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FII scorecard: India’s loss is South Korea’s gain

South Korea is attracting FII inflows as overseas investors shift their focus from Indian equities, reports MC Vaijayanthi.

business Updated: Nov 12, 2007 22:10 IST
MC Vaijayanthi
MC Vaijayanthi
Hindustan Times

South Korea is attracting FII inflows as overseas investors have have shifted their focus from Indian equities.

So far in 2007, Foreign Institutional Investors (FIIs) have made a net purchase worth over Rs 70,000 crore (more than $17 billion).

India-focussed funds saw a net inflow of just $69.8 million in the first week of November, while inflow to South Korea funds were $295.6 million. “Indeed, 30 per cent of the net inflows, or $296 million, to the Asian funds last week went into Korea funds. This is triple the amount taken in by China funds ($84.3 million), which came in second place," Citigroup analyst Elaine Chu said. India funds have seen a net outflow of $792 million so far in 2007, against an inflow of $1,751 million in the same period last year.

In comparison, South Korea funds have seen a net inflow of $2,723 million so far in 2007, against an outflow of about $14 million in the same period last year.

The outflow from India funds is second highest after China ($1,564 million) in 2007, while the inflow to Korea funds is highest across the Asia-Pacific region. <b1>

In the same period last year, China and India funds had recorded highest inflow, while Korea funds had seen the biggest outflow across the region.

The losing momentum of FII inflow to India and China is despite the overall inflow remaining strong to the Asian as well as emerging market funds.

According to country-focused fund tracking firm EPFR Global, inflows to Asian dedicated funds remained above one billion dollar in the first seven days of November, despite the regional markets falling by over three per cent.

The money flowing into all emerging market funds also outpaced that entering the global equity funds for the eleventh week in a row, totalling $36 billion between August and early November, against just $9 billion inflows to the global funds, EPFR said.

First Published: Nov 12, 2007 21:58 IST