Niveshak April Issue

Friday, April 24, 2009 , Posted by Team Niveshak at Friday, April 24, 2009

We may have been blamed of being pessimistic for sharing all bad financial news and outlook with you through Niveshak since the collapse of Wall Street. Together we have tried to find the bull among the ruins of the Sub Prime. But we were chased by bears in all the financial markets from Kospi to Nasdaq. We were also overwhelmed by negative corporate financial results and unhealthy Macroeconomic reports in all the countries across continents.

But this time we have got some good news for a change. Markets are recovering. Yes, the bull is back, picking momentum and means serious business this time. All the major share markets have shown green figures on most occasions since 9th of March 2009. After writing off billions of dollars of toxic debt to US Treasury in the past quarters, some of the major US financial institutions are back in profits this quarter.

 India has gone a step further in giving positive data. When Kospi, Dow Jones Industrial Average, S&P 500, Nasdaq composite index , Euronext etc have grown by 15 to 25%, our very own Bombay Stock Exchange has shot up by 35% since 9th of March 2009. Most of India Inc’s financial results are out and all seem to have shown profits whereas some of their counterparts in the west have struggled. This may be the first signs of decoupling of the Indian Economy from the West but we may be far away from that.

 In the present issue we shall try to focus on another Institution which has been or at least seemed virtually unscathed from the financial crisis – Microfinance. We will try to study its growth over the years and evaluate its future prospects in rural India. As we begin to assume the departure of the crisis, we take a look at the impact the global slowdown had on Indian Private Equity players and its implications on India Inc. We shall try to understand the current recession under Minksy’s Hypothesis. This hypothesis states that bubbles and slowdowns are just a part of the economic boom and bust cycle.

 In the current crisis, US and European crisis were the worst sufferers. BRIC economies were also devastated to same proportions. This crisis may see these powerful economies loose the reigns of economic growth to the N-11 countries. How true are these assumptions? We may have an answer. We will also try to substantiate this study with an article on the Investment opportunities in Nigeria, one of these N-11 countries. This is the account of one of our friends who undertook his winter internship in Lagos, Nigeria.

 World Leaders met at the London G-20 conference and took a few steps to see the world out of crisis while the International Monetary Fund decided to float it reserve currency – Special Drawing Rights worth $250bn. Though the move is expected to help emerging economies with their Liquidity problems, some economists also feel that the allocation would add to the Inflation-related woes. We shall also try to analyse these news items and their implications.

 This issue marks the official launch of the blog. This blog will carry latest news from the world of finance along with all the archive files of Niveshak. You are cordially invited to discuss on the latest news and also provide you suggestions and reviews to make your Niveshak better.

 Happy Blogging.

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