Business Daily from THE HINDU group of publications
Sunday, Sep 07, 2008
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Business Daily from THE HINDU group of publications Sunday, Sep 07, 2008 ePaper | Mobile/PDA Version | Audio |
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Power Markets - Foreign Institutional Investors In May, FIIs sold equities for $1.242 billion In June, for $2.502 billion In July, the amount dropped drastically to $455 million Ravi Ranjan Prasad Mumbai, Sept. 6 The investment pattern of foreign institutional investors (FIIs) in Indian equities over the last three months indicates an easing of selling pressure on them. Against $3.7 billion of net sales in equity by FIIs in May-June, net sales by them amounted to just $755 million over July-August. The FII outlook on India was gloomy in May-June when crude oil prices were rising sharply; the Government too was in a shaky situation when the Left parties withdrew support over differences on the Indo-US nuclear deal. “There is a correlation between high crude oil prices and FII selling because the Indian economy is highly dependent on import of crude,” said Mr S. Ranganathan, Head of Research, LKP Securities. India imports close to 70 per cent of its crude oil requirements. International crude moved up sharply in both May and June — by around $16 a barrel eachmonth; FIIs were net sellers of equities for $1.242 billion and $2.502 billion, in May and June respectively. In contrast the FIIs were net sellers in equities for only $455 million in July when the crude saw a sharp drop of close to $25 a barrel to $123 a barrel from a high of $147 a barrel earlier in the same month. In August, FIIs were net sellers for even less when crude prices subsided to $115-$112 a barrel, dropping $10 over a month. On September 2, FIIs were net buyers of Indian equities worth Rs 1,337 crore on a single day, according to SEBI data. In the first week of September, crude fell to below $110 a barrel. “Crude oil cannot be the only reason for robust FII inflows. FIIs were buying heavily during the October-December quarter last year when crude moved from $75 to $100 a barrel levels. But as crude soared even further, tolerance wore thin. There were other factors like the global sub-prime crisis and an unstable (domestic) Government, which compounded worries,” said Mr Gurudutta Dhanokar, Technical Analyst, Almondz Global Securities. FIIs also stepped up investments in Indian debt in August and July, against their net selling in debt in the March-June period. FII inflows close to $15 b in Q4 Institutional investors buy ‘out-of-favour’ sectors in July FIIs sell $3.2-b worth equities in January alone More Stories on : Power | Foreign Institutional Investors
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