Stock Market

MNCs, FIIs took out a record $48.9 billion in 2018

   Download Android App    Share in      FullScreen   CheckVideos

Mumbai: Multinational companies and foreign investors in Indian assets repatriated a record $49 billion last year either through dividends or interests, reflecting the inherent strength and vastness of an economy that now ranks consistently among the world’s fastest expanding. Investment income outflow, in the current account of India’s balance of payments, touched a new high of $48.9 billion in 2018, doubling from $24.2 billion in 2011, data from ABC showed.

These outflows comprise of dividend payouts on FDI equity inflows into Indian companies, interest payout on overseas borrowings and NRI deposits, and also dividend and interest income on foreign portfolio investments. “The increasing quantum of outflows of investors’ income, both in interest and dividend incomes, reflects a combination of factors,” said Saugata Bhattacharya, chief economist at Axis Bank.

“One, foreign capital inflows, both debt and equity, have gone up manifold over the years.

Two, profits of foreign investors, particularly in equities, have risen sharply, probably resulting in profit booking.” Furthermore, deposits by overseas Indians have risen over the years due to favourable interest rate differentials, making Indian bank deposits more attractive. High valuations of Indian growth assets may also have prompted some exits. “In addition, portfolio investors churn investments into many countries, and Indian equity-market valuations are relatively rich, probably leading to redeployment of profits into lower valued assets,” said Bhattacharya. Investment income receipts have been much lower.

India’s overseas investment is much lower than foreign investments and capital it receives.

As a result, the deficit under the head of investment income has been widening.

Deficit in investment income also reflects in the current account deficit. Investment income comprises a part of invisibles, an important source of funding the current account.

A deficit in investment income impacts invisible income adversely and could impact current account deficit funding. “But such a deficit is arising largely out of productive investments in cases where dividend incomes by FDI firms are repatriated.

These are generated from investments in productive sectors,” said an economist.




Unlimited Portal Access + Monthly Magazine - 12 issues-Publication from Jan 2021

Buy Our Merchandise (Peace Series)

 

Contribute US to Start Broadcasting


It's Voluntary! Take care of your Family, Friends and People around You First and later think about us. Its Fine if you dont wish to contribute and if you wish to contribute then think about the Homeless first and Feed them. We can survive with your wishes too :-). You can Buy our Merchandise too which are of the finest quality.

Debit/Credit/UPI

UPI/Debit/Credit

Paytm

STRIPE

Details
Category: Stock Market


21