‘FPIs likely to withdraw $3-4 bn in short term’

Pandemic risks heavy outflows: UBS

An employee walks past a logo of Swiss bank UBS in Zurich in this December 19, 2012 file photo.

Foreign portfolio investors (FPIs) have pulled out $2 billion from Indian equities as they are getting fidgety amid surging pandemic case loads and are likely to withdraw $3-4 billion more in the short-term, foreign brokerage warns.

FPIs had pumped in a record $39 billion in FY21.

Owning $555 billion of the $2-trillion domestic equities, FPIs are the biggest market-makers and market-breakers in the domestic equity market.

Between September 2020 and March 2021, their marker ownership jumped by a whopping $105 billion. At $39 billion of net investments in FY21, FPIs have surpassed their own records in FY10 and FY13 by a wide margin.

With valuations/EPS estimate stretched by 5-10% and the risks to growth outlook rising amid the pandemic, equity investors’ positioning is a concern, Swiss brokerage UBS Securities said in a note on Wednesday.

The report further said in the past five weeks alone, FPIs have pulled out $2 billion and going by the weekly median of $3 million rolling inflows, they are on course to pull out $3-4 billion more in the short-term.