FIIs bet on stable govt post 2014 polls
MUMBAI:
Foreign funds investing in India are turning positive on the country
after the state poll results showed a strong support for BJP and raised
the chances of a change of guard at the Centre by mid-2014. The biggest
positive for foreign fund managers from these poll results was the
confirmation that the democratic process in India is firmly in place and
any further indications of a stable government - along with a stable
currency - will bring back the serious long-term foreign institutional
investors (FIIs), according to traders and institutional dealers.
"The (state poll) results show people's disappointment being reflected, something that many foreign investors had started doubting of late for India in respect of some of the recent governance issues," said Sampath Iyengar, a former CEO of a hedge fund. "These results can also bring down the chances of the emergence of a third front government at the Centre, something that FIIs were not comfortable with," Iyengar said.
Dharmesh Mehta, deputy CEO, Axis Capital, said, "Irrespective of which political party comes to power at the Centre next year, FIIs are looking forward to a stable government that can move the reforms process faster."
The other factor that would decide the direction of the FII flows towards emerging market countries like India is the strength of the US economy, which in turn would decide the US Fed tapering, institutional dealers said. Last week, as the state election trends indicated a strong showing by the BJP, FIIs net-bought stocks worth about Rs 3,650 crore compared to net inflows of about Rs 8,116 crore during the whole of November. Seen another way, 45% of last month's inflows have been covered during the first week of a month that has historically seen muted FII activity, market players said.
"The (state poll) results show people's disappointment being reflected, something that many foreign investors had started doubting of late for India in respect of some of the recent governance issues," said Sampath Iyengar, a former CEO of a hedge fund. "These results can also bring down the chances of the emergence of a third front government at the Centre, something that FIIs were not comfortable with," Iyengar said.
Dharmesh Mehta, deputy CEO, Axis Capital, said, "Irrespective of which political party comes to power at the Centre next year, FIIs are looking forward to a stable government that can move the reforms process faster."
The other factor that would decide the direction of the FII flows towards emerging market countries like India is the strength of the US economy, which in turn would decide the US Fed tapering, institutional dealers said. Last week, as the state election trends indicated a strong showing by the BJP, FIIs net-bought stocks worth about Rs 3,650 crore compared to net inflows of about Rs 8,116 crore during the whole of November. Seen another way, 45% of last month's inflows have been covered during the first week of a month that has historically seen muted FII activity, market players said.
vijay kr yadav
pgdm sem-1
sou- times of india
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