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FPI inflows
Why is it in the news ?
- Amid clarity on government spending plans and positive sentiments, Foreign investors poured in close to Rs 17,220 crore on a net basis into Indian equities in February this year.
- This is the highest since November 2017.
- Between February 1 and March 22, 2019, the FPIs have pumped in a net of Rs 46,000 crore in the Indian equities.
Concept
- Foreign investors have turned into net buyers in February mainly on account of clarity on government spending post budget and value buying in several pockets.
- As per some experts, the ongoing rise in equity markets and rupee gains against the dollar are likely to continue due to the FPI inflow.
- The overall surge in FPI inflows from February to March has lifted the Sensex at the BSE by 1,908 points or 5.3%.
- The rupee, in the meantime, has gained Rs 2.13 against the dollar as it has strengthened from a level of 71.08 against the dollar on January 31 to now trade at around 69 per dollar.
Concepts:
- Foreign Portfolio Investment (FPI) is investment by non-residents in Indian securities including shares, government bonds, corporate bonds, convertible securities, infrastructure securities etc.
- 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 like a mutual fund, insurance company, pension fund 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
Indian Express.