Much has been said in support of, and against, the oft-quoted adage ‘Sell in May And Go Away’. In May 2015, so far, the nay sayers are winning, especially in India. Here are 7 reasons why:
1. Foreign buying of $1.54 bn over the past three trading days in emerging Asia ex-China ex-Malaysia, Credit Suisse claims.
2. These three days of net foreign buying reverses the net foreign selling of $1.47 bn over the prior two weeks from April 28 to May 14, the investment bank adds.
3. So far in the month of May, foreigners are now net buyers of $841 mn in emerging Asia ex-China ex-Malaysia.
4. But MSCI Asia Pacific Ex Japan down 1.7 pct for the month so far while MSCI World is up 1.4 pct.
5. Credit Suisse says Korea, Taiwan and India are seeing net foreign buying.
6. Foreigners have bought Indian shares worth nearly $300 mn the past three days, calculations show.
7. Credit Suisse says Thailand, Indonesia and Philippines are still seeing net foreign selling.
The India case: Still an FII favourite despite recent sales
Foreign investors have trimmed India positions to an extent, but it is still a favoured market – UBS
At its peak, FII overweight was a three standard deviation event versus mean – Citi
Positioning definitely not light, neither through actual selling nor in terms of investors’ expectations – UBS
Foreign portfolio investors have pumped in nearly $40 bln in equities since 2012-end when expectations that a Narendra Modi-led business-friendly regime would win elections first took hold
A more than 10 pct fall from a record high in March means the market may have priced in a more gradual economic growth apart from retrospective tax worries
Foreign investors sold nearly $2.5 bn worth of Indian cash shares over the last 23 sessions, excluding Daiichi Sankyo’s block sale of Sun Pharmaceutical Industries
Investors have been dumping Indian stocks for China, S.Korea and Taiwan