FPI ownership in BSE 200 is at 24.1 percent as of March 2019, which shows that as a group they have a substantial interest in Indian equity market
Foreign investors who looked cautious in the run-up to the election results could step on the gas now on hopes of continuity of reforms, favourable business climate and the strength of the economy, which is still growing stronger when compared to other emerging markets (EMs).
In the current month, Foreign Institutional Investors (FIIs) have withdrawn more than Rs 4,000 crore till May 28, but they still remain net buyers in 2019 pouring in more than Rs 50,000 crore in Indian markets, data showed.
Prior to this, overseas investors had infused a net amount of Rs 16,093 crore in April, Rs 45,981 crore in March and Rs 11,182 crore in February in the capital market (both equity and debt).
Inflows in Indian markets halted in May largely on concerns over trade tensions between the US and China and uncertainty around general elections, suggest experts. However, they add that India is still one of the most stable economies when compared to other emerging markets which should prompt FIIs to invest in the country.
Mark Mobius, Founding Partner of Mobius Capital Partners in an interview with CNBC-TV18 last week expressed relief that India was doing better than China.
“China has the biggest weight of 30 percent in the emerging market basket and India has less. But I hope India’s market capitalisation will go up,” he said. Mobius said he started investing two months ago. “We like some companies in finance, cement, piping, cable, etc.”
Foreign investors may remain cautiously optimistic on what Modiu government will deliver in its second term, but experts are fairly confident of FIIs turning net buyers in Indian equity market with a rise in ownership.
FPI ownership in BSE 200 is at 24.1 percent as of March 2019, which shows that as a group they have a substantial interest in the Indian equity market.
In the last four out of five years, FIIs pumped in money with the exception only of 2018 when they withdrew ~$4.5 billion, Hemang Kapasi, Portfolio Manager-Equity, Sanctum Wealth Management told Moneycontrol.
“In the first four years, they had invested $30.27 billion, hence, overall they have invested ~$26billion in the last five years in the Indian equity market. Also, in CY19, they have already invested~$9.76 billion by April end,” he said.
Kapasi further added that FII should continue to invest in Indian markets as they always look for political as well as economic policy stability.