Dear Niveshak,

The winds of change are blowing here at IIM Shillong. Amidst the hustle of the placement season, 18 fellow Niveshaks are hard at work at crossing one of the most significant milestones of our existence. The Niveshak Investment Fund, NIF as it is commonly known, is set to fight it out with the big boys. NIF will soon be going live, an ambition that is finally close to becoming a reality. It is with great pride and gratitude we dedicate this significant achievement to the forbearers of our office who have set the bar high and have been instrumental in creating a hard culture and heritage of the Finance Club, the oldest and proudest club of IIM Shillong.

This month’s magazine starts with “The Month that Was” looking at the latest happening of the financial world. We weigh in on the BRICS summit which was threatened at that point due to the Doklam crisis, something for which this administration has to be commended in succeeding to come out of the confrontation smelling of roses. The cover story of this edition tries to objectively analyze an issue we seldom have had to face before: the issue of plenty. As the country’s foreign exchange reserves peaked at a staggering US$ 402.246 Billion, we look into what is the ideal amount of foreign currency assets we should be holding and what is the cost, opportunity cost and otherwise, of holding such high levels of currency. Ms. Bekxy Kuriakose, who charmed during the recently concluded Manthan, weighs in on issues mainly relating to fixed income securities and the enormous potential that it has.

The guest articles for the month are especially interesting with the article of the month taking an interesting look at decentralized IT systems and its implications for the banking and financial systems. While the FinGyaan opines about how the consolidation of the state-run banks could play out if the existing potential synergies are exploited. FinFame looks at Viral Acharya, one of the most influential men in the Indian financial industry and widely tipped to be the next RBI governor. Finally, in its second edition, Juxtapose compares and contrasts the Zimbabwean economic crisis and US Great Depression.

We hope you have as much reading the magazine as we had in making it.

Stay Invested,
Team Niveshak

Dear Niveshaks,

A lot has been happening around the World and in India as well. The Doklam standoff keeps everyone on their heels with India maintaining its calm and diplomacy. From the financial world, the SBI brought about a 50 basis point cut to its deposit rates which would hamper the amount of savings of the retail customers of the bank. The SEBI may ease the dispute settlement norms as requested by legal advisors and other stakeholders.

The fiscal deficit soared to 81% of FY18 target in April-June owing to an increase in the food, fertilizer, and fuel subsidy. As per the Moodys poll, India to grow at a modest 6.5-7.5% over 12-18 months before it reaches to the 8% GDP growth rate again. Infosys, TCS, Tech Mahindra see a shrink in the workforce for the first time, and the Snapdeal, Flipkart and Ola founders look at clawing back the lost ground from the investors.

The Cover Story for the month of July discusses the ‘Insolvency and Bankruptcy Code’ enacted by the Government in 2016. In the words of Arundhati Bhattacharya, Chairman, State Bank of India, “Going to the Insolvency and the bankruptcy Code would be the new normal.” This code was brought in existence to come up with a better solution to the prevalent NPA issue of the banks, safeguard their interests and the welfare of other creditors and various stakeholders. The Bankruptcy Code shall supersede all the other existing laws with regards to the issue of insolvency in the country. Keeping in mind the focus of the present Government at the ‘ease of doing business,’ this Code shall improve the ranking of India at the global level by reducing the time to sort the Insolvency issues in the country which accounts for a staggering 4.3 years to resolve presently.

The Article of the Month, ‘Universal Basic Income,’ talks about a problem quite germane to India and globally too. The idea of UBI (Universal Basic Income) stresses upon the importance of achieving social cooperation and justice as well as a robust financial system by reducing income disparities. The article further compares the UBI with the other prevalent top six welfare schemes of India, critically going through its advantages and limitations when pitted against them. It poses apposite questions of whether such schemes be implemented in India and is a fine read to the reading masses.

The FinSight and FinGyaan sections discuss of the ‘State of Economies of the World’ and ‘Tail Risk in Sub-prime Crisis’ respectively. FinGyaan deals with the problem of carrying a tail risk being acute especially in the modern financial system. It mentions of the sub-prime crises as a typical story of classic informational and distorted conflicting incentive problem among the stakeholders of the security market and underpricing of the tail risk leading to a financial disaster. The FinSight mentions of the macroeconomic scenario of the world, discussing of the slump in Oil prices, the present situation in the three major countries of South East Asia, China, India and Japan and their impact on the world economy.

In the FinaFame section, one gets to know more about Mohammad Yunus - The Man who was the visionary and developer of the one of a kind micro-credit idea, the Grameen Bank. Awardee of the Nobel Prize, the article takes the reader through the personalities life history and his achievements. The Classroom section of the July issue briefs the reader about the ‘Arbitrage Pricing Theory’ and how it helps in predicting an assets’ return using various risks attached to it.

Stay Invested!
Team Niveshak

Dear Niveshaks,
This month has been quite an eventful one with the Prime Minister visiting and signing pacts with countries like the US and Israel which has both defense-related, bilateral trade benefits as well as economic impacts. The ongoing tussle with China and the renewed talk of make in India should boost consumption of domestically produces goods. The divestment approval for Air India serving a debt of over Rs 50,000 crore, is surviving on a taxpayer bailout. The Indian markets have been bullish, to say the least, and look all set to breach the highest tally ever. Amongst all of this, GST made the biggest impact in the month of June. The GST also addressed as the Good and Simple Tax by Mr. Modi was launched on the 31st of June and created maximum buzz by featuring the maximum number of times in the news portals, morning papers and the discussions of all and sundry.

That said, this month, we bring to you in our cover story another initiative that the present Government is likely to implement, ‘Will India make the shift to a new Financial Year.’ The article deals with a lot of potent questions and thoughts on the shift if it takes place, talks about the background of the current financial year and accounts for the pros and cons of the shift to the new financial year. The magazine team gives their opinions and suggestions on the shift while analyzing the move already implemented by the state of Madhya Pradesh in the conclusion section.

The Article of the Month raises a pertinent question, one that every Indian and Chinese resident ponders about with juxtaposed thoughts on the issue; ‘Can India replace China as a new superpower?’ A must read for the finance enthusiasts with comparisons drawn between the two countries on various topics including the GDP, population, and other macroeconomic factors. The FinSight and FinGyaan sections deal with ‘Capitalism, Inequality and Sustainable Development’ and ‘Indian Pharma – An Ambivalent Aura.’ The articles talk about inequality as a result of the widening
gap between the rich and poor as a result of capitalism and how it affects the sustainable growth of the world. The FinGyaan section deals with the Indian pharma sector; its impact on the Indian economy, GST’s influence on the pharma industry, the importance of US markets for Indian pharma division and the technological innovations in the industry.

In the FinaFame section, you get to read about Sanford I. Weill - The Man Who Invented Financial Supermarket (an institution or a company which offers a full range of financial services under one roof) that includes insurance, underwriting, stock brokerage services apart from a gamut of banking services. The Classroom section shall further your knowledge on ‘triple witching,’ an event that occurs when the contracts for stock index futures, stock index options, and stock options expire on the same day.

Have a fun time going through the various sections of the magazine. We hope you enjoy reading and give us your valuable feedback on what you expect to read in the upcoming volumes.

Stay Invested!
Team Niveshak