Skip to main content

FPIs keep faith in equities

Foreign investors have invested about USD 124 billion in Indian equities over 2008-17 and own large stakes in the country's best companies, says a report. In stark contrast, Indians have "consumed" around USD 300 billion worth of gold over the same period. "The next decade will perhaps decide the winner, but we note that foreigners own large stakes in India's best companies," said Kotak Institutional Equities in a note.
Foreign portfolio investors (FPIs) own a combined more than 50 per cent in five of India's top seven banks and financial institutions.
"It seems that foreigners have more faith in India's economy (banks are perhaps the most leveraged plays on the same) than Indians," the report said. Large gold imports reflect low confidence historically among Indians in government policies and the sharp rise in gold imports up to 2012-13 reflected the Indian citizens' concerns about high inflation.
The report further said India's inflation management policy achieved remarkable success, and this in turn should reduce gold's function as a "store of value".
According to the report, of the total USD 124 billion stock investment over 2008-17, FPIs put in USD 96 billion in 2010-14.
Moreover, a bulk of FPI inflows into India by this March-end in the current decade came especially in the years with high inflation.
According to the report, the value of FPI holding in the top 200 stocks by market capitalisation stood at around USD 130 billion as of March 31, 2007.
The value of the same portfolio -- no change in ownership -- of stocks would have increased to about USD 279 billion as of March 31, 2017.
"We note that the current value of FPI holding in the top 200 stocks (BSE-200 Index stocks) is USD 368 billion," the report said, adding that an analysis of the top 25 holdings of the FPIs shows that the increase in foreign ownership in certain companies has resulted in superior returns.
Moreover, India's financial inclusion programme has attained "undeniable" success and should reduce the compulsion of citizens to own gold as they have access to bank accounts.
Besides, a proper taxation policy on gold is expected to achieve the desired national goals, the report added.

Comments

Popular posts from this blog

DHIRUBHAI ENJOYED IN WEALTH CREATION

Leading businessman Anil Ambani today said more than creating wealth for himself, his father late Dhirubhai Ambani derived greater happiness from creating wealth for masses. "If you ever asked what part of being an entrepreneur he (late Ambani) enjoyed the most, he would say, 'I enjoy creating wealth. But what I enjoy even more is in creating wealth for the people of the country,'" the Anil Ambani Group chairman said while addressing an industry event here. It can be noted that the late Ambani, who had a humble beginning as a primary school teacher's son in Gujarat, is regarded as the father of capital markets and the equity cult, who made millions of investors millionaires with the IPO of Reliance Textile Industries in 1977. A person who had put in Rs 1,000 then in the IPO is worth over a million today, going by the price of RIL. Stating that the launch of Kothari Pioneer Mutual Fund, which was country's first private MF in 1993, was his (Dhirubhai's) id…

BEAR GRIP ON INDIAN STOCK MARKET

RECORDS 1 WEEKLY FALL IN 6 WEEKS
Gripped by fear psychosis due to geo-political aftershocks, key stock market indices were on a sticky wicket for the fifth day today as both Sensex and Nifty fell over 1 per cent to hit their one-month lows. The sharp plunge left investors poorer by over Rs 95,000 crore as the market cap stood at Rs 1,27,08,846 crore. Risk appetite took a hit after the Economic Survey said achieving the high end of the 6.75-7.5 per cent growth projected previously will be difficult. This is markets' first weekly fall in six.
Weakness in the rupee against the American currency and lacklustre global shares dragged down the indices, too. The BSE 30-share Sensex remained in the negative zone and settled down 317.74 points, or 1.01 per cent, at 31,213.59, its weakest closing since July 4. The index had tumbled 794.08 points in the last four sessions. The NSE Nifty after cracking the 9,700-mark to hit a low of 9,685.55, finally settled lower 109.45 points, or 1.11 per cent…

ASTRO TECHNICAL GUIDE FOR NIFTY

 for 11, April 2017
Opening Session  Subdued
Tithi ::Chaitra Bahula  Padyami
Nakshatra:Chitta
Persons born in Pushyami, Anuradha and Uttarabhadra constellations and those born in Libra and Aquarius are advised to be alert in their dealings.
Sensitive / Trend change Timings : 10.05 AM; 11.40 AM; 2.30 PM
Likely Intraday Trend...
On the basis of planetary position and aspects amongst planets, Market is expected to open  Subdued  and remain so  till about 11.20AM and could remain  better from  about 11.30 AM till about 1.30 pm and could remain subdued thereafter till  about end of the day.
Astro Technical Trading Strategy...
If Nifty Fut. Trades below  ATP/ Open level by about 9.30 AM , Short   Positions can be taken with suitable   SL, and such positions can be closed by about 11.30 AM. If Nifty Fut trades above  ATP by about 11.45 AM, Long Positions can be taken with suitable SL,and such positions can be closed by about 1.30 PM / 1.45 PM.
Technical Levels... Resistance : 9220, 9255 Sup…