Listed fund inflows at $362mn in September

Mumbai: The month of September saw listed funds inflows of $362 mn, dominated by ETF inflows of $295 mn. India-dedicated funds saw inflows of $172 mn led by non-ETF inflows of $167 mn, while GEM funds saw inflows of $118 mn led by $251 mn of ETF inflows which was offset by $133 mn of non-ETF outflows.

Listed emerging market fund flows were mixed for all countries. China witnessed $10.8 bn of inflows, followed by Brazil and India, which saw $587 mn and $362 mn of inflows. Taiwan and Thailand saw outflows of $516 mn and $207 mn. Total FPI activity and EPFR activity showed similar trends for India and Taiwan, says a study by Kotak Institutional Equities (KIE).

Allocations to China and India constitute 47 per cent of the average Asia ex-Japan fund portfolio. Allocations to India by Asia ex-Japan funds increased to 16.3 per cent in September from 15.9 per cent in August, while allocations to India by GEM funds increased to 13.1 per cent in September from 12.5 per cent in August. Allocations by Asia ex-Japan non-ETFs to India increased to 17.1 per cent in September from 16.7 per cent in August, while allocations to India by GEM non-ETFs increased to 12.6 per cent from 12.2 per cent in August.

Taking to Bizz Buzz, Shrikant Chauhan, head of equity research (retail), Kotak Securities, said: "Despite a spectacular rally in October, the market saw heavy selling pressure from FIIs at around Rs16,611 crore. The Nifty / Sensex was at 17500/58750 and moved to 18600/62245 before closing at 17850/59870 today. Since the beginning of the new financial year, the market has established a tendency to see huge selling pressure in the first month of the new quarter."

FIIs have been selling steadily due to the sudden rise in US 10-year bond yields and a steady rise in the price of Brent crude. Until the market is not crossing 18,600 points, we would see range bound activity in the market with a negative bias. However, the levels of 17700 and 17600 would be major supports for the market and we should search for buying opportunity in the market with a short-term view, he added.

KIE's foreign fund-flow tracker gives a comprehensive view of the market flow by listed funds into India and its emerging market (EM) peers. These market participants are further classified based on their investment styles [passive (ETFs) or active (non-ETFs)] in an attempt to understand the intent and sentiments governing the flow. Please note there is a difference between EPFR-reported fund flows and FPI flows reported by NSDL. EPFR fund-flow data primarily tracks mutual funds, ETFs, closed-end funds and variable annuity funds/insurance-linked funds, whereas FPI flows reported by NSDL also capture investments from hedge funds, proprietary desks and sovereign wealth funds.