Street signs: FII buying conundrum, SBI slips in global ranking, and more

The FII buying conundrum
 
Market players have been puzzled by the daily buying and selling data of foreign institutional investors (FIIs). Despite stocks sliding, overseas investors have emerged as strong net buyers. On Friday, for instance, benchmark indices fell 1.2 per cent amid escalations of trade tensions between the US and China, yet FIIs were net buyers to the tune of over Rs 16 billion. Typically, FIIs are heavy sellers during such global risk-off events. "FIIs may be pulling out money from index heavyweight banking stocks and deploying them in non-index stocks that are now available at attractive valuations," said a broker when asked why markets are falling despite huge FII buying.

 
Samie Modak
 

SBI slips in global ranking
 
State Bank of India (SBI) has slipped 41 places to 449 position on the list of largest companies in terms of market capitalisation. The state-owned lender’s shares have fallen 25 per cent in 2018 on account of concerns about banking fraud and bad loans. This is the highest fall among top 500 companies globally, followed by General Electric, which fell 23 per cent. The banking fraud has taken a toll on the share price of the country’s largest public lender. If shares slip further, it may even move out of the top 500 list.

 
Pavan Burugula
 
IPOs could face market heat
 
The ongoing correction in the secondary markets could spoil the party for IPOs. Market players said the issuances might drop in April given the market uncertainty. “Everybody is on wait-and-watch mode. The volatility has to subside. Also, long-term capital gains tax rollout needs to be smooth,” said an investment banker. Meanwhile, the grey market premium for ICICI Securities and Lemon Tree Hotels—the two last IPOs of this fiscal—has declined. Sources say shares are changing hands in the unofficial market at only two per cent above the issue price.
 
Samie Modak