FIIs are Selling. DIIs are Buying. What a Normal Investor Should Do?

18^th October 2024

FIIs are Selling. DIIs are Buying. What a Normal Investor Should Do?

Dear Investors,

Namaste! This post is for you. FIIs sold Rs.74000 Crs worth of shares in October 2024 so far. DIIs have bought close to Rs.65000 Crs in October 2024 so far. Some of the questions comes – 

1.   Why are FIIs Selling? 

2.   Why are DIIs Buying? 

3.   If Selling can’t happen without Buyer – why is the market going down? 4. What a Normal Investors should do?

We will focus on the 5 major players or factors to understand the market behaviours. They are USA / INDIA / CHINA / WARS / Individual Investors. Let us see each of them separately first.

1.   USA:  - One can love USA or hate USA but one can’t ignore USA for your economic progress world over. The FED has started a cycle to decrease the interest rates over there. If everything goes as per the FED’s plan – Interest rates will go down further. 

Less interest rates are supposed to increase the economic activities in the USA. So, the funds which were investing outside the USA – will like to go back to the USA and do the bottom fishing over there. If you look at the USA rally – it was mostly focused on the magnificent 7 stocks only. Now, with the lesser inflation and lesser interest rates – things may improve for the USA in the coming time. 

The USA is a war economy and the way wars are going on – the USA economy at the MACRO level will have tons of money to give it to the poor and manage the economy in the coming time. If democrats win - War Party will continue. So, part of the funds are getting diverted to the USA. 

However, If the TRUMP wins – the TARIFFS are going to go up. When Tariffs go up – the landed cost of the products will go up and so will inflation. In that case, the FED will be forced not to decrease the rates. 

(In the last budget – our government decreased the GOLD import duty. With that the government reduced the GOLD BOND liability by 9% immediately. And Gold became cheaper in India by 9%. If the duty were not changed the Gold would have been trading at 87000/- per 10 grams in India today. This is the power of TARIFF change).  

So, the US election results will decide the future course of the action. At the moment – we can see that the USA interested funds are selling in India and buying a pie in the USA market at the bottom levels. 

2.   India: - If I study the last two years Government communications – we are being told that our economy is growing at 7.2%. We have been told this figure so many times that we started believing that we are growing at 7.2%. 

In fact, in this month’s MPC meetings  they  also maintained this figure. 

I have studied the March 2024 corporate results. I have studied the June 2024 corporate results. I am studying the September 2024 results as and when they are announced in the current month. The corporate facts are saying that SALES is not moving up to support the 7.2% growth. Unemployment is also not going down. Look at the recent figures of Nestle / Dmart / Reliance Retail / Unsold Car Inventory figures and we can see that Retail and FMCG is not moving up. Real estate companies are also having tons of unsold inventory. I have visited major malls in Mumbai and sale & exhibitions ahead of DIWALI to understand the ground realities of the market. I can see that SHOPKEEPERS are not happy with the Sales figures. 

FIIs know this secret about the Indian economy – which our Media is not writing about. This is one of the major factors that they are selling. 

I am a hardcore fan of MODI JI and will support him as long as I am alive. But when it comes to the ground realities – the facts say that we are supplying FREE RATION to 80 Crs. Indians even today. It simply means – we are not able to provide them gainful employment. When people are not earning – they can’t spend much and naturally economic growth can’t be moving up. 

This is one of the major reasons that people are moving to the SHARE MARKET through MUTUAL funds and direct equities. They want to earn something to meet their expenses. So, our mutual funds are flush with the cash. As per MANDATE they are supposed to be invested so they are buying. With their buying the impact of FIIs sell is not FELT as it was felt in March 2020 and the NAV remains steady or gives the feelings of moving up. So, the normal guys feel that market is in the TEJI. 

Look at the Credit card and personal loan figures. They are skyrocketing. So, those who are not part of 80 Crs but earning little are spending on loans. Banks having a retail focus on their loan portfolios are facing delinquencies. Major banks are going back to big corporations for their loans.  

The conclusion is – India is shining for sure. But not as much as our RBI and FM are telling in the Media. 

Top investors know that TEJI is liquidity driven more than the Economy Driven. 

3.   China: - China is in soup. They are trying to revive  the economy with various measures by reducing the interest rates. They have twin objectives – to grow the economy and to minimize the risk of financial instability. 

 

They have given various incentives including rate cuts and the Chinese market has moved up in recent times. 

 

The problem with CHINA is that we get selective data and to make a conclusion on CHINA based on that is a mistake. 

 

However, as an astrologer – I have written way back in 2017 that CHINA will break into small countries in the coming time. 

 

So, SELL INDIA and BUY CHINA theory is not going to last long. 

4.   WARS : - Since 2022, we are seeing wars. The Russian war and Israel war are going on currently. North Korea-South Korea and China – Taiwan can also join the party. 

If I look at the above picture – the USA has a game to finish Israel, China and Russia as all the three are  strong competitors and enemies for the USA. The coming time we will see the above three countries weaken economically and otherwise also. 

In the process of weakening the others – the USA will also feel the heat. Law of KARMA is the same for all. What you give – you will get. 

The effect of the above WARS will be negative in the short term but will give clarity in the coming times. I don’t see WORLD WAR as YouTubers are making out. 

Remember - Destruction leads to new construction. 

5.   Normal Investors: - Are you puzzled and worried what to do next? We have the following broad conclusions to help you in your investing journey. 

 

a.   US Interest rates and Election results will decide the future course for the World Market. So, keep an eye on the same.

b.   India is not as strong as RBI and FM are telling us but stronger economically when we compare to the USA / CHINA. It means the funds will come to India – sooner than later.

c.   China will do some stupid things in the coming times and it will die on its own death. From Investor perspective – Funds will come back from CHINA to India. 

d.  India is peaceful compared to the Middle East and Western World. It is also protected by Natural Calamities compared to Western World. With Modi ji as a leader – he will do his best to save us from the above two. These three factors are positive for investing in India. 

e.   Western powers will try to play their dirty game in India also. And to that extent we all will be affected in the coming time for sure. 

Keep these 5 broader pictures in mind and plan your investing. 

What NEXT?

I am a devotee of LORD KRISHNA. He has asked me to work simultaneously on 5 factors – VASTU – Myself – My resources – My skill sets to use my resources and read my FATE. When I work holistically on all the factors – I can be sure of getting reasonable success in the coming time. 

We are about to celebrate the most auspicious time of the year – DIWALI. Take our personalised inputs in above 5 areas and rush towards your dreams and goals at a faster speed with confidence and conviction.

Wish you all a Happy Diwali and Happy New Year in Advance.

 

Follow me on Twitter @hiteshmparikh / WhatsApp - +91-9869425399.

 

Learn a Lesson. Live with Passion & Invest with Reason.

 

Hitesh Parikh.