Market veteran and founder of Helios Capital, Samir Arora, on December 31 floated a different theory about the ongoing topic of the heavy selling by foreign institutional investors (FIIs) in secondary markets.
Arora responded to Safir Anand, renowned Intellectual Property Rights (IPR) lawyer and Senior Partner at Anand & Anand, who said 2024 saw the second highest FII selling in a decade.
On X platform, Arora said, "Safir, Don't fall for sensational headlines from the newspapers. FII flows are overall positive in India in 2024 (and negative in secondary markets). Overall FIIs compensated for their selling in secondary markets by buying even more in primary issues and QIPs etc."
V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, recently said that while FIIs sold equities worth Rs 1.19 lakh crore in 2024, they invested nearly Rs 1.21 lakh crore through primary markets, especially when the year saw a surfeit of initial share sales.
"The selling spree by FIIs seen in October and November has declined in December. There has been occasional buying by FIIs in early December but they turned sellers again, though not on a sustained basis like in October and November. For December, through 27th FIIs have sold equity for Rs 656 crore only through the exchanges. An important characteristic about FII investment is that they have been consistent investors of equity through the primary market. In December through 27th FIIs invested Rs 17,331 crore through the primary market.
"This trend of selling through the exchanges and buying through the primary market is discernible in the year-long trend in 2024. For 2024 till 27th December, FIIs sold equity for Rs 1,19,277 crore through the exchanges. In contrast to this selling trend they invested Rs 1,20,932 crore through the primary market. This means, FIIs are net investors in India so far this year. The selling through exchanges is mainly due to the high valuations and investing through the primary market is mainly due to the fair valuations. In the debt market, FIIs have invested Rs 1,12,409 crore so far this year (all data from NSDL)," said Vijayakumar.
He also gave his prognosis for 2025 with regard to FII behaviour.
"In early 2025, FIIs may again turn sellers into equity since the dollar has been appreciating (dollar index is above 108) and the US 10-year bond yields are attractive at around 4.4%. FIIs will turn buyers in India when there are indications of growth and earnings recovery."
FIIs have sold shares for the past ten sessions in a row, offloading shares worth about $2.8 billion.
Meanwhile, Arora also said that Indian markets should have a positive day on January 1, 2025 to spread cheer among most of the global markets that will be shut on the day.
"Since India is the only (or one of few) market open tomorrow, it is our collective responsibility to spread cheer around the world tomorrow. Imagine if investors and traders around the world see a strong Indian market tomorrow, how happy they will be that 2025 has got off to a good start," said Arora.
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