Letter # 64

Bank nifty has fallen 13% in 22 days despite record Sept-21 profits and stellar guidance.

It has more to do with ownership than fundamentals. Of the ten most over-owned FII stocks, how many would you guess are financials?

Large FII selling is a short term demand-supply mismatch issue, but markets are eventually slaves to earnings. And we think banking sector is favourably placed.

Unsustainable situations find a way to not sustain. A road to Indian financials via ‘unsustainable’ situation in Turkish lira now, and Indonesia in 1990s.

Bank Nifty stocks: Financials aren’t falling because of fundamentals. It is because they are over-owned – The Economic Times (indiatimes.com)