Author: CP

According to the latest data compiled by Securities and Exchange Board of India (SEBI), foreign institutional investors (FIIs) have pulled out nearly Rs 50,000 crore from the domestic stock market in 2008-09.

FIIs’ net outflows stood at Rs 47,706.2 crore till March 30 in the current fiscal, as compared to huge inflows of Rs 53,000 crore in the previous fiscal.

However, analysts believe that FIIs are likely to resume investments in Indian equities in the later FY10 owing to higher returns as an attractive investment destination with sound fundamentals.

Infrastructure spending critical in the current economic environment – In the current domestic growth environment, while the private business capex is likely to suffer, we believe that the government’s effort to push infrastructure spending will be critical. Within the infrastructure segments, we believe the roads spending is the most important considering its strong multiplier effect.

Of the total 33,097km planned, only 10,858km had been completed as of February 2009. About 50% of roads tenders have yet to be awarded.

The progress on road development is likely to be tardy until the end of 2009. The new cabinet, which should be in place by June 2009, will need to spearhead this spending and, if need be, take the financial risk on its own balance sheet.

Leading passenger car manufacturer Maruti Suzuki has admitted for the first time that the launch of Tata Motor’s Nano would marginally affect the sales of its flagship model M800.

Reports quoted that the company could be forced to stop producing the M800 model by next year after stricter emission norms come into effect.

The current M800 model is Bharat Stage III (BS III)-compliant and the company would have to invest heavily in the engine assembly to upgrade it to meet the BS IV norms.

Maruti’s chairman R C Bhargava stated that the company is neither having any plans of cutting the prices of the M800 model or the Alto model nor is it planning to enter the segment being created by Tata’s Nano.