foreign institutional

FOREIGN INSTITUTIONALINVESTOR

MEANING:-Foreign Institutional Investor (FII), refers to the non local investors which invest in the financial market of a country. In other words, an foreign entity which is established or registered outside India proposes to make investment in the financial market of India.

DEFINITION:-An investor or investment fund that is registered in a country outside of the one in which it is currently investing. Institutional investors include hedge funds, insurance companies, pension funds and mutual funds.

Advantages of FIIEconomical the income generated is utilized economically by the host

country.Productive use of capital priority sector such as agriculture and infrastructure sector

will not have the benefit of FDI because the investors will invest only in those industries where risk is less and returns are more.

Payment certainty the foreign borrowings repayment of loans and interest

should be at the stipulated time.

Continue.....No scope for exploitation of domestic

economy in the case of foreign loans, the control of capital is

vested in the host country.Public sector development Local management and control

No fear of political domination

Disadvantages of FIIInterest payment burdenHot money concept at the first signal of the stock market trouble the foreign

institutional investor will take back their amount invested on the stocks and shares. This impacts the economy.

Stock market boom the foreign investor in stock market will unnecessarily

push the sensex and nifty indices whenever they invest more of their surplus capital that adds to the speculation game.

Influenced by political reasons

TREND ANALYSIS OF FII IN EMERGING MARKET