Hedge funds enter market in droves

Hedge funds, it seems, are making a beeline to enter the Indian stock market. In the past month, big names like Brevan Howard, Hudson Bay Capital Management, Balyasny Asset Management, Treeline Investment Management, Segantil Capital Management, Indus Capital and Myraid Capital Management have entered the market. These funds have participated in the qualified institutional placement of Ashok Leyland and others. Sources said the new foreign portfolio investment guidelines of the Securities and Exchange Board of India are encouraging many of these new entrants because of the lower cost involved by listing with the custodians directly. In June, foreign investors have put in $1.8 billion in Indian equities in the primary and secondary markets.

Focus back on pharma and IT
After being battered for some time, punters have taken a liking for pharma and IT stocks again. On Friday, the BSE Healthcare Index hit 11, 259 - a new high. In May, it had slipped from 10,857 to 9,944. Similarly, the IT index also had slipped to 8,214 and has recovered sharply to 9,270. With the rupee slipping around 2.8 per cent in June - from 58.50 to 60.10 - market players are beginning to see value in these sectors again. They say if the rupee stablises around 60, these sectors will continue to do well.

Information leakage in institutional placements
Brokerage houses, conducting private institutional placement, are a worried lot due to information leakage of their deals. The head of a brokerage fund, who had struck a deal with a mutual fund house with a placement discount of 15 per cent, was surprised to see two leading high networth individuals (HNIs) being roped in by the fund house. Interestingly, while the two HNIs got their quota, the fund house got only 50 per cent of its quota - almost 3 million shares less.