Download or read book The Relationship Between Mutual Fund Flows Foreign Institutional Investments and Stock Market Returns in India written by Sandra Valukaran and published by . This book was released on with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This thesis investigates the relationship between mutual fund investments, stock market performance and Foreign Institutional Investments in India, focusing on the period from April 2004 to October 2023. Examining three distinct hypotheses using regression and correlation analyses of secondary data, the study utilizes quantitative methodologies against the backdrop of India's booming mutual fund market. Key findings reveal a modest yet significant positive correlation between mutual fund inflows and stock index performances of NIFTY 50 and SENSEX. This suggests that while mutual fund investments impact stock market dynamics, they are not the sole determinants. Additionally, a positive correlation between mutual fund flows and historical stock market performance indicates a tendency towards momentum trading among investors. In contrast, an inverse relationship is observed between Foreign Institutional Investors flows and mutual fund inflows during financial crises,reflecting a defensive investor stance during market turbulence. These insights offer a comprehensive understanding of the Indian financial markets, highlighting the intricate interplay of various factors influencing investment trends. The research highlights the complexity of market dynamics in emerging nations and underscores the need for more investigation in this domain, which is of great importance to investors, fund managers, and regulators.
Download or read book Mutual Fund Investments FII Investments and Stock Market Returns in India written by Suchismita Bose and published by . This book was released on 2013 with total page 22 pages. Available in PDF, EPUB and Kindle. Book excerpt: Exploring the dynamic interaction between investment flows of mutual funds and foreign institutional investors (FIIs), based on post-crisis data, this study finds a strong negative relationship between the net investments by these two classes of institutional investors. Domestic mutual funds are found to determine their investment flows on the basis of their own previous investments, FII investments as well as market returns. The analysis suggests that the effect of stock market returns can be overshadowed by the effect of FII investments, in determining mutual fund flows. The study also finds evidence of net investments by FIIs having a causal influence on stock market returns even as it fails to identify any causal relation between domestic mutual funds' net investments and domestic stock returns. The conservative and contrarian pattern of mutual fund net investments in equity markets, as brought out by this study, indicates why equity mutual funds, as a group, have not provided a strong domestic alternative to foreign flows in the Indian stock market.
Download or read book INDIAN STOCK MARKET AND INSTITUTIONAL INVESTMENTS written by Dr. Sridhar Ryakala and published by Zenon Academic Publishing. This book was released on 2017-12-01 with total page 133 pages. Available in PDF, EPUB and Kindle. Book excerpt: Global integration, the widening and intensifying of links between high-income and developing countries has accelerated over the years. Over the past few years, the financial markets have become increasingly global. The Indian market has gained from foreign inflows through the investment of Foreign Institutional Investors (FIIs). Following the implementation of reforms in the securities industry in the past few years, Indian stock markets have stood out in the world ranking. During the past few years India has emerged as one of the world’s fastest growing economies. The increasing interest of foreign players in the domestic broking industry is a testimony of the stock market’s growth. The Indian stock market has also received a thrust from rise in business transactions over the years, because of sharp drop in brokerage fees and transaction costs, launch of a slew of new products, and a robust regulatory environment. The importance of institutional investors’ particularly foreign investors is very much evident as one of the routine reasons offered by market analysts’ whenever the market rises, it is attributed to foreign investors' money and no wonder we see headlines like "FIIs Fuel Rally" etc., in the business press. This is not unusual with India alone as today’s most developed economies might have seen a similar trend in the past. Domestic institutional investors on the other hand being another important section of institutional investors are playing a vital role in the Indian stock market. These investors have emerged as important players in the Indian stock market and their activities are influencing the market. There are many instances where this section of investors has stabilized the market conditions on one hand whereas their moves took the market to destabilized position on the other hand. Therefore, both FIIs and DIIs have become the most important determinants in the functioning of the Indian stock market. Thus, increasing role of these institutional investors has brought both quantitative and qualitative developments in the stock market viz., expansion of securities business, increased depth and breadth of the market, and above all their dominant investment philosophy of emphasizing the fundamentals has rendered efficient pricing of the stocks. Hence, there is a need to examine how investments made by these two groups of institutional investors’ impact each other as well as stock market returns. This book is an attempt in that direction.
Download or read book The Dynamics of Institutional Investments and Stock Market Volatility written by Pramod Kumar Naik and published by . This book was released on 2014 with total page 30 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study examines the dynamic interaction among institutional investment (FII and Mutual Funds) and the stock market returns for India in a three factor vector autoregression (VAR) framework. The data set used in this study are in daily frequency spanning from 1st Jan 2002 to 31st July 2012 and extracted from various sources such as PROWESS database of Center for Monitoring Indian Economy, the official website of Securities and Exchange Board of India (SEBI), Reserve Bank of India Official website and Bombay Stock Exchange. By considering the two types of flows (FIIs and mutual funds net equity investment) to be interdependent and hence form the endogenous part of the VAR system, we find that both mutual fund flows and the FII's fund flows are significantly influences Indian stock market. It is evident that the BSE returns (with lags) are positively influencing FII's flows but it turns to be negative in determining mutual fund investment flows during the study period. We observe similar kind of results after controlling for market fundamentals. The Granger causality analysis signifies a bi-directional causation between the institutional investment and stock market returns. The structural VAR impulse response analysis suggests that the response of Sensex return to both types of institutional investment flows are negligible or insignificant. However, the FII's net investment is positively responding to stock return about up to 3 days, and it is negatively responding to the mutual fund flows. The response of mutual fund net flows to stock return is initially positive but it turns to be negative in the next two days. It responds negatively to the FII net flows.
Download or read book Foreign Investors Under Stress written by Ila Patnaik and published by International Monetary Fund. This book was released on 2013-05-22 with total page 31 pages. Available in PDF, EPUB and Kindle. Book excerpt: Emerging market policy makers have been concerned about the financial stability implications of financial globalization. These concerns are focused on behavior under stressed conditions. Do tail events in the home country trigger off extreme responses by foreign investors – are foreign investors `fair weather friends'? In this, is there asymmetry between the response of foreign investors to very good versus very bad days? Do foreign investors have a major impact on domestic markets through large inflows or outflows – are they ‘big fish in a small pond’? Do extreme events in world markets induce extreme behavior by foreign investors, thus making them vectors of crisis transmission? We propose a modified event study methodology focused on tail events, which yields evidence on these questions. The results, for India, do not suggest that financial globalization has induced instability on the equity market.
Download or read book International Mutual Funds Capital Flow Volatility and Contagion A Survey written by Mr.R. Gelos and published by International Monetary Fund. This book was released on 2011-04-01 with total page 29 pages. Available in PDF, EPUB and Kindle. Book excerpt: Gaining a better understanding of the behavior of international investors is key for informing the debate about the optimal response to capital flows and about reforms to the international financial architecture. In this context, recent research on the behavior of international mutual funds at the micro level has expanded our knowledge about the drivers of portfolio flows and the mechanisms behind the transmission of financial shocks across countries. This paper provides a brief survey of this literature, with a focus on the empirical evidence for emerging markets. Overall, the behavior of international mutual funds is complex and overly simplistic characterizations are misleading. However, there is broad-based evidence for momentum trading among funds. Moreover, funds tend to avoid opaque markets and assets, and this behavior becomes more pronounced during volatile times. Portfolio rebalancing mechanisms are clearly important in explaining contagion patterns, even in the absence of common macroeconomic fundamentals. From a surveillance point of view, this implies that monitoring the exposures of large investors at a micro level is crucial to assess vulnerabilities.
Download or read book Portfolio Flows Into India written by Mr.James P. F. Gordon and published by International Monetary Fund. This book was released on 2003-01-01 with total page 39 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper analyzes the factors affecting portfolio equity flows into India using monthly data. Flows to India are small compared to other emerging markets, but seem to be relatively less volatile. They also seem to be quite resilient. The paper shows that portfolio flows are determined by both external and domestic factors. Among external factors, LIBOR and emerging market stock returns are important, while the primary domestic determinants are the lagged stock return and changes in credit ratings. In quantitative terms, both external and domestic factors are found to be about equally important.
Download or read book Dynamic Interactions Between Foreign Institutional Investment Flows and Stock Market Returns The Case of India written by Hemantkumar P. Bulsara Bulsara and published by . This book was released on 2015 with total page 28 pages. Available in PDF, EPUB and Kindle. Book excerpt: There has been a marked increase in the magnitude of Foreign Institutional Investments (FIIs) into India since the 1990s, resulting in increased forex reserves and liquidity and a higher-valued Indian capital market. However, such investment is more volatile than other types of flows, causing disruptive effects in the form of sudden stops (for example, the crash of the Indian stock market on January 21, 2008). This study empirically examines the dynamic relationship between FIIs and Indian stock market returns. It also analyses the effects of FIIs on Indian capital market returns, using data from January, 2004 through September, 2012. The analysis employs a Cross Correlation Function (CCF) approach, a Granger Causality Test and Vector Auto Regression after dividing the data into two parts: Pre Global financial crisis and Post Global financial crisis periods. The results of the CCF suggest bi-directional causality between FIIs and Nifty returns, whereas the Granger Causality Test and the VAR analysis suggest uni-directional causality running Nifty returns to FIIs.
Download or read book Foreign Institutional Investors FIIs and Capital Market in India written by Kulwant Singh Phull and published by . This book was released on 2014 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Since the 1990s, one of the major forces changing the face and structure of international capital markets has been the flow of cross-border portfolio investments, especially by Foreign Institutional Investors (FIIs) from developed countries to the developing economies. Portfolio investors provide institutional character to the capital markets, flavored by highly intensive research and diversified investments. FIIs are specialized financial intermediaries managing savings collectively on behalf of investors, especially small investors, towards specific objectives in terms of risks, returns, and maturity of claims. FIIs make investments in various countries to provide a measure of portfolio diversification and hedging to their assets. The forces driving the recent change in the investment portfolio of FIIs - as reflected in the growing emphasis on equities of emerging market economies - include, inter alia: (a) increased accessibility of these markets after liberalization, (b) improved marketability, (c) fewer problems relating to thin trading, and (d) improved macroeconomic fundamentals of recipient countries. This book provides a detailed account and examination of various dimensions, determinants, deterrents, and other aspects of investment flows into India through FIIs.
Download or read book International Mutual Fund Flows written by Dilip K. Patro and published by . This book was released on 2006 with total page 49 pages. Available in PDF, EPUB and Kindle. Book excerpt: The last few decades has witnessed a dramatic growth of U.S. based mutual funds that invest in non-U.S. stock markets. This paper provides a comprehensive analysis of flows into these international mutual funds for 1970-2003. Our analysis uncovers several new facts about mutual fund flows. First, the empirical findings show a strong relationship between flows into U.S. based international mutual funds and the correlation between the returns of the fund's assets and the returns of the U.S. market, consistent with investors' desire for international diversification. Furthermore, a stronger flow-performance relationship is observed when these correlations are low. As expected, the flows are lower when the volatility of the fund is higher. Second, the flows are related to contemporaneous and past fund returns supporting an 'information asymmetry' as well as 'return chasing' hypothesis for international capital flows. Finally, there is some evidence of fund outflows prior to or during the currency crises in emerging markets.
Download or read book Portfolio Preferences of Foreign Institutional Investors written by Reena Aggarwal and published by World Bank Publications. This book was released on 2003 with total page 47 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book STUDY OF IMPACT OF FOREX FII written by Nisar Munshi and published by Lulu.com. This book was released on 2012-11-24 with total page 86 pages. Available in PDF, EPUB and Kindle. Book excerpt: Study of Impact of Forex and Foreign Institutional Investor by Dr. Nisar Munshi
Download or read book Capital Inflows and Real Exchange Rate Appreciation in Latin America written by Guillermo A. Calvo and published by . This book was released on 1992 with total page 70 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Influence Of Changes Of FDI And FII Flows On Indian Stock Market written by Baranidharan S and published by . This book was released on 2020 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The inflow of Foreign Direct Investment and Foreign Institutional Investors has become a strong impression of economic development in both developing and developed countries. The research paper found that values of all variables were higher than 5; it clearly indicates that the variables were non-normal found out by using the Jarque-Bera test. The study exclaimed that there is unidirectional relationship between FDI returns and the nifty returns found out by granger causality test and it explains that FDI helps to predict Nifty returns. Policy makers can make economic enhancing and growth possible based on the research made on economic performance.
Download or read book FII Flow and Indian Stock Market written by Saurabh Singh and published by . This book was released on 2014 with total page 8 pages. Available in PDF, EPUB and Kindle. Book excerpt: In the age of global capitalism, substantial amounts of capital are flowing from developed economies to emerging economies like India. An important feature of the development of Indian stock market has been the escalating participation of Foreign Institutional Investors (FIIs) in the last 15 years. This paper tries to examine the direction of causality between flow of foreign institutional investment (FII) and Indian stock market returns i.e. whether FII flows causes variations in stock market returns or vice versa. Using monthly data of FII inflow, outflow, BSE Sensex and Nifty returns from April 2007 to October 2013, Granger-causality approach in a bi-variate VaR framework has been used to investigate the causality between FII flow and stock market returns. Augmented Dickey Fuller (ADF) test has been used to test whether the data is stationary or not. The outcome of the study was there is a bi-directional causality between FII movements and stock market returns.
Download or read book An Econometric Analysis to Test the Causal Link Between Foreign Institutional Investors and Indian Stock Market written by Tripura C.U. Sundari and published by . This book was released on 2016 with total page 12 pages. Available in PDF, EPUB and Kindle. Book excerpt: Foreign Institutional Investors is one of the very important source of portfolio capital. Earlier, the capital flow was only among the industrialized economy and the flows towards the developing economies was limited. Foreign Institutional Investors have been playing a key role in the Indian Financial Markets since early 1990. This was allowed to make portfolio investment in 1992. This paper intend to investigate the Impact of FII on Stock Market in India by employing the methods of Johansen co-integration test, Error correction model and granger causality test empirically in India. The test result reveals a positive correlation between the variables and a long run relation exist between them is divulged by cointegration test. Further, the Error correction model and granger causality exhibits an independent relation between the variables. The possible reason can be that Portfolio capital flows are consistently short term investment and it is used to analyze a particular stock or the entire stock market. Also, there are many factors that stimulate the stock market movement. Possibly this can be the reason for independent relation between the variables.
Download or read book International Capital Flows written by Martin Feldstein and published by University of Chicago Press. This book was released on 2007-12-01 with total page 500 pages. Available in PDF, EPUB and Kindle. Book excerpt: Recent changes in technology, along with the opening up of many regions previously closed to investment, have led to explosive growth in the international movement of capital. Flows from foreign direct investment and debt and equity financing can bring countries substantial gains by augmenting local savings and by improving technology and incentives. Investing companies acquire market access, lower cost inputs, and opportunities for profitable introductions of production methods in the countries where they invest. But, as was underscored recently by the economic and financial crises in several Asian countries, capital flows can also bring risks. Although there is no simple explanation of the currency crisis in Asia, it is clear that fixed exchange rates and chronic deficits increased the likelihood of a breakdown. Similarly, during the 1970s, the United States and other industrial countries loaned OPEC surpluses to borrowers in Latin America. But when the U.S. Federal Reserve raised interest rates to control soaring inflation, the result was a widespread debt moratorium in Latin America as many countries throughout the region struggled to pay the high interest on their foreign loans. International Capital Flows contains recent work by eminent scholars and practitioners on the experience of capital flows to Latin America, Asia, and eastern Europe. These papers discuss the role of banks, equity markets, and foreign direct investment in international capital flows, and the risks that investors and others face with these transactions. By focusing on capital flows' productivity and determinants, and the policy issues they raise, this collection is a valuable resource for economists, policymakers, and financial market participants.
