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FIIs put in $1 bn per week in May; 2009 inflow crosses $4 bn

This article was posted on May 31, 2009 and is filed under Press Releases

NEW DELHI: Foreign institutional investors (FIIs) have invested almost $1 billion per week in May 2009 in Indian stocks with the overseas investors’ total inflows crossing the $four-billion mark so far this year.

The net investment of foreign investors in the stocks of Indian companies stood at $4.2 billion (around Rs 20,473 crore) with most of the inflows coming in the month of May.

So far in 2009, FIIs have bought shares worth Rs 1,96,021 crore, while they sold equities valued at Rs 1,75,547 crore, resulting in a net inflow of Rs 20,472 crore ($4.2 billion), the data available with the market regulator Securities and Exchange Board of India (SEBI) shows.

Significantly, May has turned to be the golden month for the market so far in 2009, as the month alone witnessed inflows of a whopping Rs 20,117 crore ($4.1 billion) in Indian stock market. It accounts for nearly 99 per cent of the FIIs total investment in the domestic bourses so far in 2009.

Market analysts think that the FII inflow in India is part of the overseas bullish investment strategy in many emerging markets after a lull period of more than a year.

“Since several past weeks, overseas fund houses are making investments in the many emerging markets and India is the part of that investment,” Mumbai-based brokerage firm Sharekhan’s Research Head Gaurav Dua said.

However, it seems that the overseas investors are still skeptic about money market and have not yet turned into net investor in the segment.

As per the data available with the SEBI, FIIs are the net seller in debt market worth $1.3 billion (Rs 6,527 crore) so far in 2009, with May accounting over 40 per cent (Rs 2,711 crore) of the total outflow.

After pulling out a hefty Rs 52,987 crore from the Indian stock markets in 2008, which saw the Bombay Stock Exchange benchmark Sensex plunging 51 per cent, FIIs have turned net buyers during the last week of March.

The Sensex has gained over 52 per cent so far this year and closed at 14,625.25 points at the end of trade on Friday.

“Buoyed by better-than-expected GDP readings for March 2009, the market saw good buying all through the day. Sensex ended 329 points up, while Nifty (closed) 111 points higher,” Sharekhan said in a research note.

An analysis of the data of foreign investment shows that the confidence of FIIs in Indian equities has started to build in the month of March as they bought equities worth Rs 530 crore.

However, the investment was significantly less, compared to Rs 6,681 crore sell-off by them in the first two months of 2009.

source: Economic times

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