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Finance is the art of passing currency from hand to hand until
it
finally disappears
- Robert W. Sarnof
National Headlines RBI after raising CRR by 50 basis points
raises it again by another 25 basis points to
8.25%.
Despite the adverse market conditions HDFC Bank posts MTM (Mark
to Market) profits of
Rs. 293.59 Cr.
Supreme Court held Tata Teleservices & Reliance Comm. to pay
BSNL ADC (access
deficit charges) of Rs. 700 Cr. as they are limited mobile
services in form of UnlimitedCordless services.
Steel producers agree to cut prices by Rs. 2000 to Rs. 4000 a
tonne.
Govt. to divest residual 26.12% stakes in VSNL.
Tata steel along with other partners is undertaking expansion of
the Carborough Downs
coal mine in Australia.
Hindujas plan $50 billion capex in next five years.
46 companies suffer forex losses of Rs. 1365 Cr.
After SBI, ICICI, HDFC and other banks now its turn for Kotak
Bank to set aside
Rs. 86 Cr. for derivatives.
India bags stakes in Russias Sakhalin III project.
International Headlines Mars, the privately held US
confectionary group announced to acquire gum group
Wrigley for around $23 billion.
German biggie, Deutsche Bank plans to invest over $ 1 Billion in
Indian real estate andinfrastructure sector over 3 years.
French cement co. Lafarge SA is all set to acquire ready mix
concrete business of Larsen& Toubro for estimated Rs. 1000
Cr.
Toyota struggles as the quarterly profit falls by 27% to $15.33
billion.
BHP Billiton largest mining company may sell $50 billion of
assets if it succeeds in takingover rival Rio Tinto.
Microsoft walks out of Yahoo deal as it withdrew back its
takeover offer.
Citi group considers $400 billion assets sales.
16th MAY 2008
Volume 2, Issue 4
..Tracking the Economy
A weak currency is the sign of a weak economy, and a weak
economy leads to a weak nation. - Ross Perot
Inflation 7.61 % , IIP 8.7%
Issue AttractionsNationalHeadlines
1
InternationalHeadline
1
CorporateInterview
2
Quiz 2
Student Editorial 3
InvestorsCheck/Taglines/Buzz Word
4
15 days Movements
CHAANAKYACHAANAKYACHAANAKYACHAANAKYAWealth Incorporation - A
CCIM Finance Club Initiative Presents
500
000
500
000
500
000
1 2 3 5 6 7 8 9 12
Sensex
Sensex(May1-15)
00
50
00
50
00
1 2 3 5 6 7 8 9 10 12
Gold(per gram)
Gold(May1-15)
00
00
00
00
00
00
00
00
00
00
1 2 3 5 6 7 8 9 10 12
Oil(per bbl)
Oil(May1-15)
.5
40
.5
41
.5
42
.5
1 2 3 5 6 7 8 9 12
Rs/$
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Quiz
Business, that's easily defined - it's other people's money. -
Peter Drucker
1. A phrase used to describe the idea that changes or policies
designed to alter the course of the economy should be d
slowly, rather than all at once. It describes a scenario where a
central bank, such as the Federal Reserve acts
stimulate or slow down an economy. When the first stimulus is
made, the effect may not be immediate, which can ca
decision makers to increase the magnitude of the change,
eventually causing too much stimulus.2. A currency trade that
offers an all-or-nothing payoff based on a given currency exchange
rate when the position reac
its expiration date.
3. A situation where a trader who is facing financial or legal
troubles hedges his or her position in an investment wit
ticket to a tropical location.4. The market in which currencies
are traded. This market is the largest, most liquid market in the
world with an aver
traded value that exceeds $1.9 trillion per day and includes all
of the currencies in the world.
5. A strategy in which an investor sells a certain currency with
a relatively low interest rate and uses the funds to purch
a different currency yielding a higher interest rate. A trader
using this strategy attempts to capture the difference betw
the rates - which can often be substantial, depending on the
amount of leverage the investor chooses to use.
EDUCATIONAL QUALIFICATION B.Sc. (Hons), M.Sc. (Electronics),
CAIIB
Presently, he is on the board of a bank and a pharmaceutical
company, a consultant toa multinational consulting company and an
adviser to a educational group. Moreover,he spends good time on
reading and writing for financial news papers.
CONTD. FROM LAST ISSUE (Volume 2, Issue 3)..
4. Do you expect job cuts or slowdown in recruitment in the
Indian BankingSector, taking expected Recession in US into
consideration?
ANS. In recessionary periods some job cuts and slowdown are
inevitable. In India,particularly in utility and service
organisations recruitment and training are timeconsuming and during
minor ups and downs in economy no serious changes take placin the
personnel policies. Also Indian economy is on a growth path and
temporaryrecession in USA would have lesser impact on the job
creation. Thanks to globalisationthe slowdown in USA can be
moderated to some extent by the growth in China andIndia.
5. What advice would you give MBA Finance students? What should
their level ofpreparedness be when they enter the actual business
environment?
ANS. Being alert and alive to market developments is essential
in businessenvironment. Good knowledge of global markets and their
monitoring is part of the ris
management practices necessary for survival. Professionalism is
the key word. While aelement of speculation is an ingredient of any
business, adventurism and greed are tobe shunned.
Interview With M.S. Murthy
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ARVIND MILLS ,500101, NSE- ARVIND
CMP- Rs.50
TARGET PRICE: RS
DCB,BSE- 532772NSE DCB
CMP- Rs.78.85
TARGET PRICE: RS
STERLITE INDS500900, NSESTE
CMP- Rs. 818.20
TARGET PRICE: RS RS
(CMP Current Market
Stock Ratnas
When buying shares, ask yourself, would you buy the whole
company? - Rene Rivkin
Answers To Quiz
1. Full in the Shower
2. Currency Binary
3. Rio Hedge
4. Forex (FX)
5. Currency Carry Tr
NON-BANKING FINANCE COMPANIES By: Arihant Patawari
NBFC means a company which is a financial institution and has as
its business thereceiving of deposits or lending under any scheme
or arrangement. NBFCs haveemerged as an important player of the
Indian financial system. They have grownboth in magnitude and
depth. NBFCs business turnover constitutes about 25% of
the aggregate deposits of the scheduled commercial banks. Kotak
MahindraFinance Company and Sundaram Finance Co. are examples of
NBFCs.
However, in the absence of proper regulatory mechanism, all
kinds of NBFCs haveproposed. Further, imprudent policies, delayed
repayments and shortage of fundshave brought many NBFCs to the
brink of disaster even as the regulatory normsare relaxed. There
had been recurring failures of companies to pay high interestrates
or default even in paying the principle amount.
An expert group appointed under the chairmanship of Shri P.R.
Khannarecommended a supervisory framework for regulation and
supervision of NBFCs.Accordingly, the RBI act has been amended. The
amendment which comes intoforce from April 1, 1997 basically seeks
to protect the interests of depositors who
have suffered in the recent past with firms promising high rates
of interests andfailing to repay the deposits in time.
According to the provisions, unincorporated bodies who have
banned fromaccepting deposits w.e.f. April 1, 1997. If these bodies
hold any deposits on thisdate, these will be returned to the
depositors within a period of two years orimmediately.
Besides, explicit conditions have been laid down for NBFCs to
commerce or carryon their business. These include the
following:
Certification from RBI. Having net owned funds of Rs. 50 lakhs
or such amount not exceeding Rs. 200 lakhs asthe RBI may specify,
by notification in the original gazette. This has been further
reduced toRs. 25 lakhs. Every NBFC must create a reserve fund and
transfer not less than 20% of its net profit
each year as disclosed in the profit n loss account before any
dividend is declared. The act also empowers the RBI to set the
policy and issue directions to prevent NBFCs
being run in a manner being detrimental to the interest of
depositors.
RBI will also have the power to direct special audit of accounts
of the NBFCs. The Companies law board can now direct the NBFCs to
repay the deposits that have
matured if it is so satisfied that the company is unable or
unwilling to repay the depositors
Provisions have been made for the first time for making
nomination by the depositors
with regard to deposits held by them.
RBI has been empowered to wind down the business of an NBFC if
it feels that the
latter is incapable of conducting its business to the best
interest of the depositors.
Did you Know?
To commemorate
centennial of
Independence fr
Spanish rule in 19
the govt. of
Philippines wanted to
something special.
issued the worla rges t bankno
beating the previ
record (Chinas M
Dynasty 1 Kuan).
1,00,000 Piso n
measures 356 mm
216mm.
Did you Know?
The Indian fina
ministry prints the set of budget papers
its own press, wh
o p e r a t e s i n t
basement of
building.
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INVESTORS CHECK
Cont. from Volume 2, Issue 3.
Part: B-If we notice that the volume and open interest are both
increasing, then it is inferred that the current price trend (up
ordown) is likely to continue in its present direction.
When the increase in the stock price of a particular company is
accompanied by an increase in volume and open interestit implies
that the investors/ traders are flocking to the counter. As long as
fresh droves of investors/traders, reflected in
high volume and open interest, are interested in a particular
stock, the price will continue to move in an upward trajecto
This holds true in a stock that is declining as well. When the
stock price decline is accompanied by increasing volume and
the open interest, it is inferred as bearish, the reason being
that all the investors who bought the stock at higher levels ayet
to exhaust their holdings. The downward movement will end only when
all the short-term investors have divested thholdings.
If we extend this logic further, the decline in volume and open
interest indicates that the current price trend (up or down
of the stock is possibly close to end.
When the stock price of a particular company is rising along
with the declining volume and the open interest, it is inferreas a
sign of bearishness and that the stocks uptrend may be close to an
end. Similarly, when the stock price of aparticular company is
declining along with the decreasing volume and the open interest,
it is inferred as signs ofbullishness because the stocks present
downtrend may come to an end.
Please mail your valuable feedbacks, reviews at
[email protected]
Buzz Word
Fiat Money - Currency that a government has declared to
be legal tender, despite the fact that it has no intrinsic
value and is not backed by reserves. Historically,
most currencies were based on physical commodities suchas gold
or silver, but fiat money is based solely on faith.
Gap opening - Used in the context of general equities.
Opening price that is substantially higher or lower than the
previous day's closing price, usually because of some
extraordinarily positive or negative news.
Level-coupon bond - Bond with a stream of coupon
payments that are the same throughout the life of the
bond.
Book Quotes:
"The battle is not to improve ourcircumstances, to supply us
with money, toprotect us from suffering, to keep us safe fro
pain and struggle, or to quickly fix whateverproblems develop in
our bodies. We areencouraged to pray for all these things, but
wmust always finish our prayer with thatwonderful caveat that in
our immaturity wefind so annoying: if it be Thy will."
- Connecting by Larry Crab
Tag Lines:
BUSINESS INDIABUSINESS INDIABUSINESS INDIABUSINESS INDIA
>>>> The Magazine of the Corporate World
BUSINESS TODAYBUSINESS TODAYBUSINESS TODAYBUSINESS TODAY
>>>> For Managing Tomorrow
BUSINESS WORLDBUSINESS WORLDBUSINESS WORLDBUSINESS WORLD
>>>> Play the GameDEUTSCHE BANKDEUTSCHE BANKDEUTSCHE
BANKDEUTSCHE BANK >>>> A Passion to Perform
CITIGROUP or CITIBANKCITIGROUP or CITIBANKCITIGROUP or
CITIBANKCITIGROUP or CITIBANK >>>> The Citi Never
SleepsUNIONUNIONUNIONUNIONBANK OF INDIABANK OF INDIABANK OF
INDIABANK OF INDIA >>>> Good People to Bank with
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Contributions made by :
Taglines & Editing Arihant PatawariFouzia Taranum
News Anup Rajan &Ashish Poddar
Did you know, Quotes SukruthaStock Ratnas, Quiz Lavanya
Graphs Gnana DeviInvestors Check Diwakar GroverInterview Sasmit
K. SahuBook Quotes, Buzz Word Nikhil Mehta Article Arihant
PatawariCoordination Manish Sinha
