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FPI flows remain volatile, while mutual fund flows edge up in Q4FY18
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
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Summary
The foreign portfolio investors (FPI) flows had remained positive yet volatile at $2.1 billion in Q4 of the financial year 2018, ICICI Securities said in a note, adding that the mutual fund flows mildly accelerated in the fourth quarter. Despite net inflows of $3.4 billion, fiscal year 2018 was the second highest volatile year for FPI …
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The foreign portfolio investors (FPI) flows had remained positive yet volatile at $2.1 billion in Q4 of the financial year 2018, ICICI Securities said in a note, adding that the mutual fund flows mildly accelerated in the fourth quarter.
Despite net inflows of $3.4 billion, fiscal year 2018 was the second highest volatile year for FPI flows after FY16.
On the flipside, mutual funds (MF) invested a net $21.9 billion in FY18 into the markets against $8.2 billion in FY17.
In FY19 to-date, flows have been negative for FPIs at $0.9 billion (of which $ 0.2 billion was in primary markets) while MF’s continue to be positive at $ 1.5 billion, ICICI said.
In the fourth quarter of 2018, FPI holding in Nifty50 index rose by 10 basis points to 29%.
“FPIs were observed selling in their overweight (OW) sectors such as auto, consumer discretionary and cement, while buying NBFCs, private banks and telecom. FPIs were net sellers in underweight (UW) sectors, selling in consumer staples, utilities and PSU banks while buying in IT and metals,” ICICI Securities said.
While mutual funds’ net buying was seen in the top five sectors being energy, industrials, telecom, NBFCs and private corporate banks.
In two successive quarters, FPIs have increased their holdings in: IndusInd Bank, Axis Bank, Tata Power, Divi’s Lab and Infosys while they decreased holdings in Tata Motors DVR, Indiabulls Housing Finance, Power Grid, Tata Motors, Yes Bank and Asian Paints, the brokerage said.
The brokerage said that FPI flows will continue to depend on global environment for equities which could see bouts of volatility in 2018 as interest rate normalisation in developed markets unfolds and US Fed balance sheet reduction programme continues.
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