FII inflows have failed to cheer markets in 2013 so far
Every Rs 1-cr FII inflow has coincided with a Rs 11-cr investor wealth erosion
The year 2013 is seeing a breakdown in the long-standing correlation between foreign portfolio inflows and investor wealth creation in domestic stocks. In the last 12 years, stock market’s value has risen whenever foreign institutions pumped money into the nation’s equities, but the reverse is happening since January, according to a Business Standard study.
So far this year, foreign institutional investor (FII) inflows have coincided with a decrease in investor wealth. The analysis compared the increase in market capitalisation of all the listed BSE companies to the amount of FII flows in the calendar year.
FIIs have been net buyers by Rs. 53,377.60 crore thus far in 2013, but the capitalistion of companies listed on the BSE is down
Rs.5.96 lakh crore. This means every crore of FII inflows has coincided with a decrease in investor wealth by Rs.11.17 crore.
Traditionally, whenever foreign institutional investors have been net buyers in India markets, investor wealth has soared.
For more visit: Business Standard
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