Brokers advise investors to stay away from scam-hit firms | business | Hindustan Times
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Brokers advise investors to stay away from scam-hit firms

business Updated: Nov 26, 2010 21:31 IST
Sandeep Singh

If you are planning to get into one of the stocks, especially in the real estate sector that has fallen significantly over the past three trading sessions, then think twice. Market experts are advising investors against any such venture.

"Even if the stocks look cheap, I would advise investors to stay away from these stocks because in India, it takes a good amount of time for these things to get sorted and to come out clean. And as of now we don’t know who will come out clean," said Pankaj Pandey, head of research at ICICI Securities.

"I think real estate stocks have yet to bottom out and investors should wait and watch," said R Venkataraman, executive director, India Infoline.

While real estate stocks continue to be a cause of concern, experts feel that banking stocks too have witnessed a knee jerk reaction. "There have been cases of individual greed but there is no systemic failure. Investors will get an opportunity to invest in these stock in some time," said Venkataraman.

The brokers are ,in fact, advising to reduce their exposure into these companies.

"As a measure of capital protection, I would ask the investors to reduce their exposure into these companies," said Pandey.

As lot of real estate companies and some banks have witnessed a sharp fall in their share prices after the Central Bureau of Investigation (CBI) unearthed housing loan scam that involves a nexus of senior officials of LIC Housing Finance, some public sector banks and real estate companies.

Stock like DB Realty and Orbit Corporation have fell by 32% and 26%, respectively.