FIIs will help the markets: Fund Managers

Pravin Palande/Forbes India

Is it a good idea to relax FII norms for investing in India? Forbes India finds out

It will certainly help market development and create depth and liquidity. That’s the long-term objective of any regulator. It will also allow FIIs to have reasonable weightage of the Indian debt market in their global portfolios. This will facilitate the inclusion of Indian debt securities in global debt indices and allow Indian firms to raise money on cheaper terms. The only challenge: Any domestic policy rate change will impact the exchange rate.

S Ramasamy,
Chief investment officer-debt, LIC Nomura Mutual Fund

India is largely open to FIIs through the equity market; they own around a third of the listed space. It has recently opened the fixed income market to FIIs, with an indication of expanding it further. But, more ground work is needed as the bond market is shallow in India and bond investors are more ruthless than their equity counterparts when it comes to selling. So, till carry-on bonds are attractive, the FIIs will stay put and, failing which, they will fly.

Saibal Ghosh,
CIO, AEGON Religare Life Insurance

A current account deficit country like India needs the means to remove obstacles to a capital account surplus. A movement from the regulator directly implementing KYC for foreign investors to letting capital market intermediaries do so is a well-timed change. Diversifying the type of foreign investors will improve the robustness of our capital markets. These could include mid-sized institutional investors, family offices and even individuals.

Swapnil Pawar,
CIO, Karvy Capital

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