Business Daily from THE HINDU group of publications
Sunday, Dec 02, 2007
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Business Daily from THE HINDU group of publications Sunday, Dec 02, 2007 ePaper | Mobile/PDA Version |
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Stock Markets Markets - Foreign Institutional Investors
Spike in registration signals FIIs not deterred by proposal to streamline them. But exercising some caution when it comes to investing in markets. Most of the new registrations came from the UK and Luxembourg.
K.S. Badri Narayanan Chennai, Dec. 1 Registration of foreign institutional investors and their sub-accounts has increased significantly in the period since October when Securities and Exchange Board of India (SEBI) came out with changes in P-Note regulations. The number of FIIs registered in India jumped to 1,170 from 1,113 and the sub-accounts to 3,552 from 3,445. The trend signals that FIIs have not been deterred by the proposal to streamline them but, at the same time, they are exercising some caution when it comes to investing in the markets. Most of the new registrations came from the UK and Luxembourg. Quite a few from Europe/US institutions also opened their account through the Mauritius route, to avail themselves of tax benefits, as India has a tax treaty with that country. In the listAmong the big names that got registered were Aberdeen Global Income Fund Inc, US; Credit Suisse (Singapore); CLSA (Mauritius); Citigroup Global Markets Mauritius; Bank of America Singapore; Morgan Stanley Mauritius Co Ltd; Morgan Stanley Investments (Mauritius) Ltd; Prudential Investments LLC (US); Swiss Finance Corp (Mauritius); SocGen International Sicav; The Royal Bank Soctland PLC of UBS Investments (Great Britan); The Pension Trust (UK) and D.E. Shaw & Co (UK). A few pension funds such as Utah State Retirement systems, Famandsforeningen Pensam Invest, The City of Westminster Superannuation Fund, The Andrew W. Mellon Foundation, and The Pension Trust, UK, have also registered with the SEBI. Sell choiceThough the number of FIIs and sub-account registrations have gone up, FIIs remained net sellers during November. Though they pumped about Rs 3,493 crore into equity in October, they turned net sellers to the tune of Rs 4,872 crore in November. Their open positions in the derivative segment, however, increased to Rs 21,777.15 crore as of November 28 against Rs 19,631.50 crore on October 17 in the case of index futures and to Rs 45,852.17 crore (Rs 39,093 crore) on stock futures. According to Mr V.K. Sharma of Anagram Stock Broking: “Even at the time of SEBI imposing some curbs in October, there were about 1,100 FIIs registered who had large exposures to Indian markets. Post restriction, they took away some of their money. This also shows that the newly registered FIIs may be marginal players and could not commit fresh fund flows.” Flow linkAccording to Mr Sandeep Shenoy of PINC Research: “The number of FII registrations and fund flows have no connection. The latter is mainly dependent on market dynamics.” “However, the higher registrations bode well for a long-term perspective,” Mr Shenoy said. PNs: Route set for smooth transition P-note holders in a tight corner FII selling drives down stock prices for 3rd day Sensex zooms 878 points on SEBI clarification More Stories on : Stock Markets | Foreign Institutional Investors | Regulatory Bodies & Rulings
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