Companies & Sectors
LIC reduces exposure to finance, consumer and cement companies in Q2

LIC has emerged as net sellers during July-September quarter 2012 and most of the pullout was in private sector companies, says a report by BofA-Merrill Lynch

 
New Delhi: State-run Life Insurance Corp of India (LIC), a major domestic institutional investor, offloaded shares worth over Rs7,020 crore (about $1.3 billion) in companies related to financial, consumer and cement sectors in the July-September quarter this year, reports PTI quoting a research note.
 
At the same time, LIC acquired shares worth about Rs2,355 crore (about $436 million) in software and telecom companies, the global research report by BofA-Merrill Lynch said.
 
LIC sold shares of private lenders ICICI Bank and HDFC Bank and pharma company Cipla, while bought shares of Tata Consultancy Services (TCS), Infosys, Wipro, telecom major Bharti Airtel, the report said.
 
"State-run LIC lowered its exposure to companies like ICICI Bank (with sale of shares with an estimated $207 million), HDFC Bank ($175 million), Cipla ($132 million), Voltas ($94 million) and HUL ($91 million)," the report said.
 
On the other hand, LIC's major investment during the quarter included Wipro ($114 million), Bharti Airtel ($97 million), Hero Motocorp ($81 million), Infosys ($80 million) and TCS ($55 million).
 
The report said that LIC has emerged as net sellers during July-September quarter 2012 and most of the pullout was in private sector companies.
 
In contrast, LIC was net buyer during April-June quarter 2012 as the insurer had purchased shares worth an estimated over $2 billion (about Rs11,000 crore) in India equities and sold shares to the tune of $115 million.
 
In terms of sectors, LIC sold shares valued at $450 million in the finance portfolio during the quarter under review, followed by consumer ($198 million), cement ($192 million), pharma ($139 million), industrial ($134 million) and media/hotel ($53 million), the report said.
 
In contrast, the insurance giant's investment in the software sector stood at $277 million, followed by $112 million in the telecom category, $23 million in auto space, $19 million in metal and mining sector and $5 million in the energy area.
 
Financial sector accounted for 24% of LICs total equity portfolio in the country followed by energy 16%, consumer goods 12% and industrial space 10%.
 

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SAT sets aside SEBI's Rs11-crore fine against three individuals

According to the SAT, the three had not acted as intermediaries but individual traders in the securities market and hence have not violated any norms of SEBI

 
Mumbai: The Securities Appellate Tribunal (SAT) had set aside an order by Securities and Exchange Board of India (SEBI) that slapped a penalty of Rs11 crore on three individuals for allegedly engaging in fraudulent trading practices in the stock market, reports PTI.
 
The tribunal has set aside the penalty of Rs5 crore each on Dipak Patel and Kanaiyalal Baldevbhai Patel as well as Rs1 crore fine on Anandkumar Baldevbhai Patel. They were allegedly involved in "front running" related to foreign institutional investor, Passport India Investment (Mauritius).
 
Generally, front running refers to a broker executing orders with prior knowledge of the demand from the buyer side.
 
"We are of the considered view that in the facts and circumstances of the present case, the board has erred in holding the appellants guilty of violating regulation 3 of the FUTP (Fraudulent and Unfair Trade Practices) regulations. We, therefore, set aside the impugned orders and allow the appeals with no order as to costs," SAT said in its order.
 
It was alleged that Dipak Patel, a portfolio manager for Passport India, had shared information about forthcoming trading with a Kanaiyalal Baldevbhai Patel. Anandkumar Baldevbhai Patel also allegedly abetted such activities.
 
According to the SAT, the three had not acted as intermediaries but individual traders in the securities market and hence have not violated any norms.
 
As per the SEBI's regulations, front running is prohibited only by intermediaries, and not by traders in the market.
 
"In the absence of any specific provision in the (FUTP) Act, rules or regulations prohibiting front running by a person other than an intermediary, we are of the view that the appellants cannot be held guilty of the charges levelled against them," SAT said.
 
The tribunal said Passport India was the major counter party for trading in the market and had placed huge orders.
 
Hence, the possibility of traders' orders for smaller quantities matching with the orders of Passport India cannot be ruled out, it added.
 
"Therefore, it cannot be said that they have manipulated the market... In the absence of any specific provision in law, it cannot be said that a fraud has been played on the market or market has been manipulated by the appellants when all transactions were screen-based at the prevalent market price," SAT said.
 

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Playing the victim after getting caught

Indians are eager to defend Rajat Gupta because we are too used to the powerful always...

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