FII took 500 million dollar from indian market. We dont know whether that money is took by US Fii or Mauritias Fii. We dont know whether its pention fund or hedge fund. FIIs are not homogenious. they are coming from 75 different countries. But we dont have any idea of them. And we are analysing the market without these knowledge.
Participatory Notes become 60% of the total FII money. The money in PN can be drug money, terrorist moeny. Oct 2007 SEBI tried to put some restrictions on PN to find source of the money. Reserve bank of india asked for a complete ban on PN. But finance ministry overruled that. PN is not transparent.
FII and FDI are different. FII is the floating money in the stock market. It did not create job or industry. FDI is direct investment from foreign investon in indian industry. It generates jobs.
FII can come with black money and pour it into our stock market. But an Indian citizen should have all the the documents about source of the income and tax paid etc to enter into market. This is a double rule on the stock market.
In PN the “non disclosed investers” number come down in last two years. One reason is that people who take domestic money by havala and put that money as PN in the market do not have faith in the market. So thay are not putting money into market. When the market goes up then the PN number will rise again.
SENSEX took 2 years to rise from 10000 to 21000 in early Jan 2007. Nine months after it collapsed to 10000. Again it started rising again in 2009. SENSEX is mirroring the way FIIs are pumping money.
in 2007 FII pumped 17.5 billion US dollars. in 2008 it withdraw 14.5 billion US dollars. in 2009 again FII pumping the money into the market.
Now fundamentals are not affecting the market. There is no justifiable reson why market went to 10000 to 21000 or why it crashed from 21000 to 8000. The fundamentals of the economy did not changed.
Stock exchange holds only 4% to 12% total saving of indians for the last few years. total number of investers are 3% of the india’s pupulation.
– Loksabha TV