Date:14/03/2006 URL: http://www.thehindubusinessline.com/2006/03/14/stories/2006031403771500.htm

Back FII inflows cross $3.2-b mark

Our Bureau

Fund scan
Investment this year is at $3.277 b against $3.284 b last year
FIIs mobilised funds from newer geographies such as Japan, Korea and Australia

Mumbai , March 13

Foreign institutional investors' (FIIs) inflows into the stock markets so far crossed $3.2 billion mark this calendar, in line with the trend last calendar.

The 2005 calendar saw record FII inflows of $10.7 billion (Rs 47,181.20 crore).

As per the latest figures, FII equity investments touched $3.277 billion (Rs 14,718.40 crore) this calendar (January 1 to March 11), which is slightly lower than the inflows in the same period last calendar at $3.284 billion.

"FII inflows this year is not surprising at all. Despite the prospect of higher interest rates, Indian equity markets are expected to give much better returns. Even the hedge funds, which are booking profits in India, are reinvesting the money back into the stocks," said Mr Sumit Gupta, Research Analyst (Macro Economy), Networth Stock Broking Ltd.

Going by the last year's trend, the FII inflow this year would beat 2005 figures by early October, Mr Gupta said.

During 2004, FII figures stood at $8.51 billion. This figure was overtaken by September 30 next year when the FII numbers touched $8.59 billion.

Analysts said FII have mobilised funds from newer geographies such as Japan, Korea and even Australia for investments into Indian stock markets late last year. "Funds are waiting for some consolidation in the markets to enter in a big way," said a dealer with a mutual fund house.

During this calendar, FIIs pumped in $805.10 million (Rs 3,677.80 crore) in January itself. "Generally it was considered that FIIs would not invest in a big way in January. But this year, it was a different story altogether," he said. For instance, FII investments in January 2005 were $100 million.

FIIs stepped up equity investments last month when they doubled the January figure to $1.69 billion.