India Outflows Slow Relative To Taiwan, South Korea: Report

(MENAFN- IANS) New Delhi, Sep 11 (IANS) India‐focused outflows moderated to about $100 million from larger redemptions in prior weeks, even as US‐dedicated funds recorded outflows for the third week at roughly $4 billion per week, a report said on Friday.

The report from Elara Capital said incremental redemptions from Taiwan and South Korea have recently exceeded those from India, resulting in relative flow outperformance of India and China over the past two months.

India-focused outflows continued to moderate, with redemptions slowing from $170 million, $270 million and $366 million in the preceding 3 weeks.

"Long-only funds in India continue to record outflows, with cumulative inflows since September 23 now fully reversed. India's flow trend therefore remains weak in absolute terms, but the relative picture is improving," it noted.

The report said that global industrials approached a key technical support level as Global Industrial index has corrected back to its 200-day moving average.

"A decisive break below this zone could increase the risk of a sharper sell-off, given the precedent of previous breaks," the report said.

On a rolling four-week basis, the recent redemptions seen in Taiwan and South Korea are Bnotable as they come after several months of strong and increasingly crowded inflows.

The combination of crowded positioning and a sustained reversal in flows warrants closer monitoring, the firm said.

In contrast to US‐dedicated funds in India, flows remain firm in broader allocation strategies, with Global and GEM funds attracting another $10 billion and $1.5 billion, respectively.

Foreign portfolio investors (FPIs) bought equity worth nearly Rs 30,918 crore in August, of which Rs 18,790 crore was through exchanges and Rs 12,128 crore was through primary market and others category.

This is the second month in a row that FPIs have turned buyers in India.

Analysts said FPI flows into India are driven by the reversal of the chip trade, the stability in the rupee and, more importantly, the improving earnings growth in India.

-IANS

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