MUMBAI, FEBRUARY 22: Net FII investments have crossed the $500-million markin the current month, which translates into the largest inflow in a singlemonth in the last one year. The renewed interest in the Indian markets hasalso attracted fresh FII registrations taking the total to 503 to date. Inlocal currency, the net investments translate into a whopping Rs 2,307crore, with nearly half of the amount coming in the last four tradingsessions.On Monday, net FII investments were Rs 443 crore with the total turnover forthe day close to Rs 1,200 crore. The surge in dollar inflows largelyexplains the relentless rise in a host of IT stocks led by Wipro whosemarket cap has already crossed the Rs 200,000-crore mark.
There has been a remarkable shift in the pattern of FII investments. Themarkets have attracted in just 15 trading sessions in February, a third ofwhat it had received during the entire calender 1999. During 1999, the netinflows were Rs 6,900 crore while in February so far, the net investmenthas been Rs 2,307 crore.
The resurgence in FII inflows comes ahead of the budget, taking the Sensexpast the 6000-mark. A unique feature of FII investments in February is thefact that the net inflows have been positive on all the days. The grosspurchases and sales added up to Rs 13,000 crore so far in the month.Over the last two months, over a dozen new FIIs have been registered withSebi. Dexia Asia Premier, Luxembourg, Montgomery Asset Management LLC, USA,Chase Manhattan Bank(Ireland) plc as Trustee of Dekateam Emerging Markets,Ireland, Investerningsforeningen Danske Invest, Denmark, Capital Researchand Management Company, USA and KBC Bank NV, Brussels are among the new FIIsregistered during February 2000.
Fidelity Funds and Warburg Dillon Read are among the prominent FIIs to haveregistered in January. There has been a shift in the trading pattern of FIIinvestments.
During January, the net inflow was about Rs 196 crore as FIIs resorted to agreat deal of portfolio churning, but at the same time ensuring that themarket level was maintained. Thus, the Sensex has stayed around the5300-5500 level range in January.
But since the beginning of February, purchases have far outweighed salesforcing valuations of a large number of stocks to new highs. The Sensexitself has seen a rise of about 600 points, but the biggest gainer of thefresh funds inflow has been the IT stocks.
Domestic mutual funds have found the time opportune to book profits on mostdays during the last two weeks. The surge in FII inflows has also helpedmany funds declare dividends and yet sustain the rise in the NAVs of theirschemes. For instance, SBI Mutual Fund's IT fund declared a dividend of Rs 4per unit last week. The NAV of the fund has already risen by about Rs 4 toRs 47 in the last few days.
Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.