Domestic funds likely to flock to stocks from H2: Report

Domestic institutional investors (DIIs) who were record sellers in 2013 are likely to become net buyers in the second half of this year, according to a report.

"We strongly believe that the record DII selling witnessed in 2013 should abate sharply in 2014," Deutsche Bank said in a note.

However, the report said while DII selling has continued in 2014, the pace of this selling has slowed sharply so far this year at around 38 percent as against the same period in 2013.

"For DII flows to turn positive, inflows from insurance companies remain critical, which may turn around early H2 as investors of unit-linked products (Ulips) recognise the strength in market," the report said.

Deutsche Bank said the recent bold measures by the government on food inflation and railway tariff hikes illustrate its resolve to address the country's macro economic imbalances and make economic recovery the cornerstone of its political strategy.

"Raising household savings and re-directing savings from physical to financial assets has thus emerged as a corollary to the government's economic revival strategy," it said.

A sharp decline in both domestic and global gold prices, a government committed to inflation control and vibrant equity markets should see the transition from physical, which is currently at a multi-decade high of 68 percent to financial savings, it added.

According to the report, the national fixation on gold as an investment option is on the wane following declining global prices and expectations of a continuing decline in domestic prices as the government potentially rolls back gold import restrictions following CAD normalisation.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.
Image CAPTCHA
Copy the characters (respecting upper/lower case) from the image.

EDITORIAL OF THE DAY

  • Government must give up majority ownership in loss making PSU banks

    After four years of braving economic slowdown and provisioning for rising non performing assets (NPAs), public sector banks are in urgent of capital.

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

Sarthak Raychaudhuri

vice-president, HR, Asia South Whirlpool of India

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

TODAY'S COLUMNS

BK Chaturvedi

Cooperative federalism and governance

Improving relations between the states and the Centre to improve ...

Kuruvilla Pandikattu SJ

Reason drives religion, science

Both religion and science are driven by reason, claims Rama ...

Gautam Gupta

Retailers have it tough, thanks to e-commerce

For the past few months our focus has been on ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture