Portfolio investment
From Wikipedia, the free encyclopedia
| This article does not cite any references or sources. Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. (December 2009) |
|
|
This article may need to be wikified to meet Wikipedia's quality standards. Please help by adding relevant internal links, or by improving the article's layout. (December 2009)
Click [show] on right for more details.
No reason has been cited for the Wikify tag on this article.
|
The purchase of stocks, bonds, and money market instruments by foreigners for the purpose of realizing a financial return, which does not result in foreign management, ownership, or legal control.
Some examples of portfolio investment are:
- purchase of shares in a foreign company.
- purchase of bonds issued by a foreign government.
- acquisition of assets in a foreign country.
- purchase of stocks in a foreign company.
Factors affecting international portfolio investment:
- tax rates on interest or dividends (investors will normally prefer countries where the tax rates are relatively low)
- interest rates (money tends to flow to countries with high interest rates)
- exchange rates (foreign investors may be attracted if the local currency is expected to strengthen)
Portfolio investment is part of the capital account on the balance of payments statistics.
A portfolio investment is in contrast to a direct investment.
[edit] External links
| This economics or finance-related article is a stub. You can help Wikipedia by expanding it. |