For the first time in 14 months, monthly net investments into equities by domestic financial institutional (Domestic FIs) at $ 670 million exceeded net investments by FIIs at $145 million, says Deutsche Bank.
What does it mean: This further corroborates the thesis that the role of domestic investors will likely assume greater significance as the nature of savings of Indian households shifts away from physical assets to financial assets, on the back of easing macro imbalances and improving real interest rates.
India among top recipients of FII inflows: Even as FII flows into Indian equities abated sharply to $1 45 million (vs. the six-month average of $1.6 billion), India still emerged as the top recipient of FII flows amongst Asian emerging market peers.
On a YTD (year till date) basis too, India has witnessed the highest FII inflows into equities at $14 billion. FII flows into Indian debt, however, remained strong in Oct as well, coming in at $2.8 billion.
Sensex is trading at price-to-earnings ratio of 16.6x, one year forward, which is not too expensive given expectations of policy overdrive in an approaching election-free window, Deutsche Bank says
FY15 earnings revisions continue to moderate, with analysts raising earnings for 18 companies and cutting them for 26, while FY16 earnings revision saw 21 raises and 25 cuts.