• OUTLOOK ARENA
  • VIEWS ON NEWS
  • FEBRUARY 22, 2000

FII investments continue to surge

The high valuations in the markets are definitely giving the Indian investors jitters, but foreign institutional investors (FII) seem to be enjoying every bit of it. One just has to take a look at their net investments during the current month.

What is driving this euphoria in buying interest? Software stocks? Media stocks? Pharmaceutical stocks? Indeed there has been large scale buying interest in stocks in these select sectors but it is difficult, not to mention hazardous, to guesstimate the precise parking place of these funds.

Let's consider some facts. The FIIs have invested (net) Rs 19.6 bn during the month to date. That's an average of Rs 1.3 bn per day. The aggregate investment (net) of FIIs in India, in debt and equity, now stands at Rs 378.8 bn.

What these figures fail to reflect however is that FIIs have been aggressively churning their portfolios. In February alone the FII have already made gross purchases of Rs 66.5 bn and effected sales to the tune of Rs 46.9 bn. This surely reflects that FIIs have been aggressively shifting positions and in the process booking profits.

The current interest in the domestic markets has been spurred by the government's recent measures to push forward the second phase of economic reforms. The economic recovery has also contributed in significant measure to this surge in FII inflows. Whether the buying interest will continue unabated, as witnessed so far, will depend, at least partially, on the government's new policy measures. In this regard, the Union Budget will be keenly awaited.

Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (Research Analyst) bearing Registration No. INH000000537 (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA, Canada or the European Union countries, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

Equitymaster Agora Research Private Limited (Research Analyst)
103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407