Posted by
Chartered SMohit
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| The Foreign Money: What how and why? |
| Ownership | Without | Control |
| Foreign
Portfolio
Investment
also known as
FII Investments |
| | Top 10 Flls In India Based On M-Cap As On Sept '05 | Market Capitalization of Investments as in December 2005 in US $ Billion* | | HSBC | 3.12 | | Morgan Stanley | 2.42 | | Merrill Lynch | 2.31 | | Goldman Sachs | 2.26 | | CLSA | 2.10 | | Aberdeen | 1.96 | | Copthall | 1.85 | | Citi | 1.81 | | Genesis | 1.80 | | Capital | 1.71 |
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*Based on holdings of more then 1% and above in Individual companies.
Sources Exchanges and company web sites.
| | The top 10 investments by Foreign Institutional
Investors (FII) in India | | Companies | Investment value in Billion$ - December 05 | Market cap* as on Jan 04 2006 | Trailing PE as on January 04, 2006* | | Infosys | 7.90 | 83790 | 38.6 | | Reliance Industries | 6.30 | 129541 | 14.1 | | Bharti Tele | 2.60 | 65198 | 29.7 | | HDFC | 3.20 | 30962 | 27.4 | | ONGC | 2.80 | 169108 | 11.5 | | Satyam | 2.00 | 24752 | 29.3 | | HDFC Bank | 2.30 | 22889 | 30.3 | | SBI | 1.60 | 48322 | 10.5 | | BHEL | 1.60 | 35086 | 30.3 |
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Consequences of FII
Economy -
Has no effect on the GDP -
Inflationary
Stocks
|
| Ownership with control |
| Foreign
Direct
Investment
(FDI) |
| | The FDI hot spots! | | Asian Investors | European Investors | North American investors | | China | China | China | | India | India | India | | Hong Kong | Poland | United States | | Australia | Russia | United Kingdom | | Vietnam | United States | Brazil |
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Consequences of FDI
Economy -
The GDP expands -
Large Inflows of Foreign Money comes into the country causing an increase in the Foreign Exchange Reserves of the R.B.I -
Greater variety of Goods and Services are made available to domestic consumers -
An increase in FDI generates employment as there is an increase in manufacturing activity -
Small scale traders and manufacturers lose out in the short term
Stocks
-
The leaders benefit while the 2nd tier companies lose out -
Stocks gain exponentially -
The country is made an outsourcing hub -
Domestic companies making placement to foreign majors have access to better technologies of production and also to newer markets -
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