Citigroup might press SELL button from Monday : Are you waiting to lap up quite a few good stocks?

There is a popular saying that "Market always spots trend ahead of normal people" because markets are driven by smart people (read - Operators) in short term and fundamentals in long run.

What happened in case of Bear or Lehman, AIG or Freddie Mac, market has beaten down their stocks first and after sometime they are either bankrupt or merged with some other institution or bailout. In case of Citigroup one can experience similar things but this time impact will be huge because Citi has massive assets across globe which will be up for sale sooner or later.

As per the list compiled and posted here, Citigroup (& its 10-15 group companies) holds stake in various Indian companies which is worth Rs8,569 based on Nov 21st price (you can see many companies repeated in the list because same stock held by diff group companies of citigroup). As of now, when FII sells Rs 500-700Cr (Valuations are at such a low level that even if they want to sell say Rs 1000-2000Cr they will not find enough liquidity in the market), Indian market falls by 3-5%.

Since the list contains mostly mid-cap & small cap so the impact on index will be low, assuming if Citigroup sells 50% of their stake worth, which is approx $1bn; this will lead to market fall of another 5-10% (just a prediction) at least from present level.

Companies & its closing price (Nov 21st) which are worth accumulating when Citigroup sells:-
HDFC 1,396.05
EDUCOMP 1,779.30
KSOILS 39.15
SUZLON 49.45
PUNJLLOYD 149.85
INDIAINFO 40.3
TULIP 481.15
TANLA 64.9
EKC 141.2
OPTOCIRCUI 80.45
KNL 7.95
APTECHT 66.7
ICSA 173.75
ALLCARGO 493.65
ENIL 104.55
GENUSPOWER 82.75
PSTL 42.65
SUBEX 31.9
- Abhishek Sonu, Associate, HBJ Capital