FIIs shop for stocks worth $1.16 billion in first 20 days of 2012

Between 2nd and 20th January, foreign investors infused $1.16 billion, or Rs6,007 crore, into the Indian equity market, but were more bullish on the debt market, making a net investment of Rs15,933 crore during the same period, according to SEBI data

Mumbai: Foreign Institutional Investors (FIIs) stayed away from Indian equities in 2011, but have already shopped for stocks worth $1.16 billion (or Rs6,007 crore) in the first month of 2012.

Between 2nd and 20th January, foreign investors infused $1.16 billion, or Rs6,007 crore, into the Indian equity market, but were more bullish on the debt market, making a net investment of Rs15,933 crore during the same period, according to data from the Securities and Exchange Board of India (SEBI).

Market experts believe that rupee strengthening and easing concerns over inflation and economic growth have helped foreign investors step up buying in recent sessions.

Analysts said the weak earnings outlook is only a matter of concern in the short-term, as conditions may improve in line with changes in the domestic and global macro-environment.

FIIs purchased gross equities and debt securities worth Rs55,902 crore and sold shares and bonds to the tune of Rs33,962 crore during the period, translating into a net investment of Rs21,940 crore, SEBI added.

This is the third straight week of inflows into the Indian stock and debt markets by overseas investors.

Buoyed by sustained FII inflows, the stock market barometer BSE Sensex has gained around 1,284 points, or 8.30%, so far in January. In the last trading session, the key BSE index finished at 16,739.01, up 95.27 points from its previous close.

In the year 2011, FIIs purchased stocks and bonds worth Rs8 lakh crore, but sold securities worth Rs7.9 lakh crore, resulting in a net investment of Rs17,480 crore during the year.

Investors flocked toward the debt market in 2011, making an investment of Rs20,293 crore, but stayed away from the equity market, pulling out Rs2,812 crore.

 

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India’s growth likely to pick up strongly in CY 2013: E&Y

According to the E&Y’s Rapid-Growth Markets Forecast, growth in India is expected to accelerate strongly in CY13 at 9.5% as the global economy recovers, impact of previous interest rate tightening wanes, investment increases and exports pick up

Mumbai: India is expected to grow at 6.8% in calendar year (CY) 2012, in comparison to the previous forecast of 8%, but expansion is expected to accelerate strongly in CY 2013 to touch 9.5%, reports PTI quoting global audit and consulting firm Ernst & Young (E&Y.

E&Y had pegged GDP growth for CY 2012 at 8% in its first Rapid-Growth Markets Forecast (RGMF) released in October 2011.

“While growth in the current year has moderated, India’s medium-to-long-term growth prospects remain intact,” E&Y India partner & India markets leader Farokh Balsara said in a statement here.

According to the latest RGMF, growth in India is expected to accelerate strongly in CY13 at 9.5% as the global economy recovers, impact of previous interest rate tightening wanes, investment increases and exports pick up.

An improvement in both domestic and external demand will feed the recovery in growth, it said.

E&Y said slackening demand, turbulent and volatile markets and credit liquidity problems in Europe are beginning to squeeze rapid-growth markets (RGMs) but not to the extent of derailing robust economic performance.

The RGMs are expected to grow collectively by 5.3% this year, in stark contrast to the mild recession expected in the Eurozone in H1 2012 and modest growth in the US, according the latest E&Y report.

While growth in the RGMs will continue to be the envy of advanced economies in the near term, they are showing the strains from the fall in demand from the Eurozone, as well as the buffeting to financial markets and business confidence over the past few months, the consulting firm said.

“As a result, growth in 2012 is expected to be lower than forecast by RGMF in October. However, these markets will continue to contribute nearly half of the world’s growth over the next three years.” 

RGMF also observed a reversal in portfolio flows since July as investors became increasingly risk averse. Threats to liquidity and lending by European banks with a wide global reach are particularly disquieting for RGMs, it said.

Banks are selling assets and cutting back on loans under pressure to strengthen their capital which is weakening financial flows into and within RGMs with potentially depressive impacts not only on business operations but also business investment, the report said.

The immediate impact has been currency depreciations, most notably in Brazil and India. The sharp depreciation of the Indian rupee led to increased inflationary pressure on the economy, said the forecast.

“While growth prospects in the short-term have been dented by the turmoil in global markets, and could be further affected by the events in the euro area, growth in RGMs is set to rise about 6.5% in 2013-14, a pace of expansion that will be significantly higher than in advanced economies,” it added.

 

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Private telcos file caveat in SC and HC on 3G roaming

By filing the caveat, the operators have ensured that the courts would pass no orders on the Department of Telecom (DoT) plea without hearing their counsel, or get an ex-parte relief

New Delhi: Apprehending that the government may appeal against the Telecom Dispute Settlement and Appellate Tribunal (TDSAT) order which dismissed its plea that the telecom tribunal has no jurisdiction over the intra-circle third generation (3G) roaming pacts, private operators have filed caveat in both the Supreme Court as well as the high court.

By filing the caveat, the operators have ensured that the courts would pass no orders on the Department of Telecom (DoT) plea without hearing their counsel, or get an ex-parte relief.

The government had questioned role of TDSAT which had on 24th December given a lifeline to telecom operators, by entertaining their plea during the scheduled winter vacations and asking DoT not to take any coercive step against them.

A day prior to that the government had asked five telecom operators to stop inter-circle roaming on 3G bandwidth within 24 hours.

It was challenged before TDSAT. The operators are —Bharti Airtel, Vodafone Essar, Idea Cellular, Aircel and Tata Tele Services.

Confirming the move, one of the counsels representing the operators told PTI that chances are that DoT many move the high court, which is already hearing a similar issue in a PIL.

Last week, a bench headed by the acting chief justice AK Sikri had adjourned the petition on 3G roaming to the second week of February.

TDSAT had on 20th January dismissed DoT plea questioning its jurisdiction to decide on 3G roaming dispute.

It had also directed the five operators to hand over copies of their 3G roaming agreements to DoT with a rider that the government maintain its confidentiality.

DoT had questioned the jurisdiction of TDSAT saying that the tribunal has no power to look into the licence terms and conditions entered among the operators and the DoT.

TDSAT had already directed DoT not to take any coercive action against the private telecom operators on 3G roaming.

 

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