Mutual Funds Turn Net Sellers In Debt Mart

Domestic mutual funds, in order to raise cash fearing redemptions, have emerged as net sellers in the debt market as against net buyers in the equity market.

The mutual funds had been net sellers for past few months when on the other hand foreign portfolio investors were net equity buyers.

The contradictory investment moves by mutual funds and the foreign institutional investors have surprised the market players, sources said.

FIIs who hardly invested in debt markets are now parking some of their funds in the debt market.

According to data available with Securities and Exchange Board of India (SEBI), net equity buying of Rs 476.7 crore by foreign portfolio investors in August they have turned net sellers in the current month to the tune of Rs 333.1 crores.

On the other hand, mutual funds that were net equity sellers in the month of August at Rs 376.68 crore, have turned net buyers in the current month at Rs 92.81 crore (till 14 September).

The most surprising fact is that FIIs which were almost non-existent in the debt market are seen net buyers during the current month till September 14 at Rs 146 crore while mutual funds have turned net sellers in the debt market at Rs 47.94 crore after being net buyers in August at Rs 1172.40 crore.

FIIs which were net debt buyers to the tune of Rs 7.3 crore in August have turned to debt in a noticeable manner during the current month. Net debt purchases by FIIs till September 14 is registered at Rs 146.0 crore, a whopping 20 times higher than the previous month.