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FII inflows log sharp jump

The Indian equity markets seem to be slowly coming out of the shadows of big operators like Harshad Mehta, and are getting more and more institutionalised.

The influence that operators had over the markets earlier has waned, and it is now the foreign institutional investors or FIIs who are setting the tone for market movements.

In the last three months, FII turnover has been steadily on the rise -- from an average of Rs 3.8 billion in October 1999 to Rs 8.98 billion in March 2000 till date.

Month	Daily Average FII turnover (in Rs crore)
October 1999	379
November 1999	344
December 1999	321
January 2000	623
February 2000	750
March 2000	899

A jump of more than 200 per cent in the daily FII turnover has been recorded, while the monthly average of daily traded volumes has increased by almost 30 per cent to Rs 100 billion during the same period.

The domestic institutions' daily turnover is not as high as that of the FIIs. Their average turnover is around Rs 3 billion. This is quite significant as it depicts that it is primarily the FII turnover that has ballooned.

This puts the combined daily institutional turnover at about Rs 12 billion, which is 10 per cent of the daily traded volumes at the Bombay and the National stock exchanges put together.

This increase in the FII turnover coincides with the rise in the number of FIIs registered with the Securities and Exchange Board of India or SEBI from about 480 in October 2000 to 506 at present.

This jump is also due to the increase in valuations of the top 100 stocks. For instance, Infosys Technologies, which was quoting at Rs 3,500 levels in October 1999 is currently at Rs 10,200 levels. Satyam Computer, which was at Rs 1,700 levels, is currently at Rs 5,000 levels.

Yet another reason for the jump in the daily FII turnover is the FII inflows so far in this year are of $ 1.07 billion. In the entire last year FII inflows were to the tune of $ 1.5 billion.

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