FPIs turn net debt buyers after 3 yrs

livemint.com:

₹16,722 crore worth of Indian government and corporate bonds in the calendar year through June. FPIs net sold Indian bonds worth ₹1.31 trillion in the past three years ending 2022. The last time they were net buyers was in 2019, when they purchased ₹25,882 crore worth of bonds.

“I think it is to do with global fund managers reallocating funds to other EMs (emerging markets) like India from Russia, consequent to the Ukraine war, coupled with a stable currency and Indian bond yields remaining relatively less volatile," said Madan Sabnavis, chief economist, Bank of Baroda. The benchmark 10-year government bond yield has softened from a closing high of 7.43% on 8 March to 7.11% on Tuesday. This year, the bond yield fell to a low of 6.96% on 16 May before moving above the 7% psychological mark.

Bond yields and prices have an inverse relationship. When yields fall, prices increase, and vice versa. The Indian currency also has remained stable through June compared to the six months of the previous year.

It moved between a low of 82.89 and a high of 81.12 to the dollar in the first half of 2023. An attractive high-yield bond issue from the Shapoorji Pallonji Group also bolstered overall inflows. “In June, there was a large deal where Shapoorji Pallonji Group company Goswami Infratech raised ₹14,300 crore.