India gets highest FPI inflows in 12 yrs in November at $8.1 bn

NEW DELHI: Foreign portfolio investors (FPIs) infused a record $8.1 billion in November—the highest in 12 years—said Bank of America Securities (BofA Securities) in a report on Monday. FPIs own more than 24 per cent of the domestic market and have pumped in $5 billion in December so far which is also “exceptionally strong”, the report added.

India has received the highest FPI inflows among the emerging market peers in November as Brazil got only $6.2 billion, South Korea ( $ 5.2 billion), Taiwan ($ 4.5 billion) and Thailand at $ 1.1 billion. BofA added that the fund inflows were driven by active funds.

FPIs parked their maximum funds in financials at  $4 billion, followed by discretionary stocks at $ 854 million and industrials at $ 687 million and had the least interest in it where they picked up on stocks worth $104 million and real estate wherein they pulled out $58 million.

A potential return of loan growth can act as a trigger for well-run and well-capitalized private sector financial stocks like HDFC Bank, ICICI Bank and HDFC to outperform. The brokerage is also overweight on industrials and materials sectors where it sees scope for further FII repositioning on improving traction on government’s capex push.

In contrast to robust Foreign Institutional Investor (FII) flows, domestic flows remained at negative $2 billion. While active funds continued to see net outflows of $2.1 billion for the fifth month in a row in November, passive funds improved by 116 per cent month-on-month to $ 57 million, as against -$ 351 million in October.