Winds against macroeconomic weights on investor sentiments in 2018-19: Sebi annual report

New Delhi, September 2 () As macroeconomic winds weighed on investor sentiments during the year, foreign portfolio investors drew Rs 38,930 crore in 2018-19, according to the annual report of the Sebi market regulator .

To further develop the Indian stock market as a way for fundraising, the eligibility rules for IPF (foreign portfolio investors) were relaxed and data privacy concerns of IPFs were addressed, said the Annual report 2018-19.

Among other steps, the regulator had withdrawn the three-year minimum residual maturity restriction for investment in government securities and state development loans.

In addition, subcategories in the corporate bond category were discontinued, which resulted in a single limit for the investment of FPI in all types of corporate bonds, according to the report.

The limit for FPI investment in debt was revised from Rs 6.49 lakh crore to more than Rs 6.98 lakh crore for April 2019-September 2019 and more than Rs 7.46 lakh crore for October 2019-March 2020, he said.

To address data privacy concerns, a provision similar to One Time Password (OTP) was introduced, in which an intermediary can access information related to the beneficiary owner, including the senior administrative officer of an FPI only after of the confirmation of the FPI or its global custodian.

In addition, measures were taken such as the relaxation of eligibility rules for IPFs, the monitoring of foreign investment limits and the facilitation of the IPF incorporation process.

Sustained capital inflows play an important role for any economy and in particular for emerging markets, since these markets are more influenced by global forces than national ones. Despite the strong infusion of capital by the IPF in the last two months, the Indian capital market suffered a net outflow of Rs 38,930 crore in 2018-19 as macroeconomic winds weighed on the sentiment of the investors during the year, the report said. SRS RAM BAL

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