India registered FII equity inflow of $12 billion for June quarter

NEW DELHI:

Compared with other countries, India has registered an FII inflow (equity) of $12.2 billion for the quarter ended June 30.

On the other hand, countries such as South Korea, Taiwan and Indonesia have received far less inflows compared to India, Jahnavi Prabhakar, Economist at Bank of Baroda, said in a report.

Notably, the US and Thailand have seen FPI moving out of their respective countries. However, it is interesting to note that Japan has received a strong FPI inflow to the tune of $66 billion.

For debt flows, the US, Japan and South Korea outshines other countries in the fray. India has relatively low debt inflow in comparison to other countries, though it still remains more than Indonesia, Malaysia and  Thailand. The uncertainty of not been included in MSCI index has also pushed debt flows further away.

Certain global stock indices have gained double digit return from March to June. Among these, the biggest jump has been registered in Nikkei followed by Russia and Sensex. Indian equity continue to outperform other emerging economies on the back of strong optimism surround India’s growth story, signs of traction in domestic demand, supported by benign oil prices.

Additionally, robust financial markets coupled with better IPO returns and conducive environment will attract more FII flows in to the country, the report said.

Indian economy remains a favored place for investment as has been reflected by strong FPI flows in the past few months. This is likely against the backdrop of stable government polices, robust macro fundamentals, stable inflation and sustainable growth rates.

On the other hand, global economies have been witnessing challenges of slower growth, elevated inflation, fears of recession and rate hike cycle by central banks.

In terms of steady growth, China’s economy has also hit some breaks, pushing investors to rely on other countries for better returns. Countries such as India, Japan and South Korea have made most of the gains compared with global counterparts, especially in equity markets, the report said.


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