Tag: Foreign Investment
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SWFs as FIIs; Other Amendments to FII Regulations
SEBI has announced a fairly detailed set of amendments to the SEBI (Foreign Institutional Investors) Regulations, 1995. One of the key amendments relates to the recognition of sovereign wealth funds (SWFs) as a category of investors eligible to invest into the Indian markets as FIIs. This marks a significant move because it makes clear the
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Foreign Currency Borrowings: FCEBs and ECB
In an earlier post, we had analysed the notification of the Government of India permitting the issuance of Foreign Currency Exchangeable Bonds (FCEBs). The Reserve Bank of India (RBI) was expected to prescribe detailed guidelines on the mechanism for the issuance of FCEBs. It is now reported in LiveMint that the detailed guidelies would be
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Bharti-MTN: Structural Problems
The proposed deal between Bharti and MTN to combine their businesses fell through over the weekend. Although the principal reason for the fallout appears to be disagreement over who would control the combined entity, that was aided by problems with structuring the deal from a regulatory perspective. As The Economic Times reports: “In addition, there
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Regulating Hedge Funds
I have uploaded an abstract of a working paper titled Analysing India’s Approach to Hedge Fund Regulation on SSRN, which is reproduced below: “Hedge funds tend to employ aggressive investment strategies, and they highly leverage their funds. While hedge funds infuse liquidity into the financial markets and enhance market efficiency, they also engage in complex
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Miscellaneous: Commodities futures, FDI, Exchange-traded funds
The following are some key developments in the corporate sector over the last couple of days that are worth noting: 1. Commodities FuturesWe had earlier discussed on this blog the preliminary findings of the Expert Committee under the chairmanship of Dr. Abhijit Sen, which failed to find a clear causation between commodity futures and the
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SWFs and Capital Flows
The Indian Government’s latest position on sovereign wealth funds (SWFs) can be gathered from a recent speech delivered by the Governor of the Reserve Bank of India, Dr. Y.V. Reddy at a session on ‘The Role of Government-owned Investment Vehicles in Global Capital Flows’ in the International Capital Markets and Emerging Markets Roundtable held at
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Foreign Investment in the Small Scale Sector
The small scale sector has continued to receive protection from the Government when it comes to foreign investment, despite liberalisation pervading in the economy generally. It is time to alter that position, argues an editorial in today’s Financial Express: “Foreign direct investment (FDI) in small-scale industry (SSI)? It could be just what the sector needs.
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Inadequacies of the FII Regime
One of our guest contributors, Somasekhar Sundaresan, has a well-argued column in the Business Standard in which he calls for an overhaul of the regulations that govern foreign institutional investors (FIIs) in India. Here it is: The regulatory regime for foreign institutional investors (FIIs) is the Indian capital market’s window to the outside world which
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Pitfalls in Emerging Market Investments
A recent unsuccessful bid by Singapore Airlines (SIA) and Temasek to take a 24% stake in China Eastern Airlines is symptomatic of several pitfalls that exist in large investments in emerging markets. Knowledge@Wharton carries an interesting analysis of that case, a synopsis of which is as follows: “It was a perfect deal and it had
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Changes in FDI Policy
There were some significant changes to the foreign direct investment (FDI) policy earlier this week. The Department of Industrial Policy & Promotion issued as many as six press notes on March 12, 2008 (available here). The changes are in the following sectors: 1. Credit Information Companies;2. Commodity Exchanges;3. Industrial Parks;4. Civil Aviation Sector;5. Petroleum &
