India sees record $1.3 billion fund inflows from listed foreign funds in August
In comparison, listed foreign funds poured in $1.2 billion in July after pulling out $332 million in July
New Delhi: India saw a record inflow of over $1.3 billion from listed foreign funds in August, primarily on account of strong capital infusion in passive funds, says a report.
In comparison, listed foreign funds poured in $1.2 billion in July after pulling out $332 million in the preceding month.
Overall, the country has seen an inflow of $545 million so far this year.
"Listed fund flows to India recorded $1.34 billion in August with strong inflows in passive funds at $845 million," said a Kotak Institutional Equities report.
India is followed by Taiwan, which attracted an inflow of $1 billion.
The listed funds -- passive exchange-traded funds (ETFs) and active non-ETFs -- generally account for a large part of foreign portfolio investor (FPI) activity in India.
ETFs have seen higher inflows compared with non-ETFs during the month under review.
Indian market witnessed inflow worth $845 million and $499 million in ETFs and non-ETFs segments, respectively.
The report, which offers a comprehensive view on fund flows of listed funds into India and other emerging markets, said net FPI activity across emerging markets remained positive in August.
"Net FPI activity for calendar continues to be positive on the back of other participants, especially sovereign wealth funds (SWFs), whose share in FPI assets under custody remains around 11 percent in July from 8 percent a year ago," it
Active Asia (excluding-Japan) funds allocated 14.6 percent to India in July compared with 14.7 percent a month ago. Active global emerging markets funds reduced their India exposure to 13.2 percent from 13.4 percent in June.
Traders said expectations for foreign fund flows into domestic shares would help the rupee, which should open around 51.95 per dollar and move in a 51.80 to 52.20 band.
On Tuesday, the domestic currency had tumbled 31 paise to close at a fresh 29-month low of 68.38 a dollar
Market experts believe overseas investors are currently looking for triggers such as RBI's review policy that is scheduled for Friday besides the US Federal policy at the end of the month.