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FCCB:- A foreign currency convertible bond (FCCB) is a type of corporate bond issued by an Indian listed company in an overseas market
FCEB:- It is a bond expressed in foreign currency issued by an Issuing Company and subscribed to by a person who is a resident outside India in foreign currency
ISSUER COMPANY
NIGGLING DOUBTS: FCEB has been launched at the time when stock market was on its low which is not favorable to all equity instruments. Promoter companies may be loath to offload their holdings as they may not be ready to double in as venture capitalists. This is not there in case of Indian investors such as Tata could have acquired Corus by mobilizing its funds as it takes five years for redemption. In India the minimum maturity of the Foreign Currency Exchangeable Bond shall be five years for purposes of redemption.
UNAPPETISING PROSPECTS
The issuing company has the unappetizing prospect of losing grip on the offered company then the foreign investment may have back off. As the shares that they get can best be uploaded in the Indian stock exchange whereas in case of FCCB the existing possibility of exchanging if for ADR/GDR ADR/GDR enjoys two-way fungibility.
Currency War
The phenomenon of countries entering into competitive depreciation of their currencies to retain their hold in export markets.
Brazil's finance minister, Guido Mantega, has said that an "international currency war" is going on. He said, "We're in the midst of an international currency war, a general weakening of currency. This threatens us because it takes away our competitiveness.
The main culprit in this conventional view is China, although the International Monetary Fund is a close second.
IMF, which usually forces countries to devalue their currencies, is asking China to revalue
Chinese banks got too greedy and brought their financial systems a virtual halt in 2007. Debt problem creation- Western banks role Tailpiece? Toss a coin!
FDI
Investing in India
No prior permission No prior permission No prior permission required required required Inform Reserve Bank Inform Reserve Bank Inform Reserve Bank within 30 days of within 30 days within 30 days ofof inflow/issue of shares inflow/issue shares inflow/issue ofof shares
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STATEMENT ON RBIS REGIONAL OFFICE-WISE (WITH STATE COVERED) FDI EQUITY INFLOWS
Rank 1 2 3 4 5 City MUMBAI NEW DELHI BANGALORE CHENNAI HYDERABAD Percentage 25.14% 22.68% 7.03% 6.69% 4.12%
6
7 8 9 10 11 12 13 14 15 16 17
AHMEDABAD
KOLKATA CHANDIGARH PANAJI KOCHI BHOPAL BHUBANESHWAR JAIPUR KANPUR GUWAHATI PATNA RBIS REGIONS NOT INDICATED
2.84%
1.63% 0.91% 0.43% 0.24% 0.23% 0.21% 0.15% 0.04% 0.03% 0.00% 27.63% 49070.1 US $ (in million)
GRAND TOTAL (from April 2000 to November 2007)1515 Source:-RBI's - Region-wise inflows, furnished by RBI, Mumbai
FII
Foreign Institutional Investors (FIIs) are allowed to invest in the primary and secondary capital markets in India through the portfolio investment scheme (PIS). Under this scheme, FIIs/NRIs can acquire shares/debentures of Indian companies through the stock exchanges in India
LIST OF COMPANIES
List of companies in which FII investment is allowed upto 30% of their paid up capital under PIS
1 2 3 4 5 6 7 Asian Paints (India) Ltd Capital Trust Ltd Container Corporation of India Divis Laboratories Ltd Ferro Alloys Corporation Ltd Garware Polyester Ltd GIVO Ltd (formerly KB & T Ltd)
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9 10
List of companies in which FII investment is allowed upto 40% of their paid up capital under PIS
1 2 3 4 5 6 7 8 9 10 Adlabs Films Ltd. Aftek Infosys Ltd. Balaji Telefilms Ltd. Bharat Forge Ltd Burr Brown (India )Ltd Cipla Ltd. Elbee Services Ltd Glenmark Pharmaceuticals Ltd Gujarat Ambuja Cements Ltd HEG Ltd
List of companies in which FII investment is allowed upto 49% of their paid up capital under PIS
1 Alok Industries 2 3 4 5 6 7 8 9 10 Auribindo Pharma Ltd. Arvind Mills Ltd Bajaj Hindustan Ltd Balakrishna Industries Ltd Blue Dart Express Ltd Core Projects & Tech Ltd CRISIL Digital GlobalSoft Ltd. Dr. Reddys Laboratories Ltd.
FIIs may invest in: securities in the primary and secondary markets (shares, debentures, warrants of listed and unlisted companies) units issued by domestic mutual funds dated Government securities derivatives traded on a recognized stock exchange commercial paper debt instruments provided a 70/30 equity/debt ratio is maintained
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