India lures foreign investors back with big ticket block trades
The block trades were well bought by overseas investors, according to bankers. They marked the highest monthly total in almost a year and a huge jump from only $220 million in April.
"We actually saw interest coming in from a fairly diverse set of investors who were missing in action in the last six months," said Abhinav Bharti, head of JPMorgan's (JPM.N), opens new tab India equity capital market business.
"They had gone out of India, said India is just too expensive, we don't want to buy anything right now. I think we could start seeing them coming back."
Block trades often precede a recovery in IPOs and May's robust offerings come amid a strong performance for Indian stocks.
The Nifty 50 index (.NSEI), opens new tab has climbed risen 6% since early April when U.S. President Donald Trump announced his sweeping tariffs which were then paused for 90 days, with India emerging as an investor safe haven due to better-than-feared duties.
Foreigners have since bought about $3 billion worth of Indian stocks in April and May combined, data shows, opens new tab.
That comes after they pulled nearly $29 billion out of Indian stocks between October and March which followed record highs for the country's benchmark indices in September.
Gary Tan, a portfolio manager at Allspring Global Investments in Singapore, said the recent inflows into India reflect a resurgence of interest in emerging market equities.
"We've selectively added to India on pullbacks but remain underweight," said Tan, citing high valuation in some sectors. Banking, telecommunications and diversified conglomerates were his most favoured sectors, he added.
The $5.5 billion in block trades in May, according to LSEG data, included the sale of a British American Tobacco (BATS.L), opens new tab $1.51 billion stake in ITC (ITC.NS), opens new tab, according to a term sheet seen by Reuters showed.
IndiGo (INGL.NS), opens new tab co-founder Rakesh Gangwal also offloaded a 5.7% stake in the low-cost carrier through a block deal worth about $1.36 billion, while Singtel (STEL.SI), opens new tab sold $1.5 billion of Bharti Airtel (BRTI.NS), opens new tab shares. Both the ITC and IndiGo trades were increased in size after strong demand from investors, bankers said.
It was the busiest May on record for block trades in the country, the data showed.
"We're seeing high-quality global long-only accounts coming in with conviction," said Sunil Khaitan, a managing director at Goldman Sachs in India.
"Some are still waiting for levels to normalize, but 90% to 95% of the foreign liquidity coming back into the market is from deeply embedded India investors, those who understand the market and have been waiting for the right window to reengage."
Citigroup's head of India ECM Arvind Vashistha said the country's better economic performance, tax cuts and interest rate reductions had helped sentiment towards India's equity markets improve.
"The economy is in good shape, valuations have become more reasonable, which is encouraging healthy market activity. Investors are telling us that these are the companies we find interesting and if there's a supplier, we'd love to buy it," he said.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Finextra
9 minutes ago
- Finextra
Fintech CEOs call on Trump to block banks from imposing 'account access' fees
The CEOs of more than 80 firms in the open banking sphere have written to President Donald Trump calling on him to prevent banks from charging fees to access consumer data. 0 Last October, the Consumer Financial Protection Bureau (CFPB) published the Personal Financial Data Rights final rule, giving Americans the right to instruct their banks to share their financial data with third party providers. But, under the new administration's leadership, in May the CFPB moved to have the rule rescinded in a decision that the Financial Technology Association (FTA) described as a "handout to Wall Street banks". Since then, it has emerged that JP Morgan is planning to impose fees on companies wanting to access its clients' bank account data and has gone so far as sending pricing sheets to data aggregators - the intermediaries that link banks and fintechs. In the letter to Trump, made public by the FTA, the open banking CEOS say: "Large banks are taking aggressive action to preserve their market position by imposing exorbitant new 'account access' fees that would prevent consumers from connecting their accounts to better financial products of their choice. "This access is critical to ensuring Americans have control of their own financial lives in a digital economy." The move would undermine consumer choice, "which you vigorously supported during your first Administration," says the letter, adding that if the large banks are successful, it will choke off access to the finances of consumers and businesses, effectively killing competition. The CEOs - from the likes of Brex, Chime, Klarna, Plaid and Sofi - also argue that such a move would cripple innovation in crypto, AI and digital wallets and payments. "We urge you to use the full power of your office and the broader Administration to prevent the largest institutions from raising new barriers to financial freedom," they write.
Reuters
10 minutes ago
- Reuters
Oil prices climb 2% to 1-week high as Fed rate cut, Trump-Putin talks loom
NEW YORK, Aug 14 (Reuters) - Oil prices climbed about 2% to a one-week high on Thursday after U.S. President Donald Trump warned of "severe consequences" if his talks with Russian President Vladimir Putinon Ukraine fail and on expectations that a U.S. interest rate cut next month could spur oil demand. Central banks, like the U.S. Federal Reserve, use interest rates to control inflation. Lower interest rates reduce consumer borrowing costs and can boost economic growth and demand for oil. Brent crude futures rose $1.03, or 1.6%, to $66.66 a barrel at 1:32 p.m. EDT (1732 GMT), while U.S. West Texas Intermediate (WTI) crude rose $1.14, or 1.8%, to $63.79. Those price gains pushed both crude benchmarks out of technically oversold territory for the first time in three days and put Brent on track for its highest close since August 6. Brent closed on Tuesday at its lowest price since June 5 and WTI closed at its lowest price since June 2 due in part to bearish inventory and supply data from the U.S. Energy Information Administration and the International Energy Agency. said on Thursday he thought Putin was ready to make a deal on ending his war in Ukraine after the Russian president floated the prospect of a on the eve of their summit in Alaska. But on Wednesday, Trump threatened "severe consequences" if Putin does not agree to peace in Ukraine. The U.S. president did not specify what the consequences could be, but he has warned of economic sanctions if the meeting on Friday proves fruitless. Russia was the second-biggest producer of crude in 2024 behind the U.S., so any agreement that could ease sanctions on Moscow would likely boost the amount of Russian oil available for export to global markets. Trump has threatened to enact secondary tariffs on buyers of Russian crude, primarily China and India, if Russia continues its war in Ukraine. "The uncertainty of U.S.-Russia peace talks continues to add a bullish risk premium given Russian oil buyers could face more economic pressure," Rystad Energy said in a client note. Some analysts, however, remained sceptical that Trump would take action that could significantly disrupt oil supplies. Expectations that the Fed will cut interest rates in September also propped up oil prices. Traders overwhelmingly believe a cut will happen next month after U.S. consumer prices increased at a moderate pace in July. U.S. Treasury Secretary Scott Bessent said he thought an aggressive half-percentage-point cut was possible given recent weak employment numbers. But the Fed has a dilemma, U.S. producer prices increased by the most in three years in July amid a surge in the costs of goods and services, suggesting a broad pickup in inflation was imminent. In other energy news, Norwegian oil and gas investments are expected to peak this year, and start declining next year as major projects are completed, a statistics office survey of industry players showed on Thursday. Norway produces about 2% of global oil. It became Europe's largest supplier of pipeline gas after Russia's invasion of Ukraine in February 2022. In Mexico, President Claudia Sheinbaum said on Thursday that Carlos Trevino, former CEO of state oil company Pemex, had been arrested in the United States and would be deported to stand trial in Mexico for corruption charges.
The Guardian
40 minutes ago
- The Guardian
Conservatives join backlash over Trump pick for head of labor data stats: ‘Not a credible source of information'
Donald Trump fired Bureau of Labor Statistics (BLS) commissioner Erika McEntarfer, a veteran economist with decades of experience inside the federal government, after claiming without evidence that official jobs data had been 'rigged' against him. In her place, the US president has lined up an ardent supporter of his agenda accused of regularly misrepresenting and exaggerating statistics, who previously urged Trump's officials to 'take a chainsaw' to the agency he has been tapped to oversee. EJ Antoni, an economist at the Heritage Foundation and contributor to Project 2025, the rightwing blueprint drawn up ahead of Trump's re-election, has been nominated by the president to take charge of US government labor statistics. He did not respond to a request for comment. McEntarfer's abrupt dismissal had already raised fears in Washington, on Wall Street and far beyond about the integrity of official US government data. Plans to replace her with Antoni – confirmed hours after he had called on the BLS to halt the publication of monthly jobs data – have only heightened concern among leading economists. 'From selectively presenting data from particularly convenient dates to misrepresenting axes to exaggerate magnitudes, he has used all the tricks in the book and shown time and again that he is not a credible source of information,' Dave Hebert, an economist at the American Institute for Economic Research, a conservative thinktank, told the Guardian. 'Worse, he has repeatedly shown that he fundamentally misunderstands what some of the data the BLS puts out actually means. 'It's difficult to imagine someone effectively leading a vital organization like the BLS who cannot correctly define the data they're putting out.' After July's lackluster jobs report, there have been further signs of economic strain under Trump. On Thursday, the producer price index – which measures wholesale inflation – was revealed to have risen 0.9% in July, markedly more than expected, and the biggest monthly increase in three years. But data released under Antoni – who requires confirmation by the US Senate – won't be believed, according to Hebert. 'I have no problem with someone who supports President Trump, but we cannot afford such a partisan person who has neither the credibility nor the ability to generate believable data,' he added. Antoni was pictured in a crowd of Trump supporters outside the Capitol during the January 6 insurrection in 2021. The White House told NBC News he was just a bystander, in town for meetings. He is a prolific user of social media, and has frequently appeared on Fox News, Newsmax and other conservative outlets to promote Trump's policies and arguments. In July 2024, Antoni quoted a post on X, formerly Twitter, which seemingly claimed the 2020 election was stolen. He has also derided the Federal Reserve; called social security, Medicare and Medicaid 'Ponzi schemes'; and frequently cast aspersions on the BLS, which he is now set to lead, joking that the 'L' is 'silent'. Back in March, he called 10,000 federal government job losses 'a fabulous start'. Responding to a September 2023 article by ZeroHedge, a libertarian and conspiracy theory website, about US men going abroad to find wives, Antoni wrote in a post: 'Shortages in domestic markets always encourage imports. The laws of Supply and Demand will not be conned, not in any aspect of life.' In recent days, Antoni has also stirred controversy online after viewers noticed a painting of a Nazi battleship featured in some of his broadcast interviews. In a 2023 podcast interview with TFTC, Antoni confirmed the painting to be the Bismarck, used by Nazi Germany's Kriegsmarine during the second world war. Upon being asked about the painting, he replied: 'The Bismarck, yep, in all his glory.' But it is Antoni's use of official data that has drawn the most ire among other economists, who have suggested he mischaracterized BLS data about multiple job holders and native-born and foreign-born workers. He has also tried to frame previous revisions by the bureau as part of a Democratic conspiracy under Biden. Elon Musk's 'department of government efficiency' 'needs to take a chainsaw to the BLS', Antoni wrote on X in November. Shortly before his nomination to lead the bureau this week, he told Fox News the monthly jobs report should be paused over claims its data is flawed. The White House has since claimed 'the plan' is to continue publishing the closely watched report. 'He's utterly unqualified and as partisan as it gets,' Stan Veuger, a senior fellow at the conservative American Enterprise Institute, told the Washington Post. Daniel Di Martino, a fellow at the conservative thinktank the Manhattan Institute, has previously criticized Antoni for claiming that unemployment rate had been 'artificially' reduced. 'This is one of the many elementary errors that show me Mr Antoni is unqualified for the labor market data collection and analysis role he was nominated to,' Di Martino wrote on social media this week. 'People will discuss credentials but what matters is whether you know what you're talking about.' Friends of BLS, a group co-chaired by William Beach, who served as BLS commissioner during Trump's first term, has urged the Senate to do its due diligence in assessing Antoni's suitability for the role. 'The unwarranted dismissal of Dr Erika McEntarfer, the 16th Commissioner of Labor Statistics, and the baseless characterization of BLS employment estimates as 'fake' and 'rigged' have undermined public trust in the Bureau's integrity and the usefulness of its statistics,' the group wrote. 'The next Commissioner must not only manage the difficult responsibilities inherent to the role, but also restore public trust, defend the agency against political interference, and accelerate critical modernization efforts across all programs.' The White House did not immediately respond to requests for comment.
