FII investments top $60bn after 1 year

CHENNAI: Total investments by FIIs in domestic equities have crossed the $60 billion mark ��� the first time since June 2008 ��� in what could be gauged as renewed commitment by overseas investors to the Indian stock market.
Since March this year, foreign investors have once again started aggressive buying as they have pumped in nearly $7 billion in just 60 days, according to Sebi data.Extrapolating the numbers would mean that the FIIs have invested (net) of around $120 million every day since March 9. This has led to the net investment position of FIIs increase from $53.3 billion in March 9 to over $60.3 billion till June 10.
The data pertains to all the activities undertaken by FIIs in Indian securities market, including trades done in secondary market, primary market (IPO) and activities involved in right/bonus issues, private placement, merger & acquisition. As on date, the number of registered FIIs is 1,660 and the number of registered sub-accounts has crossed the 5,000 mark.
The sheer pace of incoming foreign money has made FIIs net buyers to the tune of $5.2 billion in 2009 even as they were net sellers of nearly $12 billion in 2008, Sebi data showed. Besides buying equities from the market, FIIs have aggressively gone ahead and participated in QIPs as well directly from the capital-hungry promoters. Many feel that FIIs are again realising the importance of having India in their international stock portfolio after falling out of favour with global fund managers in 2008.
"In the case of India, it already enjoys a position which other Asian economies will increasingly be desperate to achieve. That is for their economies to become more domestic demand driven as policy markers in Asia realise, as they will in the due course of time, that the US and other excess consumption-driven Western economies face long-term structural problems," Christopher Wood of CLSA Asia-Pacific said.
If the foreign money is returning, domestic institutional investors have kept buying throughout reflecting an increasing dynamic domestic asset management industry. The domestic mutual funds have bought a net Rs 4,000 crore worth of Indian stocks since early March and a net Rs 1,100 crore so far this year, after buying a net Rs 14,700 crore in 2008.
Re rises over 10% from March
The rupee strengthened on Wednesday as the three-month rally in Indian stock market extended gains to more than 90%. The partially convertible rupee ended at 47.24/25 per dollar, about 0.5% stronger than 47.48/49 at close on Tuesday. FII inflows of nearly $7 billion since early March have helped the rupee climb about 10.5% from its low of 52.2 recorded at the same time.