Does India fit in the scheme of hedge fund thinking?
How? Yes, perfectly. A country like India is ideal for hedge funds. Indian bourses are fairly shallow compared to other bigger bourses and that means a relatively less amount of money can move the market. When FIIs come into India with all guns blazing, it generally means that the markets will swing upward and vice-versa causing a lot of volatility. They are not called hot money for nothing. On a comparative basis, India has a very volatile stock market. So, should India ban FII money? I am not suggesting for a second that India should ban FII money. They should be let in but there should also be a leash placed on them. The only thing that should matter to regulators should be the well-being of the economy. And an over-inflated market is not conducive to that ideal. Bio: Mr Sunil Rongala, a PhD in economics, is the co-author of Asia in the Global Economy: Finance, Trade and Investment (along with Mr Ramkishen S Rajan of George Mason University, US), a book to be released in 2008 (www.w
