FIIs' March investment in stocks at six-month high

Foreign funds are pouring money into domestic debt and equity markets. In March alone, foreign institutional investors (FIIs) pumped in over $4 billion (Rs 18,000 crore) in equity and over $2.2 billion (Rs 9,900 crore) in debt markets.

Last month, FIIs invested Rs 18,833 crore in stocks, the highest investment in a single month by foreign players in six months. This helped the Bombay Stock Exchange’s benchmark Sensex gain 7.6 per cent, while mid-cap stocks gained 7.3 per cent and small-caps gained 7.9 per cent. In debt markets, FIIs invested over Rs 10,137 crore in March.

Market players said the positive aspects of the 2011 Budget helped attract foreign funds. However, according to analysts, even while FIIs were buying heavily, some large domestic players were not making any big investments, due to which markets had not witnessed any significant rally.
 

QUICK NUMBERS
FII investment in Rs crore

MonthFII - Net - EquityFII - Net - DebtTot (Eq+Debt) 9-Apr7,384.192,684.5010,068.69 9-May20,607.00-2,798.6017,808.40 9-Jun3,224.90743.793,968.69 9-Jul11,625.282,361.2013,986.48 9-Aug4,028.70-56.603,972.10 9-Sep19,939.502,122.4022,061.90 9-Oct8,304.107,149.7015,453.80 9-Nov5,469.20541.696,010.89 9-Dec10,367.30-1,434.008,933.30 10-Jan-1,137.008,805.007,668.00 10-Feb2,113.702,209.704,323.40 10-Mar18,833.1010,137.0028,970.10 Total110,759.9732,465.78143,225.75 So far in 2010 10-Jan-1,137.008,805.007,668.00 10-Feb2,113.702,209.704,323.40 10-Mar18,833.1010,137.0028,970.10 Total19,809.8021,151.7040,961.50

Saurabh Mukherjea, head of equities at Execution Noble, a research firm catering to FIIs, said: “While FIIs are investing heavily, some of the big domestic players like insurance companies have not been too active in the secondary market of late. While domestic institutions like mutual funds may not be sitting on huge cash, top insurance companies are betting big on primary markets due to the ongoing public sector offers.”

A number of equity analysts say a large part of the FII inflows have come from long-only funds, signalling that the quality of the investment is good.