BUSINESS

US investors' equity clout a mirage

By N Mahalakshmi in Mumbai
September 21, 2005 14:19 IST
If investors are worried that the liquidity in the Indian bourses will evaporate if the greenback flows back into the United States for some reason, here is something to put such concerns to rest.

According to data sourced from the capital market regulator Securities and  Exchange Board of India, only 35 per cent of all investments made by foreign institutional investors in Indian equities is from the United States.

The rest came from a diverse set of countries both from the developed and the developing world.

About 17.2 per cent of net investments have come from FIIs from the United Kingdom, followed by Luxembourg at 10 per cent and Singapore at 9.3 per cent.

Other countries which have an account for over five per cent of the total FII  investments in the country include Singapore, Hong Kong and Mauritius.

Besides, FIIs from Spain, United Arab Emirates, Netherlands, Australia, Denmark,  Canada, France, Switzerland, Finland and Kuwait have over Rs 500 crore (Rs 5 billion) invested in Indian stocks.

Till date, FIIs have poured in Rs 1,64,441 crore (Rs 1644.41 billion) or $38.6 billion into Indian stocks. In terms of the number of FIIs registered in the country, about 41 per cent belong to the US, 17 per cent to UK and 7 per cent to Luxembourg.

Apart from several European countries like Switzerland, Netherlands, Ireland, France, Italy and Denmark, FIIs from the Middle East countries like UAE, Oman, Bahrain and Kuwait also figure in the long list of registered FIIs.

Among the 739 FIIs registered with Sebi at the end of July, only 300 belong to the United States, about 128 are from the United Kingdom, 54 from Luxembourg, 33  from Singapore, 29 from Hong Kong and 24 from Canada. Notably, only 18 of them came from Mauritius.

And there is also evidence to show that not all of the money that is flowing into the country is sizzling hot money from hedge funds and arbitrage funds. There are several pension funds which usually take a long term approach to investing in equities.

Some such prominent FIIs registered with Sebi include Norges Bank (Central Bank of Norway) and City of New York Pension Fund.

Local Investment Fund (pension fund of the government of New South Wales), New Zealand Superannuation Fund, California Public Employees' Retirement System (CalPERS), the United Nations Joint Staff Pension Fund, Public School Retirement System of Missouri and Commonwealth of Massachusetts Pension Reserves Investment Trust.

N Mahalakshmi in Mumbai
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