Banking Current Affairs

Mauritius was largest source of FDI in India in 2016-2017: RBI

According to Census on Foreign Liabilities and Assets of Indian Direct Investment Companies 2016-17 released by Reserve Bank of India (RBI), Mauritius was largest source of foreign investment (FDI) in India.

The census yields carry comprehensive information on market value of foreign liabilities and assets of Indian companies arising on account of FDI, ODI and other investments.

Key Facts

Mauritius was largest source of FDI in India (21.8% share at market value) followed by USA, UK, Singapore and Japan. Singapore (19.7%) was major ODI destination, followed by Netherlands, Mauritius, and US.

18,667 companies had participated in census, of them 17,020 had FDI/overseas direct investment (ODI) in their balance sheets in March 2017. 96% of responding companies were unlisted in March 2017 and most of them had received only inward FDI.

Unlisted companies had higher share of FDI equity capital vis-a-vis listed companies. Further, over 80% of 15,169 companies that reported inward FDI were subsidiaries of foreign companies (single foreign investor holding over 50% of total equity).

The manufacturing sector accounted for nearly half of total FDI at market prices, information and communication services (ICTS) and financial and insurance activities were other major sectors that attracted FDI. Total sales, including exports, of foreign subsidiaries in India increased by 18.7% during 2016-17 whereas their purchases, including imports, increased by 20.1%.

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AIIB plans to issue first US dollar bonds in June 2018

China-led Asian Infrastructure Investment Bank (AIIB) is planning to issue its first US dollar-denominated bond with minimum worth of $1 billion by June 2018.

The earliest issuance window of bond will be toward end of first half of 2018 with time required for certain procedures, including Board of Governors’ approval of AIIB’s 2017 financial statements as well as borrowing and swap documentation.

Key Facts

The minimum size of the issuance will be one billion dollars, but as demand for the first bond issue may increase AIIB anticipates of having to issue a larger size.

The maturity of the bond will be between three and five years depending on investor demand at the time. he bank plans to cap its total borrowing volume at US $3 billion dollars in 2018.

The AIIB has received three top-notch ratings from global credit rating agencies S&P Global Ratings, Moody’s and Fitch in recognition of the bank’s strong capital base and stable outlook.

Asian Infrastructure Investment Bank (AIIB)

AIIB is a multilateral development bank initiated by China. Its purpose is to provide finance to infrastructure development and regional connectivity projects in the Asia-Pacific region. Its goals are to boost economic development in Asia-Pacific region, provide infrastructure, and promote regional cooperation and partnership.

It prioritises investment in energy, power generation, transport, rural infrastructure, environmental protection and logistics in Asia. It was officially established in December 2015 and opened for business in January 2016. It is headquartered in Beijing. It has an authorised capital of US $100 billion. So far it has 84 members including India.

China is the largest shareholder of AIIB with 26.06% voting shares. India is the second largest shareholder with 7.5% followed by Russia 5.93% and Germany with 4.5%.

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