Indian equities eye big GCC funds
Dubai, September 3, 2012
The investments into Indian equities, bonds and mutual funds by foreign nationals, mainly those from the GCC, through the new qualified foreign investor (QFI) route could cross the $10 billion mark in the next two years, said experts.
QFI, the new investment channel opened up by the Indian government in the beginning of this year allows foreign nationals from 45 countries from across the world, including the UAE, to invest in Indian equities and debt instruments.
The move is widely believed to have the potential to attract billions of dollars into India, which is currently among the world’s top three investment destinations.
“The new investment route provides direct access to the Indian equity and debt markets for foreign nationals, groups or associations, allowing a wider global investor base to partake the benefits of the Indian growth story,” remarked Sajith Kumar PK, the CEO & director of IBMC Group & JRG International.
According to him, the foreign investments into Indian stocks and debt instruments were earlier limited to pension funds and FIIS (Foreign Institutional Investors) only.
But now with the QFI, the markets have the potential to match or even overtake the current volume of FII investment volumes into the Indian markets in the next two to three years.
Overseas investments into Indian stock markets in 2012 has touched $12 billion so far including more than $1 billion in August this year alone, he added.
Launching the new QFI service, Sanjay Verma, Consul General of India, pointed out that the UAE and India shared extensive trade and commercial bonds and were also each other's biggest trade partners.
'The UAE, being a regional trade and investment hub, is an ideal location to promote this new initiative,' said Verma during a first-of-its-kind international seminar held at the Dubai World Trade Centre which was attended by an audience of over 15 nationalities.
The event also marked the awarding of the first QFI account to Hazza Mohammed Al Dhaheri, the chairman and managing director of IBMC Group & JRG International, by S Rengarajan, CEO, IL&FS Securities Services.
Commenting on the rationale of holding the international seminar and the QFI regime, Al Dhaheri said, Dubai, being the business hub of the region offered a vantage point to launch the service.
Bombay Stock Exchange CEO Ashishkumar Chauhan said the new QFI holds a lot of potential for Indian markets.
'There is keen global interest in the resilience of our economy. Traditionally driven by FIIs and NRIs, foreign capital inflows have gained significant importance and impact local market sentiments. QFIs would broad-base the capital flow and further deepen liquidity for Indian markets,' he explained.
PS Reddy, the CEO & MD of Central Depository Services (India) said: 'India’s growth story is to continue for next few decades. But it needs huge investment support both from internal and external sources.'
'The new QFI route is opened up for those who want to have the benefit of India’s growth. There is no better region than Gulf region which is more inclined towards India as an investment destination,' he added.-TradeArabia News Service