what is the difference between Foreign Direct Investment FDI and Foreign Institutional Investment FII..?

Question

IN INDIAN CONTEXT

Answer 1

FDI is what a foreign company invests to start a business, like investing in a partnership,opening a factory or starting a production or a chain of stores like Mc Donald/ Walmart or Coco Cola opening up their branches in India to sell their products. FII Investments are financial institutions like banks, stock trading mutual funds etc which invest in indian stock exchanges to buy and sell daily. They also buy Indian debt scrips floated by RBI and other banks. FII Investments are fair weather friends doing daily transactions and the money can move away at the click of a button. FII investments are what Indian stock exchanges attracts in competition with other country exchanges and generally follow a global trend linking with oil prices, political situations etc. FDI is longtime investment with the aim of "setting up a Shop" in the country.

Answer 2

FDI - Where a company sets up operations outside its home country. An institutional investor is a large entity investor such as a bank, insurance fund, retirement fund, mutual fund, etc. So i assume a foreign institutional investor would be as above but in another country. One is an already established company making money and expanding/investing by entering into another country. The other is an individual or large source of funds (such as a bank) investing in the company by lending money. Whether this is a foreign investor(investor in another country to the investment) or a foreign investment(investment in a different country to investor), i dont know..

Answer 3

Foreign direct investment (FDI) is defined as a long-term investment by a foreign direct investor in an enterprise resident in an economy other than that in which the foreign direct investor is based. The FDI relationship, consists of a parent enterprise and a foreign affiliate which together form a transnational corporation (TNC). In order to qualify as FDI the investment must afford the parent enterprise control over its foreign affiliate. The UN defines control in this case as owning 10% or more of the ordinary shares or voting power of an incorporated firm or its equivalent for an unincorporated firm.

Foreign Institutional Investor - FII
An investor or investment fund that is from or registered in a country outside of the one in which it is currently investing. Institutional investors include hedge funds, insurance companies, pension funds and mutual funds.

Notes:
The term is used most commonly in India to refer to outside companies investing in the financial markets of India. International institutional investors must register with the Securities and Exchange Board of India to participate in the market. One of the major market regulations pertaining to FIIs involves placing limits on FII ownership in Indian companies.

Answer 4

1) FDI

FDI is defined as a firm based in one country (the 'home country') owning 10 percent or more of the stock of a company located in a foreign country (the 'host country') -- this amount of stock is generally enough to give the home country firm significant control rights over the host country firm. Most FDI is in wholly-owned or nearly wholly-owned subsidiaries. Other nonequity forms of FDI include: subcontracting, management contracts, franchising, and licensing and product sharing.

2) FII

An investor or investment fund that is from or registered in a country outside of the one in which it is currently investing. Institutional investors include hedge funds, insurance companies, pension funds and mutual funds.

In India :

The term is used most commonly in India to refer to outside companies investing in the financial markets of India. International institutional investors must register with the Securities and Exchange Board of India to participate in the market. One of the major market regulations pertaining to FIIs involves placing limits on FII ownership in Indian companies.

Answer 5

On this issue there is nothing exceptional in the Indian contextDifferences can arise with regard to laws, type of investment, few regulatory clauses and the icing called `insider trading', which too can become risky should your investment volume and time-line glares on the face of SEBI,the regulating body.The practice is illegal, amounting to perjury and cheating, though this is not the case in countries where deregulation in many sectors has taken place.THE CONTEXT THEN BECOMES GLOBAL.BECAUSE OF HUGE LEAPS IN INFO-***-COMM-***-FEEDBACK, which makes investment flows and check-outs in real time, that has unfortunately taken away the wind of floor-trading, when investments were basically speculative and driven by business cycles. Direct investment, carried out through open windows,i.e., the incredible speed and bandwidth through fibre optics [excluding the space] can easily turn you into a 24*7 hands-on freak or a geek, in case you do not have institutionalsupport. Direct investments , something that I consider fascinating, through brookerage, agents, membershup accessto the bourse is fundamentally linked to your k-base, somewhat advanced knowledge of number theories, integers such as probability calculations, presence of mind and abstract speculations over which basically you have control and non-verbal/witten communication skills [gestures, codes are instances] of a high order, minus weak nerves rather than excess nervious energy and unability to figure out [fast mental maths]transactional gains in short time-scales. Actually very few are as gifted or counter-intuitive to handle and profit from direct investments.All of this does at times mean cheating by means of financial instruments like hedge funds. To avoid the direct and tense side, investors create, like mutual funds, organizations whereas FII's have considerable back-ups, directories and yellow pages that can help any individual investor to remain on the side of caution by advising on investing in blue+ chip corporations that assures little incrimental returns while the FII's themselves use your money over short or medium durations to get to the high-profits ceilings.
Would the aforesaid be of any use to you ? That's why I presented a decesionist de-brief.Luck counts.

Answer 6

You asked with your answer man...!