FIIs pump Rs 20,000 cr in stocks from early-March

[B. Karthick]

CHENNAI: Foreigners have been able to spot value better than Indians,
at least as far as the stock market goes. FIIs have put in close to Rs
20,000 crore into Indian stock markets in the last 43 days since the
bull rally began.

Simply put, FIIs were daily net buyers of Rs 500 crore investments per
day at a time the benchmark index went up above 14,000 from 8,160
levels. In comparison, mutual funds have been net buyers of Rs 3,300
crore - around 1/7th of the amount committed by FIIs.

According to Sebi data, FIIs have made net investments of Rs 19,820
crore till Tuesday from March 9, (when the 6,000-point rally began).
The deluge of funds brought into the country by the FIIs has made them
net buyers of equity for the calendar year 2009 at Rs 10,681 crore.
They were net sellers of stocks amounting to a whopping Rs 52,987
crore in calendar year 2008.

FIIs are betting on companies reporting an improved financial
performance in the years to come on the back of solid government
policy initiatives. "We think the ensuing policy action will improve
growth and thus earnings. We are forecasting 2.5% and 12.5% growth in
earnings for sensex constituents in FY2010 and FY2011 respectively
compared to our earlier forecast of minus 10% and 11%," Ridham Desai
of Morgan Stanley said.

While many investors are waking up the possibility of Indian economy
coming back on track with a smoother-than expected government
formation, experts say the bet taken by FIIs for the last 2 months has
paid off.

B.Karthick
Research Analyst