ManagementParadise.com : Worlds Leading Management Portal. MBA | Classroom, Boardroom and Beyond


Go Back   ManagementParadise.com Forums - Your MBA Online Degree Program and Management Students Forum for MBA,BMS, MMS, BMM, BBA, students & aspirants. > Projects HUB for Management Students ( MBA Projects and dissertations / BMS Projects / BBA Projects > Resolve Your Query - Get Help and discuss Projects > Financial Management ( FM )

Foreign Institutional Investors

Foreign Institutional Investors

Discuss Foreign Institutional Investors within the Financial Management ( FM ) forums, part of the Resolve Your Query - Get Help and discuss Projects category; A Grave Balance of Payments situation forced the policymakers to take a relook at allowing foreign capital Into the country ...

Reply

 

LinkBack Thread Tools Display Modes
Advertisements
Foreign Institutional Investors
Old
 (1 (permalink))
Sunanda K. Chavan
sunandaC has a spectacular aura aboutsunandaC has a spectacular aura aboutsunandaC has a spectacular aura about
 
sunandaC
Management Paradise Guru
 
Status: Offline
Posts: 6,685
Join Date: Jul 2010
Foreign Institutional Investors - October 6th, 2010

A Grave Balance of Payments situation forced the policymakers to take a relook at allowing foreign capital Into the country and the year of 1991 marked the announcement of some fiscal disciplinary measures along with reforms on the external sector made, it possible for the foreign capital to reach the shores of the country.

As on 31st March 2005 there were 685 (ISMR 2004-05 NSE, Mumbai) registered foreign institutional investors in the Indian stock market.

As on that date the net cumulative investments made by FIIs are around USD 35.9 billion representing around 6.55% of India's market capitalization.


Ever since they were permitted to invest in India the investments made by them showed a gradual increase except in the 1998-99. The net inflows averaged around 1.1 bn. per year and large net outflows are rare barring the year of 1998-99 where most South Asian countries were out of favor for a while.


Foreign portfolio investment carries a sense of notoriety of its own because at the first sign of trouble this flows in reverse direction.


The notoriety emanates from the very nature of FII investment - portfolio managers tend to restructure and rebalance their portfolios dynamically across the countries, their primary concern being their portfolio.

Owing to their magnitude of flows, the direction of FII investment flows tends to make or break the fortunes of a market. FII flows to India are less.

Since, it is not statutorily binding on FIIs to make public, the companies in which they are investing in, there is no publicly available information on this aspect.

However, the overall investment that can be made by all FIIs in any company's equity is monitored by Reserve Bank of India; it gives a caution notice, when the overall FII investment level reaches 22 percent in a company.

Subsequently, all purchases have to be done by prior approval of Reserve Bank of India.

From such monitoring reports it can be gauged that the FIIs are market or not.

Here, one has to note that most stocks that figure in institutional investors' portfolios are more or less those securities that comprise the Nifty or Sensex indices. Hence, co-movements between index and the institutional investments are likely.

But, when we use Advances and Declines ratio (ADR hereafter) it captures the direction of entire market in unambiguous terms. Generally advances to declines ratio indicate the breadth of the market.

Hence, we use ADR instead of Nifty or Sensex returns.

In reality, it is not possible to isolate the actions of mutual funds and FIIs on the stock market, since both the category of investors are acting simultaneously hence, the institutional activity is captured by taking the ratio of combined purchases of mutual funds and Fl Is to combined sales of mutual funds and FIIs so if the ratio is >1 means institutions have pumped in money i.e., the market witnessed a net inflow of money while a ratio of <1 indicates there is an outflow of money from the market.
Advertisements
Friends: (0)
Reply With Quote
Related to Foreign Institutional Investors
 

Similar Threads

Thread Thread Starter Forum Replies Last Post
Difference Between Foreign Capital and Foreign Aid Abhijeet S Financial Management ( FM ) 0 September 10th, 2010 05:34 PM
IMPACT OF FOREIGN INSTITUTIONAL INVESTMENT ON INDIAN STOCK MARKET Krishna Prabu Financial Management 6 June 19th, 2010 01:43 PM
Foreign Institutional Investors ross18 International banking and finance 10 April 8th, 2010 02:32 PM
IMPACT OF FOREIGN INSTITUTIONAL INVESTMENT ON INDIAN STOCK MARKET Roshni Bhatia Financial Management 27 April 4th, 2010 04:03 PM
help required regarding FII( foreign institutional investment Prashant Ravindran Financial Management 1 August 20th, 2008 08:16 PM
 

Reply

Bookmarks

Tags
foreign, institutional, investors

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is On
Trackbacks are On
Pingbacks are On
Refbacks are On


» Login
Forgot Password?  New User?
  

» Ads





» Recent Threads

BBM PROJECTS
Last post by Jagruti Shah
7 Hours Ago 10:09 PM
2 Replies
QUESTIONNAIRE on Soft...
Last post by Jagruti Shah
7 Hours Ago 10:07 PM
2 Replies
Service marketing notes ( 1 2)
Last post by Jagruti Shah
7 Hours Ago 10:03 PM
12 Replies
Pest Analysis On Zara
Last post by Jagruti Shah
7 Hours Ago 10:01 PM
1 Replies
List of projects and... ( 1 2 3... Last Page)
Last post by Jagruti Shah
7 Hours Ago 10:00 PM
49 Replies
Famous Inventions!
Last post by Jagruti Shah
8 Hours Ago 09:55 PM
5 Replies
Types of Group...
Last post by Jagruti Shah
8 Hours Ago 09:53 PM
5 Replies
Customer Relationship...
Last post by Jagruti Shah
8 Hours Ago 09:52 PM
1 Replies
Project on Service Tax
Last post by Jagruti Shah
8 Hours Ago 09:50 PM
9 Replies
Accounting Standards......
Last post by Krunal Dhabhi
8 Hours Ago 09:02 PM
5 Replies
INFLATION - ITS CAUSES...
Last post by Krunal Dhabhi
8 Hours Ago 09:00 PM
2 Replies
BEST IAS TOPPERS...
Last post by Krunal Dhabhi
8 Hours Ago 08:59 PM
1 Replies
Full Notes on Company law ( 1 2 3... Last Page)
Last post by Krunal Dhabhi
8 Hours Ago 08:56 PM
30 Replies
get free projects in... ( 1 2 3... Last Page)
Last post by Krunal Dhabhi
9 Hours Ago 08:54 PM
114 Replies
Solution manual on... ( 1 2 3... Last Page)
Last post by Anu Paliwal
9 Hours Ago 08:53 PM
35 Replies

» Projects Helpline

supply chain management
Last post by Swapnil Chormale
9 Hours Ago 07:58 PM
140 topics of TYBMS
Last post by Reena Dapat
1 Day Ago 08:11 PM
TYBMS PROJECT TOPICS...
Last post by Raj Verma
1 Week Ago 07:26 PM
ManagementParadise.com is not responsible for the views and opinion of the posters. The posters and only posters shall be liable for any copyright infringement.


Management Paradise
About Us
Press
Jobs
Contact Us
Kartik Raichura
Legal
Terms & Conditions
Privacy Policy
Disclaimer
Copyrights
Help
Zeitgeist
Support
FAQs
Tour
Feedback
Partners
Follow
Copyright © 2004 - 2013 Management Paradise. Site Developed by Available.co.in