Market watch: The missing ‘net FIIs’

While this fiscal saw indices rising higher, net foreign portfolio investments in equities look anything but promising. With just one month left for FY2018 to close, there is merit in looking at the foreign portfolio investors’ (FPIs) ‘net’ equity investment activity on the stock exchanges.

Foreign portfolio investors have a repute of making, and breaking markets, and the picture this year looks a little glum.

In the 11-months ending Feb 2018, FPIs were net sellers in equity to the tune of Rs 29,892.69 crore. In the dollar-terms, that translates to a negative $4.61 billion. In contrast, FPIs were net buyers of equity worth Rs 14,632.20 crore, or $2.53 billion, during the same period last year.

The net sellers tag gets thorny when one looks at the performance of indices during the same period. In the eleven months ended Feb 2017, the S&P BSE Sensex had increased by over 3,136 points, from around 25,606 in April 2016, to 28,743 in Feb 2017. However, the change in this fiscal is much higher – 4,265 points, from 29,918 in April 2017, to 34,184 in Feb 2018.

Yet, the net investment figures are abysmal. Although, it is in March, the last month of the fiscal, that the action can be expected. Last year in March, FPIs were net buyers on the stock exchanges for equities worth Rs 29,480.37 crore - $4.48 billion in dollar terms. This lead to FPIs’ net equity investments touching Rs 44,112.57 crore ($ 6.73 billion) for fiscal ended March 2017.

Given that March 2017, alone, accounted for over 66% of the total net investments, a similar performance will be welcome this March too.