FII's always make money. As such they are sitting on 10% return on there investment (only on rupee conversion).
When they have started buying Rupee was trading at appr.56.70, if they will sell now they will get double advantage i.e
No.1 - Rupee conversion they will get straight 10% return (no of dollars will be more)
No.2 - Profit on there investment.
If we follow Rupee movement closely, we can catch the trend.
This is my view.
When they have started buying Rupee was trading at appr.56.70, if they will sell now they will get double advantage i.e
No.1 - Rupee conversion they will get straight 10% return (no of dollars will be more)
No.2 - Profit on there investment.
If we follow Rupee movement closely, we can catch the trend.
This is my view.
Over a longer period Rupee keeps depreciating by about 6% per annum. This used to be the figure used to compare ECB borrowings Vs Local borrowings as for as interest rates are concerned.
So normally, FIIs have to make an average of atleast 6% per annum in India to breakeven in dollar terms.
When Rupee appreciates (!) the value of their investments go up, and the FIIs would be doubly rewarded as they have accounted for a exchange risk of -6% per annum! This turns the Indian Market dearer for further investments!
When Rupee depreciates their investments lose money, and the Indian Market becomes cheaper!
This is purely from the point of view of foreign exchange risk.