FPI (foreign securities investment) refers to an enterprise's investment in other enterprises by purchasing securities such as stocks and bonds to obtain income or other long-term rights, which belongs to indirect investment.
Difference:
1, with different purposes.
Foreign direct investment refers to investors' centralized control over the management right of an enterprise, and their main purpose is to have a say in the management of the enterprise.
FPI mainly refers to the purchase of stocks and other securities of foreign companies and the investment of medium and long-term international credit for the purpose of obtaining income or other long-term rights.
2. Different roles
Foreign direct investment helps to improve the competitiveness of the host country, promote the imperfection of the host country system and the degree of integration with the international community, make foreign investment safer and facilitate the inflow of a large number of foreign securities investment; FDI, such as multinational corporations, itself needs to raise a lot of money in the international money market, which substantially increases the flow of indirect investment.
The pulling effect of foreign portfolio investment on foreign direct investment is that the inflow of a large amount of foreign portfolio investment will help recipient countries to raise a large amount of funds and improve their investment environment (such as improving infrastructure construction). ) and improve their competitiveness in attracting foreign direct investment.
Extended data:
Classification of foreign securities investment:
1, stock investment
It refers to the investment behavior that investors buy shares of a joint-stock company and become its shareholders. There are two main purposes for enterprises to invest in stocks: one is to get higher cash dividends and stock appreciation income through investment, regardless of the production and operation of stock issuing companies. At this time, there is no direct connection between investment and the long-term enterprise, and speculation is very strong.
One is to become a long-term shareholder of the invested company through stock investment, hoping to get involved in the company's production and operation activities, and even hope to gain the controlling position of the company and eventually merge the company. The investment at this time is more based on the long-term development of the enterprise, closer to the real investment behavior, and more in line with the operating principles of the production enterprise itself.
2. Bond investment
It refers to an investment behavior that an enterprise buys bonds issued by financial institutions such as government, enterprises and banks with cash. The purpose of corporate bond investment is to obtain higher interest income, and at the same time, it is also concerned about whether the debtor can repay the principal and interest in time.