Foreign funds increased their investment in Indian shares in
2001, notwithstanding a series of scandals.
According to the Securities and Exchange Board of India (Sebi),
foreign funds made net purchases of $2.74 billion in 2001
nearly 80 per cent up from the previous year. During the same
period, the benchmark Bombay share index shed 17.7 per cent.
Barring September, overseas funds were net buyers every
month throughout 2001.
Foreign funds have so far invested $14.55 billion since India
opened doors to multinationals.
Even as fund managers were tempted by low and attractive
valuations in the old economy sector, domestic drug companies
emerged as the favourites, as they increased exports aided by
strong research and development.
Foreign funds are optimistic about the Indian economy, which has
been one of the fastest growing in the world over the past decade and
is expected to post a healthy 5-per cent growth this fiscal.
Fund managers say Indian markets have become safer after a recent
spate of regulatory measures aimed at improving market efficiency.
Sebi abolished carryforward trading in July after the system was
blamed for excessive volatility and a market slide, replacing the
century-old badla with derivative products similar to
those in developed global markets.