Latest news with #ForeignInvestment
Zawya
20 hours ago
- Business
- Zawya
India lures foreign investors back with big ticket block trades
SYDNEY/SINGAPORE - Foreign investors are starting to head back into Indian stocks after a major exodus, attracted by $5.5 billion worth of big ticket block trades in May and lifting hopes of a revival in the nation's equities market. 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 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 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. 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 $1.51 billion stake in ITC, according to a term sheet seen by Reuters showed. IndiGo 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 sold $1.5 billion of Bharti Airtel 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. (Reporting by Scott Murdoch and Ankur Banerjee; Editing by Edwina Gibbs)
Reuters
20 hours ago
- Business
- Reuters
India lures foreign investors back with big ticket block trades
SYDNEY/SINGAPORE, June 2 (Reuters) - Foreign investors are starting to head back into Indian stocks after a major exodus, attracted by $5.5 billion worth of big ticket block trades in May and lifting hopes of a revival in the nation's equities market. 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 ( opens new tab, according to a term sheet seen by Reuters showed. IndiGo ( 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 ( opens new tab sold $1.5 billion of Bharti Airtel ( 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.
Yahoo
20 hours ago
- Business
- Yahoo
India lures foreign investors back with big ticket block trades
By Scott Murdoch and Ankur Banerjee SYDNEY/SINGAPORE (Reuters) -Foreign investors are starting to head back into Indian stocks after a major exodus, attracted by $5.5 billion worth of big ticket block trades in May and lifting hopes of a revival in the nation's equities market. 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 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 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. 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 $1.51 billion stake in ITC, according to a term sheet seen by Reuters showed. IndiGo 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 sold $1.5 billion of Bharti Airtel 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.
Yahoo
3 days ago
- Business
- Yahoo
Do foreign investors hold too much of US assets?
Foreign holders of U.S. assets are under scrutiny as trade policy uncertainty stirs fears of a rapid sell-off. But JPMorgan's latest research finds foreign allocations to U.S. assets are far from excessive, casting doubt on the idea that overseas investors are dangerously overweight American markets. 'We are skeptical of the idea that foreign investors hold too much of US assets,' JPMorgan analysts said in a recent note, citing research showing foreign investors are surprisingly underweight U.S. assets. Despite the large dollar figures often cited, the bank notes that allocations to U.S. assets typically stand at just 10–20% of the total financial assets of households outside the U.S. This is well below the U.S. weight in global equity and bond indices—over 60% in the MSCI ACWI and about 50% for USD-denominated bonds. In other words, foreign investors are actually underweight U.S. assets relative to global benchmarks. There are outliers: Norway and Switzerland, whose sovereign wealth funds are overweight U.S. assets due to their mandates. But as JPMorgan points out, 'these two entities follow global index benchmarks, so they largely accept whatever weight on US assets markets set, rather than actively trying to diverge from market weights.' No major changes are anticipated in their allocations. Looking beyond Norway and Switzerland, the countries with the most exposure to U.S. assets are Canada, the Euro area, Taiwan, and Japan. Meanwhile, China, South Korea, India, and Brazil are among the least exposed. JPMorgan does, however, flag that custodial bias in U.S. TIC data might mean some exposures are underrepresented, but the overall picture remains: most foreign investors are not dangerously overexposed. Exposure has gradually increased in recent years, driven by outperformance in U.S. equities and steady flows into U.S. bonds. For both the Euro area and Japan, about half of their foreign portfolio investments are allocated to the U.S., though this is largely a function of global index composition and revaluation effects. Despite the headlines, JPMorgan's research suggests that fears of foreign investors being dangerously overweight U.S. assets are overblown. While there is potential for equity selling from rebalancing by balanced mutual funds, pension funds, and sovereign wealth funds, these are routine portfolio adjustments—not a wholesale flight triggered by trade policy jitters. 'Thus far, there is also little indication of either increased demand for hedging dollar exposures in cross-currency basis swaps (beyond ongoing wide levels in Taiwan) or selling of US assets by foreign investors,' JPMorgan said. Related articles Do foreign investors hold too much of US assets? Canada March GDP rises 0.1%; Q1 growth steady at 0.5% Trump says China violated agreement with U.S. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
3 days ago
- Business
- Yahoo
Trump and Putin want to talk business once the Ukraine war ends. Here's why it won't be easy
Hundreds of foreign companies left Russia after the 2022 invasion of Ukraine, including major U.S. firms like Coca-Cola, Nike, Starbucks, ExxonMobil and Ford Motor Co. But after more than three years of war, President Donald Trump has held out the prospect of restoring U.S.-Russia trade if there's ever a peace settlement. And Russian President Vladimir Putin has said foreign companies could come back under some circumstances. 'Russia wants to do largescale TRADE with the United States when this catastrophic 'bloodbath' is over, and I agree,' Trump said in a statement after a phone call with Putin. 'There is a tremendous opportunity for Russia to create massive amounts of jobs and wealth. Its potential is UNLIMITED.' The president then shifted his tone toward Putin after heavy drone and missile attacks on Kyiv, saying Putin 'has gone absolutely crazy' and threatening new sanctions. That and recent comments from Putin warning Western companies against reclaiming their former stakes seemed to reflect reality more accurately — that it's not going to be a smooth process for businesses going back into Russia. That's because Russia's business environment has massively changed since 2022. And not in ways that favor foreign companies. And with Putin escalating attacks and holding on to territory demands Ukraine likely isn't going to accept, a peace deal seems distant indeed. Here are factors that could deter U.S. companies from ever going back: Risk of losing it all Russian law classifies Ukraine's allies as 'unfriendly states' and imposes severe restrictions on businesses from more than 50 countries. Those include limits on withdrawing money and equipment as well as allowing the Russian government to take control of companies deemed important. Foreign owners' votes on boards of directors can be legally disregarded. Companies that left were required to sell their businesses for 50% or less of their assessed worth, or simply wrote them off while Kremlin-friendly business groups snapped up their assets on the cheap. Under a 2023 presidential decree the Russian government took control of Finnish energy company Fortum, German power company Unipro, France's dairy company Danone and Danish brewer Carlsberg. Even if a peace deal removed the U.S. from the list of unfriendlies, and if the massive Western sanctions restricting business in Russia were dropped, the track record of losses would remain vivid. And there's little sign any of that is going to happen. While the Russian government has talked in general about companies coming back, 'there's no specific evidence of any one company saying that they are ready to come back,' said Chris Weafer, CEO of Macro-Advisory Ltd. consultancy. 'It's all at the political narrative level.' Russia's actions and legal changes have left 'long-lasting damage' to its business environment, says Elina Ribakova, non-resident senior fellow at the Bruegel research institute in Brussels. She said a return of U.S. businesses is 'not very likely.' 'We need to strangle them' In a meeting at the Kremlin on May 26 to mark Russian Entrepreneurs Day, Putin said that Russia needed to throttle large tech firms such as Zoom and Microsoft, which had restricted their services in Russia after Moscow's invasion of Ukraine, so that domestic tech companies could thrive instead. 'We need to strangle them,' Putin said. 'After all, they are trying to strangle us: we need to reciprocate. We didn't kick anyone out; we didn't interfere with anyone. We provided the most favorable conditions possible for their work here, in our market, and they are trying to strangle us.' He reassured a representative from Vkusno-i Tochka (Tasty-period) — the Russian-owned company that took over McDonald's restaurants in the country — that Moscow would aid them if the U.S. fast food giant tried to buy back its former stores. Asked for comment, McDonald's referred to their 2022 statement that 'ownership of the business in Russia is no longer tenable.' Not much upside On top of Russia's difficult business environment, the economy is likely to stagnate due to lack of investment in sectors other than the military, economists say. 'Russia has one of the lowest projected long-term growth rates and one of the highest levels of country risk in the world,' says Heli Simola, senior economist at the Bank of Finland in a blog post. 'Only Belarus offers an equally lousy combination of growth and risk.' Most of the opportunity to make money is related to military production, and it's unlikely U.S. companies would work with the Russian military-industrial complex, said Ribakova. 'It's not clear where exactly one could plug in and expect outsize returns that would compensate for this negative investment environment.' Repurchase agreements Some companies, including Renault and Ford Motor Co., left with repurchase agreements letting them buy back their stakes years later if conditions change. But given Russia's unsteady legal environment, that's tough to count on. The Russian purchasers may try to change the terms, look for more money, or ignore the agreements, said Weafer. 'There's a lot of uncertainty as to how those buyback auctions will be enforced.' But what about the oil and gas? Multinational oil companies were among those who suffered losses leaving Russia, so it's an open question whether they would want to try again even given Russia's vast oil and gas reserves. US.. major ExxonMobil saw its stake in the Sakhalin oil project unilaterally terminated and wrote off $3.4 billion. Russia's major oil companies have less need of foreign partners than they did in the immediate post-Soviet era, though smaller oil field services might want to return given the size of Russia's oil industry. But they would have to face new requirements on establishing local presence and investment, Weafer said. Some never left According to the Kyiv School of Economics, 2,329 foreign companies are still doing business in Russia, many from China or other countries that aren't allied with Ukraine, while 1,344 are in the process of leaving and 494 have exited completely. The Yale School of Management's Chief Executive Leadership Institute lists some two dozen U.S. companies still doing business in Russia, while some 100 more have cut back by halting new investments. EU sanctions could remain even if US open U.S. sanctions are considered the toughest, because they carry the threat of being cut off from the U.S. banking and financial system. But the EU is still slapping new rounds of sanctions on Russia. Even if U.S. sanctions are dropped, EU sanctions would continue to present compliance headaches for any company that also wants to do business in Europe.
