to their losing ways in January 2009, with the Sensex shed 4-83 per cent. Amongst the other sectoral indices, BSE Realty (-31.14 per cent), BSE Consumer Goods (-13.56 per cent) and Bank Nifty (-12.9 per cent) were the worst hit.
In such a scenario, when investors are ambiguous about where to invest, we thought that taking a look at what the mutual fund industry bought and sold would be a good indication. Net selling of Rs 325 crore took place during January 2009. Construction and auto stocks witnessed the highest selling while energy and financial services were the most bought. The technology sector received a mixed response.
And predictably, Satyam topped the list of the most actively sold stocks with a sale of Rs 335 crore. After Ramalinga's confession, Satyam's shares plunged 70.35 per cent during the month. 91 out of the 97 funds that held its shares in their December portfolios offloaded the shares fully by January end. But the six open-ended equity funds that are still holding Satyam are Franklin Infotech, Franklin India Tax Shield, FT India Balanced, Taurus Star Share, Franklin India Blue Chip and UTI Equity worth a total amount of Rs 14.63 crores.
Punj Lloyd was the second most sold stock, whose shares worth Rs 191.52 crores were sold during the month. Reliance Mutual Fund accounted for 40 per cent of the total sale in the stock. Two of its schemes-Reliance Equity and Reliance Natural Resources--reduced holding in the company while Reliance Regular Savings Scheme's both plans (equity and balanced) completely exited the company.
Coming in third was Maruti Suzuki with a sale of Rs 177 crore during the month. Reliance Mutual Fund and HDFC Mutual Fund accounted for 54 per cent of the total sales in the stock. Funds like Reliance Equity Advantage, Reliance Tax Saver, HDFC Top 200 and HDFC Equity were amongst the biggest sellers of the stock.
Infosys Technologies, the most sold stock of December 2008, turned up the fourth most sold stock in January 2009 with a sale of Rs 165.95 crore. Fund houses like ICICI Prudential, Reliance and Franklin Templeton offloaded the stock, heavily accounting for 87 per cent of the total sales. Schemes like ICICI Prudential Dynamic Fund, ICICI Prudential Equity and Derivative Income Optimizer, ICICI Prudential Discovery, Reliance Growth, Reliance Tax Saver, Reliance Equity Advantage, Franklin India Flexi-Cap and Franklin India High Growth Companies were the biggest sellers of the stock.
Housing Development Finance Corporation ended up as the fifth most sold stock with sales worth Rs 152.37 crore. ICICI Prudential, Franklin Templeton and Birla Sun Life were amongst the biggest sellers of the stock. The top three funds from each fund house who were the biggest sellers of the stock were-ICICI Prudential Infrastructure, Franklin India Flexi-Cap and Birla Sun Life Equity.
On the buying front, Reliance Industries became the top pick of the month. Not only was this stock bought the most during the month, but it also forms a holding of the maximum number of equity funds in the industry. Purchases worth Rs 295.89 crore were made for this stock. 53 per cent of the total purchases for this stock were made by HDFC Mutual Fund for its three schemes-HDFC Equity, HDFC Prudence and HDFC Top 200 and 23 per cent of the total purchases took place in DSP Black Rock's two schemes, DSPBR Top 100 and DSPBR Equity.
Rural Electrification Corporation Limited emerged as the second most bought stock during the month. The total purchase of Rs 160 crore was made during the month, out of which 91 per cent of buying was made by HDFC Mutual Fund for five of its schemes-HDFC Equity, HDFC Top 200, HDFC Prudence, HDFC MIP Long Term and HDFC Taxsaver.
Satyam's downfall came as a blessing in disguise for TCS. As funds shifted positions from Satyam, TCS shares worth Rs 123.88 crore were bought by various schemes. The major buying was accounted by two fund houses - ICICI Mutual Fund & Reliance Mutual Fund. The top schemes who bought the stock were -- ICICI Equity and Derivative Fund's Income Optimizer Plan & Wealth Optimizer Plan, ICICI Prudential Indo Asian Equity Fund, Reliance Equity Fund and Reliance Regular Savings Equity Fund.
Axis Bank and Bank of Baroda were the top picks from the financial sector with total buying of Rs 110 crore and Rs 94.58 crore respectively. It is noteworthy that the Bank of Baroda was preferred over HDFC Bank last month and 12 more funds added the stock to their portfolio. Schemes like ICICI Prudential Infrastructure, Reliance Tax Saver, ICICI Prudential Dynamic, Reliance Regular Savings Equity and UTI Dividend Yield were the top buyers of the stock.