Financial Daily from THE HINDU group of publications
Friday, Jul 15, 2005
Markets - Foreign Institutional Investors
Now, it's the turn of Korea, Taiwan investors to knock at Indian doors
Mumbai , July 14
TRACING the footsteps of Japanese investors, Korean and Taiwanese FIIs are now entering the Indian equity market.
Top broking firms in India, which handle various FIIs, said most of the purchases by FIIs in the last 6-8 weeks have come from these three countries.
The exact amount that has come in is still not known but estimates by market players put it around $1 billion (Rs 4,400-4,500 crore) in the last couple of months.
Of this, around $60 million has come from Korea and Taiwan.
Investment from Taiwan and Korea has surprised various market players here as the equity market of these countries are also doing well.
Most of the money from these countries into the Indian equity market has come through the FIIs, which have registered in Singapore, Hong Kong or in the US or the UK. These FIIs have raised money from Korea, Japan and Taiwan with the objective of investing in India.
In the last few months, FIIs from Japan, Korea and Taiwan have also registered with SEBI.
Two FIIs registrations each have been made from South Korea and Taiwan while one registration has been made from Japan.
"India is attractively valued compared to markets like Korea and Taiwan and this is the reason for investors from these countries making investment in India,'' said Mr Andrew Holland, Executive Vice-President, DSP Merrill Lynch. He said due to the slowdown of US and Chinese economies, Korea and Taiwan would be affected. There would not be much impact on India.
Higher valuation for India is due to its constant growth and better corporate governance . "There is re-rating for India," said Mr Holland.
JM Morgan Stanley in a report said FIIs investors continue to place faith in Indian equities. "Post some mild selling in April and May, flows are back in the positive territory in June and July," it said.
Foreign ownership has climbed to 18.6 per cent and 21.6 per cent in India's top 200 companies and top 50 companies respectively, according to JM Morgan Stanley.
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