Non-residents remain bullish despite single-digit equity market returns since May 2014
The Indian diaspora has taken a liking to equities under the Narendra Modi-led National Democratic Alliance (NDA) government. Total equity assets owned by non-resident Indians (NRIs) have jumped nearly three fold to Rs 2,675 crore between December 2013 and December 2016, data provided by the Securities and Exchange Board of India (Sebi) showed.
Although the Modi-government came to power in May 2014, the stock markets had started moving up in December 2013 in anticipation of a change of guard. The value of NRI holding in December 2013 stood at around Rs 900 crore. The increase in NRI assets is far higher than the 30 per cent gains on the Benchmark Sensex during this period.
Market players say they have seen an increase in new NRI accounts as well as improved flows in the existing accounts since the government took charge. They attribute the optimism to improvement in the macroeconomic fundamentals of the country, confidence in the new government and buoyancy in the primary markets.
NRI investments have persisted even though the equity market returns since May 2014 have been in single-digits. The Sensex had rallied close to 40 per cent between December 2013 and April 2014. However, a mix of global and domestic headwinds has taken some steam out of the rally. The Sensex lost more than five per cent during 2015, while it ended 2016 with near-zero returns.
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