• Investment World
• eWorld
• Brand Line
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest
• The New Manager

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Cross Currency

• Rates
  
  

Shipping

• Ports
  
  

Archives

• Yesterday
• Datewise
• Resources
• In Focus
• In Depth

Group Sites

• The Hindu
• The Hindu ePaper
• Business Line
• Business Line ePaper
• Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

Our Bureau

Mutual funds turn net sellers to the tune of Rs 24 cr

Mumbai , Dec. 4

November saw the highest net inflows in equity investments by FIIs in the current calendar year. According to SEBI data, FIIs have been net buyers at Rs 9,380.10 crore, the highest for any month this year and the second highest ever.

This brings the net FII investments in equities for this year to Rs 40,207 crore. FIIs need to put in Rs 6,977.2 crore in December to equal the record inflows of 2005, which amounted to Rs 47,181 crore.

Going by the consistent FII inflows in equity markets for the past four months, this figure can be achieved, felt analysts.

However, FIIs are generally known to book profits in December.

"If there is no slowdown seen in the global economy or the US market, and if other global factors are in place, net inflows will continue in India. The India story still holds true," said Mr Andrew Holland, Head - Strategic Risk Group, DSP Merrill Lynch. However, he said December might see profit booking from FIIs.

"The momentum and fund inflow in equity markets will continue," said an official with another FII.

Mutual funds

Mutual funds, on the contrary, have been net sellers in equity in November at Rs 24.73 crore. But fund managers continue to see potential in the Indian equity markets. "Mutual funds may have booked profits as most them declared dividends last month. This could be a reason for the net outflow. Also, redemptions could have occurred," said Mr T.P. Raman, Managing Director, Sundaram BNP Paribas AMC.

However, the `steam' in the equity markets is still prevalent and should continue as there is potential for corporate growth, he added.

Long-term bets

Fund managers said the markets, though overstretched, are attractive from the long-term perspective. "Strong fundamentals of companies will drive investments in equities," said Mr A. Balasubramanian, Chief Investment Officer, Birla Sun Life Mutual Fund.

Both FIIs and MFs are betting on the infrastructure sector. "Logistics, retail, mid-cap sectors in India are very attractive," said Mr Holland.

"All sectors driven by domestic consumption along with infrastructure will be the primary drivers," said Mr Subramnaian.

Debt scene

In the debt market, FIIs pumped in Rs 806.40 crore in November; their net investments in debt for the whole year were Rs 3,147.80 crore.

Mutual funds have been aggressive buyers in the debt markets accounting for net inflows of Rs 6,334.73 crore in November.

Whether year 2006 will overtake 2005 for net inflows in equity needs to be seen.

More Stories on : Foreign Institutional Investors | Mutual Funds | Stock Markets | Debt Market

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
`Best weather' brewing for crops in TN, northern plains

Copyright © 2006, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line