The FIIs on Tuesday stood as net seller in equity and net buyer in debt. The gross equity purchased was Rs2,312.70 Crore and the gross debt purchased was Rs159.30 Crore while the gross equity sold stood at Rs2,3645.00 Crore and gross debt sold stood at Rs33.40 Crore. Therefore, the net investment of equity reported was (Rs332.30) Crore and net debt was Rs125.90 Crore.
Showing posts with label invest FIIs. Show all posts
Showing posts with label invest FIIs. Show all posts
Thursday, July 31, 2008
Tuesday, July 22, 2008
FII Activity On 21-07-2008 - July 22 , 2008
The FIIs on Monday stood as net buyer in equity. The gross equity purchased was Rs2,988.40 Crore and the gross debt purchased was Rs0.00 Crore while the gross equity sold stood at Rs2,399.20 Crore and gross debt sold stood at Rs0.00 Crore. Therefore, the net investment of equity reported was Rs589.20 Crore and net debt was Rs0.00 Crore.
Monday, June 16, 2008
It’s Never Too Early To Invest In Funds - June 16, 2008
Early birds score even if they lose their way.
“One of the greatest pieces of economic wisdom is to know what you do not know.”
— John Kenneth Galbraith
Jack and Jill were twins, and both got their first job at the age of 20. Both wished plenty from their life and started splurging on expensive luxuries.
Jack deferred his decision for an investment account for the time being. Jill, however, acted on her father’s advice and started saving a token amount of Rs 1,000 per month (cumulative amount Rs 12,000 per year) in a diversified mutual fund.
The next 10 years were fun for both, as they were living life to the fullest. Jack never started his investment account and Jill never cared to increase her investments from the meager Rs 12,000 per annum.
Accumulation phase
Ten years later, it was time to take stock. Jack, obviously, had nothing to show. Jill’s investment, on the other hand, had returned at the rate of 15% pa and her total investment of Rs 1,20,000 (Rs 12000 x 10 years) has grown to Rs 2,43,645.
Jill was not impressed with the amount at all. She decided to discontinue her investment plan. She, however, decided to leave her accumulated investment alone in the same fund.
Jack, on the other hand, decided it was time to start investing. He opened an account with the same diversified mutual fund Jill was investing in and started contributing Rs 12,000 pa.
After 30 years, it was time for both Jack and Jill to retire.
Jill had never touched her corpus, but she hadn’t bothered to put in fresh money either. This meant her invested corpus still stood at Rs 1,20,000. Jack, on his part, had invested Rs 3,60,000 (Rs 12,000 x 30) over three decades.
Both had got an annual return of 15% on their investments.
Interestingly, at the end of 30 years, Jack had accumulated Rs 52.16 lakh, while Jill, who had saved for only 10 years, had Rs 1.06 crore. Retirement phase
The accumulation phase was over now and both were in the retirement phase.
Both wished to play safe and shifted their corpuses to investment accounts that were less risky, but offered an assured return of 9% pa.
Both assumed they would live till 100. They would withdraw a level amount at the beginning of every year for the next 40 years to meet their expenses such that, assuming both survived till 100, nothing would be left for their successors.
Calculations threw up even more shocking figures. Though Jill started with 100% more retirement corpus compared with Jack, she could actually withdraw a sum of Rs 13.75 lakh pa, which was 300% more than what Jack could (Rs 4.44 lakh pa).
Summing up from the age of 60 till 100, Jill would have withdrawn Rs 5.50 crore (13.75 lakh x 40 years), while Jack would have taken only Rs 1.77 crore (4.44 lakh x 40 years).
Bottomline
The story of Jack and Jill ends here. However, I am getting tempted to tell you some interesting possibilities as an extension to the story. What may have happened if Jill never stopped her investment or Jack started his investment plan earlier?
Had Jack started at the age of 20 and invested Rs 12,000 pa, then at the age of 60, he would have accumulated Rs 2.13 crore.
Working to a financial plan early in life sure is a paying proposition. What say?
“One of the greatest pieces of economic wisdom is to know what you do not know.”
— John Kenneth Galbraith
Jack and Jill were twins, and both got their first job at the age of 20. Both wished plenty from their life and started splurging on expensive luxuries.
Jack deferred his decision for an investment account for the time being. Jill, however, acted on her father’s advice and started saving a token amount of Rs 1,000 per month (cumulative amount Rs 12,000 per year) in a diversified mutual fund.
The next 10 years were fun for both, as they were living life to the fullest. Jack never started his investment account and Jill never cared to increase her investments from the meager Rs 12,000 per annum.
Accumulation phase
Ten years later, it was time to take stock. Jack, obviously, had nothing to show. Jill’s investment, on the other hand, had returned at the rate of 15% pa and her total investment of Rs 1,20,000 (Rs 12000 x 10 years) has grown to Rs 2,43,645.
Jill was not impressed with the amount at all. She decided to discontinue her investment plan. She, however, decided to leave her accumulated investment alone in the same fund.
Jack, on the other hand, decided it was time to start investing. He opened an account with the same diversified mutual fund Jill was investing in and started contributing Rs 12,000 pa.
After 30 years, it was time for both Jack and Jill to retire.
Jill had never touched her corpus, but she hadn’t bothered to put in fresh money either. This meant her invested corpus still stood at Rs 1,20,000. Jack, on his part, had invested Rs 3,60,000 (Rs 12,000 x 30) over three decades.
Both had got an annual return of 15% on their investments.
Interestingly, at the end of 30 years, Jack had accumulated Rs 52.16 lakh, while Jill, who had saved for only 10 years, had Rs 1.06 crore. Retirement phase
The accumulation phase was over now and both were in the retirement phase.
Both wished to play safe and shifted their corpuses to investment accounts that were less risky, but offered an assured return of 9% pa.
Both assumed they would live till 100. They would withdraw a level amount at the beginning of every year for the next 40 years to meet their expenses such that, assuming both survived till 100, nothing would be left for their successors.
Calculations threw up even more shocking figures. Though Jill started with 100% more retirement corpus compared with Jack, she could actually withdraw a sum of Rs 13.75 lakh pa, which was 300% more than what Jack could (Rs 4.44 lakh pa).
Summing up from the age of 60 till 100, Jill would have withdrawn Rs 5.50 crore (13.75 lakh x 40 years), while Jack would have taken only Rs 1.77 crore (4.44 lakh x 40 years).
Bottomline
The story of Jack and Jill ends here. However, I am getting tempted to tell you some interesting possibilities as an extension to the story. What may have happened if Jill never stopped her investment or Jack started his investment plan earlier?
Had Jack started at the age of 20 and invested Rs 12,000 pa, then at the age of 60, he would have accumulated Rs 2.13 crore.
Working to a financial plan early in life sure is a paying proposition. What say?
Saturday, June 7, 2008
Single FII Can Invest Up To $200 M In Debt - June 7, 2008
MUMBAI: Foreign institutional investors (FIIs) will now have an individual ceiling of $200 million for investment in Indian debt securities.
The move is perceived, by many, to be an attempt to avoid concentration of risk in the debt market. Further, the Securities and Exchange Board of India (Sebi) ruled on Friday that the enhanced limits will be allocated to FIIs on a ‘first-come-first-serve basis’.
FIIs wishing to take advantage of the enhanced limit will have to make their applications to Sebi by June 16, 2008, and the first few entities to apply before the total cap of $8 billion is reached will be allocated the debt.
There are doubts over the exact impact of the move, especially since the existing limit also has not been utilised. Sebi’s move has come at a time when interest in government securities has waned resulting in the yield on 10-year bonds inching up to 8.25%.
Bonds have come under pressure, following fuel price hike and the government’s decision to issue more oil bonds this year. But while the new limit may not have a short-term impact, market participants feel that it is a positive signal being sent out by the government and regulators.
Last week, the government had reviewed its external commercial borrowing policy and increased the FII limit in debt securities to a total of $8 billion, of which $5 billion would be for government securities and $3 billion for investment in corporate debt.
The earlier limit for FIIs in debt stood at $4.7 billion, of which $3.2 billion was allocated for government securities and $1.5 billion for investment in corporate debt.
Standard Chartered Bank managing director and regional head for global markets and South Asia Sundeep Bhandari said, "The ceiling Sebi has imposed on companies is probably an attempt to avoid concentration of risk, and broadbase the market. It is a good move by the regulator, as it will negate the volatility that could have been caused by a lesser number of investors pumping in large amounts."
The decision to increase foreign investment in debt securities comes at a time when the market is not doing too well. According Mr Bhandari, the timing could not be better, as it will attract investors with a long term view.
"If this move had come when the market was booming, it would have fuelled a number of speculative investors," he added.
A senior official at a bond house said, "The appetite for Indian debt securities from FIIs has not been high so far. Though the signals sent out by Sebi are clear, it remains to be seen how much of an impact it will have."
Incidentally, the corporate debt market has not performed too well over the past few months. There was only two new issues in the past month. The other two issues currently open, of Gammon India and Punjab State Electricity Board, have been kept open for a period of over two months due to a lack of investor
The move is perceived, by many, to be an attempt to avoid concentration of risk in the debt market. Further, the Securities and Exchange Board of India (Sebi) ruled on Friday that the enhanced limits will be allocated to FIIs on a ‘first-come-first-serve basis’.
FIIs wishing to take advantage of the enhanced limit will have to make their applications to Sebi by June 16, 2008, and the first few entities to apply before the total cap of $8 billion is reached will be allocated the debt.
There are doubts over the exact impact of the move, especially since the existing limit also has not been utilised. Sebi’s move has come at a time when interest in government securities has waned resulting in the yield on 10-year bonds inching up to 8.25%.
Bonds have come under pressure, following fuel price hike and the government’s decision to issue more oil bonds this year. But while the new limit may not have a short-term impact, market participants feel that it is a positive signal being sent out by the government and regulators.
Last week, the government had reviewed its external commercial borrowing policy and increased the FII limit in debt securities to a total of $8 billion, of which $5 billion would be for government securities and $3 billion for investment in corporate debt.
The earlier limit for FIIs in debt stood at $4.7 billion, of which $3.2 billion was allocated for government securities and $1.5 billion for investment in corporate debt.
Standard Chartered Bank managing director and regional head for global markets and South Asia Sundeep Bhandari said, "The ceiling Sebi has imposed on companies is probably an attempt to avoid concentration of risk, and broadbase the market. It is a good move by the regulator, as it will negate the volatility that could have been caused by a lesser number of investors pumping in large amounts."
The decision to increase foreign investment in debt securities comes at a time when the market is not doing too well. According Mr Bhandari, the timing could not be better, as it will attract investors with a long term view.
"If this move had come when the market was booming, it would have fuelled a number of speculative investors," he added.
A senior official at a bond house said, "The appetite for Indian debt securities from FIIs has not been high so far. Though the signals sent out by Sebi are clear, it remains to be seen how much of an impact it will have."
Incidentally, the corporate debt market has not performed too well over the past few months. There was only two new issues in the past month. The other two issues currently open, of Gammon India and Punjab State Electricity Board, have been kept open for a period of over two months due to a lack of investor
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