India story:FIIs like govt debt more than equity, says CLSA

Moneycontrol BureauForeign institutional investors are showing a marked preference for government debt over equities for the second consecutive years and this trend could persist for a while, says the GREED & Fear newsletter of brokerage house CLSA.FIIs bought a net USD 26.3 billion worth of Indian debt in 2014 and USD 8.1 billion so far in 2015, compared to USD 16.2 billion and USD 4 billion of equities, according to GREED & fear."This is both because of the fundamental merits of the local fixed income market and also because the government continues to open the market gradually to foreign capital," says the note. "Local currency government bonds will remain a more compelling "top down” investment story in India than equities so long as there is no compelling evidence of a new investment cycle," the note says.