Niveshak November 2010 Issue

Sunday, November 28, 2010 , Posted by Team Niveshak at Sunday, November 28, 2010

Dear Niveshaks

I wonder when we are going to see this vicious circle coming to an end. The whole world witnessed the global downturn in 2008 followed by debt crisis in Dubai and Greece. And now we see Ireland joining the league. While the US economy faced the repercussions due to reckless securitising of sub-prime mortgages and Greece collapsed under the burden of misrepresented government spending, the Irish took an easier path to ruin: by taking out enormous, unregulated loans. While the Irish government might have underestimated the severity of the crisis in the last two years and have still not asked for assistance, but, given the kind of interconnected framework i.e. Euro Zone in which they operate, its neighbouring countries
might not let this continue for a longer period of time. Although European countries don’t affect our economy directly but they do affect sentiments, capital flows, gold prices, and commodity prices and so on. Thus, it makes all the more important for a recovering economy like ours to maintain the growth momentum through timely and appropriate reforms.

The waves of concerns that Ireland and few other countries of Europe may find it difficult to meet their debt commitments couldn't prevent themselves from reaching Indian bourses and dragged it below the psychological levels of 20,000 and 6,000, of Sensex and Nifty respectively. This really makes me (and many of us) believe that we are truly an integral part of so called Global village. Moving forward we can expect to see more downside movement owing to the slowly building Asian cues specifically on concerns that China may further tighten their monetary policy to curb inflation. But with the strong capital inflows from FIIs looking for greater returns and sound Indian economy backed by solid fundamentals, our benchmark indices can surprise us by breaking its greatest achieved heights by the end of this year.

Last month’s cover story gave you a detailed analysis of the Coal India’s IPO and its future outlook. The stock, when listed on 4th November 2010, actually met all its expectations and got listed at Rs. 314 which was at approximately 30% above of what investors had paid. Truly a windfall for all investors. I so wish I too had invested in it. In this month’s cover story, we are going to look, analyse and understand the second quarter results of different key sectors operating in India and their implications. At a time when Indian Financial services landscape is undergoing big time consolidation with the likes of Axis-Enam deal, we, in this edition, also present to you an article on mergers and acquisitions. We are pleased to inform you that we have introduced a new section in Niveshak called “Classroom” for your reading pleasure. In this section, we will explain and elaborate a financial term with the help of a conversation. We hope that this endeavour of ours will prove to be an interesting read for our readers and will help them understand new terms in a much easier way with fun. Looking forward to your valuable feedback and suggestions.

Stay Invested.

Bhavit Sharma
(Editor -Niveshak)

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