MFs, FIIs reverse December trends

The contribution by MFs to the equity market in December 2007 is just Rs 396.9 crore. In December 2006, MFs bought equities worth Rs1,627.06 crore.

Deven Choksey, MD, KR Choksey Securities, a Mumbai based stock broking firm, said, 8220;FIIs in December are in a holiday mood and would like to stay away until the holiday season comes to an end. So, we see instances when they are net sellers and take home their year-end profit. As far as mutual funds are concerned, at present they are sitting on huge cash and they take this opportunity to churn their assets under management AUM. However, over the last five years, MFs have significantly increased their AUM, and this has increased their strength, which allows them the option of taking a view contrary to FIIs8217;.8221;

In December 2006, FIIs sold equities worth Rs 3,667.3 crore, but MFs were net buyers at Rs 1,627.06 crore. In December 2005, FIIs bought equities worth Rs 9,335 crore and MFs were net sellers at around Rs 1,376.73 crore.

This disparity was also visible in December 2004 when FIIs had poured in Rs 6,683.6 crore and MFs sold equities worth Rs 355.83 crore.

Overall, FII inflow in equities in 2007 has increased 82.85 per cent to Rs 66, 813.60 crore compared with last year8217;s Rs 36,539.70 crore.