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    Economic Implications of Foreign Portfolio Investments

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    The document discusses the economic implications of foreign portfolio investments in India. It categorizes different financial markets and defines foreign institutional investors that can invest in India. It notes that India is an attractive destination due to its robust growth, young population, and developed banking system. However, foreign investments also face roadblocks like lack of stability and clear frameworks. The document analyzes the impact of foreign investments on stock prices, foreign exchange, GDP, and balance of payments and charts their growth over time. It concludes by noting both benefits and risks of overdependence on foreign capital.

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    Economic Implications of Foreign Portfolio Investments

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    dharmesh_k91
    41 views18 pages
    The document discusses the economic implications of foreign portfolio investments in India. It categorizes different financial markets and defines foreign institutional investors that can invest in India. It notes that India is an attractive destination due to its robust growth, young population, and developed banking system. However, foreign investments also face roadblocks like lack of stability and clear frameworks. The document analyzes the impact of foreign investments on stock prices, foreign exchange, GDP, and balance of payments and charts their growth over time. It concludes by noting both benefits and risks of overdependence on foreign capital.

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    Foreign portfolio investment

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    The document discusses the economic implications of foreign portfolio investments in India. It categorizes different financial markets and defines foreign institutional investors that can invest in India. It notes that India is an attractive destination due to its robust growth, young population, and developed banking system. However, foreign investments also face roadblocks like lack of stability and clear frameworks. The document analyzes the impact of foreign investments on stock prices, foreign exchange, GDP, and balance of payments and charts their growth over time. It concludes by noting both benefits and risks of overdependence on foreign capital.

    Copyright:

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    Flag for inappropriate content
    Download as pptx, pdf, or txt
    41 views18 pages

    Economic Implications of Foreign Portfolio Investments

    Uploaded by

    dharmesh_k91
    The document discusses the economic implications of foreign portfolio investments in India. It categorizes different financial markets and defines foreign institutional investors that can invest in India. It notes that India is an attractive destination due to its robust growth, young population, and developed banking system. However, foreign investments also face roadblocks like lack of stability and clear frameworks. The document analyzes the impact of foreign investments on stock prices, foreign exchange, GDP, and balance of payments and charts their growth over time. It concludes by noting both benefits and risks of overdependence on foreign capital.

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    of 18

    ECONOMIC IMPLICATIONS OF

    FOREIGN PORTFOLIO INVESTMENTS

    Presented By: Jaydeep Italia – 18


    Paritosh Gajjar – 30
    Viral Jobanputra – 40
    Rishabh Khanna – 49
    Dharmesh Kothari – 52
    Sharukh Lakhani - 54
    CATEGORISATION

    FINANCIAL MARKETS

    CAPITAL DERIVATIVES CURRENCY


    MARKETS MARKET MARKET
    FOREIGN INSTITUTIONAL INVESTORS
    (FII’S)

    “ An institution that is a legal entity established


    or incorporated outside India proposing to make
    investments in India only in securities . ”
    - SEBI
    WHO CAN BE FII?
    BANKS
    INSURANCE COMPANIES
    MUTUAL FUNDS
    HEDGE FUNDS
    ASSET MANAGEMENT COMPANIES
    PENSION FUNDS
    WHY INDIA?
     ROBUST DOMESTIC GROWTH STORY

     SECOND FASTEST GROWING ECONOMY

     YOUNG POPULATION

     WELL DEVELOPED BANKING SYSTEM


    ROAD BLOCKS IN FII
    INVESTMENT

    LACK OF POLITICAL STABILITY

    LACK OF ECONOMIC STABILITY

    POOR INFRASTRUCTURE

    INABILITY TO FORMULATE CLEAR FRAMEWORK


    FOR FII’S
    FII FLOW CYCLE
    IMPACT OF FII’S ON:

    1.SENSEX
    2.FOREIGN EXCHANGE
    3.GDP(GROSS DOMESTIC PRODUCT)
    4.BALANCE OF PAYMENTS
    FII NET INFLOWS
    1
    87986
    80914
    8
    71701

    42048 41664 40588


    4 35162

    2 13299
    10803.6
    6791.2
    3853.8 6200 6686 6510
    2595.1 3677
    -1479
    0

    -4
    -41216

    -6
    25000
    SENSEX

    20000 20000

    17500

    15000
    14000
    13000

    10000
    9000 9000

    6600
    5600
    5000 5000
    3900 3650 3972 3600
    3395 3055
    2745 2950
    2100

    0
    1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
    FII NET INFLOWS
    1
    87986
    80914
    8
    71701

    42048 41664 40588


    4 35162

    2 13299
    10803.6
    6791.2
    3853.8 6200 6686 6510
    2595.1 3677
    -1479
    0

    -4
    -41216

    -6
    1400 INDIA'S GDP ( in $ Bn)

    1200

    1000

    800

    600

    400

    200

    0
    1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
    BALANCE OF PAYMENTS
    400000
    369689

    300000

    200000
    163634
    143994
    115907
    100000 82037
    56592 65896 64286

    18245 27770 27662

    0
    1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

    -100000
    -97000

    -200000
    FII PORTFOLIO
    TELECOM UTILITIES
    8% 5%
    CONCUMER
    MATERIALS GOODS
    10% 10%

    IT ENERGY
    10% 13%

    INDUSTRIALS
    14%
    FINANCIALS
    28%

    HEALTHCARE
    4%
    CONCLUSION
    Overdependence is harmful

     Need to develop internal capital


    market

    Speculation
    THANK YOU

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