New Delhi. The indifference of foreign investors is continuously taking a toll on the Indian market. Investment in the Indian capital market through Participatory Notes (P-Notes) declined to Rs 86,706 crore on a monthly basis in the last month i.e. May. Experts believe that Foreign Institutional Investors (FIIs) will change their selling stance and buy the country’s stocks in the coming one or two quarters.
According to the data of the Securities and Exchange Board of India (SEBI), the value of investment through P-notes in domestic markets stood at Rs 86,706 crore at the end of May. In April, this figure was Rs 90,580 crore. At the same time, in March this year it was Rs 87,979 crore, while in February it was Rs 89,143 and in January it was Rs 87,989 crore.
According to a Moneycontrol report, out of the total P-note investment of Rs 86,706 crore in May, Rs 77,402 crore was invested in equities. At the same time, Rs 9,209 crore was invested in bonds and Rs 101 crore in hybrid securities. At the same time, Rs 81,571 crore was invested in shares and Rs 8,889 crore in bonds at the end of April. Divam Sharma, Founder, Green Portfolio, a portfolio management services company, said, “The stock market has become attractive in value terms at the present time. Inflation will moderate in the coming months with supply chain improvement.
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Withdrawals continue
According to Divam Sharma, in the coming quarter or two, foreign investors will adopt a buying trend in the domestic markets. At the same time, he also says, “If we look ahead from here, most of the pain is accompanied by a rise in 10-year bond yields and a significant fall in equity markets.” In the end, 5 percent declined to Rs 48.23 lakh crore. It was Rs 50.74 lakh crore at the end of April. Meanwhile, foreign investors pulled out Rs 40,000 crore from domestic stock markets and Rs 5,505 crore from bond markets during May. This is the eighth consecutive month that FPIs have made net withdrawals from the Indian markets.
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What is P-Note?
A participant note is a type of offshore derivative instrument. If any investor wants to invest money in Indian securities without registering with SEBI, they use it. Participatory notes to foreign investors are issued by a SEBI registered foreign brokerage firm or a foreign unit of a domestic brokerage firm. Brokers make purchases in Indian Indian securities i.e. shares, debt or derivatives and issue P-notes on them to clients by charging a fee.
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