The institutional class, which had pumped $26.8 billion into equities during the October-March period, have bought FMCG and real estate shares for two straight months now, NSDL data compiled by Edelweiss showed.
FMCG shares saw FPI inflow of $244 million in April, in addition to $516 million that flowed in in March. Real estate stocks saw net inflow of $213 million in April and $710 million in March.
“The two sectors saw highest net FPI inflow for two consecutively months,” Edelweiss said.
Realty stocks as a pack were down 7 per cent in April while FMCG stocks fell 4 per cent.
FMCG products, largely being essential in nature, are widely expected to retain demand despite the localized lockdowns to control the spread of Covid. Nitin Raheja, Co-Founder at AQF Advisors, said the FMCG space has traditionally been a safe haven and most people have parked their money at this counter in difficult times.
“FMCG firms are also going through challenging times. If you look at food companies, you would see food inflation all over the world. Prices are going up and the firms are going to face that challenge. Against that, rural markets — which were the star highlight — are starting to show stress. I think the short-term prospects of these companies are a little bit clouded and stock valuations do not necessarily reflect that,” Raheja told ETNOW.
The analyst said FMCG stocks continue to trade at premium valuations and, hence, he does not see any big upside in them at least in the near term.
In the case of real estate, Rahul Chadha, CIO of Mirae Asset Global Investments, said nobody would have thought the realty stocks would be down just 10 per cent or so despite the rapid spread of Covid second wave.
“These names have held up well, as investors are smart enough to see through this near-term negative. They are looking at the longer-term potential of these companies, consolidating the sector. With affordability being at 15-year high, the sense we are getting from the ground is that people want to upgrade their houses and move into bigger homes. This is all favourable for the sector. We continue to like the residential players in the realty space. What we have done and would probably continue to do is slowly add them to our existing positions if we get better entry levels,” Chadda said.
Overall, foreign portfolio investors owned $547 billion worth of stocks at the end of April compared with $552 billion at the end of March, down almost 90 basis points.
“May FPI flow trend will depend on the countrywide restrictions, business activities, Q4FY21 earnings and management commentaries on business prospects in the coming months, Edelweiss said.
