dkishore
11-06-2008, 06:24 AM
Realty stocks, that not long ago were the toast of Dalal Street, have now become the favourite targets for marauding bears. And through property prices have not corrected in a big way, the bears are convinced that it will be a matter of time before the companies’ bottomlines reflect the double whammy of low demand and high interest costs.
Market sources say that some of the wounds of these once high-flying companies are self inflicted. In many cases, the promoters are said to have purchased their shares in benami accounts during the first phase of the slide, in an attempt to protect their share prices.
Some promoters have also taken recourse to margin financing to hold up stock prices. But what they did not anticipate was sustained selling by foreign institutional investors. Already saddled with high borrowing costs in their core business, the promoters have been forced to unwind their positions in a bid to free up funds locked in what looks to be a hopeless cause for now
Market sources say that some of the wounds of these once high-flying companies are self inflicted. In many cases, the promoters are said to have purchased their shares in benami accounts during the first phase of the slide, in an attempt to protect their share prices.
Some promoters have also taken recourse to margin financing to hold up stock prices. But what they did not anticipate was sustained selling by foreign institutional investors. Already saddled with high borrowing costs in their core business, the promoters have been forced to unwind their positions in a bid to free up funds locked in what looks to be a hopeless cause for now