The Crash( 17.5.2006) and FII activities since then

Hi
Today I am giving FII data as indicated by SEBI which includes both NSE and BSE equity and debt.

Reporting Date-- Debt/Equity-- Gross Purchases(Rs Crores)-- Gross Sales(Rs Crores) Net Investment (Rs Crores) Net Investment US($) million at month exchange rate
02-JUN-2006--- Equity-- 2317.80-- 2600.00-- (282.20)-- (62.80)
---Debt ---39.40--- 20.00 ---19.40--- 4.30
The above report is compiled on the basis of reports submitted to SEBI by custodians on 02-JUN-2006 and constitutes trades conducted by FIIs on and upto the previous trading day.

From above data it is clear that now FIIs have acclerated their purchases but so their selling has also increased. Net sales increased to R. 282.20 crs.
a jump of about Rs. 97 crs.

Now just a thought. If FIIs know that valuations are right would they let us know in advance? This would spoil their party as too many people will be with profit when it all ends again. Just as Nomura didnot talk about valuation till it reached 12600 they would not let us know if valuations are right. Their Buy figures are intriguing. Why they are buying if valuations are not right? If market were to tank further whatever stocks are being brought will end up much lower and they would incur loss.

Now another question if they sell within one year are they going to pay LTCG tax? Mauritius root is fine. No tax. But what about rest. Nomura figures don't stand anywhere as per the Powerpoint presentation. UBS made more profit then may heavy weights. But interms of investments there are other funds that are big boss. Are they also playing Japanese roullette?

I think they are rotating their sectors and taking some profit out after jacking it up by 20% more than the fair valuation. In any case when they sell it would always lower the market. Such is the extent of their meagre selling by normal standard. 3.5 % should not ring alarm bells. It has done mostly for those who invested in the last leg of the rally.

Long term portfolio would be in good health even now and it will be an opportunity for those willing to invest. Their cost will be less.

But , should retail investors invest now? I think not.

Why? because undercurrents are there now and on analysis it seems fine but
global cues are still not there. Just before FIIs would become net buyer, global cues would come for certain.

So I think wait and watch on the sidelines of this drama.

Regards
Pankaj

Hi Pankaj and Czar

Czar u said why not be patient and buy later. You see, no one can predict bottom. Yesterday I heard some on TV saying this market is breaking supports, most probably 9600 will not hold. Now u see we did not even test 9600. Buy when u feel comfortable with a stock, i.e., its valuation and its growth. Buy when market has declined to some good degree. My view also was of that we will test 9600, but as I told ideally with so many short positions markets, can give a quick rally, that is what they did. Now, we have to see follow through, what happens here. I today again bought some shares.

Hi gandharv

Have patience. Individuals have no way of knowing valuation.
Valuation has three parts.

1. Current value as reflected by underlying assets
2. Future growth
3. Perception/psycholoy

First is quantifiable. Second could be anticipated. What about the third?

It will ignore first two. GFH.

Neither anicipate bottom nor anticipate peak. You may not buy in the valley or sell at the peak. But try to be some where. When climb is confirmed then go for it. But wait till you are convinced . Not czar nor I are important. It is for you to be convinced with your entry and your exit. Its your money and you have to feel comfortable with your investment. By all means go for it. After all pearls are found at the bottom and not on the surface of the Ocean.


Pankaj

I agree with you but I would rather go the vvonteru route of 1st thrust pattern the later learn pattern...

PK

Some more figures and some more confusion

The net investments (Buy-Sell) of the FII for themonth of MAY is -7754 Cr.

Total Market cap at the end of MAY 2884136 Cr.

% of the money FIIs pulled out in May to Market Cap is 0.3% (I am keeping it simple, actualy little less if we do the exact artimatic)

% of index fall in May is nearly 18%

0.2% pullout caused a drop of 18% in the index

Am I looking it right? Am I going wrong somewhere? I am a technical man and not a student of economics. So may be Iam looking at it wrongly. Maybe you can throw some light on this.

regards

karthik

is this 7k cr figure equity or derivatives included ?

ok this is really strange:

sebi site i opened may derivatives & took sum of buy & sell figures of index future & stock future (without decimals...rough) & the net position is rs. 6954 cr buys... now will someone explain what is this game ???

hello this is shocking..when in april fii were buyers of 521 cr net in equity & we were rejoicing 11K & 12K do you know under your very noes how much the fii sold in derivates... the net sell figure is -8997 cr...out of which its -6940 only in stock futures... & selling of 4159 cr net in march in s.futures...

boss do you think these guys are dumb...crashing the markets & getting out...noooo.... like i had said in april...these guys were getting ready with their short position without giving you any clues...

now they are just giving you the sales in equity to show but the same is being leveraged in derivatives...net net they are heavily shorted the market...I am shocked...I have to now check march...someone helllp...

Yes Baron, the figures are quite interesting. My figures are the equity figures. So in MAY they were -7K in equity and +7k in derivatives.