Niveshak August Issue: Anniversary Special
Monday, August 24, 2009 , Posted by Team Niveshak at Monday, August 24, 2009
Dear Niveshaks,
Congratulations on completing a year with us.
It was last Independence Day when Niveshak (The Investor) first saw light of the day. Now we have completed one full circle round the sun, one full year, four seasons, twelve months and most importantly we sailed through the most turbulent times of the financial world. It all began with the fall of the most formidable names in the world of finance, most notably the Wall Street Investment banks. The world watched with shock and horror as the Wall Street got completely wiped out of the species of its standalone I-Banks.
Before they fell down, they had spread their wings of destruction all over the world and across all the markets, both by geography and by sector. They pushed stock market indices to unimaginable lows across all markets starting from Nikkei & Hang Seng to Dow Jones Industrial Average & Nasdaq composite through BSE & FTSE. Commodity prices & crude oil prices hit rock bottom giving respite to the world reeling under inflation, but no one wanted it that way. International Trade suffered as suggested by the sharp dip in Baltic dry index. Bail outs after bail outs were rolled out by central banks of various countries, but the ailing financial system absorbed it all without throwing any signs of recovery. This exposed countries into further trouble of widening fiscal deficits and currency value erosions.
To fight losses, industries began to shut down, throwing millions into unemployment in the process. As unemployment rates crossed 10% in most countries, economists and analysts began drawing parallels between the Great Depression of 1929 and the Sub-Prime crisis of 2008. The already bleeding US auto industry saw its worst times when two of the iconic brands of USA, General Motors & Chrysler, ran to investors with hats in hand for survival.
From January, Indian markets started showing some signs of recovery but all the fizz was taken out when the once blue eyed boy of Indian IT industry, Mr. B Ramalinga Raju, reported of severe misappropriations in Satyam. The image of India Inc suffered heavily but recovery story was intact. All the sectors improved their performance and in the quarter ending June’09, most of the companies showed profits. India was one of the first to report green quarterly reports.
This story replicated in the west with most of worst hit countries showing profits in Q2 CY09. This was reflected by an upward movement in stock prices across all the exchanges of the world. Most of the financial giants like JP Morgan Chase, Goldman Sachs, Citibank and AIG which, a few days back, were billing overtime for survival also showed surprisingly huge profits even after paying almost all of their federal debts. This brought about much cheer to stock markets. But much before this, on 9th March 09 most of the stock market indices had started their upward journey. This may be attributed to huge bailout money and huge FII money in some countries.
This may have been the worst of all times, but all these provided us with a once in a lifetime learning opportunity. I have already emphasized in one of our earlier editorials that this is the best time to study, rather experience and understand the intricacies of finance and economics. I am very happy to note that we have not missed any significant learning opportunity. Through Niveshak, participants of all B-Schools captured the essence of all the happenings and analyzed their implications on the world of finance. During the last 8 issues, we received more than 200 articles from more than top most 30 B-Schools of India. We are extremely thankful to all our article contributors across all B-Schools and to all our subscribers who encouraged us through their appreciation mails and by increasing the count of our subscription. We are extremely thankful to Prof. Ashok K Dutta, Director, IIM Shillong, for inspiring us to take up this mission. We are thankful to Prof. S. S. Sarkar, our mentor for having inspired us during difficult times and all our faculty members whose support and encouragement made us see this day. Most of all, we thank all the participants of IIM Shillong, without whom Niveshak would not have completed a glorious year.
To grace our anniversary issue, we have an interview with Mr. C. S. Mohapatra, Director of Capital Markets, Ministry of Finance, Government of India. He talks about the present state of regulatory affairs in the Indian Capital Markets and the major reforms which are expected soon.
Our Anniversary issue is a tribute to all the major happenings that shook the world of finance over the last one year. We have attempted to capture most of the major happenings and tried to derive a lesson or two from them. We hope this would be a useful issue for you and we promise to publish more valuable issues in future. Once again, I congratulate all of you and Thank you for all your love, support and encouragement.
Stay Invested with us!
Biswadeep Parida
(Editor-Niveshak)
