The following is the definition from World Bank:

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Does it imply that apart from FDI, portfolio equity includes net inflows from equity securities including shares, stocks, depository receipts and direct purchases in local stock markets by foreign investors?


1 Answer 1


Yes given that ownership of 10 percent or more of the ordinary shares of voting stock is the criterion for determining the existence of a direct investment relationship. This threshold of 10 percent establishes a controlling interest, per guidelines established by the Organisation of Economic Co-operation and Development (OECD).

According to the OECD Portfolio investment is the category of international investment that covers investment in equity and debt securities, excluding any such instruments that are classified as direct investment or reserve assets.


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