Redemption pressure: FIIs offload Rs 5,200cr
Kumar Shankar Roy | TNN Chennai: Foreign institutional investors (FIIs) have sold stocks worth Rs 5,200 crore in the past fortnight at a time when rupee again started falling against the dollar. With the rupee depreciating by as much as 5% from February 17, FIIs have been on sell-mode as the value of their existing holdings in the stock market shrunk. Sensex on Monday fell to its lowest level in the last 42 months at 8,160.40. The dollar was trading at Rs 49.16 on February 17 and is currently at Rs 51.8, RBI data shows. During the same period, FIIs have sold shares worth $1.29 billion as Sebi’s conversion rate is Rs 40.34 per dollar as those investors have sold for the 14th straight session. Rupee plummeted to a record low of 52.20 per dollar last week, and is down 1.5% so far this month. The fresh dose of redemption has taken analysts by surprise. “We continue to be surprised by relentless selling by FIIs as the selling of the last few days seems to be primarily of ‘core’ India stocks. This would make us want to believe that this is a ‘final’ round of selling. However, this is far from certain,” analyst Sanjeev Prasad of Kotak Institutional equities Research said. Others attribute this round of share-selling to redemption pressures faced by overseas investors back home as some hedge funds have to honour the March 15 deadline. Whatever be the reason, the spate of selling has sunk sensex by 10% as FIIs have continued to sell. Capital outflows have been a key driver of the rupee’s fall. Foreign investors have sold about $2.3 billion worth of shares in 2009 after dumping more than $13.2 billion in 2008. --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups ""GLOBAL SPECULATORS"" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [email protected] For more options, visit this group at http://groups.google.com/group/globalspeculators?hl=en -~----------~----~----~----~------~----~------~--~---
