Foreign money inflow on rise
Despite the sluggishness in Indian secondary markets last year and a general feeling that much of the foreign investment in India between 1993 and 1995 has been pulled out of the country, foreign institutional investors (FIIs) poured in more than US$3 billion into Indian stock exchanges last year.
Several negative factors, such as an uncertain political situation, extremely tight domestic liquidity, a slowdown in industrial production and disappointing corporate results during the first half of the 1996-97 financial year, have not had a deterrent effect on investors.
Most important, the net inflow of foreign portfolio money - the difference between purchases and sales - remained on a positive track each month of last year, according to figures released in Bombay by the Securities and Exchange Board of India.
Cumulative overseas investment in the country stood at $7.21 billion at the end of last year.
'The fact that the net inflow of foreign money continues to be positive in spite of the all-round uncertainty prevailing in the country is an encouraging sign,' said Nimesh Kampani, chief of JM Financial Consultants, a well-known merchant banker.
There have been signs during the first fortnight of this year that FIIs have renewed their buying spree.
The stock market indices have spurted ahead by nearly 25 per cent since Christmas.
The surge has been spurred by substantial interest by both FIIs and domestic financial institutions.
