FII limit in gilts, t-bills doubled

Following the increase in the investment limit for foreign institutional investors and their sub-accounts in debt issuances to $1.75 billion, the Securities and Exchange Board of India (Sebi) has clarified that the overall investment limit by FIIs under the 70:30 route in dated government securities and treasury bills will be raised from $100 million to $200 million.

The overall investment limit under the 70:30 route in dated government securities and treasury bills is raised from $100 million to $200 million. The capital markets regulator, in a circular, has said that monitoring of the above investment limit will be on a daily basis and total outstanding positions of all FIIs and sub-accounts under the 70:30 rote in government securities and treasury bills will be published daily on its website.

Further, a 'headroom' of $25 million has been decided that FIIs and their sub-accounts are free to invest till the total investment reaches $175 million.

Thereafter, these entities will have to approach Sebi for prior approval of limit allocation. The allocation limit will be done on a first come-first serve basis. The FIIs will be granted seven days time to invest and on the expiry of which the validity will lapse.

Individual debt investment limits earlier allocated for 100 per cent FIIs and sub-accounts will be realigned based on the remaining available limit of $1,550 million out of the overall cap of $1.75 billion and the revised limits will be advised to the 100 per cent debt FIIs and their sub-accounts separately.

The capital market regulator has also decided that listing of all manner of debt securities, irrespective of the mode of issuance, shall be done through a separate listing agreement. This will cover all debt issuances whether issued on private placement basis or through public or rights issue.

CalPERS invests $110 million in Indian equities: Meanwhile, the California Public Employees Retirement System (CalPERS), with a $170 billion portfolio of global assets, has already invested $110 million in the Indian equities markets.

Of this, $10 million has been invested in private equity placements, while the rest has been invested in the primary and secondary markets. Market sources said the fund has invested the bulk of its corpus in information technology and pharmaceutical stocks, but no official confirmation could be obtained.

Priya Mathur, vice-chairperson of the investment committee of the US-based pension fund, said apart from China, CalPERs is looking at all other emerging markets in Asia.

The fund has committed $2 billion for investments in the emerging markets alone. In April, CalPERS announced for the first time its intention to invest in India and its board approved the country as an eligible investment destination, based on several parameters including good corporate governance practices in listed companies. It, however, registered with the Securities and Exchange Board of India as a foreign institutional investor only in July 2004.

Mathur said there is the need to improve the surrounding market infrastructure to provide liquidity and greater depth to the market even in large cap stocks.