Sebi says no unusual trades in ICICI counter

After the central bank’s rare move to clarify the liquidity position of India’s second largest lender ICICI Bank in October, the Securities and Exchange Board of India (Sebi) on Thursday came to the rescue of the bank, scotching rumours that the bank’s top management has been offloading their stakes for the last few days.

As per the analysis of market watchdog, although the shares of ICICI Bank fell by 49.52 per cent from Rs 720.45 on September 8, 2008 to Rs 363.65 on October 10, 2008, none of the major sellers were observed to be placing orders successively at lower price, and there was no pattern observed regarding the placement of successive orders at lower price by sellers to hammer down the price of the bank’s shares.

 

The price of the ICICI Bank shares witnessed a fall of 12.5 per cent from Rs 640 on September 15 to Rs 560.30 on September 17.

Following this, the bank had lodged a complaint with Sebi saying, “A malicious rumour is being spread to the effect that some of the top management has been selling ICICI Bank shares for the last few days.

These rumours are baseless and irresponsible, and no shares have been sold by members of the top management of the bank during the current year. ICICI Bank is taking up this matter with regulatory authorities for necessary action against those responsible for the rumours.”

According to Sebi, for the quarter that ended on September 30, 2008, around 65 per cent of the shares of ICICI Bank were held by FIIs/ Foreign entities.

The market regulator explained that as per the trading patterns, between September 8 and October 10, the client category-wise breakup of turnover in the shares of ICICI Bank in the cash market showed that foreign institutional investors (FIIs) accounted for 23.57 per cent and 18.61 per cent of the value of shares sold and bought respectively, whereas rest of the investors accounted for 76.5 per cent and 81.4 per cent of the value of shares sold and bought respectively.

During the same period, the top 20 investors in ICICI Bank both on net buy and sell basis in the cash market showed that majority of them were FIIs.

“By and large, the trading patterns are consistent with the shareholding pattern of ICICI with predominant holdings by FIIs, the general buying and selling behaviour by FIIs and the broad movements of the market during this period,” said Sebi. “While Sebi continues its surveillance of the stock exchange trading in various securities, it did not find evidence of manipulative trading in the ICICI Bank shares during the period referred to above” Sebi added.

During the given period, prices of ADRs of ICICI Bank saw a fall of 53.25 per cent from Rs 717.77 on September 8, 2008 to Rs 335.55 on October 10, 2008.

The prices of ADR has fallen more than the shares of ICICI Bank in Indian market, while Nifty and Sensex witnessed a fall of 26.82 per cent and 27.3 per cent respectively during the same period.