Stated clearly, the change recently announced by the BEA only applies to private funds making portfolio investments
(investing in stocks, bonds, and derivatives) that have 10% or more voting or controlling interests in an "operating company".
Foreign private investment is further divided into Foreign Portfolio Investment
and Foreign Direct Investment.
While foreign portfolio investment
inflow rose in March, the overall foreign investment is down.
In terms of portfolio investment
, the Japanese stock market, now barely about 11,500, remains near its rock-bottom levels from its December 1990 peak of 39,000, meaning the market has little room for further slide.
, liabilities 15 928 27 493 20 436 40 927 17 070
According to the ministry's draft, the core "general category" of the program, which exclude portfolio investments
, will be cut 4.8% from the initial 1999 fiscal plan, to 37.45 trillion yen.
Major shifts in saving and investment patterns in the large industrialized countries also contributed to the rise in foreign portfolio investment
during the 1980s and 1990s.
Gunigundo said portfolio investments
can leave the country in a flash on a perception that something is wrong with the country's economic fundamentals.
The deterioration was due entirely to a growing deficit in net portfolio investment
income, the result of a continued worsening of the U.S.
Factor markets may be imperfect, there may be no institutional structure in the country for monitoring these key variables (such as private portfolio investment
flows), and in several countries one faces a lack of institutional capacity (in terms of highly skilled staff) in the government to efficiently manage the information and effectively use it to make policy decisions on a day-to-day basis.
TIPS are an excellent core portfolio investment
. An investor can dedicate a portion of his or her equity investment funds to TIPS and trade the balance of their equity portfolio in special situation stocks.
"It is distinguished from a foreign portfolio investment
by a notion of direct control.