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<keyword id="6389755" type="General" weightage="20" keywordseo="foreign-portfolio-investors" source="Orion">Foreign Portfolio Investors</keyword> (FPIs) have infused about Rs 12,400 crore into the Indian debt markets in November so far, making it the highest <keyword id="45422" type="General" weightage="20" keywordseo="inflow" source="Orion">inflow</keyword> in more than two years, on attractive yields offered by the country's debt. The inclusion of Indian G-Sec in the JP Morgan Government Bond Index Emerging Markets has spurred foreign fund participation in the Indian bond markets, market experts said. FPIs have been bullish on Indian debt since the beginning of 2023 and have invested throughout the year, except March, when they had pulled out Rs 2,505 crore, data with the depositories showed. With the latest inflow, the <keyword id="2609447" type="General" weightage="20" keywordseo="net-investment" source="Orion">net investment</keyword> by FPIs into debt reached Rs 47,900 crore so far this calendar year. According to the data, overseas investors put in a net amount of Rs 12,400 crore into the <keyword id="144818" type="General" weightage="20" keywordseo="debt-market" source="Orion">debt market</keyword> this month (till November 27). This was the highest inflow since September 2021, when they had poured Rs 12,804 crore. This came following a net investment of Rs 6,382 crore in October. Indian debt is relatively attractive compared to debt in other emerging markets, and it offers a relatively high <keyword id="6355374" type="General" weightage="20" keywordseo="yield" source="Orion">yield</keyword> compared to debt in developed markets, Bhuvan Rustagi, COO and Co-Founder, of Per Annum and Lendbox, said. Apart from equities, FPIs pumped in a net amount of Rs 378 crore in the equity markets during the period under review. This came after FPIs dumped equities worth Rs 24,548 crore in October and Rs 14,767 crore in September. "The better-than-expected decline in inflation in the US around mid-October has given the market confidence to assume that the Fed is done with a rate hike. Consequently, the US bond yields have declined sharply with the 10-year benchmark bond yield correcting from 5 per cent in mid-October to 4.4 per cent now. This has forced the FPIs to slow down their selling," V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said. Overall, the cumulative trend for 2023 remains healthy, with FPIs pouring in Rs 96,340 crore so far this calendar year.

FPIs investment in debt market hits 2-yr high at Rs 12,400 crore in Nov

<ul><li>Between April and June 2018, foreign investors withdrew ₹610 billion from India’s capital markets. </li><li>However, a renewed confidence in India’s <keyword id="34412" type="ORGANIZATION" weightage="20" keywordseo="economy">economy</keyword> has culminated in a back-to-back monthly inflows in July (₹23 billion) and August (₹52 billion). </li><li>The rebound follows an improvement in macro-economic <keyword id="42546" type="PERSON" weightage="20" keywordseo="Growth">growth</keyword> indicators and corporate earnings as well as a positive report from the IMF in early August. </li></ul>In terms of foreign portfolio investment, 2018 hasn’t been a great year for India. In the first six months of the year, the country experienced its highest level of investment outflows <a href="https://economictimes.indiatimes.com/markets/stocks/news/fpis-outflow-hits-10-year-high-at-rs-48000-crore-in-h1-2018/articleshow/64813079.cms">in ten years</a>, largely due to the fact that investors withdrew ₹610 billion from April to June. The reasons for this had to do with a pessimistic view of India’s short-term growth trajectory, as indicated by a depreciating currency, a widening fiscal deficit, rising oil prices and concerns of a global trade war. A gradual tightening of interest rates in the US has also rerouted inflows back to this safe haven. However, in the last few months, it seems that these worries have subsided slightly. A renewed confidence in India’s economy has culminated in a back-to-back monthly inflows in July and August. Following a net positive flow of ₹23 billion in July, foreign portfolio investors pumped ₹52 billion into India’s capital markets in August - 65% of which went into bonds and <keyword id="44647" type="ORGANIZATION" weightage="20" keywordseo="debt">debt</keyword> instruments, with the rest going into the stock market. The rebound follows an improvement in macro-economic growth indicators and corporate earnings as well as a positive report from the <keyword id="6366068" type="ORGANIZATION" weightage="20" keywordseo="international-monetary-fund">International Monetary Fund</keyword> (IMF) in early August. The IMF gave its stamp of approval to reforms such as improvements to the GST regime and easing of <keyword id="46757" type="ORGANIZATION" weightage="20" keywordseo="foreign-investment">foreign investment</keyword> protocols. It maintained its medium-term growth forecast for India at 7.8%, which will make it the world’s fastest-growing major economy. The reversal in inflows also coincides with a bull run in India’s <keyword id="6391506" type="UNKNOWN" weightage="20" keywordseo="Equity">equity</keyword> markets. The Sensex has been on a record spree since July as domestic institutional investors have filled in the demand gap caused by the exodus of foreign investors. However, while a rebound in foreign portfolio investments bodes well for India’s short-term prospects, the quantity of inflows still aren’t sizeable to sufficiently stem the rupee’s decline. However, this is also a symptom of a larger currency crisis in emerging markets, most notably Turkey and Argentina, and a renewed interest in safe haven markets. While there is a still a significant amount of wariness among foreign investors, India’s recent quarterly growth figures - an 8.2% GDP growth in Q1 - and a burgeoning market for stressed assets could result in larger inflows in September. In addition, the Indian government’s move to further ease the foreign investment process by introducing <a href="https://www.business-standard.com/article/economy-policy/govt-makes-fpi-s-job-easier-introduces-single-form-for-foreign-investors-118082600172_1.html">a single common application form</a> will make it easier for foreign investors to register themselves and invest in debt and equity instruments.

After a terrible start to the year, India’s foreign investment inflows have finally rebounded

<ul><li><keyword id="3658" type="General" weightage="50" keywordseo="india" source="Orion">India</keyword>'s current account deficit widens to 4.4% of GDP in Q2, as per data released by the <keyword id="50847" type="General" weightage="50" keywordseo="reserve-bank" source="Orion">Reserve Bank</keyword> of India. </li><li>The current <keyword id="52599" type="General" weightage="80" keywordseo="cad" source="Orion">CAD</keyword> of $36.4 billion in July-September 2022-23 is up from $18.2 billion (2.2% of GDP) in the first quarter of the fiscal. </li><li>As per <keyword id="30067" type="General" weightage="100" keywordseo="rbi" source="Orion">RBI</keyword>'s <keyword id="678734" type="General" weightage="50" keywordseo="financial-stability-report" source="Orion">Financial Stability Report</keyword>, the steady net inflows of foreign direct investment and the resumption of portfolio flows since July 2022 indicate that the CAD will be comfortably financed. </li></ul>Widening trade gap pushed up the country's current account deficit to USD 36.4 billion or 4.4 per cent of the GDP in the second quarter of the current fiscal, as per data released by the Reserve Bank on Thursday. India's current account balance recorded a deficit of USD 36.4 billion in July-September 2022-23, up from USD 18.2 billion (2.2 per cent of GDP) in the first quarter of the fiscal and USD 9.7 billion (1.3 per cent of GDP) in the year ago period. "Underlying the current account deficit in Q2:2022-23 was the widening of the merchandise trade deficit to USD 83.5 billion from USD 63 billion in Q1:2022-23 and an increase in net outgo under investment income," the RBI said. It also said the current account deficit for April-June quarter of 2022-23 has been revised downwards due to downward adjustment in Customs data. "India recorded a current account deficit of 3.3 per cent of GDP in H1:2022-23 on the back of a sharp increase in the merchandise trade deficit, as compared with 0.2 per cent in H1:2021-22" the RBI added. Services exports reported a growth of 30.2 per cent on a year-on-year (y-o-y) basis on the back of rising exports of software, business and travel services. Net services receipts increased both sequentially and on a y-o-y basis. Meanwhile, the RBI's Financial Stability Report said the steady net inflows of foreign direct investment and the resumption of portfolio flows since July 2022 indicate that the CAD will be comfortably financed. Net outgo from the primary income account, mainly reflecting payments of investment income, increased to USD 12 billion from USD 9.8 billion a year ago, as per a statement on 'Developments in India's Balance of Payments (BoP) during the Second Quarter (July-September) of 2022-23'. "Private transfer receipts, mainly representing remittances by Indians employed overseas, amounted to USD 27.4 billion, an increase of 29.7 per cent from their level a year ago," the statement added. Also, net foreign portfolio investment recorded inflows of USD 6.5 billion, up from USD 3.9 billion during the second quarter of 2021-22. On BoP during April-September 2022 (H1:2022-23), it said net invisible receipts were higher on a y-o-y basis on account of higher net receipts of services and private transfers. Net FDI inflows at USD 20 billion in the first half of 2022-23 were comparable with USD 20.3 billion in the similar period of 2021-22. Portfolio investment recorded a net outflow of USD 8.1 billion as against an inflow of USD 4.3 billion in H1 of 2021-22. In the first half of 2022-23, there was a depletion of USD 25.8 billion from the foreign exchange reserves (on a BoP basis). The depletion of foreign exchange reserves was to the tune of USD 30.4 billion in July-September quarter of 2022-23 as against an accretion of USD 31.2 billion in the year-ago period.

India's current account deficit widens to 4.4% of GDP in Q2 due to high trade deficit: RBI data

Mumbai, Dec 31 () India's current account deficit (CAD) narrowed to 0.9 per cent of GDP, or USD 6.3 billion, in the September 2019 quarter, on account of lower trade deficit.
 It had stood at 2.9 per cent of gross domestic product (GDP), or USD 19 billion, in the corresponding quarter of 2018-19.
 On a sequential basis, CAD had printed 2 per cent of GDP, or USD 14.2 billion, in the June 2019 quarter.
 The current account deficit is the difference between foreign exchange inflows and outflows.
 "The contraction in the CAD was primarily on account of a lower trade deficit at USD 38.1 billion as compared with USD 50 billion a year ago," the Reserve Bank of India (RBI) said in a release on Tuesday.
 During the first half of the current financial year, CAD narrowed to 1.5 per cent of GDP from 2.6 per cent in the corresponding period in 2018-19, on the back of a reduction in the trade deficit, which shrank to USD 84.3 billion as compared with USD 95.8 billion a year ago.
 The trade deficit is the gap between the value of imports and exports.
 The balance of payment stood at USD 5.12 billion in the second quarter and USD 19.10 billion during the first half of this fiscal.
 Net foreign direct investment stood at USD 7.4 billion, almost the same level as in second quarter of 2018-19.
 Helped by net purchases in the debt market, foreign portfolio investment recorded a net inflow of USD 2.5 billion in the September 2019 quarter, against an outflow of USD 1.6 billion a year ago.
 In the April-September 2019 period, while the net FDI inflows were at USD 21.2 billion, portfolio investment recorded a net inflow of USD 7.3 billion.
 Net services receipts increased 0.9 per cent on in July-September on a y-o-y basis, on the back of a rise in net earnings from computer, travel and financial services, the RBI said.
 In the second quarter of 2019-20, private transfer receipts, mainly representing remittances by Indians employed overseas, rose to USD 21.9 billion, an increase of 5.2 per cent as against a year ago.
 The net inflow on account of external commercial borrowings to the country was USD 3.2 billion in the second quarter as compared with USD 2 billion in corresponding period of the previous financial year.
 There was a growth of USD 5.1 billion in the foreign exchange reserves in the September 2019 quarter, compared with a depletion of USD 1.9 billion a year ago.
 During the first half of 2019-20, there was an accretion of USD 19.1 billion of the foreign exchange reserves, the RBI said. HV HRS

CAD narrows to 0.9 pc of GDP in Sept quarter on lower trade deficit: RBI

<div class="image-container float_right"><div class="image"><a href="http://www.youtube.com/watch?v=eQ-XGoaJaug&amp;feature=youtu.be">Fung Global Institute</a></div></div>Great stuff here from <keyword id="1762493" type="PERSON" weightage="60" keywordseo="Richard-Koo">Richard Koo</keyword> of Nomura, who weighs in on the recent selling in emerging market currencies (and equities and debt).
His take: This is the price <keyword id="6359891" type="COMPANY" weightage="60" keywordseo="emerging-markets">emerging markets</keyword> are paying for not being more vigilant about hot money rushing into their economies after the Fed announced QE after the US crisis. The emerging market, he argues, could have preventing the big rush of foreign cash through prudent measures, but that they opted not to take any pain, and now they're paying the price for going the easy route.
He concludes that we're now in for a "tumultuous new era" for emerging markets as QE gets unwound.
...the recent announcements would not have been necessary if these countries had taken advantage of these measures to restrict capital inflows from the US. They did not do so probably because restricting capital inflows is extremely unpopular. In nations attracting foreign capital, asset prices rise, people feel richer, companies are able to obtain low-cost funding, and inflation tends to be low with a stronger currency. Essentially everyone is happy but exporters, which suffer from a stronger currency. It takes a courageous policymaker to spoil that pleasant environment with capital controls, even if it is necessary for stable, longer-term economic growth. Therefore, the authorities typically preserve the status quo, in which “everyone is happy.”
 Recent turmoil in emerging economies marks opening of tumultuous new era
Taiwan’s central bank has traditionally been quick to check on and if necessary restrict capital inflows, making its governor, Perng Fai-nan, an unpopular figure at certain foreign financial institutions. But it was only because the authorities kept such inflows in check that the Taiwanese economy escaped from the 1997 Asian currency crisis largely unscathed.
The lesson for emerging economies today is that in a world in which the industrialized economies are free to engage in quantitative easing at will, local authorities need to have the courage to restrict capital inflows or stop them altogether. It should also be remembered that the recent rise in US interest rates occurred simply because Mr. Bernanke said the Fed was considering scaling back its bond purchases. If the Fed were to actually discontinue its purchases under QE3 or sell the bonds in its portfolio, the resulting increase in rates would likely be much larger. In that sense, both the US and the emerging economies that will be affected as quantitative easing is wound down need to prepare themselves for a tumultuous era.

You Searched For "foreign portfolio inflows" and got 5 results

FPIs investment in debt market hits 2-yr high at Rs 12,400 crore in Nov

PTI

After a terrible start to the year, India’s foreign investment inflows have finally rebounded

Dilsher Dhillon

India's current account deficit widens to 4.4% of GDP in Q2 due to high trade deficit: RBI data

PTI

CAD narrows to 0.9 pc of GDP in Sept quarter on lower trade deficit: RBI

PTI

RICHARD KOO: Emerging Markets Are In For A 'Tumultuous New Era'

Joe Weisenthal

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