Fiis and Its Growth in India
FIIS AND ITS GROWTH IN INDIA
ABSTRACT The developing countries especially the emerging market economies opened up by unleashing capital controls to attract foreign capital from more than a decade in addition to domestic capital to stimulate economic growth and output. Since then, portfolio flows from foreign institutional investors (FII) have emerged as a major source of capital for emerging market economies (EMEs) such as Brazil, Russia, India, China and South Africa. This had increased the competition among the EMEs in attracting more FIIs. In the last decade India has recorded a net portfolio flows of US$ 106 .In spite of the substantial growth in FIIs in India it had also been highly volatile and unexpected at times due to various reasons viz., changes in government policies, economic recession, political in stability, fluctuation in stock market/currency value etc.,. Therefore it becomes apparent to study the trends of FII inflows in India, to understand the reason behind its lags and follow the growth strategies when it has outperformed.
Keywords: Foreign Institutional Investors (FII), Portfolio Investment, Emerging Market Economies (EMEs).
Dr. Raechel Nancy Philip, Principal, Tirupur Kumaran College of Arts & Science for Women, Tirupur.
Mrs. V. B.Mathipurani, Research Scholar, Department of International Business, Tiruppur Kumaran College of Arts & Science for Women, Tirupur.
FIIS AND ITS GROWTH IN INDIA
Introduction
Though there were many forms of restriction in foreign institutional investments inflow in many countries including India, from the early nineties it has started to attract FII inflows significantly.Portfolio investments brought in by FIIs have been the most dynamic source of capital to emerging markets from the year 1992 after the liberalization of the policies in India. The firms were interested in attracting foreign capital because it helps to create liquidity for both the firm’s stock and the stock market in
ABSTRACT The developing countries especially the emerging market economies opened up by unleashing capital controls to attract foreign capital from more than a decade in addition to domestic capital to stimulate economic growth and output. Since then, portfolio flows from foreign institutional investors (FII) have emerged as a major source of capital for emerging market economies (EMEs) such as Brazil, Russia, India, China and South Africa. This had increased the competition among the EMEs in attracting more FIIs. In the last decade India has recorded a net portfolio flows of US$ 106 .In spite of the substantial growth in FIIs in India it had also been highly volatile and unexpected at times due to various reasons viz., changes in government policies, economic recession, political in stability, fluctuation in stock market/currency value etc.,. Therefore it becomes apparent to study the trends of FII inflows in India, to understand the reason behind its lags and follow the growth strategies when it has outperformed.
Keywords: Foreign Institutional Investors (FII), Portfolio Investment, Emerging Market Economies (EMEs).
Dr. Raechel Nancy Philip, Principal, Tirupur Kumaran College of Arts & Science for Women, Tirupur.
Mrs. V. B.Mathipurani, Research Scholar, Department of International Business, Tiruppur Kumaran College of Arts & Science for Women, Tirupur.
FIIS AND ITS GROWTH IN INDIA
Introduction
Though there were many forms of restriction in foreign institutional investments inflow in many countries including India, from the early nineties it has started to attract FII inflows significantly.Portfolio investments brought in by FIIs have been the most dynamic source of capital to emerging markets from the year 1992 after the liberalization of the policies in India. The firms were interested in attracting foreign capital because it helps to create liquidity for both the firm’s stock and the stock market in
References: 2. Froot, Kenneth A., Paul G. J. O’Connell, and Mark S. Seasholes. 2001. “The Portfolio Flows of International Investors.” Journal of Financial Economics 59 (1): 151–93. 3. Gordon, James, and Poonam Gupta. 2003. “Portfolio Flows into India: Do Domestic Fundamentals Matter?” IMF Working Paper No. 03/20, January. 6. Stanley Morgan (2002), “FII’s influence on Stock Market”, Journal: Journal of impact of Institutional Investors on ism. Vol 17. Publisher: Emerald Group Publishing Limited. 7