Brokerage firm CLSA on Wednesday said that Foreign Institutional Investor (FIIs) sold Indian equities to the tune of US$0.8 billion in November as they preferred Brazil and South Korea.
Of US$0.8 billion in equity outflows from India for FIIs, non-India-dedicated active funds (87 percent of FII AUM) and non-India-dedicated ETFs (8 percent of FII AUM) had outflows of US$0.6 billion and US$0.3 billion, the brokerage noted. India-dedicated active (4 percent of FII AUM) had an outflow of US$0.1 billion while India-dedicated ETFs (2 percent of FII AUM) had minor inflows.
For November, South Korea (+US $ 3.0 billion) and Brazil (+US $ 0.3 billion) had the biggest FII inflows while South Africa (-US$1.0 billion) and Thailand (-US $ 0.3 billion) had the biggest outflows based on market size followed by Indonesia (-US$0.2 billion) and India.
CLSA further reported that domestic active equity inflows rose 16 percent MoM to US $ 2.6 billion as all fund categories had inflows. Discretionary inflows (ex-SIP flows) and SIP flows rose MoM. Domestic equity ETF inflows improved MoM to US $ 0.8 billion.
According to the brokerage, FIIs sold another US $ 1.4 billion in December 21 till date. FIIs sold down banks aggressively as their overweight in the sector went to a new multi-year low. Materials also went out of favour for FIIs. These funded the rise in 'overweight' of FIIs in discretionary to a multi-year high and to shift from 'underweight' to 'overweight' in healthcare.
The first fortnight of December 21 had an equity outflow of US$1.4 billion from FIIs, led by a secondary market outflow of US$2.8 billion, implying a US$1.4 billion inflow in the primary market.
After US$ 0.2 billion inflow in November 21, FIIs have sold US$0.3 billion in debt in December-21 to date.