CNI research study said on Impact on prise due to FII Stake rise

Mumbai, Nov 4 : Equity market research form CNI Research today said share prices of companies saw a price rise in 93 per cent of the companies when the Foreign Institutional Investment (FII) stake increased.

In a study of 208 BSE Listed companies carreid out by the CNI Research it has been found that the price was over 80 per cent in cases where the stake was incresed by five per cent. For ten per cent rise cases the price rise was 86 per cent and where the stake was increased by over ten per cent the increase in share price was witnessed in 100 per cent cases.

''However it does not mean that all the 189 companies which witnessed a price rise offer an opportunity for investors to invest, as the price rise is very erratic and in some cases it is even above 50 per cent'' the study, released here said.

CNI Research has looked closely at these 189 companies and found out that there are companies where FII have just started raising the stake and the price rise is below ten per cent, which in other terms can be called under performers and can still offer investors an opportunity to invest.

The analysis of the data available shows that there are 27 companies where the FII holding has just started to rise and price rise is still below ten per cent, which is even below the Sensex rise.

CNI Research believes that these 27 companies offer the best opportunity of buying from the perspective of investors. The companies were Crompton Greaves, Savita Oil Tech, Merck, Reliance Natural Res, Praj Industries, GTL Infrastructure, Country Club, Coromandel Internatal, Titan Inds, Alstom Project, Usha Martin Infotech, Manglore Refinery, Karnataka Bank, ICI India, Tata TeleServices, Balmer Lawrie, GTL, ICRA, Future Capital, Gammon Infra Project, Four Soft, EIH, Reliance Inds, Tata Communication, JSL, Neyveli Lignite, Visaka Inds and Blue Star.

It is generally believed that investors should identify companies where FII's have started consolidating their stake. In this category CNI Research has seen that FII holding has just started rising as the rise is not even one per dent and price rise is also just less then ten per cent.

The data also revealed that as and when the FII holding kept rising, the prices have also risen, sometimes by 50 per cent and above, release added.

--UNI

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