A PROJECT REPORT ON

ROLE OF FINANCIAL INSTITUTION IN CAPITAL

MARKET IN INDIA

SUBMITTED IN PARTIAL FULFILLMENT OF THE

REQURIEMENT FOR

BACHELOR OF BUSINESS ADMINISTRATION

OF

PUNJAB TECHNICAL UNIVERSITY

JALANDHAR

SUBMITTED BY: SUBMITTED TO:

RANG NARAYAN Mr. LOKNATH MISHRA

B.B.A(6TH SEM.) (PROGRAM DIRECTOR)

Session:2009-2012 DELHI BUSINESS SCHOOL

Roll no. :9208490013 NEW DELHI

DBS

Delhi Business School

B-II/58 MCIE Mathura Road New Delhi

Website: www.dbs.edu.in

ACKNOWLEDGEMENT

I would like to thank Mr. Loknath MIshra for providing me the opportunity to

work on this project. My sincere thanks continue to our institute for providing

me the opportunity to work on this project. It was an great part and a source

of learning for me. Last but not the least, I would like to thank all the people

who helped and contributed me knowingly or unknowingly during this project.

It may not be possible to mention all the names but their contributions have

always enriched me in every aspect.

Signature:

Rang Narayan

D E C L A R A T I O N

I, Rang Narayan, hereby declare that the Project Report

entitled ‘ROLE OF FINANCIAL INSTITUTION IN CAPITAL

MARKET IN INDIA’ written and submitted by me to the

Punjab Technical University, in partial fulfillment of the

requirements for the award of degree of Bachelor Of Business

Administration and Under Graduate Program under the

guidance of Mr. Loknath Mishra is my original work and does

not form earlier the basis for the award of any degree or

similar title of this or any other University or examining body.

In addition, the conclusions drawn therein are based on the

material collected by myself.

Rang Narayan

BBA(6th Sem.)

Roll. No.:9208490013

EXECUTIVE SUMMARY:

The objective of the project is to find the different role of institutional

investors in the capital market in India and then to find the role of

institutional investors in the major volatile episode in the capital

market in India. Finally to find the relationship between the Sensex

variation with the variation of the investments made by the

institutional investors. India opened its stock markets to foreign

investors in September 1992 and has, since 1993, received

considerable amount of portfolio investment from foreigners in

the form of Foreign Institutional Investor’s (FII) investment in

equities. While it is generally held that portfolio flows benefit the

economies of recipient countries, policy makers worldwide have

been more than a little uneasy about such investments. Portfolio

flows-often referred as “hot money”-are notoriously volatile compared

to other types of capital inflows. Investors are known to pull back

portfolio investments at the slightest hint of trouble in the host

country often leading to disastrous consequences to its economy

. They have been blamed for exacerbating small economic problems

in a country by making large and concerted withdrawals at the first

sign of economic weakness. The methodology used to is regression

analysis. The degree of association helps us to quantify the relation

ship between the variation in sensex due to the variation in the

net investments

made by the institutional investors

.

After completeing the project I could recommend that Government

should certainly encourage foreign institutional investment but should

keep a check on the volatility factor. Long term funds should be given

priority and encouraged some of the actions that could be taken to

ensure stability are Strengthening domestic institutional investors

Operational flexibility to impart stability to the market Knowledge

activities and research programs

To conclude with I would say the that the foreign funds is certainly one of the most important

cause of volatility in the Indian stock market and has had a considerable

influence on it. Although it would not be fair enough to come to any

conclusion as there are a lot of other factors beyond the scope of the

study that effect returns and risks .it is not easy to predict the

nature of the macroeconomic factors and their behavior but it has a

great significance on any economy and its elements. Although generally

a positive relation has been seen between the stock market returns

and the FII inflows it is not easy to say which is the cause n which is the

effect.

TABLE OF CONTENTS

CONTENTS ABSTRACT 1. INTRODUCTION 2. OBJECTIVE 3. METHODOLOGY 4. INSTITUTIONAL INVESTORS 5. TYPES OF INSTITUTIONAL INVESTOR 5.1 DOMESTIC INSTITUTIONAL INVESTORS 5.1.1 DOMESTIC FINANACIAL INSTITUTION 5.1.2 INSURANCE COMPANIES 5.1.3 BANKS 5.1.4 ASSET MANAGEMENT COMPANY 5.2 FOREIGN INSTITUTIONAL INVESTORS

5.2.1 SOURCES OF FII IN INDIA 6. CAPITAL MARKET IN INDIA 7. INSTITUTIONAL INVESTORS REGISTERED IN INDIA 7.1 MUTUAL FUND REGISTERED IN INDIA 7.2 FII REGISTERED IN INDIA 8. MAJOR INSTITUTIONAL INVESTORS IN INDIA 8.1 DOMESTIC INSTITUTIONAL INVESTORS 8.1.1 LIFE INSURANCE CORPORATION

8.1.2 RELIANCE MUTUAL FUND

8.1.3 ICICI PRUDENTIAL 8.1.4 UTI MUTUAL FUND 8.1.5 HDFC MUTUAL FUND 8.2 FII 8.2.1 DEUTSCHE GROUP 8.2.2 CITIGROUP GROUP 8.2.3 HSBC GLOBAL INVESTMENT 8.2.4 MORGAN STANLEY &CO INTERNATIONAL LTD 8.2.5 DSP MERRILL LYNCH 9. INVESTMENT TRENDS OF INSTITUTIONAL INVESTORS IN INDIA 9.1 INVESTMENT TRENDS OF INDIAN MUTUAL FUND

INDUSTRY 9.2 FOREIGN INSTITUTIONAL INVESTMENT 9.2.1 REASONS FOR GROWTH IN FII INVESTMENT

10. FII: COST BENEFIT ANALYSIS

11. DETERMINATION OF FII

12. COMPARISION BETWEEN FIIS & MUTUAL FUND INVESTMENT

13. ROLE OF INSTITUTIONAL INVESTORS IN CAPITAL

MARKET

14. A STUDY OF MAJOR EPISODES OF VOLATILITY

15. STATISTICAL ANALYSIS

RECOMMENDATION

CONCLUSION

REFERENCES

ANEXURE

ABSTRACT:

"The whole is much more than just the sum of

the parts"–Aristotle

An economy, apart from everything else, is a highly fluid transmission

mechanism. Its beauty lies in how the smallest of changes have the most

complex trickle-down effects. A paradigmatic example of how seemingly

minor policy changes can jumpstart the economy can be illustrated by

examining the effects liberalization on capital market in India.

Globalization had led to widespread liberalization and implementation

of financial market reforms in many countries, mainly focusing on

integrating the financial markets with the global markets. Indian Capital

Market has also undergone metamorphic reforms in the past few years.

Every segment of Indian Capital Market viz primary and secondary

markets, derivatives, institutional investment and market intermediation

has experienced impact of these changes which has significantly

improved the transparency, efficiency and integration of Indian market with

the global markets.

This is one of the prime reasons why the foreign portfolio investments have

been increasingly flowing into the Indian markets. A significant part of these

portfolio flows to India comes in the form of Foreign Institutional Investors’

(FIIs’) investments, mostly in equities. Ever since the opening of the Indian

equity markets to foreigners, FII net investments have steadily grown. Thus,

we can see that there has been a consistent rise in the FII inflows into the

country.

While the concerns such as FII pulling back their investments and the kind of

destabilizing effect on the capital market in India are all well-placed,

comparatively less attention have been paid so far to analyzing the FII flows

data and understanding their key features. A proper understanding of the

nature and determinants of these flows, however, is essential for a

meaningful debate about their effects as well as predicting their chances of

their sudden reversals. Thus this project aims at studying the role of these

Institutional investors and its impact on the capital markets in India

.This also aims to find out the various factors and determinants for their

investments and also cite out scenarios where in these investments when

pulled back by these FII could really effect the capital markets in India.

Institutional investors are a permanent feature of the financial landscape,

and their growth will continue at a similar and perhaps faster pace. The

factors that underpin their development are far from transitory and in many

cases have only just started having an impact. The behavioral

characteristics of institutional investors, therefore, will be an increasingly

important determinant of domestic and international financial market

conditions, and the implications for financial market stability warrant

serious consideration"

Bank for International Settlements, Annual

Report 1998, p95.

1. INTRODUCTION:

Financial markets are the catalysts and engines of growth for any nation.

India’s financial market began its transformation path in the early 1990s. The

banking sector witnessed sweeping changes, including the elimination of

interest rate controls, reductions in reserve and liquidity requirements and an

overhaul in priority sector lending. Persistent efforts by the Reserve Bank of

India (RBI) to put in place effective supervision and prudential norms since

then have lifted the country closer to global standards. Around the same

time, India’s capital markets also began to stage extensive changes. The

Securities and Exchange Board of India (SEBI) was established in 1992

with a mandate to protect investors and usher improvements into the

microstructure of capital markets, while the repeal of the Controller of

Capital Issues (CCI) in the same year removed the administrative

controls over the pricing of new equity issues. India’s financial markets also

began to embrace technology. Competition in the markets increased

with the establishment of the National Stock Exchange (NSE) in 1994,

leading to a significant rise in the volume of transactions and to the

emergence of new important instruments in financial intermediation.

Indian investors have been able to invest through mutual funds since

1964, when UTI was established. Indian mutual funds have been organized

through the Indian Trust Acts, under which they have enjoyed certain tax

benefits. Between 1987 and 1992, public sector banks and insurance

companies set up mutual funds. Since 1993, private sector mutual funds

have been allowed, which brought competition to the mutual fund industry.

This has resulted in the introduction of new products and improvement

of services. The notification of the SEBI (Mutual Fund) Regulations of

1993 brought about a restructuring of the mutual fund industry. An arm’s

length relationship is required between the fund sponsor, trustees,

custodian, and asset Management Company. This is in contrast to the

previous practice where all three functions, namely trusteeship,

custodianship, and asset management, were often performed by one body,

Usually the fund sponsor or its subsidiary. The regulations

prescribed disclosure and advertisement norms for mutual funds, and, for

the first time, permitted the entry of private sector mutual funds. FIIs

registered with SEBI may invest in domestic mutual funds, whether listed or

unlisted. The 1993 Regulations have been revised on the basis of the

recommendations of the

Mutual Funds 2000 Report prepared by SEBI. The revised regulations

strongly emphasize the governance of mutual funds and increase the

responsibility of the trustees in overseeing the functions of the asset

management company. Mutual funds are now required to obtain the consent

of investors for any change in the “fundamental attributes” of a scheme, on

the basis of which unit holders have invested. The revised regulations

require disclosures in terms of portfolio composition, transactions by

schemes of mutual funds with sponsors or affiliates of sponsors, with the

asset Management Company and trustees, and also with respect to personal

transactions of key personnel of asset management companies and of

trustees.

India opened its stock markets to foreign investors in September 1992

and has, since 1993, received considerable amount of portfolio investment

from foreigners in the form of Foreign Institutional Investor’s (FII)

investment in equities. This has become one of the main channels of

portfolio investment in India for foreigners. In order to trade in Indian

equity markets, foreign corporations need to register with the SEBI as

Foreign Institutional Investor (FII). SEBI’s definition of FIIs

presently includes foreign pension funds, mutual funds,

charitable/endowment/university fund’s etc. as well as asset management

companies and other money managers operating on their behalf

The sources of these FII flows are varied .The FIIs registered with SEBI

come from as many as

28 countries(including money management companies operating in India on

behalf of foreign investors).US based institutions accounted for slightly over

41% those from the U.K constitute about 20% with other Western European

countries hosting another 17% of the FIIs.

Portfolio investment flows from industrial countries have become

increasingly important for developing countries in recent years. The Indian

situation has been no different. A significant part of these portfolio flows to

India comes in the form of FII’s investments, mostly in equities. Ever since

the opening of the Indian equity markets to foreigners, FII investments have

steadily grown from about Rs.2600 crores in 1993 to over Rs.272165 crores

till the end of Feb 2008.

While it is generally held that portfolio flows benefit the economies of

recipient countries, policy makers worldwide have been more than a little

uneasy about such investments. Portfolio flows- often referred as “hot

money”-are notoriously volatile compared to other types of capital inflows.

Investors are known to pull back portfolio investments at the slightest hint of

trouble in the host country often leading to disastrous consequences to its

economy. They have been blamed for exacerbating small economic problems

in a country by making large and concerted withdrawals at the first sign of

economic weakness. They have also been responsible for spreading financial

crisis –causing contagion in international financial markets.

International capital flows and capital controls have emerged as an

important policy issues in the Indian context as well. The danger of “abrupt

and sudden outflows” inherent with FII flows and their destabilizing effect on

equity and foreign exchange markets have been stressed.

The financial market in India have expanded and deepened rapidly over the

last ten years. The Indian capital markets have witnessed a dramatic

increase in institutional activity and more specifically that of FII’s.

This change in market environment has made the market more

innovative and competitive enabling the issuers of securities and

intermediaries to grow. In India the institutionalization of the capital markets

has increased with FII’s becoming the dominant owner of the free float of

most blue chip Indian stocks. Institutions often trade large blocks of shares

and institutional order’s can have a major impact on market volatility. In

smaller markets, institutional trades can potentially destabilize the markets.

Moreover, institutions also have to design and time their trading strategies

carefully so that their trades have maximum possible returns and minimum

possible impact costs.

2. OBJECTIVE OF THE PROJECT:

To Study the Impact of Institutional Investors especially the FII on the

capital market in

India.

To study the major Episodes of volatility in India and analyzing the impact

of Institutional investors in these episodes.

To quantify the relation between FII flows and their relationship with

economic variables, particularly with NIFTY.

3. METHODOLOGY:

For covering the Theoretical part I shall be going through a lot of literature

including books on FII & Capital Market. Beyond this I shall be tracking the

performance of FII through the help of internet.

To Study the major episodes of volatility in India, I would be reading through a

lot of literature, articles, and magazines and visiting various sites for their

comments during that period.

For the study purpose, I will take only NIFTY that is the National Stock

Exchange (NSE) benchmark Index is considered. This is because the larger

chunk of FII activity in India happens on the NSE. NSE is the dominant

exchange in India with close to 75% of cash market turnover and well over

90% of derivatives turnover in India happening on the NSE. The daily

index volatility and volatility in daily FII cash flows were studied and daily

FII volatility on the Nifty volatility. On the information so gathered I will be

running SPSS analysis & reaching onto the conclusion.

Thus throughout the project I shall be making use of

secondary data.

4. INSTITUTIONAL INVESTOR:

An institutional investor is an investor, such as a bank, insurance company,

retirement fund, hedge fund, or mutual fund that is financially sophisticated

and makes large investments, often held in very large portfolios of

investments. Because of their sophistication, institutional investors may

often participate in private placements of securities, in which certain aspects

of the securities laws may be inapplicable.

5. TYPES OF INSTITUTIONAL INVESTOR

5.1. DOMESTIC INSTITUTIONAL INVESTOR

is used to denote an investor - mostly of the form of an institution or

entity, which invests money in the financial markets of its own

country where the institution or entity was originally incorporated. In

India, there are broadly four types of institutional investors.

5.1.1 DEVELOPMENTAL FINANCIAL INSTITUTIONS like Industrial Finance

Corporation of India (IFCI), Industrial Credit and Investment Corporation of

India (ICICI), Industrial Development Bank of India (IDBI), the State

Financial Corporations, etc. The role played by these financial institutions (FIs)

is to extend funds to the companies for both long term financing and (more

recently) working capital financing. The financial institutions extend both debt

and equity financing to their nominee directors in the companies.

5.1.2 INSURANCE COMPANIES like the Life Insurance

Corporation (LIC), General Insurance Corporation (GIC), and

their subsidiaries.

5.1.3 BANKS: Earlier banks used to finance only the working

capital of the companies. But now they are also extending

long-term finance to the companies.

5.1.4 ASSET MANAGEMENT COMPANIES all the mutual funds

including Unit Trust of India (UTI). The mutual funds collect funds

from both individuals and corporate to invest in the financial

assets of other companies. In India, the mutual funds

participate largely in the equity capital of the companies. The

mutual fund industry which is the major institutional investors in

India started in 1963 with the formation of Unit Trust of India,

at the initiative of the Government of India and Reserve Bank.

The history of mutual funds in India can be broadly divided into

four distinct phases

First Phase: 1964-1987, Unit Trust of India (UTI) was

established on

1963 by an Act of

Parliament.

Second Phase : 1987- 1993, Entry of Public Sector Funds

.1987 marked the entry of non- UTI, public sector mutual funds

set up by public sector

banks and Life Insurance Corporation of India (LIC)

and General Insurance Corporation of India (GIC).

Third Phase: 1993-2003, Entry of Private Sector Funds in

1993. Kothari Pioneer (now merged with Franklin Templeton)

was the first private

sector mutual fund registered in July 1993.As at the end of

January 2003;

there were 33 mutual funds with total assets of Rs. 1, 21,805

crores. The Unit Trust of India with Rs.44, 541 crores of assets

under management was way ahead of other mutual funds.

Fourth Phase: 2003-2007 In Feb 2003 the Unit Trust of

India Act 1963

UTI was bifurcated into two separate entities. The Specified

Undertaking of Unit Trust of India, functioning under an

administrator and under the rules framed by Government of

India. The second is the UTI Mutual Fund Ltd, sponsored by

SBI, PNB, BOB and LIC. It is registered with SEBI and

functions under the Mutual Fund Regulations.

5.2 FOREIGN INSTITUTIONAL INVESTOR (FII)

is used to denote an investor - mostly of the form of an institution or

entity, which invests money in the financial markets of a country

different from the one where in the institution or entity was originally

incorporated.FII investment is frequently referred to as hot money for

the reason that it can leave the country at the same speed at which it

comes in. In countries like India, statutory agencies like SEBI have

prescribed norms to register FIIs and also to regulate such investments

flowing in through FIIs.

Pension Funds

Mutual Funds

Investment Trust

Insurance or reinsurance companies

Endowment Funds

University Funds

Foundations or Charitable Trusts or Charitable Societies

Asset Management

Companies Nominee

Companies Institutional

Portfolio Managers Trustees

Power of Attorney Holders

Bank

5.2.1 SOURCES OF FII IN INDIA:

The sources of these FII flows are varied. The FIIs registered with

SEBI come from as many as 28 countries (including money

management companies operating in India on behalf of

foreign investors). US-based institutions accounted for slightly

over 41%; those from the UK constitute about 20% with other

Western European countries hosting another 17% of the

FIIs. It is, however, instructive to bear in mind that these

national affiliations do not necessarily mean that the actual

investor funds come from these particular countries. Given the

significant financial flows among the industrial countries, national

affiliations are very rough indicators of the ‘home’ of the

FII investments. In particular institutions operating from

Luxembourg, Cayman Islands or Channel Islands, or even those

based at Singapore or Hong Kong are likely to be investing funds

largely on behalf of residents in other countries. Nevertheless,

the regional breakdown of the FIIs does provide an idea of the

relative importance of different regions of the world in the

FII flows.

6. CAPITAL MARKET IN INDIA

The Bombay Stock Exchange (BSE), which began formal trading in 1875,

is one of the oldest in Asia. Over the last decade, there has been a rapid

change in the Indian securities market, both in primary as well as the

secondary market. Advanced technology and online-based transactions

have modernized the stock exchanges. In terms of the number of

companies listed and tota market capitalization, the Indian equity

market is considered large relative to the country’s stage of economic

development. Currently, there are 40 mutual funds, out of which 33 are

in the private sector and 7 are in the public sector. Mutual funds were

opened to the private sector in 1992. Earlier, in 1987, banks were allowed

to enter this business, breaking the monopoly of the Unit Trust of India

(UTI), which maintains a dominant position. Before 1992, many factors

obstructed the expansion of equity trading. Fresh capital issues were

controlled through the Capital Issues Control Act. Trading practices were

not transparent, and there was a large amount of insider trading.

Recognizing the importance of increasing investor protection, several

measures were enacted to improve the fairness of the capital market.

The Securities and Exchange Board of India (SEBI) was established in

1988. There have been significant reforms in the regulation of the

securities market since 1992 in conjunction with overall economic and

financial reforms. In 1992, the SEBI Act was enacted giving SEBI

statutory status as an apex regulatory body. And a series of reforms was

introduced to improve investor protection, automation of stock trading,

integration of national markets, and efficiency of market operations. India

has seen a tremendous change in the secondary market for equity. Among

the processes that have already started and are soon to be fully

implemented are electronic settlement trade and exchange-traded

derivatives. Before 1995, markets in India used open outcry, a trading

process in which traders shouted and hand signaled from within a pit.

One major policy initiated by SEBI from 1993 involved the shift of all

exchanges to screen-based trading, motivated primarily by the need for

greater transparency. The first exchange to be based on an open

electronic limit order book was the National Stock Exchange (NSE), which

started trading debt instruments in June 1994 and equity in November

1994. In March 1995, BSE shifted from open outcry to a limit order book

market. Before 1994, India’s stock markets were dominated by BSE. In

other parts of the country, the financial industry did not have equal access

to markets and was unable to participate in forming prices compared

with market participants in Mumbai (Bombay).

As a result, the prices in markets outside Mumbai were often different

from prices in Mumbai. These pricing errors limited order flow to these

markets. Explicit nationwide connectivity and implicit movement toward

one national market has changed this situation. NSE has established

satellite communications which give all trading members of NSE equal

access to the market. Similarly, BSE and the Delhi Stock Exchange are

both expanding the number of trading terminals located all over the

country. The arbitrages are eliminating pricing discrepancies between

markets.

The Indian capital market still faces many challenges if it is to

promote more efficient allocation and mobilization of capital in the

economy.

First, market infrastructure has to be improved as it hinders

the efficient flow of information and effective corporate

governance.

Second, the trading system has to be made more transparent.

Third, India may need further integration of the national

capital market through consolidation of stock exchanges.

Fourth, the payment system has to be improved to better

link the banking and securities industries.

The capital market cannot thrive alone; it has to be integrated with

the other segments of the financial system. The global trend is for the

elimination of the traditional wall between banks and the securities

market. Securities market development has to be supported by

overall macroeconomic and financial sector environments. Further

liberalization of interest rates, reduced fiscal deficits, fully market-

based issuance of Government securities and a more competitive

banking sector will help in the development of a sounder and a more

efficient capital market in India.

7. INSTITUTIONAL INVESTORS REGISTERED IN INDIA:

7.1 MUTUAL FUNDS REGISTERED IN INDIA:

From the bar chart above it is clearly evident that the mutual fund

industry is still at a nascent stage as compared to the FII’s. Since its

inception in 1964 when the first mutual fund i.e. UTI had the

monopoly for 25 years. It was thus in the year after 1989 that public

sector banks and financial institution started their AMC .Finally in the

third phase when private players entered the arena, it lead to a fierce

battle to hold the top slot in the Indian mutual fund industry .The growing

number of mutual fund companies corroborates the fact that Indian

public are now looking for different avenues to invest their earnings and

are confident on the working of capital market in India. This shows that

SEBI has in a way restored the faith of these investors in spite of the

different scams that rocked the capital market in India.

7.2 FII REGISTERED IN INDIA:

Let’s look at some of the data to get an idea about the trend of FIIs

in India, and also to see the future direction of their movement.

India had 528 FIIs were registered with SEBI by end of 2001 and by

end of Feb-2008 the number increased to1303. The trend in the

number of registered FIIs has been consistently on the rise as can

be seen from the table; showing the significant amount of

confidence that Indian Capital market has developed in the last few

years.

Not only has been the number increasing on a consistent basis, but

the amount of inflow into Indian market has also seen a manifold

increased. The gross purchase, sales and net investment figure on

an annual basis gives a fair idea about the consistency of their

investments in our country.

As we can see in the investment trends table, except for 1998, the

net investment by the FIIs in the Indian market has always been

positive since liberalization which to a large extent tells about the

consistency of their presence in Indian market. This is also evident

from the fact that the number of FII registering in India is

increasing in spite of the fact that SEBI has declined to issue any

further PN notes and also asked them to get registered. This shows

that India still remains the hot spot for the foreign investors in

the coming years.

8. MAJOR INSTITUTIONAL INVESTORS IN INDIA

The total number of Domestic institutional investors specially the

mutual funds is 40 in number. Similarly insurance companies and

other banks are very large in number. But out of these there are some

heavy weights which solely by their investments are among the top 5

domestic institutional investors in india.Among the total FII registered

i.e. 1303 by the end of feb 2008 the top 5 FII in terms of their

investment in India are listed below.

8.1. DOMESTIC INSTITUTIONAL INVESTORS

8.1.1. LIFE INSURANCE CORPORATION OF INDIA.

Life Insurance in its modern form came to India from England

in the year 1818. The first two decades of the twentieth

century saw lot of growth in insurance business. From 44

companies with total business-in-force as Rs.22.44 crore, it rose

to 176 companies with total business-in-force as Rs.298 crore in

1938. During the mushrooming of insurance companies many

financially unsound concerns were also floated which failed

miserably. However, it was much later on the 19th of January,

1956, that life insurance in India was nationalized. About 154

Indian insurance companies, 16 non-Indian companies and 75

provident were operating in India at the time of

nationalization. Nationalization was accomplished in two

stages; initially the management of the companies was taken

over by means of an Ordinance, and later, the ownership too by

means of a comprehensive bill. The Parliament of India passed

the Life Insurance Corporation Act on the 19th of June

1956, and the Life Insurance Corporation of India was created

on 1st September,

1956, with the objective of spreading life insurance much more

widely and in particular to the rural areas with a view to

reach all insurable persons in the country, providing them

adequate financial cover at a reasonable cost.

LIC’s emergence as the biggest investor in the country should not surprise

anyone. The state-owned company is 51 years old and enjoyed a

state-sanctioned monopoly over the life insurance business till 2000.

The firm has issued 220 million policies and earned total premium income

of Rs39, 541 crore in 2006-07. It is allowed to invest 35% of its funds in

equities.

The largest chunk in LIC’s portfolio is the stake it owns in listed

engineering giant Larsen and Toubro Ltd. The 15.7% stake in L&T is

valued at more than Rs19, 642 crore. Other major investments include a

4.14% stake in Reliance Industries Ltd, the largest Indian company by

market capitalization, 7.2 % in ICICI Bank Ltd,

13.4% in ITC Ltd and 4.2 % in Reliance Communications

Ltd.

8.1.2 RELIANCE MUTUAL FUNDS:

Reliance Mutual Fund (RMF) is one of India’s leading Mutual

Funds,

with Average Assets Under Management (AAUM) of Rs. 90,938

Crores (AAUM for Mar 08 ) and an investor base of over 66.87

Lakhs.Reliance Mutual Fund, a part of the Reliance - Anil

Dhirubhai Ambani Group, is one of the fastest growing mutual

funds in the country. Reliance Capital Ltd. is one of India’s

leading and fastest growing private sector financial services

companies, and ranks among the top 3 private sector financial

services and banking companies, in terms of net worth.

Reliance Capital Ltd. has interests in asset management, life and

general insurance, private equity and proprietary investments,

stock broking and other financial services.

8.1.3 ICICI PRUDENTIAL FUNDS:

ICICI Prudential Asset Management Company enjoys the

strong parentage of

prudential plc, one of UK's largest players in the insurance &

fund management sectors and ICICI Bank, a well-known and

trusted name in financial services in India. ICICI Prudential Asset

Management Company, in a span of just over eight years, has

forged a position of pre-eminence in the Indian Mutual Fund

industry as one of the largest asset management companies in

the country with assets under management of Rs. 37,906.24

crore (as of March 31, 2007). The Company manages a

comprehensive range of schemes to meet the varying

investment needs of its investors spread across 68 cities in the

country. Upon its inception in May

1998 it manages 2 funds of Rs 160 Cr and has grown to manage 35 Funds worth

Rs 62,008.95

Cr.

8.1.4 UTI MUTUAL FUNDS:

UTI Mutual Fund came into existence on 1st February 2003.

Bank of Baroda (BOB), Punjab National Bank (PNB) and State

Bank of India (SBI) and Life Insurance Corporation of India

(LIC) are the sponsors of the UTI Mutual Fund. UTI Mutual

Fund is managed by UTI Asset Management Company

Private Limited (AMC). UTI AMC is a registered portfolio

manager under the SEBI (Portfolio Managers) Regulations,

1993 for undertaking portfolio management services and also

acts as the manager and marketer to offshore funds. UTI Mutual

Fund has a nationwide network consisting 70 UTI Financial

Centers (UFCs) and UTI International offices in London, Dubai

and Bahrain. The fund has a track record of managing a variety

of schemes catering to the needs of every class of citizenry.

8.1.5 HDFC MUTUAL FUND:

HDFC (Housing Development Finance Corporation Limited) is one of

the dominant players in the Indian mutual fund space. HDFC was

incorporated in 1977 as the first specialized Mortgage Company

in India. HDFC Mutual Funds are handled by HDFC Asset

Management Company Limited. HDFC Asset Management

Company was incorporated under the Companies Act, 1956, on

December 10, 1999, and was approved to act as an Asset

Management Company for the Mutual Fund by SEBI on July 3,

2000. The company also provides portfolio management / advisory

services.

8.2 FOREIGN INSTITUTIONAL INVESTORS:

8.2.1 DEUTSCHE GROUP:

DWS Investments part of Deutsche Asset Management, was

founded in 1956 in Frankfurt/Main. With fund assets under

management of euro 267 bn, the company is one of the Top 10

companies worldwide. In Europe, DWS is one of the leading

mutual fund companies and currently manages euro 173 bn. In

excess of more than euro 147 bn assets under management,

DWS represents 22, 3% of the fund market in Germany, making

it the unchallenged number one.

The International nature of its business differentiates DWS

significantly from its domestic and international competitors.

DWS Investments’ activities span all the key European markets.

In the USA, DWS is represented by DWS Scudder and manages

assets of euro 86 bn. In spring 2006, it launched its first funds

as well as the DWS brand in Singapore and India, continuing its

successful expansion in the

Asia-Pacific region. Thereafter, more funds were registered in other countries in

Asia-Pacific.

8.2.2 CITIGROUP:

The formation of Citigroup in 1998 created a new model of

financial services organization to serve its clients’ financial needs. As

the company continues to grow and evolve, it’s increasingly

evident that such a large, complex grouping of businesses can

indeed succeed. With 275,000 employees working in more than 100

countries and territories, Citigroup’s globality and diversity

contribute to its continued success.

8.2.3 HSBC GLOBAL INVESTMENTS:

HSBC Investments is one of the world's premier

fund management organizations. It has established a

strong reputation with institutional investors including corporations,

governments, insurance companies and charities the world over for

delivering consistently superior returns. In India we offer

fund management services for institutional as well as retail

investors. Our array of products includes Equity Funds Income /Debt

Funds.

8.2.4 MORGAN STANLEY &CO INTERNATIONAL LTD:

Morgan Stanley is a global financial services firm and a market leader

in securities, investment management and credit services. It has

more than 600 offices in 27 countries and manages $421 billion in

assets for institutional and individual clients around the world.

Stanley Investment Management (MSIM),

the asset management company of Morgan Stanley was

established in 1975. Morgan Stanley entered Indian market in

1989 with the launch of India Magnum Fund. In

1994, Morgan Stanley launched Morgan Stanley Growth Fund

(MSGF). It is one of the largest private sector schemes investing in

equities.

8.2.5 DSP MERRILL LYNCH :

DSP Merrill Lynch Mutual Funds are managed by DSP Merrill

Lynch Fund Managers. DSP Merrill Lynch Ltd. (DSPML) is a

premier financial services provider and Merrill Lynch (ML)

holds 90% stake in DSPML. DSPML was originally called DSP

Financial Consultants Ltd. The firm traces its origins to D. S.

Purbhoodas & Co., a securities and brokerage firm with

over 140 years of experience in the Indian market. Merrill

Lynch is one of the world's leading wealth management, capital

markets and advisory companies with offices in 37 countries and

territories and total client assets of approximately $1.5 trillion.

9. INVESTMENT TRENDS OF INSTITUTIONAL INVESTORS:

9.1 INVESTMENT TRENDS OF INDIAN MUTUAL FUND INDUSTRY:

The Assets under Management of UTI was Rs.4563 Cr by the end of

1987. Let me concentrate about the performance of mutual funds in

India through figures. From Rs.

4563 Cr. the Assets under Management rose to Rs. 32977

Cr in March 1993

The net asset value (NAV) of mutual funds in India declined when

stock prices started falling in the year 1992. Those days, the market

regulations did not allow portfolio shifts into alternative investments.

There was rather no choice apart from holding the cash or to further

continue investing in shares.

A lone UTI with just one scheme in 1964 now competes with as

many as 400 odd products and 34 players in the market. In spite of

the stiff competition and losing market share, Last six years have been

the most turbulent as well as exiting ones for the industry. New

players have come in, while others have decided to close shop by

either selling off or merging with others. Product innovation is now

passé with the game shifting to performance delivery in fund

management as well as service. The industry is also having a profound

impact on financial markets. While UTI has always been a dominant

player

on the bourses as well as the debt markets, the new generations of

private funds, which have gained substantial mass, are now flexing

their muscles. Fund managers, by their selection criteria for stocks

have forced corporate governance on the industry. Rewarding honest

and transparent management with higher valuations has created a

system of risk- reward created where the corporate sector is more

transparent then before.

Funds collection has been increasing in last 5 years which can be

attributed to the fact of sound economic growth and the confidence of

the retail investors on the capital market of India.

9.2 FOREIGN INSTITUTIONAL INVESTMENT

(FII) is one of the main channels of foreign investment in India.

Foreign institutional investors (FIIs) were permitted to invest in Indian

securities market in 1993. Since then, their investments into Indian

equity market have grown by leaps and bounds. In fact, FIIs, as a

class of institutional investors, have assumed a major role in

mature and emerging market economies, in recent years. The FII in

the Indian equity markets has risen steadily since 2003-04. The

gross purchases of debt and equity together by FIIs increased by

50.0 per cent to Rs. 5,20,508 crore in 2006-07 from Rs. 3,46,978

crore in

2005-06.

INVESTMENTS BY FOREIGN INSTITUTIONAL INVESTORS

The gross sales by FIIs also rose by 60.3 per cent to Rs. 4, 89,667 crore from Rs. 3,

05,512 crore during the same period. However, the net investment

by FIIs in 2006-07

declined by 25.6 per cent to Rs. 30,840 crore in 2006-07 from Rs. 41,467 crore in 2005-

06 mainly due to large net outflows from the equity segment. But

the cumulative net investment by FIIs in Indian stock market (since

1993) crossed USD 50 billion at the end of March 2007. As on March

31, 2007, the cumulative net investment by FIIs was USD

52 billion. The cumulative net investment by FIIs at acquisition cost,

which was USD

15.8 billion at the end of March 2003, had risen to USD 45.3 billion at

the end of March

2006. The FII in equity, which was high in the previous years,

declined in 2006-07. During 2006-07, FIIs reduced their investment,

in both equities as well as debt securities. The net FII investment in

equity during 2006-07 was Rs. 25,236 crore, at its lowest in past

three years. This was mainly due to large net sales in some months of

2006-07.

NET INVESTMENT BY

FII INVESTMENT TRENDS

BY FII

As far as the investment trends of FII are considered we can see

that the trend and the actual investment go hand in hand except in

98-99 and 2003-2004.The net investment flows by FIIs were

negative during 1998-99 primarily because of the uncertainty that

prevailed after India tested a series of nuclear bombs in May 1998

and the imposition of economic sanctions by the US, Japan and

other industrialized countries but the FIIs portfolio flows quickly

recovered and have become a positive net investment from the

subsequent years onwards.

9.2.1 REASONS FOR GROWTH IN FII INVESTMENTS

Global liquidity is, of course, the primary cause of the recent surge

in Asian markets including India. Also low interest rate regime

has led foreign investors to look for fresh avenues to invest. This

has resulted in most emerging markets seeing heavy inflows.

FII’s see India as a good destination to invest in and make

money. They are happy with the Indian government's

commitment to economic reforms. They are also looking closely

at sectors (and companies within these sectors) which they

think

have potential. Infact, the growing competitiveness of Indian

companies is an enticing factor.

Long-Term Capital Gains Tax: which is the tax an investor pays

when he sells his shares after more than a year -- has been

abolished; thus one can sell his shares without having to pay the

government any kind of tax.

Rupee Appreciation: The dollar has been falling in value

vis-à-vis other currencies. As a result, FIIs don’t find the thought

of investing in the US market all that attractive. They know they

will make more money if they invest elsewhere. Economic

Growth: As mentioned earlier we witnessed a GDP growth rate of

about

8.5% last year. Our industries like Telecom, Banking etc are

doing relatively well. All these make our country very attractive to

invest in.

The sheer size of India and the relative stability the country offers

are other obvious plus points. Whatever the case may be, a

perception is gaining momentum that foreign investors are here

to stay at least in the short-term.

10. FOREIGN INSTITUTIONAL INVESTMENT: A COST BENEFIT ANALYSIS

The role of foreign investment over the years can’t be ignored . It certainly

has had an impact on the Indian stock market with a lot of benefits but

along with these benefits there are a few costs attached with it. Therefore it

is useful to summarize the benefits and costs for India of having foreign

inflows.

BENIFIT

S

a) Reduced cost of equity

FII inflows augment the sources of funds in the Indian capital

markets. FII investment reduces the required rate of return for equity,

enhances stock prices, and fosters investment by Indian firms in the

country. The impact of FIIs upon the cost of equity capital may be

visualized by asking what stock prices would be if there were no FIIs

operating in India.

b) Stability in the balance of payment

For promoting growth in a developing country such as India, there is

need to augment domestic investment, over and beyond domestic

saving, through capital flows. The excess of domestic investment over

domestic savings result in a current account deficit and this deficit is

financed by capital flows in the balance of payments. Prior to 1991, debt

flows and official development assistance dominated these capital flows.

This mechanism of funding the current account deficit is widely believed

to have played a role in the emergence of balance of payments

difficulties in 1981 and 1991. Portfolio flows in the equity markets, and

FDI, as opposed to debt-creating flows, are important as safer and more

sustainable mechanisms for funding the current account deficit.

c) Knowledge flows

The activities of international institutional investors help strengthen

Indian finance. FIIs advocate modern ideas in market design, promote

innovation, development of sophisticated products such as financial

derivatives, enhance competition in financial intermediation, and lead to

spillovers of human capital by exposing Indian participants to

modern financial techniques, and international best practices and

systems.

d) Strengthening corporate governance

Domestic institutional and individual investors, used as they are to the

ongoing practices of Indian corporate, often accept such practices, even

when these do not measure up to the international benchmarks of best

practices. FIIs, with their vast experience with modern corporate

governance practices, are less tolerant of malpractice by corporate

managers and owners (dominant shareholder). FII participation in

domestic capital markets often lead to vigorous advocacy of sound

corporate governance practices, improved efficiency and better

shareholder value.

e) Improving market efficiency

A significant presence of FIIs in India can improve market efficiency

through two channels. First, when adverse macroeconomic news,

such as a bad monsoon, unsettles many domestic investors, it may

be easier for a globally diversified portfolio manager to be

more dispassionate about India's prospects, and engage in stabilizing

trades. Second, at the level of individual stocks and industries, FIIs

may act as a channel through which knowledge and ideas about

valuation of a firm or an industry can more rapidly propagate into

India. For example, foreign investors were rapidly able to assess the

potential of firms like Infosys, which are primarily export-oriented,

applying valuation principles that prevailed outside India for software

services companies.

COSTS

a) Hedging and positive

feedback training

There are concerns that foreign investors are chronically ill informed

about india, and this lack of sound information may generate herding

(a large number of FIIs buying or selling together) and positive

feedback (buying after positive returns, selling after negative

returns).These Kinds of behavior can exacerbate volatility ,and push

prices away from fair values.

b) Balance of payment vulnerability

There are concerns that in an extreme event, there can be a

massive flight of foreign capital out of India, triggering difficulties in

the balance of payments front. India's experience with FIIs so far,

however, suggests that across episodes like the Pokhran blasts, or

the 2001 stock market scandal, no capital flight has taken place. A

billion or more of US dollars of portfolio capital has never left India

within the period of one month. When juxtaposed with India's

enormous current account and capital account flows, this

suggests that there is little vulnerability so far.

c) Possibility of

takeovers

While FIIs are normally seen as pure portfolio investors, without

interest in control, portfolio investors can occasionally behave like FDI

investors, and seek control of companies that they

have a substantial shareholding in. Such outcomes, however, may

not be inconsistent with India's quest for greater FDI.

Furthermore, SEBI's takeover code is in place, and has

functioned fairly well, ensuring that all investors benefit equally in the

event of a takeover.

11. DETERMINANTS OF FOREIGN INSTITUTIONAL INVESTMENT

After the initiation of economic reforms in the early 1990s, the

movement of foreign capital flow increased very substantially. There are

a lot of factors that determine the nature and cause of foreign

institutional investment in a country a few of them being inflation

exchange rate equity returns, government policies, price earring ratio

and risk. Now if we try to analyze the relation of each of these factors

with the level of foreign inflow in the country, we might have a better

understanding. let us broadly classify the factors into inflation, risk and

stock market returns and understand the basic principle behind the

inflows.

a) Equity returns- An increase in the return in the foreign market

will induce investors to withdraw from the Indian (domestic) stock

market to invest in the foreign market. Investors are believed to

follow a higher return, hence when the return in the domestic market

increases, FII flows to the domestic market. While the flows are

highly correlated with equity returns in India, they are more likely to

be the effect than the cause of these returns. . It is assumed that the

equity returns have a positive impact on the FII inflow but foreign

investors can also get involved in profit booking. They can buy

financial assets when the prices are declining, thereby jacking-up

the asset prices and sell when the asset prices are increasing and

hence be the cause of such returns so making it more of a bi-

directional relationship.

b) Risk- Investors are considered to be risk averse, hence when risk

in the domestic market increases they will withdraw from the

domestic market, when risk in the foreign market increases,

investors will withdraw from the foreign market and invest in the

Indian (domestic) market. Investments, either domestic or foreign,

depend heavily on risk factors. Hence, while studying the behavior of

FII, it is important to consider the risk variable. Risk can be divided

into ex-ante and unexpected risk. While the ex-ante risk certainly has

an inverse relation with the foreign investment nothing can be clearly

said about the unexpected risk.

c) Inflation- The inflation no doubt has an inverse relation with the foreign

investment inflow as the investor would keep in mind the purchasing

power of the funds invested and as inflation increase i.e. the purchasing

power declines the investor is most likely to withdraw his money. When

inflation in the domestic country increases, the purchasing power of the

funds invested declines, hence investors will withdraw from the domestic

market. Similarly, when inflation in the foreign country increases, the

purchasing power of funds invested in the foreign country declines,

causing institutional investors to withdraw from the foreign market

and make investment in the domestic (Indian) market.

d) Exchange rate –When the value of the home currency is stronger

the FII investments will also increase as the percentage of returns the

FII get automatically increases and visa versa

So it can be said that the inflation and risk in the domestic country and

return in the foreign country adversely affect the FII flowing to the

domestic country, whereas inflation and risk in the foreign country and

return in the domestic country have a favorable effect on the flow of FII.

12. COMPARISON BETWEEN FIIS AND MUTUAL FUNDS INVESTMENTS

The comparison between the FII purchases and net investment with Mutual

funds for the period reveals some interesting information. As can be seen

from the figure,

The amount of mutual fund investment in our country is very meager

as compared to that of FIIs. It means that Indian public is still not

putting its bet on mutual funds and.

FIIs are much more aggressive in nature than mutual funds, who

seem to have been very constant in there approach to the Indian

equity market.

Since May’04, when the stock market crashed by 800 points in a

day, the market has recovered smartly and the FIIs have been able

to cash on to the gains by buying ‘Value

stocks” during the lean periods, or buying on the dips. While the

mutual funds have seems to taken a different route altogether and

have been net sellers for most of the period since May’04.

But after the year 2004 mutual Fund investment have also a

tremendous increase. There activity is the proof of the condition that

has prevailed in the capital market recently that has created a lot of

faith among the retail investors also.

Also in the year 2007 has so far been the best year for mutual fund

industry as it has shown a tremendous growth in terms of net

investment.This corroborates the fact that now Indian public has

started recognizing mutual fund as tool for investing in the capital

market in india.

13. ROLE OF INSTITUTIONAL INVESTORS IN CAPITAL MARKET IN INDIA :

As the Indian capital market opened its gates for the foreign institutional

investors . with time there has been an increasing trends of there

participating in the capital market. With there increasing participation

there has been a lot of effect on many parametes of the indiaN capital

market. The major effect of the increasing participation of the

institutional investors has been observed in the following areas.

Liquidity: Market liquidity is a business, economics or investment

term that refers to an asset's ability to be easily converted through

an act of buying or selling without causing a significant movement in

the price and with minimum loss of value. An act of exchange of a

less liquid asset with a more liquid asset is called liquidation.

Liquidity also refers both to that quality of a business which enables

it to meet its payment obligations, in terms of possessing sufficient

liquid assets; and to such assets themselves.

A liquid asset has some or more of the following features. It can be

sold (1) rapidly, (2) with minimal loss of value, (3) anytime within

market hours. The essential characteristic of a liquid market is that

there are ready and willing buyers and sellers at all times. An elegant

definition of liquidity is also the probability that the next trade is

executed at a price equal to the last one. A market may be

considered deeply liquid if there are ready and willing buyers and

sellers in large quantities. This is related to a market depth, where

sometimes orders cannot strongly influence prices.The liquidity of a

product can be

measured as how often it is bought and sold; this is known as volume.

Often investments in liquid markets such as the stock exchange or

futures markets are considered to be more liquid than investments such

as real estate, based on their ability to be converted quickly. Some assets

with liquid secondary markets may be more advantageous to own, are

willing to pay a higher price for the asset than for comparable assets

without a liquid secondary market.

Price building mechanism: With the increasing participation of the

institutional investors in the capital market, it has also helped the

different companies to raise funds for there use through the capital

market in india.earlier the companies use to go for debt financing

which has a cost attachéd to it and also in those days the cost of issuing

an IPO was higher as compared to the funds that were being generated

by the companies.With the help of FII the market has become more

competitive. fair value of their.

Role of speculation: Generally people transact for three reasons hedging

speculating and arbitraging Hedgers are those to intend to hedge their

risk. Speculation may be defined as the purchase or sale of a good with a

view to resale or repurchase at a later date, where the motive behind

such action is the expectation of changes in the prices.

Speculation is one of the most watched activity in any capital market its

importance varies in different countries in countries like in US it forms

an integral part of the market whereas in developing countries like

India its taken as a threat. It is often believe that speculators even out

the price fluctuation by due to change in demand and supply

condition but the concerns about the adverse effects of speculation

come from two sources. First, the possibility that speculation, instead

of evening out price fluctuations, may end up exacerbating such

fluctuations. Second, is the problem of speculation destabilizing

rather than stabilizing prices and hence affecting resource

allocation. Through speculation, future expected price not only depends

on, but also has an impact on the spot price.

The market for shares is subject to much larger fluctuations than the

market for bonds or even commodities. Shares represent a share in the

expected future profits of a company.

When fortunes of companies – both in the short run as well as in the

medium to long run – fluctuate, so do share prices. Uncertainty

regarding the future leads to heavy discounting of future profits, and to

focus on short-period expectations about capital value rather than long-

period prospects of the company.

The effect of foreign speculative activity in emerging markets can

be particularly beneficial if in the emerging market, liquidity is poor

First, the potential of market manipulation is acute in small emerging

markets and liquidity is often poor. Although there are many policy

initiatives that could increase liquidity and reduce the degree of

collusion among large traders, there may not be a sufficient mass of

domestic speculators to ensure market liquidity and efficiency.

Second, opening the market to foreign speculators may increase the

valuation of local companies, thereby reducing the cost of equity capital.

Volatilty: Volatility most frequently refers to the standard deviation of

the change in value of a financial instrument with a specific time horizon.

It is often used to quantify the risk of the instrument over that time

period. Volatility is typically expressed in annualized terms, and it may

either be an absolute number ($5) or a fraction of the mean (5%).

Volatility is often viewed as a negative in that it represents uncertainty

and risk. However, volatility can be good in that if one shorts on the

peaks, and buys on the lows one can make money, with greater money

coming with greater volatility. The possibility for money to be made via

volatile markets is how short term market players like day traders hope

to make money, and is in contrast to the long term investment view of

buy and hold. In today's markets, it is also possible to trade volatility

directly, through the use of derivative securities such as options and

variance swaps. Foreign institutional investment is certainly volatile in

nature and its volatility has certainly posed some threats to the Indian

stock market considering its influence on the market. Given the presence

of foreign institutional investors in Sensex companies and their active

trading behavior, small and periodic shifts in their behavior lead to

market volatility. Such volatility is an inevitable result of the

structure of India’s financial markets as well. Markets in developing

countries like India are thin or shallow in at least three senses. First,

only stocks of a few companies are actively traded in the market. Thus,

although there are more than 8,000 companies listed on the stock

exchange, the BSE Sensex incorporates just 30 companies, trading in

whose shares is seen as indicative of market activity. Second, of these

stocks there is only a small proportion that is routinely available for

trading, with the rest being held by promoters, the financial institutions

and others interested in corporate control or influence. And, third the

number of players trading these stocks is also small.

In such a scenario investment by the foreign institutional investors leads

to a sharp price increase this provides incentives to FII investment and

enhances investment and when the correction in the stock prices begins it

would have to be a pull out by the FII and can result in sharp decline in

the prices. The other reason for volatility is that the foreign institutional

investors are attracted to a market by the expectation of price increase

that tend to be automatically realized, the inflow of foreign capital can

result in an appreciation of the rupee vis-à-vis the dollar This increases

the return earned in foreign exchange, when rupee assets are sold and

the revenue converted into dollars. As a result, the investments turn

even more attractive triggering an investment spiral that would imply a

sharper fall when any correction begins. Apart from that the growing

realization by the FIIs of the power they wield in what are shallow

markets, encourages speculative investment aimed at pushing the

market up and choosing an appropriate moment to exit. This

manipulation of the market would certainly enhance the volatility

and in volatile markets even the domestic investors try to manipulate

the market when the prices are really high. Overall the foreign

institutional investors have been bullish on the Indian stocks but the

problem is that this bullish nature might be a result of the activities

outside the Indian market it might be due to the performance of their

equity market or their non equity returns. Therefore they seek out for

best returns and diversified geographical portfolio in order to hedge their

risk and when they make some adjustments in their portfolio and make

shifts in favor or against a country it borings about sharp changes.

14. A STUDY OF MAJOR EPISODES OF VOLATILITY

14.1 Asian Major Episodes of Volatility

Excess volatility induced by the foreign investment is often

taken as an argument against liberalization with such

incidences happening in the past. Let us now try to find out

whether the foreign investors in particular destabilize the

capital market beyond a level. The two most common

examples of such destabilization caused by the portfolio

investment particularly the hedge funds are the Asian crisis of

1997 and the ERM crisis of 1992.

I. ERM crisis The high-profile ERM crisis of 1992 came

with speculators betting that the member countries of

the European Monetary System (EMS) were

converging to the European Monetary Union (EMU), and

high-inflation countries would have to realign their

exchange rates, but the extent of depreciation would be

less than the interest rate differential between the high-

inflation and low-inflation countries. The expectation

regarding the extent of exchange rate adjustment led to

‘carry trade’ – borrowing from the low interest ERM

countries and lending to the high interest countries, or in

the forward currency market, taking a long position in the

higher yielding currency and shorting the lower-yielding

currency. In spite of the material impact of hedge fund

activities in the ERM crisis, the role of the hedge funds in

the crisis was limited. The practice of extending lines of

credit to offshore entities on a non-recourse basis against

collateral was not widely accepted by most banks, and

foreign exchange trading was primarily an inter-bank

activity.

East Asian crisis After ten years (1986–97) of pegging of

the Thai baht to the U.S. dollar, on July 2, 1997, the peg had

to be abandoned, and this created pressure

on other Asian currencies, and eventually brought down the

Malaysian ringgit, the Indonesian rupiah, the Philippine peso,

and the Korean won. By end-1997, these currencies had lost

between 44 and 56 percent of their value against the U.S.

dollar, bankrupting many Asian corporations and banks that

had borrowed in foreign currencies, and leading to a

significant contraction of the economies. This episode is known as

the East Asian crisis or Asian crisis.Foreign investors were often

blamed for the dramatic difficulties of the East Asian countries at

the times of the 1997 crisis. It was believed that the developing

countries were more vulnerable to vacillations in international

flows than ever before A variety of reasons are adduced to explain

why foreign investors can have a destabilizing effect on capital

markets in emerging economies. Foremost among them are the

pursuit of a positive feedback strategy that is buying when prices

are rising and selling when prices are falling, thereby exacerbating

both the upswings and downswings. Positive feedback leads to

bubbles when prices depart from fundamentals and to crashes

when bubbles burst.It is also believed that the Asian financial

crisis was the result of a panic created in the market Prime

Minister Mahathir Mohammed of Malaysia accused hedge funds of

being the modern equivalent of “highwaymen” in breaking

the Asian currencies. Aggressive flow of the carry trade down the

credit spectrum in Asia during the 1990s — from sovereign credit,

to top -tier domestic commercial banks, to lower-tier commercial

banks and finance companies, and finally to firms. The excessive

build-up of foreign debt, they attribute to the confidence of

domestic companies and banks in the fixed official exchange rate.

FII investment in equities had little role to play in the crisis. Fung,

Hsieh, and Stsatsaronis (2000) report “At the height of the

episode, some Asian government officials accused speculators

and hedge funds of attacking the currencies and causing their

downfall. A public debate ensued, and the International Monetary

Fund (IMF) responded by examining the role of hedge funds in the

Asian currency crisis. The resulting study by Eichengreen,

Mathieson, Chadha, Jansen, Kodres, and

During the stock market scam which shook the capital

market in india the FII were also one of the major factors

which exacerbates the fall in the sensex.During the Black

Monday episode the FII were also on a heavy selling

spree which ultimately lead to some major fall in the sensex

value.

FII investment behavior during these four specific events indicates

that these events did affect the behavior of the foreign portfolio

investors. But, these events did affect domestic investors’ behavior

as well.

These experiences show that FII outflow of as much as a billion dollars

in a month – which corresponds to an average of $40 million or Rs.170

crore per day – has never been observed. These values – Rs.170 crore

per day – are small when compared with equity turnover in India. In

calendar 2004, gross turnover on the equity market of Rs.88 lakh crore

contained Rs.5 lakh crore of gross turnover by FIIs. This suggests that

as yet, FIIs are a small part of the Indian equity market. Transactions

by FIIs of Rs.5 lakh crore in a year might have been large in 1993, but

the success of a radical new market design in the Indian equity market

have led to enormous growth of liquidity and market efficiency on the

equity market. Through this, India’s ability to absorb substantial

transactions on the equity market appears to be in place.

The net FII inflows into India have been less volatile compared to

other emerging markets this stability could be attributed to

several factors: Strong economic fundamentals and attractive

valuation of companies. Improved regulatory standards, high quality of

disclosure and corporate governance requirement, accounting

standards, shortening of settlement cycles, efficiency of clearing and

settlement systems and risk management mechanisms. Product

diversification and introduction of derivatives. Strengthening of the

rupee dollar exchange rate and low interest rates in the US.

I. Post 2004 Major Volatile

Episodes:

As from the above graph it is clear that in the month of jan 2008 the

BSE sensex was already moving down due to the weak global cues

and US recession and similarly the FII investment fell drastically

during that period running panick among the investors

and further exacerbating the fall. But in the case of mutual fund

investment went up during the time shows that the the domestic

institutional investors cash on the fall of sensex because of the

strong fundamentals of the Indian capital market.

By looking at the above graph we can very well say that this time

around the fall of BSE sensex was majorly due to the FII which

went on a selling spree which lead to the fall of the market during

this Crash.FII acted in this fashion because of the weak global cues

i.e at that point of time other emerging markets were also down .

The fall of 769 points by sensex on Dec 17,2007 was attributed to the

fact mainly due to the subprime losses and also was exacerbated due

to the withdrawl of investments by the FII. As the subprimelosses

mainly hit the US economy and the majority of FII participating in the

Indian capital market are from US .To cover there losses in US

they started selling in india which lead to the fall of sensex on that

particular day and subsequent days.

During the month of Ostober 2007 indian govt took some strict

measure to control the usage of the Participatory notes. The

restrictions proposed by SEBI in regulating participatory notes in a

sudden announcement wrought havoc in the operations of the share

market causing a fall of over 1,700 points in the Sensex on

Wednesday. SEBI

should have used some pragmatic caution by avoiding the

announcement and introducing regulatory steps in a phased

manner. The share market is extremely vulnerable to the

sentiments created by the utterances of those in regulatory

authority.

This lead the FII to withdraw from the Indian market as they were

not sure of how the measure taken by the govt will be

implemented .This is clearly vivble from the above graph that this

time around the FII were the main cause of the crash of the

sensex on

18th oct . But also there comes an interesting fact that there was

also a heavy selling on 22nd October but this time the FII

Withdrawl effect was offset by the Huge investment made by

domestic institutional investor specially LIC,which saved the

market from a heavy meltdown.

The reasons being given for the crash are the sale of Rs

7300 crore (Rs 73

Billion)sharwes by FII’s in the past 1 week, an expected increase

in interest rates by the US Feds, a crash in the international

commodity prices, and the straw which broke its back seems to

be a government circular which was interpreted that FIIs

should be taxed. P Chidambaram, the country’s Finance Minister,

issued an evening press release denying the latter.

15. STATISTICAL ANALYSIS

For the purpose of statistical analysis I have considered 7 yrs data of

FII Net Investments, Mutual Funds Net Invesments ,NSE S&P CNX

Nifty and BSE Sensex Indices. Statistical Analysis is carried out to find

the degree of association between the Net investments by the

institutional investors with the capital market i.e (Sensex & Nifty

indices). Since 7 years data is a very comprehensive data and the

internal and the extraneous factors have been changing

over the time which does have impact on the Indian capital market. So

in order to have appropriate data I calculated the volatility of BSE Sensex

for each year and then divided them into 3 periods i.e 2001-2003,2004-

2005,2006-Feb 2008. Then I have applied regression analysis to find

out the degree of association among the FII Net Investments ,the Sensex

and Mutual Fund Investments , the Sensex . Similarly the degree of

association is been calculated for Nifty index with FII and Mutual funds net

investments.

To calculate the volatility of the BSE Index and to find out the degree of

association ,the formula and the methodology is given below.

I. Volatility

Volatility is a measure of the range of an asset price about its mean

level over a fixed amount of time. It follows that volatility is linked to

the variance of an asset price. If a stock is labeled as volatile then the

price will varies greatly over time. Conversely, a less volatile stock will

have a price that will deviate relatively little over time. Since volatility is

associated with risk, the more volatile that a stock is, the more risky it

is. Consequently, the more risky a stock is, the harder it is to say with

any certainty what the future price of the stock will be.

Computing the Volatility

The estimation of volatility comes from a mathematical model of stock

prices.The mathematical model we will use is based on three assumptions

about stock prices and their movements. The first assumption that we

will be using is that volatility is constant. The next assumption is that

stock prices cannot be negative; once a stock price reaches $0 it

cannot go any lower. The third assumption is that the price of a stock is

a normal random variable.

Thus volatility is calculated as standard deviation as it is the standard

measurement device used worldwide to calculate the volatility.

Standard deviation is a statistical term that provides a good indication

of volatility. It measures how widely values (closing prices for instance)

are dispersed from the average.

Dispersion is difference between the actual value (closing price) and

the average value (mean closing price). The larger the difference

between the closing prices and the average price, the higher the

standard deviation will be and the higher the volatility. The closer the

closing prices are to the average price, the lower the standard

deviation and the lower the volatility.

Standard Deviation = √∑(Xi-X)2

64

II. Regression Analysis:

Regression Analysis is another statistical tool for measuring the

association between two variables. It is a technique used to predict

the nature and closeness of relationships between two or more

variables. This analysis helps the researchers to evaluate the causal

effect of one variable on another variable. It is used to predict the

variability in the dependent variable based on the

information of one or more independent

variable.Regression analysis that involves two variable is termed

as bivariate linear regression analysis. It is expressed as following

equation.

Y=a+b*X

Where

Y is the dependent variable (Sensex and

Nifty Indices )

X is the independent variable (FII Investments and Mutual

Funds Investments). a & b are two constants which are known

as regression coefficients.

b is the slope coefficient i.e the value of b is the change in value of Y

with corresponding change in one unit of X.

The constant b can be calculated using following formula:

b = n∑(XY)- ∑X∑Y

n∑(X)2 – (∑-X)2

64

a represents Y intercepts

when X=0. a =Y-bX

where Y=the mean of values of dependent variable.

X=the mean of values of

independent variable. We now develop the

estimated regression equation

Ŷ= a+bX

Ŷ represents the estimated value of dependent variable for a given value of X.

Strength of Association - R2

The above developed estimated regression equation can only

explain the nature of relationshipbetween two variables.However, if

the researcher wants to know how strong or weak the relationship is

i.e to what degree that the variation in Y can be explained by X.the

coefficient of determination denoted by R2 is used. R2 which is

measured in percentage will explain how much of the total variation in

Y is explained by X variable.

R2 = explained Variance / Total

Variance

Total Variance=Explained Variance – Unexplained Variance

64

R2 = (Total Variance- Unexplained Variance) /

Total Variance. Unexplained Variance = ∑(Yi- Ŷ)2

Total variance= ∑(Yi- Y)2

Tables below give the results of the regression analysis done on the data

above mentioned.

The above table which shows the result of the regression analysis done

with ssensex as the dependent variable and FII as the independent

variable. Volatility is calculated for sensex and the table shows that the

sensex volatility has been increasing over the years.The value of R2 implies

that the in the year 2001 – 2003 , the total variation of sensex nearly 27%

is explained by the variation of FII investments.Over the years it has

been following a decreasing trend which is good for the Indian capital

market as this shows that FII is not the only criteria on which the

volatility of sensex is dependent.

The above table shows the analysis ran between the sensex and the

mutual funds in india.As we know mutual funds in india are at a nascent

stage . the result of R2 tells us that the dependency of sensex variation on

the mutual fund investment has been increasing over the years.

The Above graph shows us the volatility of Nifty over the period of seven

years and the results tell us that the volatility has been increased over

the years. The Value of R2 also tells us that the total variation of nifty

index, nearly 26% is explained by the variation in FII net investment in

the year 2001-2003 and has been decreasing over the years.

Interpretation of the

64

Analysis.

Now looking at the result table above it is clearly visible that volatility

has increased tremendously during the years.Volatility has increased six

times in the case of Sensex and for nifty it has increased nine times as

compared to what it was there in the years 2001-

2003. Also the value of the constant ‘a’ in the regression equation

is following an increasing trend which tells the effect on the dependent

variable when the independent variable is zero. Similarly the constant

‘b’which tells the magnitudinal change with one unit change in the

independent variable is also following a decreasing trend in the case of FII

investments but in the case of mutual funds it is showing an increasing

trend which tells us that domestic institutional investors are also

restoring faith in the market and

subsequently they have increased there participation in the capital

market. The degree of association i.e R square tells us an important

fact that slowly and steadily the degree of association of FII

investments with the Sensex is decreasing .It tells us the fact that in

the year 2001-2003 around 27% of the total variance shown by

sensex could be explained by FII investments in both the leading stock

exchanges in india.Also in the subsequent years the value or R square

is decreasing in case of FII investments leading to the fact that the

volatility effect of FII on the capital market is on the decreasing

trend,which is beneficial for the Indian stock market.Also the

increasing value of R square in case of mutual funds is also a positive

sign for the Indian stock market as it tells us that the domestic

investors over the years has shown increased participation and helped

the market to stablise inspite of such high volatility .

64

Recommendations

After analyzing the nature and behavior of the foreign institutional

investment in the past and its influence on the Indian stock market it would

be safe enough to say that foreign funds are one of the most volatile

instruments floating in the market and needs to be handled cautiously.

Government should certainly encourage foreign institutional investment but

should keep a check on the volatility factor. Long term funds should be

given priority and encouraged some of the actions that could be taken to

ensure stability are

Strengthening domestic institutional investors

The participation of domestic pension funds in the equity market would

augment the diversity of views on the market and hence the domestic

pension funds must be encouraged .

Broad basing of eligible entities

In order to address the market integrity concerns arising out of allowing

some entities, which do not have reputational risk or are unregulated,

there is merit in prohibiting such entities from getting registered.

Operational flexibility to impart stability to the market

The stability of foreign investment in India will be enhanced if FIIs are able

to switch between equity and debt investments in India, depending on their

view about future equity returns. SEBI can make such policies.

Knowledge activities and research programs

There must be a lot of research programs and studies conducted by

the economic affairs regulators in India

64

Conclusion

After analyzing the nature of FII in the past it would be safe enough to say

that the foreign funds is certainly one of the most important cause of volatility

in the Indian stock market and has had a considerable influence on it.

Although it would not be fair enough to come to any conclusion as there are

a lot of other factors beyond the scope of the study that effect returns and

risks .it is not easy to predict the nature of the macroeconomic factors and

their behavior but it has a great significance on any economy and its

elements. Although generally a positive relation has been seen between the

stock market returns and the FII inflows it is not easy to say which is the

cause n which is the effect and strange behavior has also been noticed in the

past.

Foreign investment certainly are influencing the Indian stock market

but the extent of this influence cannot be determined or rather the

extent of India’s dependence on the FIIs is a subjective issue as on no

clear grounds can we see a permanent relationship between the stock

market returns and the Foreign inflows. But to generalize they have

shown a positive relation most of the time apart from a few occasions

where the behavior of their relation was difficult to explain.

73

REFERENCES:

WEPSITE: www.nseindia.com

www.finmin.nic.in

www.bseindia.com

www.investopedia.com

www.indiainfoline.com

www.amfiindia.com

www.livemint.com

www.sebi.gov.in

www.capitaline.com

73

ANEXURE:

Table 1: Data of Sensex,Nifty,FII and Mutual Fund Net Investment

Date

Sensex

FII in Crore

Mutual

Funds

in

Crore

Nifty 3-Jan-

05 6679.2

106.7

23.1

2059.8 4-Jan-

05 6651.01

345.9

7.8 2080.5 5-Jan-

05 6458.84

200.6

107.7

2115 6-Jan-

05 6367.39

-57.9

19.9

2103.75 7-Jan-

05 6420.46

-31.8

73.2

2032.2 10-Jan-

05 6308.54

-68.3

44.4

1998.35 11-Jan-

05 6222.87

-32 60.3

2015.5 12-Jan-

05 6102.74

-86.5

72 1982 13-Jan-

05 6221.06

-185.8

51.8

1952.05 14-Jan-

05 6173.82

-0.8 131.1

1913.6 17-Jan-

05 6194.07

116 5.9 1954.55 18-Jan-

05 6192.35

15.8

-9.3 1931.1 19-Jan-

05 6173.32

-164.6

-67.4

1932.9 20-Jan-

05 6183.24

-77.3

24.1

1934.05 24-Jan-

05 6106.43

-13.3

-29.8

1926.65 25-Jan-

05 6162.98

-158.6

-16.3

1925.3 27-Jan-

05 6239.43

-281.8

92.8

1909 28-Jan-

05 6419.09

198.8

62.3

1931.85 31-Jan-

05 6555.94

632 -24.6

1955 1-Feb-

05 6552.47

895.3

-1 2008.3 2-Feb-

05 6530.06

820.4

-49.2

2057.6 3-Feb-

05 6619.97

1374

-113

2059.85 4-Feb-

05 6618.23

489.3

44 2052.25 7-Feb-

05 6535.17

249.6

-16.2

2079.45 8-Feb-

05 6544.77

105.3

17.6

2077.95 9-Feb-

05 6593.53

220.1

-85.5

2055.1 10-Feb-

05 6577.83

128.4

29.7

2055.15 11-Feb-

05 6633.76

176.6

52.3

2070 14-Feb-

05 6679.33

249.5

49.7

2063.35 15-Feb-

05 6670.06

834.2

61.6

2082.05 16-Feb-

05 6607.78

604.1

45.2

2098.25 17-Feb-

05 6589.29

473 -132

2089.95 18-Feb-

05 6584.32

233.3

22.2

2068.8 21-Feb-

05 6534.68

252 -97.3

2061.9 22-Feb-

05 6589.41

210.8

-49.4

2055.55 23-Feb-

05 6582.5

257 -58.4

2043.2 24-Feb-

05 6574.21

297.8

-73 2058.4 25-Feb-

05 6569.72

41.5

82.3

2057.1 28-Feb-

05 6713.86

464.1

239.7

2055.3

73

1-Mar-05

6651.08

342.8

105 2060.9 2-Mar-

05 6686.89

538.2

-22.8

2103.25 3-Mar-

05 6784.72

698.5

-172.3

2084.4 4-Mar-

05 6849.48

367.6

46.4

2093.25 7-Mar-

05 6878.98

554.3

175.8

2128.85 8-Mar-

05 6915.09

461.8

216.1

2148.15 9-Mar-

05 6892.82

498.3

142.4

2160.1 10-Mar-

05 6907.65

793.2

-21.1

2168.95 11-Mar-

05 6853.73

1310

24.8

2160.8 14-Mar-

05 6810.04

130.7

-38.6

2167.4 15-Mar-

05 6752.45

2897.5

49.9

2154 16-Mar-

05 6746.88

-46.1

-71.6

2146.35 17-Mar-

05 6669.52

-198.8

38.7

2128.95 18-Mar-

05 6700.34

64.2

160.6

2125.55 21-Mar-

05 6656.69

136 51.1

2098.5 22-Mar-

05 6535.45

43.8

47.8

2109.15 23-Mar-

05 6454.46

-42.5

142.3

2096.6 24-Mar-

05 6442.87

-131.2

91.3

2061.6 28-Mar-

05 6510.74

263.2

153.3

2026.4 29-Mar-

05 6367.86

535.3

225.2

2015.4 30-Mar-

05 6381.4

-1724

-70.8

2029.45 31-Mar-

05 6492.82

9.4 183.3

1983.85 1-Apr-

05 6605.04

358.6

95 1993.7 4-Apr-

05 6604.42

27.9

77 2035.65 5-Apr-

05 6550.29

244 104.5

2067.65 6-Apr-

05 6606.41

103.4

16.8

2063.4 7-Apr-

05 6545.64

95.1

41.9

2052.55 8-Apr-

05 6479.54

59.9

-8 2069.3 11-Apr-

05 6397.52

-54.3

69.5

2052.85 12-Apr-

05 6464.61

70.5

65.4

2031.2 13-Apr-

05 6467.92

-108.7

-2.5 2008.2 15-Apr-

05 6248.34

176.4

57.3

2024.95 18-Apr-

05 6156.78

-574.4

49.9

2025.45 19-Apr-

05 6134.86

-456.7

27.1

1956.3 20-Apr-

05 6243.74

-124.1

225.1

1927.8 21-Apr-

05 6299.2

-231.2

138.6

1909.4 22-Apr-

05 6346.57

-22.8

-17.3

1929.7 25-Apr-

05 6377.85

284 162.8

1948.55 26-Apr-

05 6339.98

12.9

176.2

1967.35 27-Apr-

05 6278.5

-55.5

54.4

1970.95 28-Apr-

05 6284.2

-133.9

79.8

1957.1 29-Apr-

05 6154.44

-325.2

132 1935.4 2-May-

05 6195.15

-34.3

50 1941.3 3-May-

05 6216.77

-16 41.5

1902.5 4-May-

05 6289.55

30.2

53.1

1916.75 5-May-

05 6359.65

-67.6

109.7

1920.7 6-May-

05 6388.48

123.3

64.4

1942.6 9-May-

05 6481.35

127.3

140 1963.3

73

10-May-05

6454.71

39 110.2

1977.5 11-May-

05 6445.13

-98.7

213.4

2000.75 12-May-

05 6456.82

-173.2

187 1994.3 13-May-

05 6451.54

-44.5

99.2

1985.95 16-May-

05 6528.03

190.7

167.4

1993.15 17-May-

05 6466

-188.3

286.4

1988.3 18-May-

05 6447

-74 374.5

2012.6 19-May-

05 6478.94

-438.5

180.9

1990.8 20-May-

05 6499.5

63.5

446.3

1982.75 23-May-

05 6539.83

-22.9

123.6

1990.85 24-May-

05 6565.37

64 77.7

1992.4 25-May-

05 6597.6

-162.5

70.2

2013.9 26-May-

05 6670.78

-10.9

366.9

2028.6 27-May-

05 6707.72

-185.1

293.2

2043.85 30-May-

05 6663.55

-446.9

123.8

2074.7 31-May-

05 6715.11

185.3

68.8

2076.4 1-Jun-

05 6729.9

298.5

-136.3

2072.4 2-Jun-

05 6655.56

205.2

-75.4

2087.55 3-Jun-

05 6748.85

125.5

20.3

2087.55 4-Jun-

05 6753

302.5

-111.3

2064.65 6-Jun-

05 6758.19

32.7

-102.5

2094.25 7-Jun-

05 6781.25

87.7

0.9 2092.35 8-Jun-

05 6858.24

76.4

-2 2092.8 9-Jun-

05 6832.53

292.8

23.6

2098.15 10-Jun-

05 6781.99

293.5

46.4

2112.4 13-Jun-

05 6832.68

261.9

-36.9

2103.2 14-Jun-

05 6860.18

-2131.3

-30.1

2090.6 15-Jun-

05 6906.98

185.3

4.7 2102.75 16-Jun-

05 6900.41

392.8

21.5

2112.35 17-Jun-

05 6906.52

418.3

-13.9

2128.65 20-Jun-

05 6984.55

229.5

-86.3

2123.7 21-Jun-

05 7076.52

460.8

-166.8

2123.4 22-Jun-

05 7145.34

298.9

-228.1

2144.35 23-Jun-

05 7119.76

1467.6

-68.2

2170 24-Jun-

05 7148.62

485.3

-306.3

2187.35 27-Jun-

05 7151.08

354.2

-317.3

2183.85 28-Jun-

05 7049

275.5

-32.9

2194.35 29-Jun-

05 7119.88

521.9

-88.4

2199.8 30-Jun-

05 7193.85

393.1

-211.9

2169.85 1-Jul-

05 7210.77

732.1

-73.9

2191.65 4-Jul-

05 7277.31

314.5

-57.6

2220.6 5-Jul-

05 7220.25

196 -187.8

2211.9 6-Jul-

05 7287.6

380.3

0.2 2230.65 7-Jul-

05 7145.13

387.8

-62.9

2210.75 8-Jul-

05 7212.08

405.9

-37.7

2228.2 11-Jul-

05 7306.74

322.3

-103.3

2179.4 12-Jul-

05 7303.95

462.6

-92.8

2196.2 13-Jul-

05 7247.91

376.9

-111.1

2218.85

73

14-Jul-05

7187.7

253 -125.9

2220.8 15-Jul-

05 7271.54

176.6

-138.8

2204.05 18-Jul-

05 7347.1

204.6

40.5

2185.1 19-Jul-

05 7346.63

369.4

106.6

2212.55 20-Jul-

05 7342.89

388.1

10.1

2234 21-Jul-

05 7304.32

317.7

63.4

2237.3 22-Jul-

05 7423.25

299.1

70.8

2241.9 25-Jul-

05 7505.6

1040.6

35.9

2230.5 26-Jul-

05 7552.77

621.5

148 2265.6 27-Jul-

05 7605.03

490.9

143.7

2291.75 29-Jul-

05 7635.42

194.2

180.6

2303.15 1-Aug-

05 7669.45

1010.2

108.4

2319.1 2-Aug-

05 7756.04

642.7

343.8

2312.3 3-Aug-

05 7756.47

563.8

-134.4

2318.05 4-Aug-

05 7797.08

279.8

116.1

2353.65 5-Aug-

05 7754

241 204.4

2357 8-Aug-

05 7606.17

807.2

94.7

2367.8 9-Aug-

05 7595.57

419.9

68.1

2361.2 10-Aug-

05 7729.82

118.7

-86.8

2324.4 11-Aug-

05 7816.51

-101.3

-93.4

2318.7 12-Aug-

05 7767.49

-0.2 189.1

2360.15 16-Aug-

05 7768.24

274.9

235.6

2380.9 17-Aug-

05 7859.53

17.6

505.6

2361.55 18-Aug-

05 7811.33

156.3

132 2369.8 19-Aug-

05 7780.76

47.1

43.1

2403.15 22-Aug-

05 7750.6

-77.1

110.1

2388.45 23-Aug-

05 7615.99

9.4 -33 2383.45 24-Aug-

05 7612

60.6

70.7

2367.85 25-Aug-

05 7660.42

-110.5

95.9

2326.1 26-Aug-

05 7680.22

306.8

170.8

2322.5 29-Aug-

05 7634.43

117 157 2354.55 30-Aug-

05 7745

9.2 45.5

2357.05 1-Sep-

05 7876.15

371.4

47.1

2337.65 2-Sep-

05 7899.77

313.1

197.2

2367.75 5-Sep-

05 7925.24

234 177.8

2405.75 6-Sep-

05 7946.78

247.9

192.3

2415.8 8-Sep-

05 8052.56

70.7

88.8

2422.95 9-Sep-

05 8060.01

543.3

-45.5

2428.65 12-Sep-

05 8138.42

-50 183.3

2454.45 13-Sep-

05 8193.96

167.6

284.6

2455.45 14-Sep-

05 8189.48

418.2

315.9

2484.15 15-Sep-

05 8283.76

158.7

270.3

2500.35 16-Sep-

05 8380.96

407.2

132.2

2492.45 19-Sep-

05 8444.84

443.7

39.6

2523.95 20-Sep-

05 8500.28

101.1

164.4

2552.35 21-Sep-

05 8487.14

321.9

121.2

2567.1 22-Sep-

05 8221.64

307.6

74.9

2578 23-Sep-

05 8222.59

514.4

90.9

2567.3

73

26-Sep-05

8478.91

-325.5

1.5 2476.5 27-Sep-

05 8525.52

199.3

86.1

2477.75 28-Sep-

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26.3

133.3

2557.35 29-Sep-

05 8650.17

42.5

231.4

2574.85 30-Sep-

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133.4

200.2

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454.4

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27 2601.4 5-Oct-

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421.6

156.3

2630.05 6-Oct-

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54.1

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71.3

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74.4

210.7

2574.05 13-Oct-

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2566.85 14-Oct-

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177.7

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293.1

23.2

2537.3 18-Oct-

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237.4

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312.7

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596.8

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25.7

2395.45 25-Oct-

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276.7

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189.8

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285.5

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223.8

2352.9 2-Nov-

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50.6

202.6

2316.05 7-Nov-

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384.5

2.8 2386.75 8-Nov-

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530.8

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2419.05 9-Nov-

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609.2

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99.1

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2489.1 14-Nov-

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29.2

207.1

2500.7 16-Nov-

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34 69.6

2548.65 17-Nov-

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145.3

107.5

2558.7 18-Nov-

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90.8

114.3

2582.75 21-Nov-

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286.3

117 2603.95 22-Nov-

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423.7

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2620.05 23-Nov-

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167.6

35.4

2602.5 24-Nov-

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311.9

0.4 2572.85 25-Nov-

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461.4

103.7

2608.6 26-Nov-

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247.9

65.2

2635 28-Nov-

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39.4

17.9

2664.3 29-Nov-

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158.7

176.6

2683.45 1-Dec-

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261.5

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2712 2-Dec-

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425.1

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514.7

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2697.95 7-Dec-

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72.8

183.5

2660.5

73

8-Dec-05

8906.31

-68.5

124.7

2662.3 9-Dec-

05 9067.28

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420.1

48.8

2706.7 13-Dec-

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281.2

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2756.45 14-Dec-

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1163.9

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432.6

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542.1

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2685.5

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1125.1

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322 -155.9

2842.6 22-Dec-

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384.7

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2826.2 23-Dec-

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260.6

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2822.9 26-Dec-

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241.6

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56 -19.7

2804.85 28-Dec-

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21.6

126.9

2749.6 29-Dec-

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144.9

29.9

2805.9 30-Dec-

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135.3

189.1

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526.9

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477.7

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466.6

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86.9

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344.5

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397 -153.8

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320.3

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81.4

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55 -52.1

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42.1

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719.1

94.1

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217.4

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508.1

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364.1

44.7

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626.5

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796.5

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935.6

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614.4

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335.5

45.8

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59.6

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46.9

3021.6

73

17-Feb-06

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247.1

69.9

2981.5 20-Feb-

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344.4

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586.1

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125.3

22.8

3050.8 23-Feb-

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417.4

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761.4

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1001.8

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383.8

217.3

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201.8

204.1

3123.1 2-Mar-

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576 135.5

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645.7

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3147.35 6-Mar-

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389.8

229.5

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247.1

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3182.8 8-Mar-

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222.5

483.6

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832.3

217.8

3129.1 10-Mar-

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413.2

3183.9 13-Mar-

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624.8

289.9

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229.5

40.4

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164.6

138 3226.6 17-Mar-

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24.2

460.5

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474.9

101.9

3265.65 21-Mar-

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148.2

209.3

3262.3 22-Mar-

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181.7

63.8

3240.15 23-Mar-

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300.6

56 3247.15 24-Mar-

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56.3

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3279.8 27-Mar-

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137.5

517.7

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550.2

317.8

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371.7

52.3

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93.9

256.7

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502.5

439.6

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45.2

211.7

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477.9

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132.4

117.7

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252.9

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159.3

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224.9

25.6

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151.5

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194.8

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327.7

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2513.8

194.2

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82.3

3557.6

73

2-May-06

12218.78

60.9

48.8

3605.45 3-May-

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218.5

142.4

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907.2

274.9

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322.6

234.4

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1108.1

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366.5

151.5

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460.5

528.2

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322.9

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3701.05 12-May-

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356.2

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18.6

785.4

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193.3

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533.7

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125.6

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640.4

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571 -257.7

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84.8

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31.9

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111.2

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508.9

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97.9

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659.5

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91.6

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7 -127.5

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433.8

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106.3

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254.8

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214.7

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73

6-Jul-06

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556 -213.4

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9.1 -416.3

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62.3

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375.3

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321.3

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31.5

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229.8

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238 262.8

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461.7

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131.2

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355.8

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104.1

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240.1

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115.9

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298.6

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250.5

21.3

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151.9

47.5

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63.5

32.5

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10.6

27 3356.05 17-Aug-

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952 -23.8

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808.8

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519.1

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42.7

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58.6

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67.6

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67.8

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43.4

73.1

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368.9

58.3

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487.1

54.5

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236.6

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451.1

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62.2

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451.2

128.7

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192.8

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94.7

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112.5

3389.9

73

14-Sep-06

11973.02

519.4

381.8

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491.5

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459 -16.8

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495.1

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276.6

63.8

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236 -269.3

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288.8

191.6

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152.1

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34.9

468.5

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555 -115.5

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719.5

308.7

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1293.5

121.1

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123.7

89.2

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71 116.8

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96.4

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803.4

100.2

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539.3

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3621.05 16-Oct-

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1093.8

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3676.05 17-Oct-

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794.7

65.6

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389 -121.1

3715 19-Oct-

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1007.9

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444.1

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-23.2

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168.8

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3657.3 27-Oct-

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493.3

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496.7

289.6

3739.35 1-Nov-

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323.8

147.4

3769.1 2-Nov-

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368.5

53.9

3744.1 3-Nov-

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139.1

344.7

3767.05 6-Nov-

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227.4

146 3791.2 7-Nov-

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422.9

77.7

3805.35 8-Nov-

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335.5

164.3

3809.25 9-Nov-

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526.9

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3777.3 13-Nov-

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478.1

-155.2

3796.4 14-Nov-

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778.2

129.9

3834.75 15-Nov-

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1523.8

52.1

3858.75 16-Nov-

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99.6

-108

3865.9 20-Nov-

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1302.7

206.5

3876.3 21-Nov-

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58 362.4

3876.85 22-Nov-

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642.3

85.8

3852.8 23-Nov-

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-21.1

-285.8

3856.15 24-Nov-

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1178.7

-78.8

3918.25

73

27-Nov-06

13773.59

994.6

206.3

3954.75 28-Nov-

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405.6

-276.2

3945.45 29-Nov-

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-335.3

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3950.85 1-Dec-

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258.1

-26.1

3968.9 4-Dec-

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349.3

-269

3921.75 5-Dec-

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-2813.8

116.5

3928.2 6-Dec-

06 13949

433.2

-88.4

3954.5 7-Dec-

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244.2

304.3

3997.6 8-Dec-

06 13799.49

10.1

43.1

4001 11-Dec-

06 13399.43

-152.6

50.5

4015.75 12-Dec-

06 12995.02

422.3

-177.4

4015.95 13-Dec-

06 13181.34

95.2

4.2 4015.35 14-Dec-

06 13487.16

-96.9

67.8

3962 15-Dec-

06 13614.52

148.6

-657.2

3849.5 18-Dec-

06 13731.09

-46 -550.1

3716.9 19-Dec-

06 13382.01

-182.7

-231.8

3765.2 20-Dec-

06 13340.21

-673.4

-71.7

3843.05 21-Dec-

06 13384.86

-365.1

150 3888.65 22-Dec-

06 13471.74

264.8

45.5

3928.75 26-Dec-

06 13708.34

8.2 10.7

3832 27-Dec-

06 13859.69

-153

460.5

3815.55 28-Dec-

06 13846.34

-368.2

236.2

3833.5 29-Dec-

06 13786.91

-1049.7

347.9

3871.15 2-Jan-

07 13942.24

331.9

336.4

3940.5 3-Jan-

07 14014.92

3353.3

356.1

3974.25 4-Jan-

07 13871.71

207.8

677.1

3970.55 5-Jan-

07 13860.52

-262.2

225.1

3966.4 8-Jan-

07 13652.15

0.9 -8 4007.4 9-Jan-

07 13566.33

-3075.7

193.8

4024.05 10-Jan-

07 13362.16

-368.2

-21.4

3988.8 11-Jan-

07 13630.71

-1106.8

15.5

3983.4 12-Jan-

07 14056.53

159.2

-148.3

3933.4 15-Jan-

07 14129.64

207 -364.6

3911.4 16-Jan-

07 14114.73

-238.9

-123.6

3850.3 17-Jan-

07 14131.34

101.3

-328.4

3942.25 18-Jan-

07 14217.75

91.2

637.1

4052.45 19-Jan-

07 14182.71

111.9

103.5

4078.4 22-Jan-

07 14209.24

76.8

71.8

4080.5 23-Jan-

07 14041.24

319.8

89.6

4076.45 24-Jan-

07 14110.46

269.1

59 4109.05 25-Jan-

07 14282.72

172.7

-402

4090.15 29-Jan-

07 14211.96

141 -54.2

4102.45 2-Feb-

07 14403.77

-469.7

-537.1

4066.1 5-Feb-

07 14515.9

664.6

-351.2

4089.9 6-Feb-

07 14478.19

345 145.9

4147.7 7-Feb-

07 14643.13

656 -66.9

4124.45 8-Feb-

07 14652.09

545.4

-77.6

4183.5 9-Feb-

07 14538.9

698.9

-165.5

4215.35

73

12-Feb-07

14190.7

274.6

-28.3

4195.9 13-Feb-

07 14090.98

218.7

-37.8

4224.25 14-Feb-

07 14009.9

-239.6

-193.1

4223.4 15-Feb-

07 14355.55

210.5

-190.8

4187.4 19-Feb-

07 14402.9

617.1

-389.4

4058.3 20-Feb-

07 14253.38

220.2

24.9

4044.55 21-Feb-

07 14188.49

473.9

-481.1

4047.1 22-Feb-

07 14021.31

-40.2

104.9

4146.2 23-Feb-

07 13632.53

-225.2

130.8

4164.55 26-Feb-

07 13649.52

4287.2

3 4106.95 27-Feb-

07 13478.83

-582.1

17.8

4096.2 28-Feb-

07 12938.09

-415.7

0.7 4040 1-Mar-

07 13159.55

-1644.3

37.2

3938.95 2-Mar-

07 12886.13

-438.7

270.6

3942 5-Mar-

07 12415.04

324.9

348.6

3893.9 6-Mar-

07 12697.09

-312.7

243.9

3745.3 7-Mar-

07 12579.75

-570.4

-29.1

3811.2 8-Mar-

07 13049.35

84.1

-125.3

3726.75 9-Mar-

07 12884.99

115.8

166.1

3576.5 12-Mar-

07 12902.63

395.7

68.4

3655.65 13-Mar-

07 12982.98

204.3

-379.6

3626.85 14-Mar-

07 12529.62

-84 -39.8

3761.65 15-Mar-

07 12543.85

-861.4

-384.3

3718 16-Mar-

07 12430.4

18.5

-145.8

3734.6 19-Mar-

07 12644.99

2.1 -13.5

3770.55 20-Mar-

07 12705.94

-250

38.2

3641.1 21-Mar-

07 12945.88

136.3

-206.4

3643.6 22-Mar-

07 13308.03

164.5

-209.6

3608.55 23-Mar-

07 13285.93

713.1

33.1

3678.9 26-Mar-

07 13124.32

678.5

57 3697.6 28-Mar-

07 12884.34

80.5

-56.3

3764.55 29-Mar-

07 12979.66

520.2

91.8

3875.9 30-Mar-

07 13072.1

-359

-168.2

3861.05 2-Apr-

07 12455.37

840.8

-295.3

3819.95 3-Apr-

07 12624.58

-473.5

-206.8

3761.1 4-Apr-

07 12786.77

-169.9

93.7

3798.1 5-Apr-

07 12856.08

-2.2 5.8 3821.55 9-Apr-

07 13177.74

567.5

70.5

3633.6 10-Apr-

07 13189.54

569.4

-102.1

3690.65 11-Apr-

07 13183.24

402.6

-138.1

3733.25 12-Apr-

07 13113.81

101.9

41 3752 13-Apr-

07 13384.08

55.2

46.3

3843.5 16-Apr-

07 13695.58

475.7

-470.1

3848.15 17-Apr-

07 13607.04

788.3

289.4

3862.65 18-Apr-

07 13672.19

648.5

-21 3829.85 19-Apr-

07 13619.7

640.1

262.2

3917.35 20-Apr-

07 13897.41

-73.4

204.9

4013.35 23-Apr-

07 13928.33

748.7

-251.1

3984.95

73

24-Apr-07

14136.72

-68.5

19.1

4011.6 25-Apr-

07 14217.77

501.5

-25.8

3997.65 26-Apr-

07 14228.88

961.5

190.8

4083.55 27-Apr-

07 13908.58

359.8

252.6

4085.1 30-Apr-

07 13872.37

-194.8

361.1

4141.8 3-May-

07 14078.21

-304.6

251.8

4167.3 4-May-

07 13934.27

56.2

17.8

4177.85 7-May-

07 13879.25

212 -38.7

4083.5 8-May-

07 13765.46

96.7

71.2

4087.9 9-May-

07 13781.51

-222.1

298 4150.85 10-May-

07 13771.23

23.3

109 4117.35 11-May-

07 13796.16

191.5

21.7

4111.15 14-May-

07 13965.86

-336.2

-18.8

4077 15-May-

07 13929.33

60.5

-124.2

4079.3 16-May-

07 14127.31

-330.8

226.6

4066.8 17-May-

07 14299.71

-139.2

100.7

4076.65 18-May-

07 14303.41

1060.8

40.1

4134.3 21-May-

07 14418.6

1260.3

-77.8

4120.3 22-May-

07 14453.72

477.6

335.6

4170.95 23-May-

07 14363.26

450.8

630.5

4219.55 24-May-

07 14218.11

446 -135

4214.5 25-May-

07 14338.45

319.5

313 4260.9 28-May-

07 14397.89

-147.1

-47.5

4278.1 29-May-

07 14508.21

324.2

16.2

4246.2 30-May-

07 14411.38

837.4

-446.8

4204.9 31-May-

07 14544.46

-377.1

38.3

4248.15 1-Jun-

07 14570.75

310.4

153.3

4256.55 4-Jun-

07 14495.77

482.4

-2.2 4293.25 5-Jun-

07 14535.01

222.1

411.4

4249.65 6-Jun-

07 14255.93

-37.8

65.2

4295.8 7-Jun-

07 14186.18

-69.6

365.5

4297.05 8-Jun-

07 14063.81

-222.8

15.6

4267.05 11-Jun-

07 14083.41

-936.2

51.1

4284.65 12-Jun-

07 14130.95

-54.6

-134

4198.25 13-Jun-

07 14003.03

545.3

-38.5

4179.5 14-Jun-

07 14203.72

-307.8

232.4

4145 15-Jun-

07 14162.71

211.8

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07 14080.14

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4155.2

19-Jun-07

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5

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20-Jun-07

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95

653.1

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21-Jun-07

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24

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22-Jun-07

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36

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208.2

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25-Jun-07

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72

78.2

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73

26-Jun-07

14501.

08

497.8

158.2

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27-Jun-07

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06

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76

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28-Jun-07

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57

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29-Jun-07

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51

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2-Jul-07

14806.

51

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162.2

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3-Jul-07

14880.

24

200.7

122.9

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4-Jul-07

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89

410

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5-Jul-07

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12

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187.9

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6-Jul-07

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73

1275

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9-Jul-07

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88

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122.1

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10-Jul-07

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45

889.3

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11-Jul-07

14910.

62

702.1

195.2

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12-Jul-07

15092.

04

363.5

28.4

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13-Jul-07

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72

699.6

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16-Jul-07

15311.

22

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17-Jul-07

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82

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18-Jul-07

15301.

17

946.4

117.1

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19-Jul-07

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13

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295.8

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20-Jul-07

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55

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23-Jul-07

15732.

2

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24-Jul-07

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92

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25-Jul-07

15699.

33

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130

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26-Jul-07

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31

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27-Jul-07

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57

248.2

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07 15260.

-

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486.8 4620.7

5

73

91

31-Jul-07

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1-Aug-07

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0.9

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2-Aug-07

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7

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251.6

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3-Aug-07

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4

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6-Aug-07

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03

192.8

186.3

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7-Aug-07

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77

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8-Aug-07

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98

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9-Aug-07

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15

190.2

256.8

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10-Aug-07

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25

382.6

47.9

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13-Aug-07

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21

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14-Aug-07

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16-Aug-07

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21

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17-Aug-07

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52

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20-Aug-07

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55

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23

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21-Aug-07

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11

92.8

151.5

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22-Aug-07

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66

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239.2

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23-Aug-07

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98

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878.3

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24-Aug-07

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87

330.4

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27-Aug-07

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38

414.5

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28-Aug-07

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19

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211.6

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29-Aug-07

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04

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331.4

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30-Aug-07

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74

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07 15318.6 -

664.5 345.4

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3-Sep-07

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07 15465.

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4

5-Sep-07

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6-Sep-07

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31

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7-Sep-07

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42

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10-Sep-07

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83

580.9

98.8

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11-Sep-07

15542.

77

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67.4

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12-Sep-07

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445.6

45.2

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13-Sep-07

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44

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14-Sep-07

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8

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17-Sep-07

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18-Sep-07

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12

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19-Sep-07

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75

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80

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20-Sep-07

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95

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21-Sep-07

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23

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24-Sep-07

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83

924.3

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25-Sep-07

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54

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26-Sep-07

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39

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27-Sep-07

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56

1004

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4837.55

28-Sep-07

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1

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1-Oct-07

17328.

62

3493.3

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3-Oct-07

17847.

04

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4-Oct-07

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14

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92.7

5000.55

5-Oct-07

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36

575

31.2

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8-Oct-07

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39

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5068.95

9-Oct-07

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24

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73

10-Oct-07

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25

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11-Oct-07

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07

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12-Oct-07

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04

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15-Oct-07

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67

781

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16-Oct-07

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1

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17-Oct-07

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82

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18-Oct-07

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19-Oct-07

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98

125.7

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22-Oct-07

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99

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23-Oct-07

18492.

84

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24-Oct-07

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91

777

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25-Oct-07

18770.

89

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26-Oct-07

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17

213

286.8

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29-Oct-07

19977.

67

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337.4

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30-Oct-07

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51

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735.3

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31-Oct-07

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99

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1-Nov-07

19724.

35

228

421.1

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2-Nov-07

19976.

23

180.6

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5-Nov-07

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78

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6-Nov-07

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67

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7-Nov-07

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83

5.1

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5932.4

8-Nov-07

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93

37.7

83.5

5847.3

9-Nov-07

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6

62.8

5786.5 12-Nov-

07 18737.22

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5782.35

13-Nov-07

19035.

48

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5698.75

73

14-Nov-07

19929.

06

122.2

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15-Nov-07

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89

952

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16-Nov-07

19698.

36

788.4

483

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19-Nov-07

19633.

36

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187.7

5912.1

20-Nov-07

19280.

8

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142.9

5906.85

21-Nov-07

18602.

62

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5907.65

22-Nov-07

18526.

32

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138.2

5780.9

23-Nov-07

18852.

87

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5561.05

26-Nov-07

19247.

54

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305.2

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27-Nov-07

19127.

73

470.2

334.7

5608.6

28-Nov-07

18938.

87

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252.9

5731.7

29-Nov-07

19003.

26

-450

128.6

5698.15

30-Nov-07

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19

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57.1

5617.55

3-Dec-07

19603.

41

1480.4

403.4

5634.6

4-Dec-07

19529.

5

114.4

660.5

5762.75

5-Dec-07

19738.

07

19.5

449.4

5865

6-Dec-07

19795.

87

1081.3

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5858.35 7-Dec-

07 1996

6 822.4

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5940

10-Dec-07

19930.

68

5.2

97.7

5954.7

11-Dec-07

20290.

89

300.6

72.4

5974.3

12-Dec-07

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87

20104.

39

2003

0.

83

1926

1.

35

689.9

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5960.6

13-Dec-07

59.8

308.1

6097.25

14-Dec-07

1082.1

37.1

6159.3

17-Dec-07

407.5

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6058.1

18-Dec-07

19079.

64

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6047.7

73

19-Dec-07

19091.

96

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20-Dec-07

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57

-1092.5

346.6

5742.3

24-Dec-07

19854.

12

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123.6

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26-Dec-07

20192.

52

167.4

658.2

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27-Dec-07

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72

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830.1

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28-Dec-07

20206.

95

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31-Dec-07

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99

1140.9

716.9

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1-Jan-08

20300.

71

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34.3

6079.7

2-Jan-08

20465.

3

142.3

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3-Jan-08

20345.

2

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183.5

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4-Jan-08

20686.

89

725.1

295.2

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7-Jan-08

20812.

65

508.8

490

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8-Jan-08

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33

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616.6

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9-Jan-08

20869.

78

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30

6279.1

10-Jan-08

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08

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11-Jan-08

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05

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14-Jan-08

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05

113.7

46.3

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15-Jan-08

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09

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16-Jan-08

19868.

11

225.8

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17-Jan-08

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82

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18-Jan-08

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7

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21-Jan-08

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35

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22-Jan-08

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07

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23-Jan-08

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07

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08 17221.

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1 4899.

3

73

74

25-Jan-08

18361.

66

-1351.2

874.4

5203.4

28-Jan-08

18152.

78

669.1

350.1

5033.45

29-Jan-08

18091.

94

-1513.4

221.2

5383.35

30-Jan-08

17758.

64

-285.1

368.8

5274.1

31-Jan-08

17648.

71

-611.4

-117.7

5280.8

1-Feb-08

18242.

58

-3393.4

416.3

5167.6

4-Feb-08

18660.

32

1034.3

2134.5

5137.45

5-Feb-08

18663.

16

3810.7

100

5317.25

6-Feb-08

18139.

49

576.9

818.9

5463.5

7-Feb-08

17526.

93

-528.2

-297.5

5483.9

8-Feb-08

17464.

89

-168.4

-212.2

5322.55

12-Feb-08

16608.

01

-1845.6

-78.4

5133.25

13-Feb-08

16949.

14

-115.1

-293.5

5120.35

14-Feb-08

17766.

63

349

-99.9

4838.25

15-Feb-08

18115.

25

-1183.1

600.4

4929.45

18-Feb-08

18048.

05

1147.5

296.3

5202

19-Feb-08

18075.

66

-115.9

161.9

5302.9

20-Feb-08

17617.

6

1585.1

456.7

5276.9

21-Feb-08

17734.

68

56.7

-326.8

5280.8

22-Feb-08

17349.

07

285.6

-191.3

5154.45

25-Feb-08

17650.

57

-453.8

-226.8

5191.8

26-Feb-08

17806.

19

738.5

-163.6

5110.75

27-Feb-08

17825.

99

85.4

-140.5

5200.7

28-Feb-08

17824.

48

396.4

525.9

5270.05

73

Table 2 Variables Calculated for Sensex and FII investments from

the table 1 data for the calculation of R2 .

Table 3 Variables Calculated for Sensex and Mutual Fund

investments from the table 1 data for the calculation of R2 .

Table 4 Variables Calculated for Nifty and FII investments from the

table 1 data for the calculation of R2 .

Table 5 Variables Calculated for Nifty and Mutual Fund investments from

the table 1 data for the calculation of R2 .