FIIs go on buying spree as domestic institutions sell
The Financial Express – Corporates & Markets, May 5, 2009, Page 1
fe Bureau, Mumbai
The contrasting trend in the Indian equity markets is getting starker. While overseas investors have been seen making consistent purchases in the Indian market, domestic institutional investors have been selling off.
In the month of April, according to the Securities & Exchange Board of India (Sebi) website, overseas investors have been net purchasers to the tune of Rs 6,508 crore (around $1.3 billion), the most since October 2007. And, according to the data provided by the BSE, domestic institutions have been net sellers to the extent of Rs 782 crore. A similar trend was noticed on Monday as well.
“There has been high cash level with Asia dedicated and GEM fund, which gets deployed, hence the buying,” said Amitabh Chakraborty, president (equity), Religare Capital Markets. “Overseas investors are seeing India as a long-term bet and are willing to take risks. The risk apetite has also improved over the year and the flows have begun to happen. The system, despite the meltdown, has liquidity with funds of more than $1 trillion being stashed in liquid funds. These are searching for investment destinations and emerging markets are one of the best places to go,” said a senior representative of one of the large FIIs in India.
On the other hand, domestic institutional investors see this as an opportunity to book profits and re-enter the markets at lower levels. “We think that post elections there could be a correction,” said Jiten Shah, an analyst with a Mumbai-based stock broker. Hence, the contrasting styles. The domestic institutions funds are anyway flush with funds hence their net selling clearly indicates this trend, he added. And according to first cut results, the mutual fund houses have also seen an increase in their asset under management levels.
This contrast can also be seen in the investing styles. According to a study by Kotak Institutional Equities, in the first quarter of 2009, FIIs decreased their positions in the banking and telecom stocks while the domestic insurance companies actually increased their positions these very sectors.
And, mutual funds bought into consumer related sectors while the insurance companies preferred to be net sellers in this sector.
The Financial Express – Corporates & Markets, May 5, 2009, Page 1
fe Bureau, Mumbai
The contrasting trend in the Indian equity markets is getting starker. While overseas investors have been seen making consistent purchases in the Indian market, domestic institutional investors have been selling off.
In the month of April, according to the Securities & Exchange Board of India (Sebi) website, overseas investors have been net purchasers to the tune of Rs 6,508 crore (around $1.3 billion), the most since October 2007. And, according to the data provided by the BSE, domestic institutions have been net sellers to the extent of Rs 782 crore. A similar trend was noticed on Monday as well.
“There has been high cash level with Asia dedicated and GEM fund, which gets deployed, hence the buying,” said Amitabh Chakraborty, president (equity), Religare Capital Markets. “Overseas investors are seeing India as a long-term bet and are willing to take risks. The risk apetite has also improved over the year and the flows have begun to happen. The system, despite the meltdown, has liquidity with funds of more than $1 trillion being stashed in liquid funds. These are searching for investment destinations and emerging markets are one of the best places to go,” said a senior representative of one of the large FIIs in India.
On the other hand, domestic institutional investors see this as an opportunity to book profits and re-enter the markets at lower levels. “We think that post elections there could be a correction,” said Jiten Shah, an analyst with a Mumbai-based stock broker. Hence, the contrasting styles. The domestic institutions funds are anyway flush with funds hence their net selling clearly indicates this trend, he added. And according to first cut results, the mutual fund houses have also seen an increase in their asset under management levels.
This contrast can also be seen in the investing styles. According to a study by Kotak Institutional Equities, in the first quarter of 2009, FIIs decreased their positions in the banking and telecom stocks while the domestic insurance companies actually increased their positions these very sectors.
And, mutual funds bought into consumer related sectors while the insurance companies preferred to be net sellers in this sector.
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