FII inflows nearing $9 bn

The foreign Institutional Investors' (FIIs) net investment in the Indian stock markets in calendar year 2005 came close to $9 billion last Friday (December 9) overtaking their $8.5 billion net investment in equities last year.

This is the highest ever FII investment in Indian equities since the stock markets opened up for them in December 1993.

According to data released by the Securities and Exchange Board of India (Sebi), FIIs bought $91.90 million equity shares on last Friday, taking the net inflows this year to $8.996 billion "" just $4 million away from the $9 billion.

The net FIIs inflows in current calendar year have been higher by $477 million so far compared with net investments of $8.5 billion in calendar year 2004.

In rupee terms, FII investments touched Rs 39,384 crore on December 9 compared to Rs 38,966 crore in calendar year 2004. This year, the FIIs bought Rs 263,204 crore equity shares and sold Rs 223,820 crore shares.

"Looking forward, the FII flow will increase and we will not be surprised if it crosses the $10 billion mark next year. The India story is still unfolding and a rising US rates will not dent the sentiment," said a fund manager. According to him, the FIIs net inflow by the end of December could come close to $9.5 billion.

After turning net sellers of shares worth $841 million in October 2005, FIIs bought shares worth $ 903 million in November and $342 million in current month till December 9.

Apart from October this year, the FIIs were net seller in the Indian equity market in April and May of 2005. They sold shares worth $150 million in April and $261 million In May 2005.

The FIIs were net buyers to the tune of over $1 billion each for as many six months during current calendar. In February 2005, they made a net purchase of shares worth $1.9 billion followed by $1.7 billion in March, $1.2 billion in June, $1.8 billion in July, $1.16 billion in August and $1.07 billion in September 2005.

In calendar year 2004, FIIs had bought $6.59 billion equity shares and in 2003, $751 million equity shares in Indian stock markets.