Will FII investment touch $2 billion-mark in 2009?

Investment by Foreign Institutional Investors in Indian equities has touched the two billion dollar-mark (nearly Rs 10,000 crore) so far this year, which includes a record single day net purchase of Rs 4,085 crore.

According to the latest available data on SEBI website, FIIs made net purchases worth $2 two billion or about Rs 9,973 crore so far in 2009, with the stock market seeing major investments in the past two weeks.

"FIIs have been in the buying mode for the last couple of months and after their initial sell-off in early 2009, have turned net buyers of Indian equities year-to-date. Positive trend is likely to continue well into FY'10," Angel Broking Head of Research Hitesh Agrawal said.

Yesterday, FIIs put in as much as Rs 4,085 crore ($838 million) in a single day with an over Rs 2,000 crore investment in shares of realty firms DLF alone.

Since the beginning of the new fiscal year, FIIs have started putting money in domestic stocks, including blue-chips like Housing Development Finance Corporation, private sector lender HDFC Bank and realty major DLF.

In May alone, FIIs made gross purchases of equities worth Rs 27,872 crore and sold shares of Rs 18,255 crore, resulting in a net investment of Rs 9,616 crore ($1.93 billion), as per the data available with SEBI.

Three foreign fund houses, Deutsche Securities Mauritius, Euro Pacific Growth Fund and Copthall Mauritius had purchased a total 9.15 crore shares representing 5.39 per cent in DLF for Rs 2,106.1 crore in open market transactions yesterday.

"We believe the positive trend will continue well into FY 2010. Notably, after having reduced their stake in many blue-chip companies in FY 2009 on account of the global liquidity shortage and economic slowdown concerns, FIIs are now coming back into market," Agrawal added.

The previous week also recorded the biggest weekly infusion by FIIs in the current calendar year. With a bulk investment of Rs 1,491 crore in a single day, FIIs remained net buyers in equities in the remaining days.

FIIs have turned net buyers from last week of April, after pulling out a hefty Rs 52,987 crore from Indian stock markets in 2008, which saw Sensex plunging 51 per cent.

Earlier, two Foreign fund houses Capital Group and Sansar Capital Mauritius bought HDFC shares worth Rs 316 crore, while Deutsche Securities bought Rs 422 crore shares of HDFC Bank.

Agrawal said if no further bad news comes, the world wide the markets would revive by 2010 if FII buying spree continues.

"Pre-empting this, FIIs will look at increasing their stakes in firms that are best placed to ride the recovery and large-cap stocks are preferred ones to begin with," he added.

Agencies

Satyam CFO attempts suicide

Srinivas Vadlamani, CFO of Satyam, who is thought to be involved in one of the major IT company's scam, has attempted a suicide in a house in Ameerpet near Hyderabad.

Significantly, in Raju's letter to Securities and Exchange Board of India (SEBI) and the company's board of directors, the name of CFO is missing from the list of those who were 'unaware of the real situation'.

Meanwhile the Andhra Pradesh state police may register a suicide case today. K. Arvind Rao, Addl DG, (intelligence) declined to comment, when CXOtoday contacted him over phone. "I can't speak on this issue right now," said Arvind.

Srinivas Vadlamani, has been reported 'missing' from his home in Malkajgiri for the last couple of days. However, interim CEO -- Ram Mynampati in a press conference on Thursday said that Vadlamani had put in his papers. The decision on his resignation will be taken in board's meeting to be held tomorrow, the media had been informed.

Source: CXOtoday

Probe into Satyam market operations: SEBI

Startled by the disclosure of fudging of accounts by Satyam founder B Ramalinga Raju, market regulator SEBI on Wednesday ordered probe into share market operations and inspection of the IT company.

"SEBI has ordered an investigation into the affairs relating to buying, selling or dealing in the shares of Satyam Computers," it said in a release.

The probe follows a letter written by Raju in which he disclosed that "accounts provided to the stock exchanges were not true".

The investigation, SEBI said, will ascertain whether any provision of the Act or regulation has been violated.

As a first step, SEBI today ordered an investigation into affairs relating to buying, selling or dealing in shares of Satyam to ascertain if any regulatory provision was violated. Besides, it ordered inspection of Satyam Computer (books).

Giving details of the irregularities, Raju said the company's balance sheet as of September 30 carries "inflated (non-existent) cash and bank balances of Rs 5,040 crore (as against Rs 5,361 crore reflected in the books)."

It also carries "an accrued interest of Rs 376 crore which is non-existent, understated liability of Rs 1230 crore on account of funds arranged by me, overstated debtors position of Rs 490 crore (as against Rs 2651 crore in the books."

The USD 2-billion Satyam also reported a revenue of Rs 2700 crore for the September quarter and an operating margin of Rs 649 crore (24 per cent of revenue) as against the actual revenue of Rs 2112 crore and an actual operating margin of Rs 61 crore (3 per cent of revenue).

"This has resulted in artificial cash and bank balances going up Rs 588 crore in Q2 alone," Raju said, adding that the gap in the Balance Sheet has arisen purely on account of inflated profits over a period of last several years.

Satyam, meanwhile, said Board member Ram Mynampati has been appointed interim CEO. "We are obviously shocked.. immediate priorities are to protect interest of shareholders, protect the careers and security of its approximately 53,000 associates..," Satyam said in a statement.

A shocked industry called for deeper regulation. "This fraud on the investors and employees... shows a systemic breakdown in audit and board oversight... questions will need to be asked," FICCI President Rajeev Chandrasekhar said.

FICCI and CII, however, said the Satyam episode should not be seen as a blot on all the Indian firms.

Corporate Affairs Minister Prem Chand Gupta said stern action would be taken under the law.

Agencies