FPIs invested heavily in financials, industrials in June; a look at other trends

Foreign portfolio investors (FPIs) invested heavily in financials and industrials sectors in June, a report by Kotak Institutional Equities stated.

According to the brokerage, in June, the industrials witnessed inflows of $1,298 million, followed by financials at $1,179 million. Meanwhile, consumer discretionary and consumer staples also saw inflows worth $806 million and $768 million, respectively. Apart from them, healthcare, materials, telecom, real estate, and utilities also saw inflows in the month of June.

However, IT and energy were the only 2 sectors that witnessed outflows worth $435 million and $52 million, respectively, informed Kotak.

The brokerage analysed the sectoral trend for FPIs in 2023 YTD, as well. In this period, the consumer discretionary sector was the top FPI choice with inflows worth $3,510 million followed by industrials with $3,339 million inflows and consumer staples at $1,004 million.

Materials, healthcare, real estate, and utilities also saw inflows in 2023 YTD whereas IT saw the highest outflows at $2,118 million followed by energy at $1,954 million and telecom at $156 million, added the brokerage.

It further highlighted that listed funds witnessed $1.8 billion of inflows in June, broken down into $850 million of ETF (exchange-traded funds) inflows and $909 million of non-ETF inflows. India-dedicated funds saw inflows of $1.6 billion, led by $1.2 billion of non-ETF inflows, it added. Government e-Marketplace (GeM) funds also witnessed inflows of $162 million, led by $280 million of ETF inflows that were offset by $118 million of non-ETF outflows, observed Kotak.

NSDL data shows that FPI AUC increased to $626 billion in June 2023 from $590 billion.

Country-wise

As per the brokerage, listed emerging market fund flows were positive for all countries. China witnessed $6.2 billion of inflows, followed by India, Brazil and South Korea, which saw $1.8 billion, $829 million and $528 million of inflows, it showed.

The brokerage further informed that allocations to China and India constitute 44 percent of the average Asia ex-Japan fund portfolio. Meanwhile, Asia ex-Japan funds’ allocations to India increased to 17.1 percent in June from 16.7 percent in May, whereas allocations to India by GEM funds increased to 15.4 percent in June from 15.1 percent in May, it mentioned. Allocations by Asia ex-Japan non-ETFs to India also increased to 17.6 percent in June from 17.2 percent in May; allocations to India by GEM non-ETFs increased to 14.6 percent in June from 14.3 percent in May, it added.

Back home, the brokerage noted that the largest quantum of FPI AUC comes from US-based investors. In June, $262 billion came from US-based funds followed by $46 billion each from Singapore and Luxembourg. $37 billion came from Mauritius-based funds and finally $35 billion from UK-based investors.