FII inflows top $7.5 bn in eight months

Foreign institutional investors' (FIIs) net investments crossed $7.50 billion mark to $7.61 billion in the first eight months of calendar 2005. This is almost 90 per cent of the $8.52 billion net investments made by them in entire calendar 2004. FIIs had reported net inflows of $6.59 billion in 2003 and $751 million in 2002.

"The Indian market may be a bit over-stretched but FIIs are not particularly concerned about fundamentals. They are buying the growth story," said a fund manager with a foreign brokerage.

In rupee term, FII investments in the first eight months of 2005 was Rs 33,226 crore against Rs Rs 38,965 crore in 2004. If one excludes the outflow of Rs 3,854 on account of the conversion of global depository receipts (GDR) of ICICI Bank and Infosys Technolgoies, total inflows in the market in 2005 thus far has been almost 96 per cent of last year's FII inflows.

The FIIs have aggregated a turnover (buying and selling) of Rs 3,07,798 crore in first eight months of 2005 which was 93 per cent of whole calendar year 2004. In 2004, FII turnover in Indian equity markets was Rs 3,32,379 crore.

After being net sellers in April and May, FIIs have continuously making net purchasers in last three months with $ 4.21 billion worth of equity shares. In August, they purchased shares worth $1.16 billion, according to the data available with the Securities and Exchange Board of India (Sebi).

They bought $1.23 billion worth of shares in May and $1.82 billion in July. FIIs sold $150 million shares in April and $261 million in May. The largest-ever single month inflow was recorded in February 2005, when they were net buyers of shares worth $1.91 billion.