Niveshak January 2011 Issue

Sunday, January 30, 2011 , Posted by Team Niveshak at Sunday, January 30, 2011

Dear Niveshaks

The year 2011 has started on an unexpected note with the emerging markets coming down and the developed markets, like that of Europe and the US scaling up. This is not entirely surprising given the fact that the emerging markets outperformed the developed markets throughout 2010. The Indian markets, in particular, were clear outperformers with the benchmark Sensex moving up by over 3000 points during 2010 on the back of impressive FII inflows and a robust domestic economy. However, with the advent of 2011, the problems of rising inflation and a slump in industrial production brought the Indian markets down with the BSE Sensex falling about 2000 points below the 2010 highs. With the RBI policy review and the budget coming up, it would be interesting to see what steps our policy makers take in order to curb inflation and yet not hurt the growth. On the international front, we saw China surpassing Japan in terms of GDP last year. The United States embarked upon QE2 to revive its staggering economy. It would be interesting to see in 2011 if the QE2 actually kick starts the US economy. If QE2 works, then it would be the first time that such a monetary policy will work for a nation. On the negative side, QE2 poses a serious risk of asset bubble creation in emerging markets such as India and China. The Euro debt crisis was another major thing that dominated the headlines last year. The monetary and fiscal steps taken by European nations to resolve the crisis would be a significant thing to watch out for in 2011.

The first edition of 2011 will be incomplete if we don’t have a look at the events that happened in the past year and how the current year will shape up in the context of Finance. Our cover story this month delves into the major events of 2010 and gives our outlook on how the economy will shape up in the coming months of 2011. The “Article of Month” gives a further insight into what happened in the banking sector in 2010 and what would be some of the key challenges that the banking sector is going to face in the coming months as the liberal monetary and fiscal policies get withdrawn. One of the important events that happened last year was the SEBI-IRDA tussle over ULIPs. Post winning the battle, IRDA came out with new regulations governing ULIPs. The current issue features an article on the same and the impact it will have on investor perceptions and the future pattern of ULIP investments. The current issue also features an article on Basel III guidelines which came up in September last year. The article goes in depth into the various facets of Basel III norms and what they mean for the Indian Banking Industry. Lastly, the newly introduced Classroom section discusses various aspects of Green Shoe Option.

We the new team feel privileged to be associated with the illustrious Niveshak. The outgoing team including Bhavit, Bhavya, Durgesh, Hitesh, Sumit, Swarnabha, Tanvi and Upasna successfully published the last 12 issues and with all your support brought the magazine to the height where it is today. I would like to take this opportunity to applaud them all on behalf of the new team. Also, I would like to thank all the readers for their valuable articles, crossword entries and appreciation e-mails. It is only because of readers’ constant support and encouragement that Niveshak has been such a great success. On these closing thoughts, I on behalf of the entire team of Niveshak would like to wish you all a happy and unforgettable 2011.

Please send in your suggestions and feedback at and as always, stay invested.

Rajat Sethia
(Editor -Niveshak)

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