REITs turn net sellers in September and take ₹ 2,038 so far

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NEW DELHI :
Foreign portfolio investors (REITs) have become net sellers in Indian markets by pulling out So far, 2,038 crore in September as participants have become cautious of rising Indochinese tensions and weak global signals.

According to data from custodians, a network 3,510 crore was withdrawn from the shares, while 1,472 crores were in debt by the REITs between September 1 and September 11.

REITs have been net buyers for three consecutive months – from June to August.

They invested 46,532 crore in August, 3301 crore in July and 24,053 crore in June on a net basis.

“REITs have taken a cautious stance on investing in Indian stock markets since early September,” noted Himanshu Srivastava, Associate Director – Manager Research, Morningstar India.

Citing the reasons, Srivastava said the sharp slowdown in the Indian economy in the quarter ended June 2020 dented investor sentiment and REITs preferred to sit on the sidelines, also due to weak global signals. and rising border tensions between India and China.

The recent net outflows could also be attributed to the reservation of profits by REITs due to the surge in Indian stock markets, he added.

Regarding investments in the debt segment, Srivastava noted that despite aggressive bond purchases by the US Fed, yields have come down, which could be one of the reasons REITs are looking for other attractive investment destinations like Indian debt markets which could potentially offer a better return.

However, a relatively lower amount of net inflows also indicates that REITs have not yet gained a relatively high level of conviction in Indian debt markets to invest substantially, he added.

Going forward, “on the home front, the challenges of increasing COVID-19 cases and resuming economic growth remain and escalating tension between India and China at the border may not bode well for the markets, ”Srivastava said.

He further noted that on the global front, the increase in COVID-19 infection and tensions between the United States and China could deter investors from risk if the scenario demands it.

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