Finance Ministry to hold roadshows in five Gulf countries to attract QFIs

NEW DELHI: Aiming to attract investment from foreign retail investors in equity and bond markets, the Finance Ministry will organise roadshows in five Gulf nations, including Kuwait and the UAE next month.

"We will organise roadshows from June 10-15 in five Gulf countries -- Bahrain, Oman, Kuwait, the UAE and Saudi Arabia, to attract Qualified Foreign Investors (QFI) in the securities market," a senior Finance Ministry official said.

A QFI is an individual, group or association resident in a foreign country that is compliant with Financial Action Task Force (FATF) standards. QFIs do not include FIIs/sub-accounts.

"We are discussing many things to encourage more capital flows. We are looking at various things as to how to implement budget announcements for QFIs, FIIs," the official added.

The official further said that the ministry is working on measures for attracting foreign investment into corporate bonds. Also the FII limits set for investment into these instruments were almost exhausted in the last fiscal.

The Foreign Institutional Investors (FIIs) can invest up to $20 billion in corporate bonds and $15 billion in government securities (G-secs).

It is expected that over the next two years QFIs would invest $50-75 billion in the country's equity and bond markets.

In Budget 2012-13, Finance Minister Pranab Mukherjee had announced opening up of corporate bond market for QFIs.

Earlier on January 1, 2012, the government had allowed QFIs to directly invest in the Indian equity market.

Allowing QFIs to directly invest in the Indian equity and bond markets would widen the non-resident investor base in stock markets and expand the set of non-resident portfolio investors, experts said.

The move comes against the backdrop of significant foreign capital outflows from the domestic equity market and lack of investors interest in corporate bond market.

In August last year, the government had allowed foreign investors to directly invest up to $13 billion in equity and debt schemes of mutual funds.