Tag: FII

Analysts, BFSI News, ET BFSI

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Stock markets this week will be driven mostly by updates related to the new coronavirus variant that sent equities tumbling globally on Friday, macroeconomic data announcements and auto sales numbers, analysts said. A World Health Organisation panel has named the new COVID strain ‘Omicron‘ and classified it as a highly transmissible variant of concern, the same category that includes the Delta variant.

The potentially more contagious Omicron was first reported to the WHO from South Africa on November 24, and has also been identified in Botswana, Belgium, Hong Kong and Israel. Many countries have introduced travel bans and restrictions on southern African countries in an effort to contain Omicron’s spread.

“New COVID variant, FIIs’ behaviour along with macro numbers will be key factors to drive the market this week. COVID related developments will remain key triggers for the market where the market will remain keenly interested to know the efficacy ratios of various vaccines against a new variant of COVID whereas restrictions-related news across the globe will also cause volatility,” said Santosh Meena, Head of Research, Swastika Investmart Ltd.

The Sensex nosedived 1,688 points on Friday amid concerns over the new coronavirus variant that also led to rout in global markets.

Yesha Shah, Head of Equity Research, Samco Securities, said, “Post Q2 result season, Dalal Street will look towards macros for hints to move the needle in broader markets. Inflation being a key factor will be at the centre of all news in the next two weeks since the RBI MPC meet is scheduled in December. November monthly auto sales number can be a trigger to drive some movement this week.”

Among macroeconomic data, PMI numbers for manufacturing and services sectors would also be tracked.

“Equity markets in the near term will closely follow the impact of new COVID variant, inflation data, and Central Bank policies,” said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd.

During the last week, the BSE benchmark plunged 2,528.86 points or 4.24 per cent. PTI SUM MR



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FPIs bet big on private insurers

Banking & Finance

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Foreign portfolio investors (FPIs) are going strong on the Indian insurance sector. Bolstered by a strong growth in new business premium and profitability besides sensing a huge scope for insurance penetration, FPIs have been substantially increasing their stake in listed private insurers over the last 2-3 years.

Between FY19 and FY21, FPIs pumped in ₹52,527 crore into the sector.

Explosive growth

“Insurance industry in India is on the cusp of explosive growth. Even now insurance penetration (insurance premia as percentage of GDP) in India is abysmally low at 3.72 percent,” VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said. “The upcoming five years are expected to witness 13-15 percent growth of the industry. Eying this opportunity, all investors – FIIs, DIIs, HNIs – have been scaling up investments in the sector,” he added.

Of the record FPI inflows worth ₹2.74-lakh crore in FY21, insurance attracted the second largest chunk after the private sector banks, Vijayakumar noted.

Prayesh Jain, Lead Analyst – Institutional Equities at YES Securities said that both life and general insurance are highly under-penetrated in India and have the potential to see a 15-18 per cent growth in premium CAGR over the next few years.

“Unlike other countries where insurers went bankrupt due to default in their investment papers, Indian insurers did not face any such situation due to strong regulations; their underwriting and claim settlement are quite impressive. All these factors make Indian insurance space more attractive for the foreign investors,” Jain added.

FPI holdings

Among private insurers, FPI holding in SBI Life more than doubled to 30.51 per cent as of FY21 from 14.06 per cent in FY19.

Similarly, foreign investors’ holding in HDFC Life jumped to 25.67 per cent (10.52 per cent) while their holding in ICICI Prudential Life went up to 16.51 per cent (10.08 per cent) during this period.

Stake dilution by promoters in these companies over the last two years to meet the regulatory guidelines have also helped FPIs to lap up their stocks in these companies.

“SBI Life has seen amongst the highest increase in APE market share for private players from 9 per cent to 11 per cent over the last one year. New Business Premium market share for the company has also improved more than 100bps to 7.4 per cent,” said Siji Philip, Senior Research Analyst at Axis Securities.

He also added that while HDFC Life had a commendable improvement in APE market share over the last one year from 6 per cent to 8 per cent, ICICI Prudential’s market share was largely flattish at 5.9 per cent.

“Overall, the industry performance is expected to improve in FY22 driven by a revival in ULIPs, improvement in non-par pension, annuity products, and demand pick-up which generally happens post a pandemic, besides the benefit of the low-base effect,” Philip added.

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Nifty Bank & financials trade in green; ICICI, Kotak Mahindra Bank top gainers, BFSI News, ET BFSI

Personal Finance

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Nifty bank index traded at Rs 31,797 adding 0.24%, while BSE Bankex ended at 36,396 adding 0.34%. Shares that contributed the most were – RBL Bank at Rs 284 adding 5.40% followed by ICICI Bank at Rs 546 (1.80%), SBI at Rs 284 (1.12%), Kotak Mahindra Bank at Rs 1,970 (0.55%), federal Bank at Rs 72 (0.55%). While all the other major indices remained green, Axis Bank at Rs 654 (-1.48%) and HDFC Bank traded lower at Rs 1,420 (-0.43%).

Nifty Financial Services ended at 15,393 adding 0.09%. Indiabulls HSG was the top gainer at Rs 220 adding 0.32% followed by Power Finance at Rs 118 (0.13%). Shares that traded lower were- Bajaj Finance at Rs 5,030 (-1.73%), Cholamandalam at Rs 434 (-0.55%) and HDFC at Rs 2,638 (-0.49%).

Other key takeaways

India receives highest FII inflows in 2020
Indian equities received more than Rs 1.6 lakh crore ($23 billion) from foreign institutional investors in 2020, the highest among emerging markets. In fact, most Asian and emerging markets witnessed outflows in the year gone by. This was the second year in a row when FII inflows into Indian equities were highest among emerging markets. In 2019, the inflow was $14.2 billion.

Bitcoin breaks above $35,000 to touch new high
Bitcoin traded above $35,000 for the first time in Asia on Wednesday, rising to a high of $35,879 and extending a rally that has seen the digital currency rise more than 800% since mid-March.The world’s most popular cryptocurrency crossed $20,000 for the first time ever on December 16.

Rupee trades flat
Indian rupee erased the gains and trading flat at 73.18 per dollar, amid selling seen in the domestic equity market. It opened flat at 73.17 per dollar against Tuesday’s close of 73.17.

Gold Updates
On the Multi-Commodity Exchange (MCX), February gold contracts were trading lower by 0.31 percent at Rs 51,561 per 10 gram at 0920 hours. March silver was trading 0.72 percent lower at Rs 70,346 a kilogram.

Gold has support at 51440-51200 and resistance is placed at 52000-52200 levels. Silver has support at 70200-69500 while resistance is placed at 71500-72200 levels. Gold and silver extend gain on Tuesday amid weakness in the dollar index and 7-weeks lockdown in the UK. Both the precious metals were settled on a positive note.



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