By: DEEPSHIKHA SIKARWAR & APURV GUPTA
Source: http://articles.economictimes.indiatimes.com
Category: Investment In India
NEW DELHI/MUMBAI: The finance ministry is considering allowing individual foreign investors to directly buy corporate bonds issued by Indian companies, extending to debt a similar facility recently allowed for equity investments that could, in the long run, help deepen the country's shallow bond market.
Finance ministry officials said the proposal, aimed at capitalising on the strong appetite for high-yielding Indian debt, was likely to be a part of the budget package for the financial sector, although the final decision on whether it would figure in the March 16 announcement would be taken by Finance Minister Pranab Mukherjee.
"Extending this regime to debt will largely complete the reforms agenda for overseas investors," a finance ministry official told ET.
In the last budget, Mukherjee had unveiled the so-called qualified foreign investor framework, allowing individual foreign investors to invest in Indian mutual funds. This was extended to equities on January 1.
The capital markets division in the finance ministry is already in discussions with the RBI on the proposal, which it thinks will deepen the corporate bond market and attract foreign flows needed to fund widening current account deficit.
At present, foreign individuals are permitted to invest in Indian corporate bonds only as a sub-account of a foreign institutional investor (FII), which in turn has to apply to Sebi on their behalf. Direct investment will make the process simpler and less expensive as investors will just have to open an account with a depository participant and place orders.
The government on January 1 this year allowed foreign individual investors, pension funds and trusts to directly invest in equities, a move that was followed by a market rally that seems to have caught many participants by surprise. The benchmark BSE Sensex has risen 17.4% so far this year, after falling 25% in 2011.
Source: http://articles.economictimes.indiatimes.com/2012-02-17/news/31071557_1_corporate-bonds-indian-debt-foreign-investors
Source: http://articles.economictimes.indiatimes.com
Category: Investment In India
NEW DELHI/MUMBAI: The finance ministry is considering allowing individual foreign investors to directly buy corporate bonds issued by Indian companies, extending to debt a similar facility recently allowed for equity investments that could, in the long run, help deepen the country's shallow bond market.
Finance ministry officials said the proposal, aimed at capitalising on the strong appetite for high-yielding Indian debt, was likely to be a part of the budget package for the financial sector, although the final decision on whether it would figure in the March 16 announcement would be taken by Finance Minister Pranab Mukherjee.
"Extending this regime to debt will largely complete the reforms agenda for overseas investors," a finance ministry official told ET.
In the last budget, Mukherjee had unveiled the so-called qualified foreign investor framework, allowing individual foreign investors to invest in Indian mutual funds. This was extended to equities on January 1.
The capital markets division in the finance ministry is already in discussions with the RBI on the proposal, which it thinks will deepen the corporate bond market and attract foreign flows needed to fund widening current account deficit.
At present, foreign individuals are permitted to invest in Indian corporate bonds only as a sub-account of a foreign institutional investor (FII), which in turn has to apply to Sebi on their behalf. Direct investment will make the process simpler and less expensive as investors will just have to open an account with a depository participant and place orders.
The government on January 1 this year allowed foreign individual investors, pension funds and trusts to directly invest in equities, a move that was followed by a market rally that seems to have caught many participants by surprise. The benchmark BSE Sensex has risen 17.4% so far this year, after falling 25% in 2011.
Source: http://articles.economictimes.indiatimes.com/2012-02-17/news/31071557_1_corporate-bonds-indian-debt-foreign-investors
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