FIIs pour in $2 bn so far in 2015

By: | Published: January 20, 2015 2:40 AM

Indian bonds continue to lure the foreign institutional investors in 2015, as expecations of rate cut by RBI brought dollars into the bonds.

Indian bonds continue to lure the foreign institutional investors in 2015, as expecations of rate cut by RBI brought dollars into the bonds.

FIIs poured in $2 billion in the first 12 trading days of 2015, data from the depositories showed. This is in contrast to the outflow of $41.3 billion see from equity markets during the same period.

Bulk of this $2 billion has come into corporate bonds. As of January 16, FIIs had used 63% of the $51-billion worth of investment limits in corporate bonds, up from 59% as of December end.

FII investment limit of $25 billion in the government bonds is at 99%, with no room for further purchases. This limit was exhausted in August.

As and when limits were freed due to redemptions or sale, FIIs lapped up by paying record premium at auctions where these limits were offered.

As per Sebi norms, once the investment limit reaches 90%, the rest would be auctioned to investors. At an auction earlier this month, FIIs had bought investment limits by paying premiums of 55 basis points.

FIIs have been buying corporate bonds since September 2014 after the investment limit in government bonds was exhausted.

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