“DOES FII’S INCREASES STOCK MARKET VOLATILITY”
“DOES FII’S INCREASES STOCK MARKET VOLATILITY” Section : A Semester : 2 Batch : 2008-2010 STUDENT NAMES & ROLL NO:
AMRIT RANJAN SAHOO (6) ANUBHAV GARG (9) ANWAR HUSSAIN (10) KARTIK SHETH (24) PARTH MEHTA (35) POONAM BAKSHI (37) PREETISH SATHEESH (39) ASHISH PUGALIA (40) RAHUL KHANNA (42) SHIVANI MAHESHWARI (52) VIKASH JAIN (62)
We would like to add a few heartfelt words for the people who were the part of this project in numerous ways, the people who gave support right from the stage the project idea was conceived. Needless to say, this project would not have been possible without the blessings of the Almighty, we are deeply indebted to our faculty Dr. Himani Joshi for her supporting nature, stimulating suggestions and encouragement that helped us in all the time of research for and completing the project. We take this opportunity to convey our sincere thanks to Professor Mayank Patel and Professor Suneel Arora for the kind co-operation and support extended to us during the whole project tenure. Last but not the least we are thankful to our family, friends and colleagues, who were the constant source of inspiration throughout our project work.
TABLE OF CONTENTS
Cover Title Title, Section, Semester, Batch, Students Name and Roll No. Acknowledgement Table of Contents Table of Appendices Abstracts Main Text Current Scenario Limitations Learnings Findings and Suggestions Bibliography Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 to Page 32 Page 33 Page 34 Page 35 Page 36 Page 37
TABLE OF APPENDICES
Model Summary and Parameter Estimates (a Predictors: (Constant), quarterly outflow) Model Summary and Parameter Estimates (a Predictors: (Constant), quarterly inflow) Page 22 Page 23 Page 5
Since the beginning of liberalization Foreign Institutional Investor (FII) flows to India have steadily grown in importance. Given the presence of foreign institutional investors in BSE Sensex listed companies and their active trading behaviors, their role in determining share price movements must be considerable. Investment by Foreign Institutional Investors in stock markets surged past the 50-billion dollar on Nov 2007. This figure proves a phenomenal growth in FII flows when compared to a mere USD 4 million in 1992-93 (the first year of allowing FII participation in the Indian markets).
Indian stock markets are known to be narrow and shallow in the sense that there are few companies whose shares are actively traded. Thus, although there are more than 4,700 companies listed on the stock exchange, the BSE Sensex incorporates just 30 companies, trading in whose shares is seen as indicative of market activity. In this project we will analyze the relationship between FII Inflows and outflows and stock market volatility.
Overview on Foreign Institutional Investor
Foreign Institutional Investor [FII] is used to denote an investor - mostly of the form of an institution or entity, which invests money in the financial markets of a country different from the one where in the institution or entity was originally incorporated.
India opened its stock markets to foreign investors in September 1992 and has, since 1993, received considerable amount of portfolio investment from foreigners in the form of Foreign Institutional Investor’s (FII) investment in equities. This has become one of the main channels of international portfolio investment in India for foreigners. In order to trade in Indian equity markets, foreign corporations need to register with the SEBI as Foreign Institutional Investors (FII). SEBI's definition of FIIs presently includes foreign pension funds, mutual funds, charitable/endowment/university funds etc. as well as asset management companies and other money managers operating on their behalf.
The trickle of FII flows to India that began in January 1993 has...