Stocks lure $553 mn fresh investor capital

After pulling out over $4 bn in 2011,investors have funneled some fresh capital into India.

Written by Agencies | New Delhi | Published:April 2, 2012 7:25 pm

After pulling out over USD 4 billion in 2011,investors have poured in USD 553 million of fresh capital in India equity funds during the first three months of 2012.

As per data compiled by global fund-tracking agency EPFR,Indian markets attracted USD 553 million of fresh capital in equity in January-March quarter of 2012 as against an outflow of USD 526 million in the year-ago period.

Market analysts believe a strengthening rupee and easing of inflationary concerns have helped foreign investors step up their buying activities in India in the recent past.

In 2011,India-focused equity funds had witnessed an outflow of USD 4.12 billion.

Emerging markets regained some ground after a tough 2011 with BRIC (Brazil,Russia,India and China) countries together accounting USD 2.98 billion in the January-March quarter of 2012. During January-March 2011,BRIC countries witnessed an intake of USD 1.72 billion.

As per country-wise analysis,net investment into the China-focused equity funds has totalled USD 1.63 billion,followed by USD 1.23 billion in Russia and USD 553 million in India. However,equity funds dedicated to Brazil saw an outflow of USD 437 million during the period under review.

Overall,the total net inflow to emerging market equity funds so far in 2012 has reached USD 25.59 billion,as compared to a net intake of USD 24 billion for the same period of 2011.

“Flows into emerging market equity funds,meanwhile,were largely driven by interest in Russia’s oil story which offset fresh doubts about emerging Europe (the Eurozone debt crisis),the Middle East (Syria’s civil war and tensions with Iran) and Africa (political tensions and inflation),” the report noted.

Besides,equity funds-focused to Asia (excluding Japan) absorbed in USD 3 billion of capital during the first three months of the year against an outflow of USD 11.33 billion during the same period last year.

Globally,funds focused on developed-nation stocks posted a net outflow of USD 10.76 billion for the January-March period of this year,while they had infused USD 49 billion in the year-ago period.

The pull-out from equity funds dedicated to developed nations is mainly on account of huge outflow (USD 7.6 billion) from western Europe.

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