“What’s the hurry to sell even the most expensive smallcap stocks? ” asked a friend. His rationale was simple. Mutual funds are flushed with flows. They will only buy and somehow deploy their cash. Investors simply need to hold on for a while and liquidity could potentially make their holdings more valuable. This view of his seems to be the broad mood of the market.
Promoters, however, are taking a very different view of this opportunity. Multiple blocks of large parcels are being sold by promoters to institutions. They see this opportunity to sell as a godsend simply because they aren’t facing any competition. And, large Investors and institutions are forced to buy only from them. Interestingly, in some companies, the promoter’s appetite to sell is higher than the institutional appetite to buy.
Excessive liquidity makes different stakeholders act very differently. This is creating a textbook case study of investors turning more bullish than promoters of companies. And, this trend could get even more stronger if the liquidity sustains. For now, Promoters are seeing money rain in their till.
