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FPIs investment in November
Why is it in the news ?
- Foreign investors have pumped in nearly Rs 8,285 crore into the Indian capital markets so far this month(November).
- The recent infusion comes following a net outflow of more than Rs 38,900 crore in October, which was the steepest withdrawal in nearly two years.
More in the news
- Foreign portfolio investors (FPIs) had pulled out over Rs 21,000 crore from the capital markets (both equity and debt) in September.
- Before that, they had put in Rs 7,500 crore in July and August.
- The latest inflow attributed to :1. Fall in crude oil prices,2. Recovery in rupee and3. Improvement in the liquidity situation.
- On the global front, escalating trade war tensions between US and China has caused widespread uncertainty in emerging markets.
- This, coupled with increasing interest rates globally, prompted the investors to look for other attractive and safer alternatives.
Foreign Portfolio Investment (FPI)
- FPI is investment by non-residents in Indian securities including shares, government bonds, corporate bonds, convertible securities, infrastructure securities etc.
- The class of investors who make investment in these securities are known as Foreign Portfolio Investors.
- Any equity investment by non-residents which is less than or equal to 10% of capital in a company is portfolio investment. While above this the investment will be counted as Foreign Direct Investment (FDI).
- NRIs doesn’t comes under FPI.
- Foreign Portfolio Investors includes investment groups of Foreign Institutional Investors (FIIs), Qualified Foreign Investors (QFIs) and subaccounts etc.
- FII is an institution who is registered under the Securities and Exchange Board of India (Foreign Institutional Investors) Regulations, 1995.
- QFI is an individual, group or association which is a resident in a foreign country.
Source
The Hindu, Economic Times.