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Oil stakes prick the Buffett bubble

Mumbai, Aug. 11: Warren Buffett, the oracle of Omaha, is still not biting' Reports earlier said that the investment wizard found Indian oil companies good value picks.

But a glance at the shareholding pattern of leading Indian oil and petrochemical companies for the period ended June 30, 2003, show he is yet to make a big-ticket investment in India, though marketmen do not rule out the possibility of him nibbling away at some Indian stocks through sub-accounts of other foreign institutional investors.

But it is unlike him to take small pickings, say Buffett watchers.

During the same period, Berkshire Hathaway, Buffett’s investment vehicle, has taken a 1.3 per cent stake in PetroChina — a China-based oil company. It could be more now.

In India, petroleum companies that an investor in the petroleum sector could include in his portfolio are the five public sector companies and private sector behemoth Reliance Industries. The five PSUs are Indian Oil, Oil and Natural Gas Corporation (ONGC), Hindustan Petroleum (HPCL), Bharat Petroleum (BPCL) and Gail India.

Foreign investors who have taken an exposure in the Indian oil companies are few and far between. “The low floating stock and the uncertainty of disinvestment may be fobbing investors like him,” an analyst said.

In BPCL, Emerging Markets Growth Fund Inc and Oppenheimer Funds Inc have taken a a 1.10 per cent and 1 per cent stake respectively.

In Reliance Industries, it is still Janus Fund with a 1 per cent stake and Emerging Markets Growth fund with a 3.85 per cent. In HPCL, Prudential Assurance holds 1 per cent stake.

Indian Oil and ONGC, the big two who feature in the Fortune 500 list, still do not have any sizeable presence of a foreign institutional investor. The government alone holds above 80 per cent stake in the public sector behemoths.

However, analysts feel it is still too early to write him off.

They argue there is no proof that he has not invested in the current quarter. The share prices of many Indian oil and petrochemical companies have been on an upswing since the last quarter. But Buffet had little to do with the rally at the oil counters.

Analysts feel Buffett might take his own time. He is not known to invest in a hurry, like the rest.

The US-based stock investor, with wealth in excess of $30 billion, is known for his panache in spotting winners in the markets and as a long-term investor.

Anil Jain, president of Berkshire Hathaway Reinsurance Group, Buffet's flagship company, had visited India some months back, visiting stock exchanges, meeting government and top company officials in the country. The Indian markets need investors like Warren Buffett as they are known for their long term investment strategy. They also attract other bulge bracket investors in their wake.

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