Letters: The FII myth

Apropos Devangshu Datta's column "FIIs climb the Wall of Worry" (Front Running, April 8), domestic institutional investors (DIIs) expect a definite return on their equity investment, failing which they could go for fixed-income securities. As the return on equities is not even compensating inflation, DIIs are withdrawing rapidly. However, foreign institutional investors (FIIs), who receive liquidity at a cheaper rate from their own country which has a nominal inflation rate, have no overriding expectations about the return. They only want their money to grow faster than what it was in their country. They had invested in India, hoping the economy will come out of the bottom. But when the bottom is still uncertain, how can they afford to stay on? Besides, it's time foreign direct investments make up for this losing trend. The myth that FIIs alone would drive the market should be overcome.

R K Arya Faridabad

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