Reasons for Indian Stock Market's Biggest Crash(3)

I feel that this step taken by the SEBI is good step towards improving clarity of FII investments.

Many are saying this should have been done a lot before, say 6-7 years back.

But at that time p-notes were not that much a highly weighted investment instrument by the FII.

As a report says "the notional value of PNs has zoomed from 20% of FII/sub-account assets in March 2004 to 51.6% in August 2007, in other words from Rs 31,875 crore to Rs 3,53,484 crore!".

While FIIs were net investors to the tune of $8.5 billion during the last calendar year, expectations are that they would invest close to $12 billion this year.

This would take the market's exposure to P-Notes to over $5 billion , if the same ratio were maintained for the next three months



By Saurabh Patil