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Foreign fund equity inflows drop in Jan
Foreign fund inflows into Indian equity plunged 91.2 per cent in January from a year ago, reflecting both investors` concern over slower earnings and better opportunities in other emerging economies, analysts said.
Foreign fund inflows into Indian equity plunged 91.2 per cent in January from a year ago, reflecting both investors' concern over slower earnings and better opportunities in other emerging economies, analysts said.
Data released by the Indian market regulator on Friday showed net foreign fund investments in shares in January totalled $74.5 million -- just 8.8 per cent of the $849.9 million in foreign fund equity inflows in the same month last year.
"Most funds are bullish on Far Eastern markets such as South Korea, which are leveraged to a global recovery compared with India," said a London-based fund manager with $35 million in Indian stocks.
In contrast, companies in India's software technology sector -- the single biggest attraction for foreign investors -- have disappointed investors by lowering their earnings estimates.
Clearly, the lack of earnings visibility in the near term has made investors very cautious on the tech sector," said Hong Kong-based Ashish Goyal, who helps manage $6 billion at Prudential Asset Management Asia. Some three per cent of that is invested in India.
The inflows were higher than in each of the previous two months -- which combined stood at $86.4 million -- but analysts said allocations should peak at the beginning of the year, while fund managers usually book profits at the end of the year.
Bureau Report
Data released by the Indian market regulator on Friday showed net foreign fund investments in shares in January totalled $74.5 million -- just 8.8 per cent of the $849.9 million in foreign fund equity inflows in the same month last year.
"Most funds are bullish on Far Eastern markets such as South Korea, which are leveraged to a global recovery compared with India," said a London-based fund manager with $35 million in Indian stocks.
In contrast, companies in India's software technology sector -- the single biggest attraction for foreign investors -- have disappointed investors by lowering their earnings estimates.
Clearly, the lack of earnings visibility in the near term has made investors very cautious on the tech sector," said Hong Kong-based Ashish Goyal, who helps manage $6 billion at Prudential Asset Management Asia. Some three per cent of that is invested in India.
The inflows were higher than in each of the previous two months -- which combined stood at $86.4 million -- but analysts said allocations should peak at the beginning of the year, while fund managers usually book profits at the end of the year.
Bureau Report