On 17th Dec. I had put out an idea that PN investment by NRI's might have slowed down due to black money drive though I did not have the data to support my view at that time. It now transpires that there is a gradual erosion in PN in the domestic market which plunged to its lowest level in three years to Rs.1.79 lakh crore in Nov. end. With tightening of disclosure norms, the share of PN's has fallen from a high of 25-40% in 2008 & peak of 55% in 2007. Though the effect of demonetisation might have had little impact on PN, it's the squeeze on domestic hot money  (which keeps interchanging b/w Zaveri Bazaar & Dalal Stteet) & flow-back of FPI money to the U.S. which is impacting our market. If the market has still not catapulted to the level seen in 2008 it is possibly due to consistent buying by MFI/LIC/ Private Insurance Cos. & investment in ETF by EPFO. All said, the market sentiment is negative & will slowly open up opportunities for investment. Is it then time to come out with the fishing rod to catch the big fish? I feel not yet though one can start testing the waters before taking the plunge

By Sh GRChari