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What do foreign investors want?

This article was posted on Dec 17, 2013 and is filed under Market News

It is a common practice in media to gauge the behaviour of the foreign institutional investors (FIIs) from the numbers put out by the exchanges and regulators. The data typically includes numbers of total purchases by FIIs on a given day, total sales and an aggregate number netting off the sales and purchases.

Based on this number, it is concluded that the FII mood was positive or negative as the case may be. The mathematical possibility of a single large transaction skewing the numbers is almost always overlooked, since the number of buyers or sellers on a given day are not available.

Despite media and regulatory mechanisms to bunch these players under the FII umbrella, they remain a heterogeneous group with diverse interests. It is not very often one see them talking in unison and through a forum.

Last year, Indian government put forward its proposal on General Anti-Avoidance Rules (GAAR). The move, seen as a common threat, united the foreign entities like never before and Asia Securities Industry and Financial Markets Association (Asifma) emerged as the voice of foreign investors and represented them in discussions with government.

Though it is not recognised as an official FII mouthpiece, it is better than the other barometers of FII sentiment we have. Asifma recently published a white paper titled ‘Asia’s capital markets: strategies for sustained growth.’

For more visit: Business Standard

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