NRIs are being bullish on parking
funds they inherit in India
into stocks and are least interested
in taking money out of the country.
For the past few years, NRIs
have been seen selling their
ancestral land or any other
property acquired in India followed
by bringing the money abroad.
Also, they preferred to save
the money in banks. However,
the trend has been changing
now.
Contrary to earlier scenario,
NRIs are largely investing in
IPOs and buying shares from
the secondary market. Such investments
are believed to have increased
from $362 million in 2000-01
to $6.3 billion in March 2007.
Add to it are the attracting
factors from a fast flourishing
stock market and a liberal currency
regime. Previously, NRIs have
to face a lot of hurdles in
taking money from property transactions
out of the country. But, the
stringent rules have been relaxed
by RBI two years ago. And, the
impact can be clearly seen.
The figure on acquisition of
shares by NRIs soared from $930
million in 2004-05 to $2.2 billion
in 2005-06, to $6.3 billion
in 2006-07.
NRIs have been seeking the exposure
in India through the portfolio
investment scheme, subscribing
to cross border funds launched
by fund houses in India and
even through sub accounts of
Foreign Institutional Investors
(FIIs).
Talking about the general investment
by the Indian Diaspora, they
have been making large investments
in bank stocks. NRIs bought
bank shares worth $3 billion
in December 2006.
Interestingly, the recent data
showcased by RBI says that 3%
of the remittances by the diaspora
are invested in stocks and 54%
is used for family maintenance.
The remaining per cent generally
goes in other assets like real
estate, bank deposits, and other
investments.
Source: Indian
Realty news; 22nd July’07
|
