FPIs, MFs pump ~97k cr into markets in 6 months

Foreign portfolio investors (FPIs) and domestic mutual funds’ investments in the equity market at ~97,705 crore had surged more than threefold during the first half (January-June) of the current calendar year (CY17). FPIs invested ~55,908 crore and MFs another ~41,797 crore in equities. Their collective investment was 3.4x higher as compared to the same period last year, when they pumped in a net ~28,811 crore, shows data from the National Securities Depository.

The abundant liquidity has taken the benchmark indices, the S&P BSE Sensex and the Nifty50 on the National Stock Exchange, nearly 18 per cent higher, to become the best performing market globally on a year-to-date (YTD) basis. The rally in mid-caps and small-caps has been sharper, with the S&P BSE mid-cap and small-cap indices surging a little over 30 per cent.

Of the ~41,797 crore invested by MFs thus far, ~30,328 crore or 73 per cent was in April-June, the first quarter of FY18. They have been net buyers in the equity segment for a 11th straight month. “Investors have matured over time and realised that professionally managed and well-regulated MFs are a safe investment avenue. That apart, the other forms of investment – real estate, gold, etc – have lost charm. As a result, investors turned towards MFs, which then invested this corpus in equity markets,” said Nilesh Shah, managing director, Kotak Mahindra Asset Management. Of the total that FPIs invested in the first half of CY17, almost a third or ~16,097 crore was through subscriptions to IPOs and secondary offerings. Even then, their half-yearly investment thus far is the highest since the quarter ended June 2014, when they invested ~59,521 crore in the equity segment following the victory of the NDA in the general election. Observers believe India will continue to attract flows from domestic and foreign investors. There could be aberrations or withdrawals in the near term but this is a normal part of the tactical shifts in allocation that all funds make periodically. “India has been, and continues to be, one of the biggest overweights for global investors, who feel the country offers a great long-term story. The most encouraging feature is the surge in inflows we have seen from domestic investors. This is again going to be very healthy for the markets, since it will reduce volatility caused by global factors,” said Jyotivardhan Jaipuria, founder and MD, Veda Investment Managers. More on business-standard.com