Indian stock debacle..
 

Recently the Indian government has proposed severely limiting how foreign investors (i.e. us Americans) invest directly in local Indian shares of stock. They want to get rid of participatory notes, the main way to invest in the Indian market directly if you are a casual investor (not the same as investing in Indian ADRs). As a result, all ADR indian stocks dropped ~5% today.

Link: Sebi limits PNs

Apparently the main reason why the Bombay Stock Exchange (India's main stock market) was going up was because of foreign investors.

Do you think the drop in the stock price of all the ADRs was deserved? Do you think we will see a rebound tomorrow? What are the chances of the Indian govt going thru with these restrictions?

Re: Indian stock debacle..
 

wow I think I just made the call of a lifetime. Long TTM $100k and its up over 4% in before hours trading (after going up like 5.5% on Bombay Stock Exchange).

Cmon guys I wouldnt post for nothing lol

Re: Indian stock debacle..
 

Nice.

Yea the BSE is fuelled by FDI (foreign direct investment) and FIIs (institutional.)

Check out the crash and rebound of May 2006.

Re: Indian stock debacle..
 

simpleton question....will this directly affect my ishares india etf, and how so if yes?

Re: Indian stock debacle..
 

The ETF usually just owns ADR's and not the special investment deriviates that hedge funds and like use to speculate in the India market (and only that is being debated about restricting) so your fund won't be effect functionality. But it could lower the share price of the underlying holdings if the India market sells off on this news. I think most of the drop has already been reversed

Steve