The Crash( 17.5.2006) and FII activities since then

PK/Karthik

What would certainly help in this analysis is some idea of FII volumes as a percentage of total volumes over a long enough period, say at least a month

Would anyone have some numbers, even ballpark?

AGILENT

Agilent

True, the panic sellers would have definitely added to the fall. Also like you said it would be interesting to analyze the FII volume as a percetage of total volume. Hope our data miners PK and Baron would help us by getting the data.

By the way PK and Baron ...stop blaming the FII ...start blaming the Panic sellers.

regards

ok sorry lol....come back simon, come back simon...dont "quit India" give us your $ - we promise to give up our freedom (& our beloved sensex)

Baron

May be that should read as "come back simon, come back simon...dont "quit India" Bring back your $ - Take back our hardearned money"

Hi

All of you are right in a way. Sad though it is.

Agilent , though I niticed the increased volume in FII derivatives and cash segment, complete data would take some time and I will post it in usable form. It is consistently much higher since September 2005 in derivative segment while cash segment was flagging since april 2006.
As a percentage of volume, it should make some sense. But the question is if you are shorting in derivatives and selling in cash what would be impact and also how well you are able to hide it by proppin up the indices.

By the way long time back I had asked one question in the forum about significance of % of delivery to the total traded quantity as I was not much aware of it then.
http://www.traderji.com/31457-post137.html
Market was shooting in the last leg of rally so it went unnoticed and perhaps badly phrased.

Then there was this thread in which many contributed including Agilent. Remember . It was called "The Deadly art of stock manipulation pt1"
http://www.traderji.com/3415-post1.html

Yes karthik panic selling would be there. If your headlines are "" so and so (FII) has taken 5% in this or that company" and the prices would start shooting up thinking that if they did it must be good. I don't know how many of the panic sellers would have choice to remain invested. Most of them are for upside for a three month period. How many times we have come across the query that one has 10000 and wants to invest in market for 20-30 % gain. And , if he is wise enough to get out the he would be left with say 7000. Will he muster courage to re-enter immediately after the loss?

Margin players and leveraged money will automatically be squeezed out. When market is extremely volatile stop losses would stop functioning unless you have NEAT terminal and directly connected to the Exchange with T3 line. How many would have that?

Yes czar, it is FIIs that hold the key even now. Day traders and arbitrageurs, retail investors( who give in to panic seeing 30% of value wiped off) have been deeply scarred and are scared to enter again. Retailers are last in and last out so the will loose their shirt. Day tarders etc who work on margings are in losses and will take time to come back. Rest of the crowd will be fearful to enter.

So it will be "Aaja, laut ke aaja mere meet tujhe mera sensex pukare".

What we say. SAD but true..... Is there any thing new or surprising. I suppose not. It is age old. And why to blame anyone. Show continues. Even now. Nothing stops and Market will surpass its peak may be this year but till such time it will be in narrow channel seaching for direction.

We are prone to India centric view but I don't see any othe country In Asia except China and India ( may be Malesia and Indonesia) having enough wherewithal to continue to grow and catch up with developed world.

Regards
Pankaj

PK/Agilent/Baron

In 2004-2005 after a almost year long bull run the market suddenly tanked in early January 2005. The indices lost about 18%. The fall was also quite swift, in about 6 sessions. Then the main reason attributed to the fall was "readjustement of portfolio by the FII" ( Oh..ya... the same guys.. and .... Readjustment... ). Iam sure there must have been similar manipulation even at that time. Then also there were many voiced raised against FII investments. Today the nifty has risen from 2000 level in early 2005 to 3600 and the whole the history is being replayed. I am sure this too will pass and nifty will reach 4500 or 5000 and the same drama will repeat.

Any way I came across a nice article that appeared in the "front Line" during that time... a case against FII investments.. Interestingly the same article if reprinted with a few changes - the dates and indices values - would aptly be applicable for today's situation as well.

http://www.hinduonnet.com/fline/fl2202/stories/20050128002609800.htm

regards

karthik

Hi
This thead is about FII activity , so I would point out (like I did recently in some other thread) that a few FIIs seem to be having a rethink on India

In particular, Nomura (the equity research arm ... which probably advises their Fund) said last week that Sensex true value is around 7000/7500.
If we analyse this 'judgement' in conjunction with the fact that Nomura entered India at 8500 (!), the matter becomes intriguing. I mean .. how come Nomura overlooked this overvaluation when sensex was cruising past 8000 some mths ago??

The answer was provided by Nomura themselves... they said they had been misled by deceptively high earnings guidance by India Inc.

I think we all need to ponder on that. There is some sense in what they say.
Look specifically at last quarter results of 3 heavyweights ... TISCO, SBI and Dr Reddys. (See attachment). My question is : honestly, how many of us had anticipated such a downturn (at least in these cases). Related question : how were their respective guidance statements ? What about analysts' estimates .... I doubt if any of them warned, or is it that they too had been in the dark?

I know we can't generalise this trend to India Inc as a whole , but maybe we now have some possible explanations to the current bear trend ... I mean , to why some FIIs have been dumping Indian equity.

Views ?

AGILENT

Attached Files

qtr reports.pdf (4.2 KB, 5 views)

now that you have become nostalgic....here goes.... pardesiyo se naa akhiya milana....pardesiyo ko hai ek din jaana..

well whatever we derive from the fii data, one thing is for sure, whether you agree or not...this market has got definate traits of KP style... only difference is that what he did last time from india, now he is doing it thru fii's...

also lets not talk about developed & developing... only difference is that their developing is always under the carpet... I dont know till how long can USA survive with Japanese & asian money parked & offering the consumers credit for decades with money earned & parked from japan's pockets... I think a financial 3 rd world war is in the offing... since USA depreciating its currency to control chinese growth & currency...EU will follow...

Hi czar/agilent.karthik

I think it would be difficult to reverse the clock back. Pardesi babus will not go back and come again and woo desi bull and bears or is it ..
Like it or not have to bear with them.

USA has always faought on finacial fron any attempt to dominate them be it Japan, China or good old friend Britain. During 80s and 90s they have bullied India on several matters in order to open up the economy.

We also got somewhat benefitted. But the whole process has become irreversible and on a world scale. How much we take advantage of it depends on our ability and resolve.

Tisco's results have always been in doubt given the international scenario in steel , excess capacity, china slow down, fragmented indutry etc. Infact whole of 2005 it has been subdued and did not participate in Rally. Steel rally in fact started after Mittal's bid on arcelor which raised hopes of consolidationa and return of pricing power. Those who expected better result must have been fooling others. What was surprising for me is that tata was the main contributoe for current rally along with Reliance, both heavyweight. and had not participated much in sensex rise. Now it appears that these scrops along with sbi was used to camouflage the other operations of FII which would have otherwise kept index from rising.

SBI being in banking sector, interest rates would have telling effect. Not much was expected except mergers with subsidiary etc.

Pharma was in dumps for 2004-2005. Hence who expected Dr. Reddy's to perform well. Few nes here and there about patent cases . That all. These would have been used to jack up the prices.
At least I never believed the earning estimates. Nonetheless, these companies are worth in the portfolio in their own right but one has to wait for good entry price.

I have been through various reports and none of them suggested these to be an outperformer.

The question of NOMURA . It is clear they have indulged in doublespeak and deception. but ordinary folks would not have the kind of data to come to any conclusion of manipulation. Only guesses. Which is not what we want.

So I tend to agree with Karthik and that is the purpose of this thread mainly. When we discuss other things it is only to become alive to factors other then charts and technicals. Common investors would , in any case , be lost in that. So when FIIs come back, if we get some idea of their buying coupled with other factors , we can think of worst is over.

Though the current trend is on a global scale, we have to keep in mind that and instead of abondaning the market must come back to it in time before we become last in the queue. Market will get up soon and cross higher peaks. Yes same stories will be repeated. But then the members of this forum would be better equipped to deal with that situation. Karthik's optimism is what I share essentially. As an investor I can never short though money could be made off others.

Regards
Pankaj

yeah dada I know what you mean... my problem is 80% of money I make is thru shorts only, in bull run I sit straight & hold a few position till life do us apart... I might say i'm a critical pesimist...lol