Are foreign investor flows a good market indicator?

Foreign investors activities still account for a substantial share of turnover at the bourse. PHOTO | FILE

Investment flows can provide powerful insights into economic and market trends. Both long-term foreign direct investment and shorter-term portfolio flows can be viewed as the business and investing communities’ judgement on the investment environment. For stock market investors, short-term capital flows are increasingly becoming a must-follow signal.

Focus on foreign flows into fixed income and equity can help us understand sentiment by the foreign investor community.

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Note: The results are not exact but very close to the actual.