The stock-selling spree unleashed by foreign institutional investors over the past one month from November has turned them net sellers in the cash market this calendar year. But the markets have shown resilience mainly due to big buying by insurance companies, say experts.
The continued selling in frontline stocks by foreign investors over the past one month, which also coincided with curbs on participatory notes (P-notes), delayed the Sensex and the Nifty from closing above the crucial milestone of 20,000 and 6,000 respectively.
Infrastructure, realty are the current favourites.
In spite of a curb on P-notes and markets being generally volatile throughout November, IPOs have bucked the trend by most of them getting listed at a premium. It seems that FIIs have entered more aggressively into primary market after this move.
With the AIM (Alternative Investment Market) becoming increasingly popular as a fund raising destination, Indian companies are flocking to tap the opportunity provided by this sub-market of the LSE.
With the stock markets growing in size, this rule, which was framed eight years back, needs revision to allow such nominal dilution only if the IPOs are worth Rs 500 crore (Rs 5 billion) or above, according to experts. The rules require promoters to shed at least 25 per cent if the IPOs are less than Rs 100 crore (Rs 1 billion). The promoter holding in 500 listed companies has gone up to 58 per cent during the July-September quarter from 54 per cent in the April-June quarter.
While Geojit Financial Services and Kotak Securities are already managing large NRI portfolios in West Asian countries, Sharekhan, yet another local brokerage outfit, recently launched a broking platform called India First in Bangkok for NRI clients.
Sixty out of 154 mutual funds have underperformed their benchmarks by over 30 per cent
The new entrants into the Indian mutual fund industry are making big strides through a plethora of new fund offerings and fixed income schemes as they grow their assets under management at a fast pace. Fund house Lotus Asset Management Company, which was launched just a year ago, has seen its assets grow from Rs 6,385.86 crore (Rs 63.85 billion) to Rs 8,142.93 crore (Rs 81.42 billion) in October, a steep rise of 27.5 per cent.
Credit Agricol (CA), the second-largest French bank, is all set to enter the Indian insurance and asset management business.US-based middle market focused investment bank Jefferies Group, which opened its representative office in New Delhi last month, plans to enter the institutional brokerage and asset management business in India.
High net-worth individuals, or the rich investors with investment portfolios of Rs 25 lakh and above, who totted up huge losses in this year's price corrections in February and August, are booking profits following the nearly 4,000-point surge in the Sensex since late August.
A day after Federal Reserve Chairman Ben Bernanke announced the rate cut, FIIs bought shares worth over Rs 2,400 crore (Rs 24 billion), lifting the index up by 650 points, one of its biggest intra-day gains.
Foreign institutional investors (FIIs), which were the major sellers last month, are on a buying spree.
Of the 450 stocks, 243 stocks -- mostly small- and mid-caps -- touched their 52-week highs on Tuesday. Both the Sensex and Nifty ended the day with declines of 0.34 and 0.24 per cent respectively.
This comes on the back of impressive performance in infrastructure stocks in 2006 and in the first seven months of this calendar.
Lower price-earnings ratio, big IPOs attract players.
The Indian mutual fund industry's assets under management race from Rs 3 trillion to Rs 4 trillion has come in just nine months.
The ministry of corporate affairs (earlier company affairs) is amending the stringent IDR (Indian depository receipts) regulations to make it easier for foreign companies to list here.
India Inc created a new record by mobilising Rs 24,993 crore (Rs 249.93 billion) in FY06-07, which is higher by as much as 5 per cent compared with the previous year's Rs 23,676 crore (Rs 236.76 billion).
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