Instanex Capital launches FII Index, which helps instant tracking of transactions.
Tracking foreign institutional investor’s (FII) intra-day deals on bourses is a lot easier now. Instanex Capital Consultants, which compiles the Skindia GDR index based on global depository receipts of Indian companies, has launched Instanex FII index, which is based on the top 15 stocks in the portfolio of FIIs. The stocks are also part of the 30-scrip Bombay Stock Exchange Sensitive Index and the 50-share S&P CNX Nifty.
Gautam Chand, CEO of Instanex Capital, said the Instanex FII Index will help investors to track FII transactions more closely. The top 15 companies included in the index have stock future listed in India, 20 per cent weightage to single scrip, 30 per cent to industry and over 30 per cent holding of principal shareholder in that company.
The FII holdings in these 15 stocks is more than one-third of the total floating market capitalisation. Whenever the FII index underperforms the benchmark index, the trading data posted by BSE and NSE at the end of the day show a net seller status for FIIs. It is true vice-versa also.
| IN SYNC | |||
| Instanex FII Index* | BSE Sensex* | FII Flows Rs cr | |
| Feb 13 | 1.40 | 1.78 | -13.15 |
| Feb 16 | -3.31 | -3.42 | -45.33 |
| Feb 17 | -2.88 | -2.91 | -462.21 |
| Feb 18 | -0.50 | -0.22 | -288.44 |
| Feb 19 | 0.45 | 0.30 | -363.49 |
| Feb 20 | -2.26 | -2.21 | -201.17 |
| Feb 24 | -0.69 | -0.24 | -431.18 |
| Feb 25 | 0.73 | 0.91 | -384.37 |
| Feb 26 | -2.11 | 0.71 | -463.00 |
| * change over pervious day | |||
Chand said the index could be an important benchmark as FIIs are the largest institutional investors in India and determine the direction of the market. Their buy and sell orders are usually three times the value of those posted by domestic domestic institutional investors (DIIs). Index weights are based on the adjusted market value of holdings of FII investments in the 15 companies and are constantly updated for all corporate actions. Reviews are conducted quarterly and companies are deleted from the index if they are not among the top 20 FII holdings.
Foreigner interest in Indian equities is highly concentrated with the top 10 American Depository Receipts (ADRs) accounting for 90 per cent of the value traded abroad.
The Instanex FII Index tracks the price performance of the portfolio of listed Indian equity shares owned by FIIs and is the first index in the world based on market value of securities of an investor class. In 1994, Chand, a member of the core team that developed the S&P CNX Nifty in 1995, developed the Skindia GDR Index using free-float market capitalisation as the basis for weights.
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Instanex is the only non-exchange developer of major indexes in India. Chand said research indicated that 30 per cent of Indian equity trading by foreigners was done outside India, mainly through ADRs and GDRs on the US and UK exchanges and networks. This market was represented by the Skindia GDR Index, he said. The balance 70 per cent of foreigner trading is done in India, mainly on NSE and BSE.
This market is represented by the Instanex FII Index.