Niveshak September Issue

Monday, September 21, 2009 , Posted by Team Niveshak at Monday, September 21, 2009

The global financial system is reminiscing the fall of Lehman Brothers, the event of September 15, 2008, that shook the world economy and sparked the worst financial crisis in generations. A year after, world is slowly but surely coming out of its tremor. The markets across the globe are continuously scaling new heights every week, backed with strong fundamentals from all the sectors. Hence with some level of confidence we can say the financial systems around the world have stabilized and the economy recovery is on its way. Whether this has been possible due to the resilience of economies and financial markets or the prudence of policymakers who responded to the crisis with massive macroeconomic stimulus and other measures to prop up their domestic financial system is already a burning topic of discussion.

The Asian and European market is on upward trend which has been termed as “Cautiously Bullish”, is now waiting for the second quarter results of the corporate. The market sentiments and expectation across the globe has been positive for last three months, with almost all markets giving positive returns. The revival of US market and numerous signs recovery like positive home sales for the first time since 2007 and the growing of order book of manufacturing sectors have brought some cheers to the Wall Street. But the glaring fact which needs to be pointed is that the world is still looking up to US to pull the global economy from the crisis. China on the other hand is showing signs of recovering from the present crisis with the funding from government and bank lending. Today, China is one of the fastest growing economy of the world. We have covered this question whether China is the next economic superpower of the world and will overtake US is highlighted in this issue.

India’s GDP growth for the first quarter of 2009 stood at 6.1%. This exceeds the consensus estimates and an improvement from the last quarter growth which was 5.8%. Hence given the global downturn these figures have brought some cheers to the investors in the Dalal Street and also to the policymakers of the country. But the fiscal deficit at 6.8% of GDP is hot topic of discussion among policymakers and economist. It’s not that only India is facing its worst fiscal deficit in past decade, most of the countries across the globe are facing the problem of huge fiscal deficit. US fiscal deficit stood 12.3% of its GDP. Our cover story is in line with these issues and gives a perspective whether to worry about fiscal deficit and what implication it will have on the recovery from the current crisis.

We have also covered the topic of rising prices and falling inflation which have been making news every week. The basic of inflation calculation in India and the comparison of CPI and WPI method have been outlined. This issue also features the prospects of credit default swaps in India. An inside look into the Build America bonds have also been covered in this issue.

I am glad to mention that this is the beginning of second year of Niveshak journey and would thank all our well wishers for their support for making the Anniversary issue a huge success. We will constantly try to scale new heights. Now in the outset of the recovery of the world economy it’s even more important to track the global cues and be informed. Economists and experts across the global have already stated that it may be ‘V’ or ‘W’ or even square root shape recovery. So it’s the time to keep a watch on the Bull and Bear fight in the global market and support the Bull to win the race.

Stay Invested for the good times ahead.

Biswadeep Parida

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