Financie Minister of India to meet Foreign Investors Portfolio representatives to understand current scenario of financial markets

NEW DELHI | AHMEDABAD-GANDHINAGAR-RAJKOT – In an official communication statement issued by the Finance Ministry of Government of India, as signed by Finance Ministry Secretary Atanu Chakraborty, representatives of Foreign Investors Portfolio are invited for an interaction with the Finance Minister Nirmala Sitharaman on Friday between 4:00pm to 5:00pm, to understand the prevailing current scenario in financial markets.

DATELINE GUJARAT has a copy of one such communication dated August 06, 2019 as signed by Atanu Chakraborty, addressed to one of the Foreign Investors Portfolio company in India.


THE COMMUNICATIO TEXT

The communications reads that, Hon’ble Finance Minister will be holding consultation with representatives of Foreign Portfolio Investors on 09.08.2018 (Friday) from 04:00 PM to 05:00 PM in Room no.72, North Block, New Delhi to ascertain view on issues relating to financial markets.

I request your participation in this dialogue. Though it is a short notice, I am sure you will find time out of your busy schedule.

I look forward to seeing you during the discussion.


WHAT REALLY WENT WRONG?

In less than one month’s period, after the announcement was made in the Union Budget speech by Finance Minister of imposing surcharge on Foreign Investors Portfolios, stock markets in India witnessed erosion of 14.55 trillion (~14.55 lakh crore) rupees between July 4, 2019  to August 7, 2019.

With the economic scenario going low due to consumption not picking up.

Demand not seen and commentaries from several rating agencies, after the new tax component imposed in the budget on super-rich class and financial market transactions, foreign institutional investors were one of the bigtime sellers in the recent bear rally, witnessed by the Indian Equity space.

News of shutdown of several plants, earnings or financial numbers of Mid Cap companies for first quarter (Apr-Jun) not in tandem and share prices of these Mid-Cap equities having eroded heavily, the FIIs were busy selling and exiting the equity space in India.

Adding fuel to the fire was the recent geo-political development in Jammu & Kashmir.

After the heaviest deployment of forces in the history, Indian Government decided to scrap Article 370 and Section 35A granting autonomy to the state of Jammu & Kashmir.

In both houses of Indian Parliament on Monday, August 4, 2019 – Union Home Minister tabled a bill and made announcement of converting the areas in Jammu & Kashmir in two Union Territories.

Foreign investors were a little awry, about the uncertainties prevailing, in the political context alongwith trade war clouds looming in international space and economic uncertainty in India.


ADVANTAGE EDGE

However, after the news of Indian Prime Minister Narendra Modi to address the Nation on 8th August, 2019 (Thursday) and the possibility of surcharge imposed on Foreign Portfolio Investors (FPIs) likely to be withdrawn as media reports suggested, was instrument to bring some relief pushing the two prime Indices and indicators of Indian Stock Market  – SENSEX and NIFY in Green zone ending on positive counters and closure, on Thursday.

Emphasis on the socio-eco-political inclusion of the newly announced Union Territory areas of Jammu-&-Kashmir in India, as emphasized by Prime Minister Narendra Modi in his address to nation on Thursday night, has reconciled the confidence with investors, it seems –  because SENSEX and NIFTY opened in GREEN zone on Friday, on positive counters.


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