FII withdrawal in last 7 days larger than that of entire 07

By Varinder Bansal, CNBC-TV18



To start with the cash market, this is the steepest cut ever seen in the Indian markets. Imagine a small number which I am trying to give you, in the last seven trading sessions, FIIs have withdrawn nearly USD 3.8 billion which is equivalent to around Rs 15,000 crore. This total amount is the biggest which we have ever seen, of course, in the last seven trading sessions. But if you compare it to the total withdrawals seen in the Indian markets in 2007, it was equivalent to around Rs 14,700 crore just in three months. So in the last seven trading sessions, we have seen withdrawals which are far larger than the total withdrawals in entire 2007.



If one sees, in the F&O series, in the last seven trading sessions, FIIs have invested nearly USD 2.09 billion which is a reverse arbitrage which they have done. On a net-to-net basis, if one compares cash plus F&O, the net figure will come at withdrawal of USD 1.7 billion.



One of the strongest pillars of this market has been DIIs, which we say banks insurance companies and domestic financial institutions. In the same period, the total investment by DIIs has been around USD 2.6 billion which is around Rs 10,200 crore. To break this up this into DIIs or into mutual funds, mutual funds have invested nearly Rs 4,100 crore which is around 40% and banks insurance companies and DFIs have invested nearly Rs 6,000 crore which is around 60%.



We had prudential ICICI today in the morning and they mentioned that they have invested nearly Rs 800-900 crore in the market. We also learn that LIC has invested nearly USD 1 billion in the last one week or so. But if you just see the Asian markets, we stand far apart because, as mentioned earlier, in the cash market we have seen a withdrawal of around USD 3.8 billion. In Taiwan there has been USD 1.2 billion of outflow, in Thailand there has been around USD 550 million and Philippines has been around USD 150 million.


As you were mentioning about the F&O markets, we have seen a sell figure of around Rs 10,200 crore since the start of the series till January 18 for which we have seen open interest going up by around 8.8 lakh crore. But most importantly, in the last four days we have seen net buy figure of around Rs 11,700 crore and open interest going down by around 4.2. So all the buy which FIIs have done in the earlier part have been reversed due to reverse arbitrage and also negative cost of carry. But in the cash market, we have seen a huge selling pressure.