Foreign portfolio investors (FPIs) have shifted from debt to equities in July, investing $2.59 billion in the first 10 days. This marks a significant sentiment change from earlier in the year, driven by a steady rupee and a shift from semiconductor investments.
The Indian rupee hit a record low of 96.96 against the US dollar on May 20, prompting sustained intervention by the Reserve Bank of India (RBI), which widened its net short forward position to $106.6 billion. The currency has since recovered, aided by anticipated foreign capital inflows.
The Reserve Bank of India has revamped its FCNR(B) scheme to attract foreign capital, allowing Indian banks to route overseas deposits and removing currency/credit risks for lenders. This aims to boost NRI deposits by offering attractive fixed rates.
India's Finance Minister Nirmala Sitharaman announced plans for additional measures to boost foreign capital inflows, following recent tax relief and banking regulator initiatives. The government aims to attract more foreign investment to strengthen the Indian market amid the West Asia war.
India's Finance Minister Nirmala Sitharaman announced new measures to attract foreign capital, including expanded access to government securities and tax exemptions. These steps aim to bolster forex reserves and support the rupee amidst geopolitical crises and rising import costs for oil and fertilizers.
India's RBI and government are implementing measures, including forex swap facilities and tax exemptions, to attract $60-70 billion in foreign capital. These steps aim to support the rupee, boost investor participation in government securities, and strengthen India's financial standing.
India's stock market has fallen from 5th to 7th largest globally, driven by a record exodus of foreign capital and a lack of participation in the AI-led rally benefiting markets like Taiwan and South Korea. Concerns over valuations, capital gains tax, and geopolitical conflicts have impacted Indian equities.
India's stock market has dropped from fifth to seventh largest globally, overtaken by Taiwan and South Korea. This decline is attributed to a record exodus of foreign capital and India missing out on the AI-driven rally benefiting tech stocks in other nations.
Chinese businesses in Indonesia are facing investment challenges due to tax hikes, forex retention rules, and project suspensions. The China Chamber of Commerce in Indonesia has raised concerns about opaque law enforcement and blocked appeal channels, urging Indonesia to improve its business environment.
Beijing's decision to block Meta's US$2 billion acquisition of AI start-up Manus reflects China's new approach to US-China business ties, prioritising national security and technological self-reliance over commercial deals. The timing, ahead of the May 14-15 Xi-Trump summit in Beijing, signals Beijing's belief it holds a stronger negotiating position given US preoccupations with the Middle East and Trump's need for tangible wins ahead of midterm elections.
King Charles III navigated a complex US visit, using diplomatic charm to engage Donald Trump while subtly critiquing populism. Despite the royal success, the visit underscored the difficult diplomatic reality for Prime Minister Keir Starmer.
India's stock market valuations are attractive but face a structural challenge from the global AI narrative pulling foreign capital away from emerging markets, according to Manish Gunwani, CIO at Bandhan AMC. While valuations of private banks and other stocks have derated and look reasonable, India lacks large AI companies to attract global capital. Gunwani prefers manufacturing exporters including pharmaceuticals, capital goods, and chemicals, along with smallcaps over largecaps for the next three to five years. He sees IT sector facing long-term structural decline and identifies two triggers that could bring foreign investors back: either the AI theme slows or India delivers significant structural reforms.
China's red-chip structure, a common method for tech firms to access foreign capital, is under increased regulatory scrutiny, potentially altering the Hong Kong IPO landscape and pushing companies to dismantle or defend these complex offshore arrangements.
