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FII inflows in the past five months highest since 2001

This article was posted on Jun 5, 2012 and is filed under Market News

At a time when apprehensions of foreign investors shying away from India are being raised across the board, total foreign institutional investor (FII) inflows in equity and debt during the first five months of the current year, is still the highest since 2001.

According to the data currently being analysed by the finance ministry, FII inflows in equity and debt between January and May stood at $11.89 billion, more than the inflow of $10.54 billion in the same period in 2010.

A senior finance ministry official said the FII investment figures till May being more than those for 2010 should be seen as a positive, as the total FII inflow that year had reached $39.47 billion, the highest since 2001. In 2011, total inflows stood at only $8.30 billion.

He stressed that inflows were affected in the past few months due to the worries over the Budget proposals. But, the overall impact had not been very significant and the situation would improve in the coming months despite the poor gross domestic product numbers, if the government could take critical policy decisions to improve sentiments.

The data, however, also clearly shows inflows have gone down considerably after February, and especially in April and May, as compared to the first two months.

The total inflows in equity and debt, in fact, had reached $12.64 billion at the end of March. However, it declined to $11.71 billion at the end of April due to the net outflow of $927 million in April. In May, the total inflow in equity and debt had turned positive with a $178 million accrual.

The equity segment, however, has witnessed net outflow in both April and May of $205.53 million and $139.35 million, respectively.

The ministry official said though inflow in equity had been negative in the past two months, inflow figures should be seen in totality, both equity and debt taken together. This was still very encouraging.

The highest FII inflow in equity and debt taken together took place in February and stood at $7.16 billion. Of which, the contribution of equity was $5.13 billion.

Inflow in equities reached $8.85 billion at the end of March and stood at $8.50 billion by the end of May.

Source: Business Standard

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