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FPIs Inject Rs 10,980 Crore Into Indian Equities In…

7 September 2024
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Mumbai: Indian stock markets opened September on a strong note, supported by robust investments from foreign investors during the first week of the month.

According to data from the National Securities Depository Limited (NSDL), Foreign Portfolio Investors (FPIs) made net investments totaling Rs 10,980 crore during the first week of September. However, on Friday, FPIs registered a net selling of equities amounting to Rs 904.19 crore.

This shift was largely attributed to the fact that Friday marked the final day of the Securities and Exchange Board of India’s (SEBI) deadline for unregistered FPIs to disclose their beneficial owners.

As per SEBI, it mandated that all foreign investors provide details of their ultimate beneficial owners by this deadline, failing which they would be disqualified from investing in Indian markets. FPIs that did not comply with this regulation would be required to wind up their existing investments.

“The domestic market was in panic due to the SEBI’s deadline over FIIs disclosure norm, however, this is not expected to impact India’s lucrativeness to FIIs in the long-term.

Coupled with a lack of new market catalysts and elevated valuations, a muted trend is expected to continue in the short term,” said Vinod Nair, Head of Research, Geojit Financial Services.

Earlier, the net foreign investment in August in the Indian equity market declined to Rs 7,322 crore, marking the lowest monthly investment in the past three months.

This drop is particularly stark when compared to July, where foreign portfolio investors (FPIs) had invested Rs 32,359 crore, according to data from the National Securities Depository Limited (NSDL). As per the data by NSDL, throughout August, foreign investors were largely net sellers in the Indian equity market.

The data also highlighted that the foreign investors during the last week of August (Aug 26 to 30) made a record net investment in the equity market of Rs 23,585.92 crore, which turned the overall investment in the August month positive.

FPIs, which involve investors acquiring foreign financial assets, play a significant role in influencing market dynamics by channelling substantial funds into the Indian equity market.

Science & Environment

FPIs Buying In Indian Debt Market As Rupee Remains…

31 August 2024
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Foreign portfolio investors (FPIs) have increased buying in the Indian debt market because the rupee has been stable this year and the stability is expected to continue, market watchers said on Saturday. Bulk of the buying that FPIs are doing now are through the ‘primary market and others’ category. In the cash market, they have been consistent sellers because of the elevated valuations.

In August, FPIs invested Rs 7,320 crore in equity compared to Rs 32,365 crore in July. They infused more than 11,366 crore in the Indian debt market, pushing the net inflow tally in the debt segment to more than the Rs 1 lakh crore mark in 2024 to date, according to NSDL data.

Analysts said that fundamental reason for the low FPI interest in the equity market is the high valuation and FPIs have opportunities to invest in much cheaper markets. Leading FIIs have been selectively investing in defensive market segments, focusing on sectors such as healthcare and FMCG.

On the debt market front, the strong buying trend among FIIs can be traced back to India’s addition to JP Morgan’s Emerging Market government bond indices earlier this June, said Vaibhav Porwal, Co-founder, Dezerv. The US Fed is expected to start its rate cut cycle in September. Historically, rate cut cycles in the US market have not been favourable for their equity markets.

“We anticipate that FIIs will shift their focus to emerging markets, deploying capital where valuations are more appealing. However, India may not be a significant beneficiary of these flows,” said Porwal. FPIs have been selling in the secondary market, where valuations are perceived to be high, and redirecting their investments towards the primary market, which offers relatively lower valuations.

The inclusion in global bond indices, attractive interest rates, stable economic growth, shift from equities, and favourable long-term outlook have been the key factors driving FPIs to invest in debt, said analysts.

According to Vipul Bhowar, director listed investments, Waterfield Advisors, while September is likely to see continued interest from FPIs, the flows would be shaped by a combination of domestic political stability, economic indicators, global interest rate movements, market valuations, sectoral preferences, and the attractiveness of the debt market.

Science & Environment

FPIs Turn Net Sellers; Pull Out Rs 21,201 Crore…

18 August 2024
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New Delhi: Foreign investors continued their relentless selling in the Indian equity markets in August, offloading shares worth Rs 21,201 crore due to the unwinding of the yen carry trade, recession fears in the US and ongoing geopolitical conflicts.

This came after an inflow of Rs 32,365 crore in July and Rs 26,565 crore in June, data with the depositories showed.

Foreign portfolio investors (FPIs) infused funds in these two months on the expectation of sustained economic growth, continued reform measures, better-than-expected earnings season and political stability.

Before that, FPIs withdrew Rs 25,586 crore in May on poll jitters and over Rs 8,700 crore in April on concerns over a tweak in India’s tax treaty with Mauritius and a sustained rise in US bond yields.

According to the data, FPIs withdrew a net amount of Rs 21,201 crore in equities so far this month (August 1-17). So far this year, FPIs invested Rs 14,364 crore in equities, data with the depositories showed.

FPI outflows witnessed in August were mainly driven by a combination of global and domestic factors. “Globally, concerns about the unwinding of the Yen carry trade, potential global recession, slowing economic growth, and ongoing geopolitical conflicts led to market volatility and risk aversion,” Vipul Bhowar, Director of Listed Investments, Waterfield Advisors, said.

The outflow was triggered due to the unwinding of the Yen carry trade after the Bank of Japan raised interest rates to 0.25 per cent. Domestically, after being net buyers in June and July, some FPIs might have chosen to book profits following a strong rally in previous quarters.

Additionally, mixed quarterly earnings and relatively higher valuations have made Indian equities less attractive, Bhowar added. Himanshu Srivastava, Associate Director, Manager Research, Morningstar Investment Research India, said the post-budget announcement of an increase in capital gains tax on equity investments has largely fuelled this selling spree.

In addition, FPIs have been cautious due to the high valuations of Indian stocks, coupled with global economic concerns like rising recession fears in the US amid weak jobs data, uncertainty over the timing of interest rate cuts, and the unwinding of yen carry trade, he added.

A significant trend in FPI flows recently, which became pronounced in August, is the sustained selling by them through the exchange while continuing to invest through the ‘primary market and others’ category. This difference in FPI behaviour is due to the differences in valuations.

“The primary market issues are at comparatively lower valuations, while in the secondary market, the valuations continue to remain high. So, FPIs are buying when securities are available at fair valuations and selling when the valuations get stretched in the secondary market,” said VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

On the other hand, FPIs invested Rs 9,112 crore in the debt market in August so far. This has taken the tally to Rs 1 lakh crore so far in 2024.

Science & Environment

Foreign investors infuse Rs 15,420 crore in Indian markets…

20 July 2024
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NEW DELHI: The foreign portfolio investors have infused Rs 15,420 crore so far this week in the Indian equity market, according to the data by National Securities Depository.
The net investment by the foreign portfolio investors (FPI) surged to Rs 30,772 crore so far in July indicating the good buying by the foreign investors in the Indian markets.
The foreign investors have so far bought equities worth of Rs 1,30,138 crore this year.
“FPI flows are expected to remain volatile, this week the markets were strong, led by strong earnings and commentary from the large-cap. This week the markets of India, Brazil, Indonesia, Malaysia, Philippines, and South Korea witnessed inflows, while the markets of Taiwan, Thailand and Vietnam witnessed outflows” said Shrikant Chouhan, Head of Equity Research, Kotak Securities.
Internationally the foreign investors this week have injected around $ 585 million in Brazil, $ 300 million in Indonesia, $ 324 million in Malaysia and $ 2085 million in South Korea. While Taiwan witnessed an outflow of $ 5325 mn, Vietnam witnessed a selling of $ 278 million of foreign investment this week.
According to market experts, foreign investors are investing in Indian markets amid a weakening in dollar and bond yields, and if this trend continues foreign investment will continue.
“During the fortnight ending 15th July FPIs were buyers in autos, capital goods, healthcare, IT, telecom, and oil and gas. A notable trend was the lack of buying in financial services, which partly explains the poor performance of financial services in July so far. If the recent trend of weakness in dollar and bond yields persists, FPIs are likely to continue their buying in the market,” said V K Vijayakumar, Chief Investment Strategist, at Geojit Financial Services.
Foreign Institutional investors were sellers in January, April, and May, cumulatively selling equities worth around Rs 60,000 crores. However, they were buyers in February, March, and June, with cumulative purchases amounting to Rs 63,200 crores.

Science & Environment

FPI Turns Positive In June With Rs 12,170 Crore…

23 June 2024
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New Delhi: Foreign Portfolio Investment (FPI) in the Indian equity market turned positive in June with a net investment of Rs 12,170 crore, according to data from NSDL. The data highlights that by June 21, FPIs had injected this amount into the equity market for the month. However, the overall net investment for the calendar year 2024 remains negative, with net selling amounting to Rs 11,194 crore.

On the last trading session of the previous week, FPIs invested Rs 2,250.20 crore in the Indian markets. The shift in FPI behaviour has been particularly noticeable since June 10, influenced by the election results. (Also Read: Gautam Adani’s 2024 Salary Revealed – Less Than Some Of His Own Employees! Find Out Here)

“Foreign Portfolio Investors (FPIs) have altered their position in the equity market following the election results, injecting Rs 23,786 crore since June 10th. There are three primary reasons for this positive inflow. First, the continuity of the government assures ongoing reforms. (Also Read: Kolkata Struggles With Soaring Vegetable Prices Due To Scanty Rainfall; Full Details Inside)

Second, the Chinese economy is decelerating, as evidenced by a 12 percent decline in copper prices over the past month. Third, certain block deals in the market have been eagerly taken up by FPIs,” said Sunil Damania, Chief Investment Officer, MojoPMS.

In contrast, may saw FPIs withdraw Rs 25,586 crore from the equity market, while in April, they were net sellers with a withdrawal of Rs 8,671 crore. This trend of outflows had created a cautious atmosphere in the market.

Market experts note that the recent FPI inflows are concentrated in a select few stocks rather than being spread across the market or sectors. They believe that high valuations currently commanded by the Indian equity market will constrain FPI inflows. While June’s figures show a positive net investment, the overall sentiment among FPIs remains one of cautious optimism, tempered by valuation concerns.

This strategic approach by foreign investors highlights their close monitoring of economic indicators and the government steps before the presentation of budget. As the year progresses, the balance of net investments will likely depend on the evolution of these factors, particularly in the context of global economic conditions and domestic policy continuity.

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FPIs Inject Rs 10,980 Crore Into Indian Equities In…

FPIs Buying In Indian Debt Market As Rupee Remains…

FPIs Turn Net Sellers; Pull Out Rs 21,201 Crore…

Foreign investors infuse Rs 15,420 crore in Indian markets…

FPI Turns Positive In June With Rs 12,170 Crore…