Foreigners Investing and Market volatility!
A finance ministry official says “If foreigners are allowed to invest directly in India, volatility will go down in Indian markets”. I am completely unable to understand this.
Like I cannot understand what is wrong with Intra day or Intra month volatility! Markets have always been volatile – the question is how volatile that is all. We should also stop this excessive ‘foreign’ syndrome. The hangover of the gora just refuses to go away.
Let us look at FDI in retail. We allowed FDI in banking – we now have ONLY foreign banks in India – other than the PSU banks that is. Has it helped in banking? We have had FDI in mutual funds – at least for the past 20 years – has it helped in penetrating the rural markets? We have FDI in life and general insurance….same answer is it not? L O L.
Then we thought we need FDI in retail (I guess this was a ploy to hold the real estate price high) – but somebody said it was to tackle the runaway valuation of the US $!!
Now imagine the foreigner wanting to invest in India. He will want data regarding say the last 10 year’s working (maybe in XBRL format), he will want some independent research reports (we do not have them at all), he will want to open a brokerage account (forget opening, I am unable to get Icici direct to activate my wife’s brokerage account for the past 12 months!)…OMG it requires some effort!
First increase the number of investors in India (I am not sure whether we have 100,000 investors or 1,000,000 investors – Sucheta Dalal vs Sebi!!) – whatever the figure, we need to double it a couple of times at least. Once we do that we can get the gora…
first let the Indians invest in India, then the gora can come…what is the hurry??
Ashal Jauhari
Dear Subra, Just yesterday, incidently open the CNBC Awaj during News Hour (around 9PM), on this very same issue of allowing foreign retail investors, a gentleman (avoiding to use the world – expert) was saying something like – It seems another channel provided to convert Black money of India, stashed abroad, into White one.
I do not know anything regarding all this foreign retail participation but the point mentioned by the person was an interesting one.
Your viwews please on this dear Subra.
Thanks
Ashal
subra
do not agree at all. The NRI window was always open….so whats new?
Suresh
Its tough having independent thoughts. Its tough because we have to take responsibility for our actions. You cannot take a “Big 4” opinion and CYA. Or claim you went with the best and still it did not work.(usually MNC = Best).When you have been a slave for a 1000 years its difficult to think ‘independently’. And of course ‘gora=superior’.
One real estate development firm is using an Australian consultant to build faster (at massive costs) whilst locally there is a fly-ash brick technology which provides better solution at a fraction of the cost.
Management justification – brand value.LoL.
pravin
indians obviously DONT want to invest in the stock markets for many reasons a)not much disposable income for the average indian b)doesnt trust the markets (nothing wrong with that)
if foreigners want to invest why not? does arbitrary political jurisdiction have anything to do with the fundamentals of the companies that they invest in?
you speak of ICICI being foreign owned.so be it.explain why it is bad for the indian consumer? without ICICI we would not have internet banking and other consumer friendly services.
FDI etc -all are supposed to be for the benefit of the consumer and not the banking (industry) or sector in which investment is allowed.