This story is from July 9, 2005

Investments by FIIs top USD 5 billion

Narayan B Bhatt / TNN / Jul 9, 2005, 01:47 IST

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AHMEDABAD: Net investments by FIIs have crossed the USD 5 billion mark in the first six months of 2005.

AHMEDABAD: Net investments by FIIs have crossed the USD 5 billion mark in the first six months of 2005. In 2004 this mark was surpassed after 9 months — in October 2004.
If the current wave of FIIs inflows continues at the same pace, then the USD 10 billion mark is well within reach by year-end, scaling the USD 8.5 billion total investment came in 2004.
The all-time high Sensex level of 7000 plus is not acting as a deterrent for fresh FII inflows. Head of research at Anagram Securities, Vinod Sharma, says that apart from US-based FIIs, a lot of fresh funds are coming from Japan.
"Japanese FIIs are moving a part of their investments from China to India. Most of their funds will go into large-cap stocks," he added.

Interestingly, there is a substantial increase in the number of FIIs registering with Sebi, with rising inflows. The number of FIIs jumped by 91 entities in nine months from 517 in December 2003 to 608 in September 2004. In the first 6 months of 2005, 94 more FIIs registered with Sebi, taking the total to 731.
Global investm ent firm CLSA stated in a report that new India-dedicated funds will be guided by benchmark stocks which are mostly in the large-cap space. In fact, global mutual fund giant, Fidelity, recently raised USD 1 billion from Japanese investors for investing in India.

The Sensex dropped to 5583 on September 30, 2004 from 5838 on December 31, 2003. The month of May 2004 witnessed heavy selling from FIIs due to change of government at the Centre. Heavy FIIs buying was witnessed between October-December 2004.
Sensex went up from 6602 as of December 2004-end to 7193 on June 30, 2005. The months of April and May this year saw net sales by FIIs, while January ended with a net inflow of USD 101 million. It's February, March and June alongwith the first week of July which took FIIs flows beyond the USD 5 billion mark.
An HSBC Securities study found that Indian corporates are profitable with an average return on equity of 24% likely this year.

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