Though the country’s stock and money markets still nurse fears of large-scale FII pullout from India, latest Sebi data shows FIIs are, instead, buying into the India story. As many as 120 new foreign institutional investors have registered in India since the global financial crisis broke out in September. These FIIs come from a diverse set of operational areas, and includes names like American Airlines, International Finance Corporation, University of Southern California, Bank of Korea, the Bill & Melinda Gates Foundation, and Warburg Pincus International.More importantly, the months of September-November have seen registration of 358 new sub-accounts — the highest in any block of three months in 2008. While an FII registration allows a fund manager to operate in the Indian markets, a separate sub-account is to be registered for every distinct fund run by the FII to be invested in India. “We are still seeing a healthy growth in FIIs seeking to register in India and our officials are as busy as three months ago,” a senior official in the FII department of the Securities Exchange Board of India told FE. FIIs continue to be net sellers in November but on Wednesday they turned net buyers — the first in nine trading sessions — buying stocks worth Rs 1,384.20 crore and selling Rs 1,382.9 crore. “It’s clear that foreign money is not on a one-way street out of India — while some FIIs are pulling out money either to douse home fires or because they don’t see value in Indian stocks, there are enough FIIs who see long-term value in India,” another Sebi official said. While the numbers tell a part of the story, the mood about India among big-ticket global investors can be gauged from Donald Coxe. The global portfolio strategist for BMO Capital Markets, Coxe travelled across India last week with a group of influential fund managers who manage over $1.5 trillion in assets. BMO itself manages assets worth $375 billion.“India will be out of the emerging markets basket in the next cycle and your companies will have PE ratios in line with mature markets. We want to be here for that. If you don’t go back into Nehruvian socialism, India will be the no.1 country by 2040-2050,” said Coxe, pointing out that the coming general election will play a key role as more political sophistication is needed in the country. China, the growth of which is expected to slip to the lowest in 19 years, has to demonstrate it can get through the global crisis without losing its double-digit growth. “The last time growth fell to around 6 per cent in China, there was Tianenman Square. We are already seeing riots now,” Coxe warned. China’s one-child policy will ensure India will overtake China in 2025 for the single reason of having a better demographic, he said. On Tuesday, after reporting record losses, Norway’s sovereign wealth fund indicated it would rejig its investment to include markets like India. The $314-billion Norwegian fund will begin investing in realty estate next year in India, China and Egypt. The fund is the world’s second largest SWF after the Abu Dhabi Investment Authority and the biggest equity investor in Europe.
