CHENNAI: In a speculative bet, foreign
institutional investors have increased their shareholding in debt-ridden
Kingfisher Airlines while cutting their exposure in seemingly better-placed
rivals Jet Airways and SpiceJet.
The latest shareholding data filed with the stock exchanges show that foreign investors have increased their stake in the Vijay Mallya-owned airline to 2.46% in the September quarter from 0.98% in June. During this period the airline's troubles worsened with unpaid employees refusing to work and the civil aviation regulator suspending its licence. Kingfisher has since reached a deal with its staff and is waiting for the suspension of its licence to be revoked.
Foreign funds, however, cut stakes in Jet Air and SpiceJet, which have gained market at the cost of Kingfisher and got back into the black in the first quarter of 2012-13.
Foreign investors cut their stake in the Naresh Goyal-owned Jet Airways to 4.81% from 7.12% as well as in the Kalanithi Maran-owned SpiceJet, where their stake is now 2.86% from 3.59% in the previous quarter.
In SpiceJet, US-based fund College Retirement Equities Fund held a 1.1% in the June quarter. Its name doesn't find a mention anymore. This indicates that it has either exited or brought its stake below 1% (in which case a shareholder isn't identified). The names of other foreign institutional investors in SpiceJet, Kingfisher and Jet Airways aren't known either, implying each of them hold less than 1% stake.
"This is a speculative bet on Kingfisher about its prospects with the lenders and foreign direct investment in aviation. Kingfisher and Pantaloon Retail have been the speculative bets for FIIs in September," said Saurabh Mukherjea, head of equities at Ambit Capital.
The biggest positive for the airline industry in the September quarter was the government approval for 49% foreign direct investment in aviation.
Foreign investors drive the mood of the Indian stock market. According to a Morgan Stanley research report, FII holdings have touched a five-year high in the broader market comprising 1,200 stocks and valued at $240 billion, only marginally lower than the country's foreign exchange reserves.
Kingfisher shares lost 5% in the September quarter. However, the stock gained as much as 49% in the week following the FDI announcement on September 14. Subsequently, it pared all its gains. Shares of SpiceJet have remained flat, while those of Jet Airways have lost 8.8% from the June quarter.
Bank of America Merrill Lynch expects airlines to post loss in the second quarter on account of seasonal weakness and low utilisation. However, it said the third quarter would be profitable.
In a recent note to clients, it also said it does not except Kingfisher to normalise its operations in the near term. And, it said, despite Kingfisher's temporary shutdown none of the carriers are rushing to add capacity. The brokerage has a "buy" rating on Jet Airways with a price target of Rs 480 and SpiceJet with a price target of Rs 42.
The latest shareholding data filed with the stock exchanges show that foreign investors have increased their stake in the Vijay Mallya-owned airline to 2.46% in the September quarter from 0.98% in June. During this period the airline's troubles worsened with unpaid employees refusing to work and the civil aviation regulator suspending its licence. Kingfisher has since reached a deal with its staff and is waiting for the suspension of its licence to be revoked.
Foreign funds, however, cut stakes in Jet Air and SpiceJet, which have gained market at the cost of Kingfisher and got back into the black in the first quarter of 2012-13.
Foreign investors cut their stake in the Naresh Goyal-owned Jet Airways to 4.81% from 7.12% as well as in the Kalanithi Maran-owned SpiceJet, where their stake is now 2.86% from 3.59% in the previous quarter.
In SpiceJet, US-based fund College Retirement Equities Fund held a 1.1% in the June quarter. Its name doesn't find a mention anymore. This indicates that it has either exited or brought its stake below 1% (in which case a shareholder isn't identified). The names of other foreign institutional investors in SpiceJet, Kingfisher and Jet Airways aren't known either, implying each of them hold less than 1% stake.
"This is a speculative bet on Kingfisher about its prospects with the lenders and foreign direct investment in aviation. Kingfisher and Pantaloon Retail have been the speculative bets for FIIs in September," said Saurabh Mukherjea, head of equities at Ambit Capital.
The biggest positive for the airline industry in the September quarter was the government approval for 49% foreign direct investment in aviation.
Foreign investors drive the mood of the Indian stock market. According to a Morgan Stanley research report, FII holdings have touched a five-year high in the broader market comprising 1,200 stocks and valued at $240 billion, only marginally lower than the country's foreign exchange reserves.
Kingfisher shares lost 5% in the September quarter. However, the stock gained as much as 49% in the week following the FDI announcement on September 14. Subsequently, it pared all its gains. Shares of SpiceJet have remained flat, while those of Jet Airways have lost 8.8% from the June quarter.
Bank of America Merrill Lynch expects airlines to post loss in the second quarter on account of seasonal weakness and low utilisation. However, it said the third quarter would be profitable.
In a recent note to clients, it also said it does not except Kingfisher to normalise its operations in the near term. And, it said, despite Kingfisher's temporary shutdown none of the carriers are rushing to add capacity. The brokerage has a "buy" rating on Jet Airways with a price target of Rs 480 and SpiceJet with a price target of Rs 42.
No comments:
Post a Comment