Niveshak June 2014 Issue with Page Flip version
Monday, June 30, 2014 , Posted by Team Niveshak at Monday, June 30, 2014
Dear Niveshaks,
We hope that the month of June has brought forward
more clarity in terms of the economic agenda of the new Government. The
government after announcing its ministers and the portfolios allocated to them,
took strict actions to increase the efficiency of the government officials.
We would like to thank our readers for their immense support and encouragement. You remain our prime motivation factor that keeps our spirits high and give us the vigor and vitality to keep working hard.
Also, the Government has begun well by attacking the low hanging fruits, to bring back the Indian economy on the growth path. A lot of buzz has been created due
to this in the news flow of the PSU stocks, with many people expecting a large
divestment program from the current government. The focus has shifted from the
elections to the Budget to be announced by the new Finance Minister Mr. Arun
Jaitley. A lot of sops are being seeked by the manufacturing sector in this
budget. Also there are many speculations relating to the various tax structures
our new Finance Minister could introduce this time.
On the business front, Mr. Vishal
Sikka has been appointed as the first non-founder CEO of Infosys. He has been
instrumental in his past role at SAP, Germany. With his appointment Mr. Narayan
Murthy stepped and down from his post and retired from the company. Another
major development from the 2 wheeler sector was that Bain Capital, which had
invested $550 million (Rs.2, 800 crore) in Hero MotoCorp, in March 2011, sold
part of its stake to book some profits it had made. The sale was triggered
because of some undisclosed cause like Hero may have promised certain IRR
(Internal rate of return) to Bain in three-four years. In the Banking sector,
State-owned Central Bank of India proposes to raise an estimated Rs.540 crore
by selling stake on preferential basis to Life Insurance Corporation of India (LIC).
The board approved raising of additional capital by issuance and allotment of
up to 71,075,753 equity shares at a face value of Rs.10 each to LIC on
preferential basis. The Government of India currently holds an 88.63% stake in
Central Bank. The bank recorded a 4% decline in net profit to Rs.162.44 crore
in the quarter ended 31 March compared to the same quarter the previous fiscal
year. In 2013-14, the bank made a loss of Rs.1, 262.84 crore, compared with a
profit of Rs.1, 014.96 crore in the previous fiscal year, due to higher
provisioning. The month also saw the beginning of the 2014 Football World cup
and many finance professionals have tried to predict the outcome of this mega
event. Brazil will beat Germany to win soccer’s World Cup and also will score
the most goals, according to a survey of economists across 52 countries. The
tournament’s host nation eclipsed Germany and Argentina as the top choice among
171 economists from 139 companies in a Bloomberg News poll. In another major development,
BNP Paribas SA (BNP) faces harsher treatment from U.S. authorities than Credit
Suisse Group AG (CSGN) with a fine twice the size of the Swiss bank’s and a
business prohibition that could cause loss of clients. Regulators and
prosecutors are now seeking more than $5 billion in fines and a guilty plea to
criminal charges for violating U.S. sanctions. In addition, a temporary ban on
transferring money into and out of the U.S. is being considered.
In this June edition of Niveshak,
our editors have covered the story about the expected steps that the new Indian
Government would take in order to revive the economy. The Article of the month
this time is “Yuan Vs Gold- Successor to Dollar as Global Reserve” which
compares the chance of Yuan and Gold of replacing dollar as the reserve
currency of the world. FinGyan section covers the M-Banking situation in India
and its growth prospects. Finpact section in this issue touches upon the
M&A deal between Reliance Industries and BP, where RIL sold a part of its
stake in the KG D6 oil wells to BP for $7.2 billion. The Finsight section gives
insights into “Crowd Funding: Is it the next big Financial Idea?” . The
Classroom section shares knowledge on Angel Investors.
Stay invested!
Team Niveshak
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