FII 's in indian stock market and Gold .

Friends I read somewhere that FIIs own as much as 24% of the market cap of india. the value of this holding is 24 lac crore. imagine if this money was with us indians, what would have happend?
our quality of life would have been 2 times better now than the actual. we are losing out the most valuble asset of our country india to foreigners bcoz of ignorance. we are still busy in buying unproductive gold in tons. we have bought gold which is worth 75 lac crores at todays price. per head gold holding comes to 57,700 rs. what is the use of holding/buying gold in tons which will never give a single penny income in its lifetime.

 

Look up the ownership of leading private sector banks & insurance companies. Then the FDI figure across sectors. Go swadeshi. Boycott anything foreign.

Republic Day hangover or just nationalistic feeling?

No FIIs - who'll give us Indians multi-baggers then?

Posted from a Made in China handset, bought from an Indian e-com firm with Singapore holding company.

 

@BombayBoy no republic day hangover. but yes a nationalistic feeling bcoz we are missing out the oppurtunity to become financialy independent. what i mean is instead of buying gold we could invest in equities/mf and take part in india's long term growth story of good indian companies which all indians know better than FII's.. even if we invest in a small way.
as i said we are holding 75 lac crores of gold . what returns gold can give in next 10-15 years? what do you think? if we are investing 10 % of money invested in gold ie; 7-8 lac crores in equities/mf now, that can change our lives in next 10-20-30 years.
I am not saying buy swadeshi. and boycott foreingn products. i meant only the ownership of equities of indian companies.
Multibaggers are created not by FII's. even if FII's are not investing in india , indian markets will give multibaggers, but it will take a longer period to create them.FII' create momentum, not multibaggers i think so.
i am not against using china made sets or foreign products. we can use anything we like and if you think it is good.
one thing i know is indian promoters avg. holding in indian market cap is 40%. and FII holds 24% close to promoters holding. and indian domestic investors hold 5%.this under owning of equities is only good for FII and a life changing oppurtunity losing for us indians.share your thoughts. @kharb @Parin Gala @RAMA MURTHY SASTRY CHALLA @BombayBoy

 

Gold - try explaining that to the ladies. And it should be one's choice, not just because a @w4wealth had a rush of nationalistic feelings and felt FII's holding Indian equities and Indians not participating in equity markets is hindering the opportunity for Indians to become "financially independent". Isn't it? Also - why are central banks across the world buying gold?

Savings & Investments are different. When you "invest," you have a greater chance of losing your money than when you "save."

Gold holding (hoarding?) by Indian households isn't something which emerged overnight but over a period of time - centuries perhaps - "sone ki chidiya"! Why do people buy gold? Some buy it as an investment - bars/coins. Majority is still in jewellery. Aspirational. Auspicious. People trust gold will retain its value unlike money - currency, which can become worth what its printed on (hyper/inflation). The security of "holding" physical gold is what Indians prefer to holding it in an electronic form - Sovereign Gold Bond Scheme 2015 was a failure due to various reasons. Don't know about the 2016 issue. Would you prefer a gold indexed bond to actual gold?

FIIs and multi-baggers, you'll regret it if FII's don't pump in their $$$
Check this World Bank data for India - portfolio equity, net inflows for 1991 - 2014, only 3 years of net outflows 1998, 2008 & 2011 - do the math.

Indians are more financially independent than you or me think. There's more black money in India than in the Swiss Banks. Gold & Realty will continue to be the avenues for this purpose.

You can disregard my reasoning for FIIs but you can't refute the facts and figures!

 

Just to add :

Not to miss the P-note share in FII investment which probably is arnd 15% of total FII flows - who are the real beneficial owners of this investment is anybody's guess.

Do the following say something ?
- The positive corelation in the crackdown on black money with Swiss Banks and Gold imports from Switzerland
- poor response to both Gold Bond and Monetisation is it due to that people derive 'security' from holding in physical form or they 'fear' disclosing the quantity held? If the later why the fear? Is it the fear of their tax evasion coming to light?

I don't know....

But yes an increased retail participation on the exchanges is very much required to improve the depth and stability of the markets.

 

@darth p notes are different from equity ownership.

 

Gold - try explaining that to the ladies. And it should be one's choice, not just because a @w4wealth had a rush of nationalistic feelings and felt FII's holding Indian equities and Indians not participating in equity markets is hindering the opportunity for Indians to become "financially independent". Isn't it?

nationalistic feeling is not bad. i think so.

Also - why are central banks across the world buying gold?

dear @BombayBoy i will say central banks are in different position and individual investors are different. dont compare them.

Savings & Investments are different. When you "invest," you have a greater chance of losing your money than when you "save."

will you say that gold prices will not fall from these levels ? how much returns do you see from gold in next 10 years ie in 2025? can you guarantee +ve returns in 2025?

Gold holding (hoarding?) by Indian households isn't something which emerged overnight but over a period of time - centuries perhaps - "sone ki chidiya"! Why do people buy gold? Some buy it as an investment - bars/coins. Majority is still in jewellery. Aspirational. Auspicious. People trust gold will retain its value unlike money - currency, which can become worth what its printed on (hyper/inflation). The security of "holding" physical gold is what Indians prefer to holding it in an electronic form - Sovereign Gold Bond Scheme 2015 was a failure due to various reasons. Don't know about the 2016 issue. Would you prefer a gold indexed bond to actual gold?

i am not saying dont buy gold at all. we should buy it judiciously. and not as investment.

FIIs and multi-baggers, you'll regret it if FII's don't pump in their $$$
Check this World Bank data for India - portfolio equity, net inflows for 1991 - 2014, only 3 years of net outflows 1998, 2008 & 2011 - do the math.

Do you think FII creates multibaggers in india.? Suppose if FII are not investing in india? what will happen?
market momentum will get reduced. thats all. indian economy will keep growing if FII invest in india or not. ( FDI is different.)

Indians are more financially independent than you or me think. There's more black money in India than in the Swiss Banks. Gold & Realty will continue to be the avenues for this purpose.

30 % of 130 crore population of india is in poverty and you are saying indians are financially independent? what is the base for such argument.

You can disregard my reasoning for FIIs but you can't refute the facts and figures!

i am not disregarding your reasons. but facts are totally differnt than you mentioned.

 

@ w4wealth - Hi, can you explain the difference to clear any understanding gap

 

Let me begin with Jai Hind, so I can assert that I'm an Indian too.

Can I forecast and guarantee positive returns on gold in 2025? It's a good jump from your initial question in a previous post - what I think about expected returns from gold in the next 10-15 years. Shows the level of discussion.

What's FIIs or equity investment got to do with poverty alleviation?

The fact presented was for FII investments in India over a certain period of time. Did you even check the data? What's the net position?

Why are the FIIs responsible for financial independence of Indians?

Would you please define financial independence for me.

There's slavery in modern day. People are bonded labor for generations. Many places near Mumbai still don't have a 24 hour power supply. People lack access to basic sanitation and potable water. Graduates churned out of colleges are unemployable. People with PhD's & Master's apply for a lowly govt job.

Kuch din to guzaro Bharat me!

CBA with poverty data anymore. Economic Inequality is real.

PS - PN reference is to benami/anonymous investments.

 

and so who is the likely beneficial owner when Any dividends or capital gains collected from the underlying securities go back to the investors of PN?

 

how foolish is this question? @BombayBoy i am really proud that there is a indian(@BombayBoy ) who believes that FII give us multibaggers.can you please explain this statement?

 

Run out of questions? Just citing a previous one & took you more than 24 hours to realise that the question is foolish? Excellent. *Loud applause*

I can't stoop to your level even if I wanted to. Repeating yourself doesn't make you correct, but don't let me affect your free speech. It helps the rest of us see how much a tool you are.

Time to run to the admin!

 

Also, how can you own market cap? Or are you wanting to say that the value of what FII's own is ~ 24% of total market cap. And if this is the interpretation, do you have what is the FII ownership in Indian companies or is that to 24% too

 

Point of @w4wealth is Indians are investing in gold instead of productive assets like equities. Same point is made by Warren Buffett:

Warren Buffett has been very vocal about his disdain for gold as an investment. He sees little to no value in gold. What Buffett refers to as a lack of value results from a lack of usefulness. He once stated about gold, "It doesn't do anything but sit there and look at you."

One of Buffett's basic principles of investing is that one should only invest in things that are useful, that serve some purpose and that supply some practical need that people have.

https://www.investopedia.com/ask/answers/021615/does-warren-buffett-invest-gold-why-or-why-not.asp

He is feeling sad that FIIs are major investor in equity and not Indians and FIIS are taking all the wealth of country. This is good point and we have to encourage investment in stocks because that is best way to get rich.

 

@Srouta Mukherjee Those with normal thinking abilities can understand what i said like srouta. those are abnormal thinks like lunatics.

 

We have to avoid such exchange of words to focus on imp issues otherwise attention is diverted.

 

Completely agree. Cant let attention being diverted. Some clarification sought still pending. More follow......

 

Additionally what's the remedy to plug this great money drain too.....

Should india ban private gold holdings like America did in 1933? should special incentive be given to first time investors? Should provisions be introduced which deter FII's from investing : impose taxes or implement SIT reco's on P Notes ? Impose additional gold tax which is based on gold holdings? Reduce the permitted FII caps? Any other measures which incentivizes indians to reduce gold and increae equity investment and disincentivizes FII or reduces FII share. I don't know

Surely our intelligent finance minister will easily recognise the huge merit in moving the gold holdings (wealth destructor) to equity ( road to get rich, impoving the quality of life 2x and all the other good things)

Budget round the corner..... Is the price of any such measure worth paying if the Potential is 3x of FII share coming into the market. Will 100,000 be then kissed in 4 years???

 

Like the old american saying goes"Dont fix it , if it aint broken"..Indian economy tendsto stay afloat ..come what may... largely due to a complex system comprising of black money, gold, salaried income,real estate, strong central bank policies, government spending, subsidies ...the list goes on. The fascinating part is just like the traffic in our cities the economy finds a way out through this organised chaos!!!

Correct me if im wrong...Only 5-10% of the entire population is exposed to equities ,and a large part of them may have lost their shirt in the numerous crashes... Gold on the other hand has historically appreciated up until 2010...
and has proven to be a safe haven and has given a sense of security to us Indians from time in memorial..

My Point is each asset class will have its own die hard followers as they have given them fantastic returns...through their own tried and tested methods..Me being a third generation entrepreneur/businessman swear by my Fathers advice .."There is no better investment than your own business" .
FII ,s....( a part of whom are Indian entities re -routing their money ) have & will continue to be the major participants & beneficiaries of the equity market ...Thats a fact we cannot wish away...

 

my point is not that FII should be banned or they are robbers. they made money because they were smarter than us.
my point is we citizens should take part in equities directly or thru mf's. not that sell your house and bet on stock markets. investing even in a small way make a big difference.

conclusion is that dont buy gold as invesment anymore. instead invest that money in equities.
FII's will remain there. Dont think that FII's give us multibaggers, they are just investors.how can any investor can give multibaggers??
Multibaggers are not given by anybody. multibaggers happens in normal course of markets.