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fdi or foregin direct investment is bought in by the investors under the rules as laid down in fera and fema... these investment are bought in by the investors with a long term horizon say anything between 5-10 years and even more(hero Honda is classic example) . They bring in much need working capital, cash to run industry.Along with this they also bring in expertise and knowledge to run industry. This all helps our industry to grow in terms of sales,profits, goodwill. this in turn increases earnings per share and this is sought by the investors. Hence they purchase the shares there by liifting our sensex or nifty. it also helps in macro environment that is we have higher GDP, higher standard of living, and this in turn leads to better consumption in economy. This all factors make our nation a favourable destination for profitable investments. This is were fiis (foregin institutional investors ) comes. fii are short term investors say with investment horizon of 1-2 years. They either have entry through pn(participatory notes) or through brokers, or can directly invest by registrating themselves.
fiis see the domestic condition as well as external factors before investing in companies. they then either make equity infusion with a lock in period of 1-2years and after words exit. Thus industry instead of borrowing get money in form of equity infusion there by saving interest outgo. if company performs well in all parameters fiis may also become fdis and would exit much after stipulated time......hence fiis and fdis are investors who bring in necessay cash with a hope to earn decent profits and on the basis of profits the future earnings are discounted and speculators play in these shares thereby caousing movements in the market.
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Recent trends in fdi and its impact on Indian stock market?
recent trends in fdi and its impact on Indian stock market
How is relation between FDI and FII?
FII generally means portfolio investment by foreign institutions in a market which is not their home country. These institutions are generally Mutual Funds, Investment Companies, Pension Funds, Insurance House's is a short term benefit to the country and the rules and regulations to enter the Indian Market are not much, the fluctuations in the stock market is generally due to the FII Investments , cause the rules are eased the investor can leave the market at Any point of time. There investments are in the stock market whereas FDI is generally a long term commitment to a particular company in a sector in terms of equity investment by some foreign entity. Therefore we could see Lehman investing 15% in say Unitech, now that would be FDI. However if Lehman has bought shares of Unitech though secondary markets (stock trading market) it would have been an FII. FII funding is a paramount maker of stock markets and there selling or buying moves the stock in a day. FDI also have to follow a high rules and regulations to enter the market and the subs. given to such players are huge in term of taxes .FDI have long term commitment and hence we see flight of capital in terms of FII outflows but not generally in FDIs.The Economy high and low depends on the FDI's Investment where as the Stock mark fluctuations are generally because of FIIForeign direct investment (FDI) flows into the primary market whereas foreign institutional investment (FII) flows into the secondary market, that is, into the stock market.All other differences flow from this primary difference. FDI is perceived to be more beneficial because it increases production, brings in more and better products and services besides increasing the employment opportunities and revenue for the Government by way of taxes. FII, on the other hand, is perceived to be inferior to FDI because it only widens and deepens the stock exchanges and provides a better price discovery process for the scrips.Besides, FII is a fair-weather friend and can desert the nation which is what is happening in India right now, thereby puling down not only our share prices but also wrecking havoc with the Indian rupee because when FIIs sell in a big way and leave India they take back the dollars they had brought in.
Definition of FDI?
FDI stands for Foreign Direct Investment. It is when you directly invest in a foreign company or expand your operations to that country. It does not include the buying of bonds or stock.
What is the FDI cap on investment in Infrastructure Company in the Securities Market in India?
26%
Is there any difference between fdi and direct investment?
If the direct investment is foreign, then no, since FDI stands for 'foreign direct investment'.
What is the relationship between fdi and retail?
Those opposing FDI in the retail sector argue that a large number of small and medium retail traders will lose their livelihood. But they forget one important thing - that there is no quality control over the goods we get from them. The consumers are at their mercy. Milk, edible oils, pulses and cereals are all adulterated. When retail giants of international repute enter the market, unscrupulous traders will either lose their business or have to assure quality
What is the difference between FDI and FII?
Portfolio investors: buy stocks or bonds in foreign country's and foreign direct investment: Investment that establishes a lasting interest in another country. SK(APEX) FII is investing into financial markets of India. Majorly secondary market. FDI is acquisition of physical assets or capital in INdia. It leads to change in management, transfer of technology, increase in production etc. 1. FDI is an investment that a parent company makes in a foreign country. On the contrary, FII is an investment made by an investor in the markets of a foreign nation. 2. FII can enter the stock market easily and also withdraw from it easily. But FDI cannot enter and exit that easily. 3. Foreign Direct Investment targets a specific enterprise while FII targets the capitak markets of foreign country. 4. The Foreign Direct Investment is considered to be more stable than Foreign Institutional Investor 5. FDI flows into the primary market, the FII flows into secondary market. 6. FIIs are short-term investments, the FDI's are long term. FDI means foreign direct investment. FDI outflow means withdrawal of investments from a country is more than new investment, i.e.. more money is taken out than invested at a particular time. Portfolio investors: buy stocks or bonds in foreign country's and foreign investment: is an investment in an enterprise or buisness that operates outside the investors country.
Advantages and disadvantages of FDI?
FDI can be of benefit for strengthening ties between the countries involved. It can also be disadvantageous, as there may be political crisis in one of the countries, causing loss of business.
Objective of fdi?
The objective of Foreign Direct Investment (FDI) is to promote economic growth, transfer technology and expertise, create job opportunities, and improve infrastructure in a host country. FDI also helps in increasing productivity, fostering competition, and boosting innovation in the local market.
When was FDi magazine created?
FDi magazine was created in 2001.
What has the author Chang-Soo Lee written?
Chang-Soo Lee has written: 'The effect of labor market institutions on FDI inflows'
What is the fullform of FDI?
The Full Form of FDI isForeign direct investment
