FIIs ARE BOOKING THEIR PROFITS IN LONG POSITION IN INDEX FUTURES INCLUDING NIFTY FUTURE VERY FAST ALSO LIQUIDITY IS DECREASING IN CASH SEGMENT BE ALERT..........26 MARCH 2012 :-
AFTER ANALYZING THE ABOVE TABLE IT IS CLEAR THAT FIIs ARE BOOKING THEIR PROFITS IN LONG POSITION IN INDEX FUTURES NIFTY FUTURE VERY FAST. FIIs HAD TAKEN LONG POSITION IN JAN 2012 & FEB 2012 RS. 5312 CR. @ 5164.71 NIFTY SPOT LEVEL BUT HAVE SOLD RS. -3729.91 CR. @ 5315.81 NIFTY SPOT LEVEL, MEANS CLEAR INDICATION THAT WHATEVER LONG POSITION WAS TAKEN @ 5164.71 ON AVERAGE BASIS IS BOOKING NOW @ 5315.81 ON AVERAGE BASIS AND ONLY RS. 1582.09 CR. HAS REMAINED LONG POSITION WHICH IS EXPECTED TO BOOK EARLIER IN THE COMING TRADING SESSIONS. SO CLEAR INDICATION IS THAT FIIs HAVE CHOSEN NIFTY SPOT LEVEL @ 5315 - 5330 TO BOOK PROFIT IN LONG ON AVERAGE BASIS, SO IN THE COMING TRADING SESSIONS NIFTY SPOT IS LOOKING VERY HARD @ 5315 - 5330 LEVELS.
FIIs POSITION ANALYSIS IN INDEX FUTURES INCLUDING NIFTY FUTURES ON CARDS :-
FIIs POSITION IN INDEX FUTURES INCLUDING NIFTY FUTURE FROM 1ST MARCH 2012 TO 26TH MARCH 2012
AFTER ANALYZING THE ABOVE CARD IT IS CLEAR THAT THERE WAS 17 TRADING SESSIONS IN MARCH SERIES TILL 26 MARCH 2012 AND FIIs HAVE SOLD ONLY IN INDEX FUTURE INCLUDING NIFTY FUTURE IN 11 TRADING SESSIONS OUT OF 17 TRADING SESSIONS. FIIs HAVE BOUGHT ONLY IN 6 TRADING SESSIONS OUT OF 17 TRADING SESSIONS. THE TOTAL SELLING AMOUNT IN INDEX FUTURE INCLUDING NIFTY FUTURE IS RS. -6029.48 CR @ 5301.04 NIFTY SPOT LEVEL ON AVERAGE BASIS IN THESE 11 TRADING SESSIONS AND BOUGHT RS. 2299.57 CR. ONLY @ 5330.58 NIFTY SPOT LEVEL ON AVERAGE BASIS. IN THESE 17 TRADING SESSIONS FIIs ARE NOT ONLY BUY THE LOWEST BUYING AMOUNT IN INDEX FUTURE INCLUDING NIFTY FUTURE IN 2012 BUT ALSO SELL THE HIGHEST SELLING AMOUNT IN INDEX FUTURE INCLUDING NIFTY FUTURE IN 2012. ON 2ND MARCH 2012 FIIs BOUGHT THE LOWEST AMOUNT RS. 12.25 CR. @ 5359.35 NIFTY SPOT LEVEL IN 2012 AND ON 26TH MARCH 2012 SOLD THE HIGHEST AMOUNT RS. -1434.59 CR. @ 5184.25 NIFTY SPOT LEVEL IN 2012. SO IT IS CLEAR INDICATING THAT FIIs ARE UNWINDING ITS LONG POSITION IN NIFTY FUTURE IN MARCH SERIES VERY FAST. SO NIFTY SPOT IS LOOKING 5300 VERY HARD IN MARCH SERIES.
FIIs CASH FLOW PATTERN IN CASH SEGMENT FROM JAN 2012 TO MARCH 2012 (TILL 26TH MARCH 2012).
AFTER ANALYZING THE ABOVE PATTERN IT IS CLEAR THAT LIQUIDITY IS DECREASING IN CASH SEGMENT ALSO. ON 23RD MARCH 2012 FIIs BOUGHT THE LOWEST AMOUNT IN CASH SEGMENT RS. 9.46 CR @ 5278.20 NIFTY SPOT LEVELS IN 2012, IT MEANS FIIs ARE NOT LOOKING 5278.20 NIFTY SPOT LEVEL IS SAFEST BUYING LEVELS OR STRONG LEVEL TO BUY AND TREND IS CLEAR IS CLEAR SHOWING THAT LIQUIDITY IS DECREASING VERY FAST IN CASH SEGMENT. ON 26TH MACH CASH SEGMENT DATA WAS IN NEGATIVE FIGURE. SO NOW WE CAN SEE FURTHER NEGATIVE DATA IN CASH SEGMENT IN COMING TRADING SESSIONS.
SO, ON OVERALL BASIS, FIIs ARE LOSING THEIR EXPOSER NOT ONLY IN FUTURE SEGMENT MEANS BOOKING PROFITS AND ALSO BECOMING FULL-STOP IN CASH SEGMENT. SO BE ALERT............
WHAT WILL HAPPEN IF GAAR (GENERAL ANTI AVOIDANCE RULE) IS PROPOSED BY THE GOVERNMENT FROM 1ST APRIL 2012 :-
FIRSTLY THE THING IS THAT NEED TO UNDERSTAND THE GAAR, WHAT IS GAAR :-
"GAAR is introduced in Finance Bill 2012 to address aggressive tax planning and codify the doctrine of “substance over the form”. However, such introduction when a Report of the Standing Committee has provided significant comments thereon (which Report is being discussed in the Finance Ministry) is certainly not the best thing. As per legal circles, the provisions of GAAR can perhaps be challenged as violative of the constitutional right to practice any profession, or to carry on any occupation, trade or business. This will also nullify an established position that a tax payer is legally entitled to arrange his affairs so as to pay minimal tax and is not expected to choose a way which entails payment of maximum tax. "
"Surprisingly, in the present form of GAAR the burden is on the assessee to prove that there is no “tax benefit” and the transaction is not an “avoidance transaction”. Even under criminal law, the Constitution provides that no person accused of any offence shall be compelled to be a witness against himself. The provisions of GAAR by casting a presumption of tax avoidance where any tax benefit results from an arrangement or even part thereof (unless the assessee proves otherwise) amounts to casting an onerous burden on a tax payer."
"In Canada, the burden is on the revenue to prove that there is “abusive” tax avoidance and GAAR is applied only if transaction results in misuse or abuse of the provisions of the Act/ Regulations/Rules/Tax Treaties. "
"A perusal of the finance bill provides following situations for invoking GAAR:
- Creates rights / obligations that are not normal between arms’ length parties;
- Results directly or indirectly in misuse or abuse of the provisions of the Act;
- Lacks commercial substance;
- Means or manner employed not ordinary for bona fide purposes."
Under the proposed GAAR, the country's income tax department will have the power to deny individuals and entities the benefits of any tax avoidance treaty. The main Indian stock indices fell sharply on Monday amid media reports that the proposed General Anti-Avoidance Rules (GAAR) could affect FII investments through participatory notes (P-notes), which run into billions of dollars.
The GAAR comes into effect from April 1.
Under the proposed GAAR, the country's income tax department will have the power to deny individuals and entities the benefits of any tax avoidance treaty. FIIs are worried that the Government could raise tax demands as a result of these new provisions. Some market experts warn that fresh P-note issuance could be hit badly from April 1 until there is clarity from the Government on the matter.
The total FII investment into Indian equities stands at Rs. 11.15 lakh crore. Nearly 17% of FII participation in the Indian equity markets is through the P-note route or ~Rs 1.8 lakh crore.
OVERVIEW OF FIIs IN INDIA 2011
IN THE ABOVE TOP 10 FIIs HAS MENTIONED IN TERMS OF NUMBERS OF FIIs IN INDIA. THERE ARE TOTAL 1731 FIIs FROM 47 COUNTRIES AND THERE TOP 10 COUNTRIES WHICH HOLDS MAJOR PERCENTAGE IN TERMS OF NUMBER OF FIIs. THESE COUNTIRIES ARE :-
1. UNITED STATES OF AMERICA
2. UNITED KINGDOM
3. LUXEMBOURG
4. MAURITIUS
5. HONKONG
6. SINGAPORE
7. CANADA
8. AUSTRALIA
9. IRELAND
10. GREAT BRITAIN
IF GAAR IS PROPOSED BY THE GOVERNMENT FROM 1ST APRIL 2012 THEN 5 COUNTRIES OF FIIs WILL BE AFFECTED WHICH ARE FROM MAURITIUS, SINGAPORE, CANADA, AUSTRALIA AND GREAT BRITAIN, BECAUSE GOVERNMENT HAS DOUBLE TAXATION AVOIDANCE AGREEMENT BETWEEN THESE COUNTRIES. IF GAAR IS PROPOSED THE FIIs FROM THESE COUNTRIES WILL BE AFFECTED. THERE ARE 105 FIIs FROM MAURITIUS, 77 FIIs ARE SINGAPORE, 77 FIIs FROM CANADA, 64 FIIs FROM AUSTRALIA AND 44 FIIs FROM GREAT BRITAIN. THE TOTAL NO OF FIIs IN INDIA IS 1731, AND TOTAL OF FIIs INCLUDING ALL 5 COUNTRIES IS. 367 FIIs MEANS ALL 5 COUNTRIES HOLDS 21.20% FIIs NUMBERS OUT OF TOTAL FIIs NUMBERS. CLEAR INDICATING IF GOVERNMENT IS PROPOSED GAAR THEN SUCH NUMBERS OF "P" NOTES WILL BE BECOME UNWIND BY THESE 5 COUNTRIES RESULTING BIG WITHDRAWALS CAN BE SEEN IN THE MARKET .
