In­dia Again Find­ing Favour with FIIs: Edel­weiss

The Economic Times - - Money - VIKAS KHEMANI

Mum­bai: For­eign institutional in­vestors’ in­ter­est in In­dia is pick­ing up again fol­low­ing a spell of sell­ing in the wake of de­mon­eti­sa­tion and a weak­ness in emerg­ing markets in re­cent months. That is one of the key takeaways from Edel­weiss’ two-day an­nual investment con­fer­ence that con­cluded on Thurs­day.

“For­eign in­vestors are sit­ting on a lot of cash. They want to de­ploy cash be­cause post Novem­ber 8, there has been a lot of sell­ing. From over­weight, In­dia has come to equal-weight in most port­fo­lios and that has cre­ated cash,” said Vikas Khemani, pres­i­dent, Edel­weiss Se­cu­ri­ties.

For­eign in­vestors are sit­ting on a lot of cash. They want to de­ploy it be­cause post Novem­ber 8, there has been a lot of sell­ing

For­eign Port­fo­lio In­vestors (FPIs) net sold shares worth about Rs 31,200 crore in the three months ended De­cem­ber, pri­mar­ily due to strength in the dol­lar-based as­sets af­ter Don­ald Trump, who ad­vo­cates anti-glob­al­i­sa­tion, was elected as US Pres­i­dent. The In­dian gov­ern­ment’s move to pull out 86% of the cur­rency in cir­cu­la­tion on Novem­ber 8 by ban­ning higher de­nom­i­na­tion notes added to the FPI’s woes.

How­ever, the pace of sell­ing slowed in Jan­uary when FPIs sold shares worth about ₹ 46 crore. With no neg­a­tive sur­prises in the Union Bud­get, FPIs have turned buy­ers again, pick­ing up shares worth nearly ₹ 1,400 crore in Fe­bru­ary so far.

Ac­cord­ing to Khemani, In­dia as an investment des­ti­na­tion is find­ing lot of favour with FPIs. “EM funds are also be­gin­ning to get flows. In the EM bas­ket, In­dia is a bright spot,” Khemani said on the side­lines of the con­fer­ence.

The re­cent turn­around in sen­ti­ment in the In­dian eq­uity market is be­ing at­trib­uted by market ex­perts to cor­po­rate earn­ings for the De­cem­ber quar­ter which started off in Jan­uary and have in­di­cated that the im­pact of de­mon­eti­sa­tion is not as bad as feared. Com­pa­nies are now op­ti­mistic about the road ahead and are back in the growth mode, Khemani said. “From growth per­spec­tive, most com­pa­nies have given a pos­i­tive and ro­bust out­look. They see de­mon­eti­sa­tion as a blip and say they are back to nor­mal. We es­ti­mate around 14-15% growth for FY18. We will prob­a­bly start see­ing ear nings up­grade cy­cles soon,” he said.

Pres­i­dent, Edel­weiss Se­cu­ri­ties

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