The Hindu Business Line : FII inflows close to $15 b in Q4

Chennai, April 1 According to revised US estimates the sub-prime mortgage crisis was accompanied by a drop in capital outflows or re-exports from $ 465 billion in April/June 2007 to $ 174 billion in July/September 2007. Provisional data for October/December 2007 show a further drop in capital flows from the US, to $ 116 billion. But India has yet to feel the pinch.

Data released by the Reserve Bank of India on Monday show that the October/December quarter witnessed a further step up in FII inflows into India. Net flows increased from $ 7.4 billion in April/June to $ 10.9 billion in July/September and then to an all time high of $ 14.7 billion in October/December.

The step-up in net flows was accompanied by a rapid rise in the Sensex from about 14,500 in early April 2007 to 20,000 points at the end of year.

Meanwhile there was an increase in the percentage of unrepatriated inflows, in a 180 degree turnaround of the trend in earlier years when the percentage of net to gross inflows fell from 39 per cent in 2003/4 to 22, 15 and 3 per cent in 2004/5, 2005/6 and 2006/7 respectively.

Factor in the precipitous drop in the Sensex in January 2008, and you have all the makings of a good thriller; a roller-coaster ride which keeps investors rapidly turning page after page to see what comes next. The RBI perhaps already knows. But the rest of us will have to wait a while because, like most other central banks, the Federal Reserve and the RBI only release BOP data after a 3 month cooling-off period.

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