Showing posts with label 2010. Show all posts
Showing posts with label 2010. Show all posts

Niveshak December 2010 Issue

Posted by Team Niveshak on Saturday, January 1, 2011 , under , , |



Dear Niveshaks

As we all get ready to take a leap into the next decade, I find myself jotting down my thoughts for the last time in editorial. Our team’s journey is finally coming to an end and it is the time when we need to pass on the legacy to the next team. It is indeed a déjà vu feeling of last December when our team had got the opportunity to work for this illustrious magazine. The time since then has passed in a flash. Let us have a quick recap of our eventful journey. We started with the footsteps to 2010 where we saw how this world of finance was going to shape up, followed by auditing what is called as the balance sheet and income statement of our India Inc –Union budget 2010. Later we had a sneak peek of some of the most important events in the world of finance like Greece Debt crisis, Goldman Sachs fraud case, and currency war between nations which did affect the whole globe. We also took you through some of the milestones of the last century in our anniversary edition which was highly appreciated and acclaimed by our readers including those from corporate world. In the meanwhile, we constantly tried to make this magazine a platform to facilitate interaction by introducing interesting sections like Nivesh – A portfolio game and Crossword apart from the Fin Quiz section.

When we took charge of this magazine, the responsibility and expectations were high as the magazine had already achieved a lot in its one year of existence. We started the magazine with the dream of making it even bigger in the field of finance and we firmly believe that we have achieved the same to a great extent. Now Niveshak has become the most coveted platform to facilitate knowledge sharing among the finance enthusiasts of India. This would not have been possible without your support and encouragement. We improved with every issue solely because of the feedback and compliments received from your side which really motivated us and boosted our morale. We take this opportunity to thank the entire B-School fraternity of the country, and especially to those participants who sent numerous appreciation mails, articles, fin-Q and crossword entries. They are the ones who are undeniably the reason behind Niveshak’s success. I would also like to acknowledge the guidance and support of our mentors – Prof Sarkar and Prof Sivasankaran who inspired and motivated us throughout our journey. I must congratulate and also thank the entire team of Niveshak comprising of Bhavya, Durgesh, Hitesh, Sumit, Swarnabha, Tanvi and Upasna for completing this journey successfully. They were phenomenal during the whole journey. Here I would like to make a special mention of Bhavya and Swarnabha whose creative intelligence and perseverance have been instrumental behind Niveshak’s grand success. Last but not the least, I would like to congratulate Biswadeep for creating this masterpiece.

Just as after every sunset, the sun rises again with all the new hopes and enthusiasm, I am confident that the new team Niveshak, with their enthusiasm and motivation, will take Niveshak to greater heights and achieve those feats which our team couldn’t even think of. I just wish the new team gets the same love and support from you which we got in the last 1 year.

Although this is my last editorial, I won’t bid adieu as Niveshak is something to which I shall remain attached forever. Bbye for now.

Stay Invested.

Bhavit Sharma
(Editor -Niveshak)

(click on image or here to view)

...Read more

Niveshak November 2010 Issue

Posted by Team Niveshak on Sunday, November 28, 2010 , under , , |



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)

(click on image or here to view)

...Read more

Niveshak October 2010 Issue

Posted by Team Niveshak on Tuesday, November 2, 2010 , under , , |



Dear Niveshaks

The currency space around us is on the threshold of a major transformation. We can distinctly see battle lines formed ahead of a forthcoming currency war that threatens to pit the developed nations against the emerging economies of Asia and South America. Although G-20 has been trying to work around this issue, all their efforts seem to be going in vain. Currency devaluation, which has been a policy weapon of exporting nations like China for quite some time, has become a ubiquitous phenomenon used to gain undue competitive advantage by many nations. This is probably the major reason why emerging economies, especially Brazil which has the highest real interest rates in G-20, are seeking to restrain their currencies as investors seek higher-yielding assets in emerging markets amid near-zero interest rates in the US, Japan and the euro region. The absence of any concrete steps to resolve this do make us believe that the currency wars could well intensify and the recent G-20 accord will prove as worthless as the piece of paper it is written on.

Well… All may not be well on the global platform but we have some recent Indian success stories to cherish. Our last edition had an article which posed some serious questions about Commonwealth Games 2010. To our surprise, India not only managed to host it up better than our expectations but also achieved unprecedented success in it. But one thing which has really grabbed all finance enthusiasts attention in the last few days is Coal India’s IPO. The massive response to Coal India IPO that had been oversubscribed 15 times augurs well for our Indian economy and suggests that it is gaining momentum from the pre-crisis era that began in 2008. This is because of the ‘utility’ model in ‘commodity’ business which is coupled with the characteristics of sellers’ market; we can say that CIL will essentially have a linear earnings curve and impressive return on equity as well as free cash generation. This has also paved the way for share sales of few more PSUs lined up for disinvestment. Our cover story for this month delves into this same topic to give you complete analysis and probable implications of the Coal India IPO which is going to be the largest IPO in India till date.

It is giving me a déjà vu feeling while writing this editorial as it was the same October edition last year when the incumbent Niveshak team had joined this illustrious magazine Niveshak. The time has now come to pass on this legacy to our new team Niveshak. We, the Editorial Team of Niveshak, are pleased to introduce to you our new team, which has been elected to carry on the baton of Niveshak. They are: Alok Agrawal, Deep Mehta, Jayant Kejriwal, Mritunjay Choudhary, Rajat Sethia, Sawan Singamsetty, Shashank Jain, Tejas Pradhan, Vishal Goel and Vivek Priyadarshi. Please join us in welcoming them to Team Niveshak. We are confident that they will take the brand of Niveshak to greater heights. Keep supporting them the way you have been doing to us.

Stay Invested.

Bhavit Sharma
(Editor-Niveshak)

(click on image or here to view)


...Read more

Niveshak September 2010 Issue

Posted by Team Niveshak on Thursday, September 30, 2010 , under , , |



Dear Niveshaks

Heartiest congratulations to all of you. We, Niveshaks, have completed another circle round the sun and have stepped into our 3rd year of existence with glory and pride. There have been many learning opportunities for all of us and I am glad to note that we have not missed any significant one in the last one year. Participants of all B-Schools of India and some renowned foreign universities, through Niveshak, captured the essence of all happenings and analysed their implications on the world of finance. During the last 12 issues, we received more than 700 articles (including approximately 110 articles for the August anniversary issue) from the top 30 B-Schools of India. We are extremely thankful to all our article contributors across all B-Schools and to all our subscribers who supported and encouraged us through their appreciation mails and by increasing the count of our subscription. We are also thankful to Public Relations committees of all B-Schools of India who have circulated Niveshak among their participants. For all our readers who are not aware of Niveshak’s second anniversary issue’s launch ceremony, here is the news. General J J Singh, ex- Indian Army chief and incumbent Governor of Arunachal Pradesh graced the launch ceremony by releasing Niveshak which got covered and praised by some major media houses like Times of India and Telegraph. Thanks to all of you.

The beginning of 3rd year of Niveshak coincidently started with something else also to cheer about. SENSEX recently scaled 20k figure after 32 months and have entered a new bull run with 20% gain from 2010 lows and so have other emerging markets as investors fromdeveloped nations chase returns. BSE Sensex, few days back, gained nearly 800 points (4.2%) in just 5 trading days which was the biggest weekly gain for the index in over a year while on percentage basis this was the biggest upmove in the last 10 months. With the BSE benchmark Sensex breaching the 20,000-level and still going strong, we have good reasons to believe that Indian markets have entered a bull phase and persistent FII inflows may push the index past its highest mark of 21078 in the coming days.

The cover story for this month focuses on Corporate Debt Restructuring which is often perceived as the saviour of firms distressed by an unhealthy proportion of debt in their capital structures. The article explains the procedure of CDR in detail and emphasizes on its relevance in the recent past by picking examples from the airline and retail industry. This edition also brings to you something interesting which has been the talk of the town for the last few weeks. We present to you an article on 2010 Commonwealth Games which are going to be the largest multi-sport event conducted in India to date. Nobody in 2003, when India won the bid for hosting the event, would have thought that the games will be hit by bad weather and criticism of the facilities and village in the last few days before the inauguration. But things aren’t in good shape as of now and the next 15 days are going to tell us whether India will be able to prove itself as a capable host or not. I hope the issue will definitely stimulate and keep you engrossed in the world of finance. Looking forward to your comments and wishes to bring out more interesting issues in the future.

Start following us on facebook and twitter.

Bhavit Sharma
(Editor-Niveshak)

(click on image or here to view)


...Read more

Niveshak Second Anniversary (August 2010) Issue

Posted by Team Niveshak on Thursday, August 26, 2010 , under , , , |



Dear Niveshaks,

Congratulations on your second anniversary. Thank you for having me as the guest editor of your anniversary issue and giving me the opportunity to express my personal views on some of the milestones that shaped the financial world.

These are very fascinating times that we live in – much has been written and analysed since the inception of the recent financial crisis in 2007 which will result in having a deep impact on our mindsets and actions in future atleast for a while. It is important to note that this crisis has been handled in a concerted manner globally and should also have singular ramifications for good or bad. Regulations are getting dusted off and rewritten.

Since the early 20th century, time and again the financial world has been shaken by major events that have brought about lasting reforms in the financial world. To my mind much of these events have to do with liquidity and investor confidence.

The financial panic in 1907 triggered by the collapse in a copper trust resulted in NYSE falling by about 50% from its peak and second highest bankruptcy filings to that date – retracting liquidity and confidence. There was no overarching governing body to step in and return normalcy. It eventually led to the creation of Federal Reserve System. Indeed, a very positive development.

The Roaring Twenties led to the Great Crash in 1929 and a chain of events which resulted in a decade long economic slump in industrialized nations and severe macroeconomic problems – unemployment, decline in money supply and GDPs; Dow reached its nadir point in July 1932. Subsequently the Congress passed the Glass Steagall Act in 1933 which required a separation between commercial banking and investment banking operations to resolve conflicts and to control speculation. The Act was later repealed in 1999 and was blamed to be one of the many causes of the current subprime crisis.

Post World War II, the Japanese government created an environment which encouraged savings. Credit was easy and with so much money available for investments, speculation was inevitable and it resulted in too much money chasing assets and led to an economic bubble between 1986 and 1991 in real estate and stock prices. The ‘bubble-burst’ hit very hard and lasted for more than a decade only to be worsened in the recent crisis. It also resulted in the development of Yen carry trade which eventually collapsed in 2008.

Asia has grieved as well during 1997-98 when the Thai Baht collapsed on the back of de-pegging the currency from USD and significant outflow of foreign debt from Thailand into US-denominated assets due to rise in interest rates in US. This made the country effectively bankrupt and the contagion spread to neighboring countries affecting Indonesia and South Korea most. It was a reminder of the fact that foreign exchange reserves are important and Exchange rate regimes are difficult to maintain. The Asian economies have more than recovered since then but not without suffering some permanent currency devaluations.

With this backdrop I think it was not very difficult to imagine (of course in hindsight) that the Governments will do a good job of steering the world out of the crisis and they have by and large succeeded so far. However what seems to be different this time around is that we have not seen as many bankruptcies and permanent loss of capital (keeping history in perspective) – Assets have mostly just changed balance sheets and that may be something to worry about.

I have brought you a long way to make a small point that when markets are too confident and shooting up, think if what’s driving it is sustainable, because all said the law of gravity still prevails.

Wish all of you a great life.


Ghanshyam Das Khandelwal

Head - Strategic Transactions Group,

HSBC Bangalore


Disclaimer: "The opinions expressed in this editorial are personal to the author and do not reflect those of the HSBC Group."

(click on image or here to view)

...Read more

Niveshak July 2010 Issue

Posted by Bhav on Saturday, July 24, 2010 , under , , |



Dear Niveshaks

The other day I was wondering about what could have brought China an indomitable competitive advantage which has not only helped it in achieving a phenomenal GDP growth rate but also in making it resilient of the recession which gulped most of the parts of the world 2 years back. A prolonged discussion with one of my colleagues brought forth various points like labour cost, manufacturing competence etc. One thing where our discussion ultimately boiled down to was China’s pegged currency. But recently we saw China making an announcement that it will make Yuan’s exchange rate more flexible thereby breaking the currency’s 23-month-old dollar peg. This move was welcomed by most of the stock indices of the world with Sensex advancing by 1.7% and MSCI Emerging Markets Index by 2.4%. The S&P 500 was 1.2% higher, so were European stocks.

The dollar peg had come under intense fire from critics as China’s export juggernaut roared back to life, while much of the rest of the global economy remained sluggish in the wake of the financial crisis. But China has ruled out any chance of a major appreciation or one-off revaluation. So the question arises whether this unpegging of currency will dampen this form of China’s competitive advantage in due course of time or it is just an intended move to placate critics of China’s currency regime. Our cover story for this month answers this question by stating the possible implications, or I should rather say repercussions, on China and rest of the world.

The May issue carried an article on the much hyped SEBI-IRDA tussle that had surfaced because of the insurance product ULIP. Well… the insurance industry regulator IRDA has emerged victorious in the regulatory turf-war, with the government ruling that it and not the market watchdog SEBI would oversee the product. But what seem important for us are the steps taken by IRDA to ensure that ULIPs sold by agents are based on the financial profile of the individual being approached and not on the fees. This, if implemented on a larger scale, will definitely serve the purpose in the best interest of the investors. In the current edition, we present to you a very interesting article on BP and the oil spill from one of its rigs in the Gulf of Mexico. This focuses specifically on the financial aspects and impacts of the oil spill, which contaminated a vast area of United States marine environment and continues to have a serious impact on the ecosystem, on BP and the whole Oil industry of the world.

Time indeed moves so fast. It gives me immense pleasure to inform you that we, Niveshak, are at the doorstep of our 3rd year of existence and will celebrate its second anniversary in the next issue. With this new beginning, let us revisit the world of finance with all its failures and their learning from the last century. Yes this is the theme for the next issue. We invite you to write articles on “Milestones that shaped the world of Finance” for the Anniversary edition. However, you can also send articles on any topic of your choice. For more information, please see the declaration page of this issue. We look forward to your support and wishes to continue this growth story at an exponential pace.

What a journey it has been.

Bhavit Sharma
(Editor-Niveshak)

(click on image or here to view)

...Read more

Niveshak June 2010 Issue

Posted by Bhav on Monday, June 28, 2010 , under , , |



Dear Niveshaks

FIFA world cup fever has again gripped soccer fans across the globe as this most popular sporting event in the world made its maiden voyage to the continent of Africa in mid-June. We can see the fervour has risen in India too and it won’t be a surprise if football becomes the next big thing after IPL this summer. The impetus to this tournament can be gauged by the fact that it has generated revenue of USD 1.6 billion between 2007 and 2010 as opposed to USD 584 million between 1999 and 2002. Some of the credit behind this goes to the valuation of sponsorship by IEG valuation service whose assessment of the model of a small number of sponsors with a broader right package and competitive environment significantly helped FIFA in selling its packages very profitably. Looking at the euphoria and enthusiasm among football fans, we have brought an article on ‘’Finances and football” for your perusal in this issue.

I, on behalf of team Niveshak, would like to thank you all for liking and appreciating our endeavour of presenting a sector wise analysis of some major sectors in the May issue . We hope to bring more such analysis in future. The sector which witnessed some major happenings last month was Telecom. After 34 days and 183 rounds of intense bidding, 3G spectrum was auctioned for which the total bid price touched Rs 16,750.58 crore on the 34th day of bidding. It was the auction format and severe spectrum shortage, along with ensuing policy uncertainty, which drove the prices beyond reasonable levels of Rs 35000 crore which was calculated in the budget by our finance minister. These prices, although reasonably high for telecom operators, augur well for our economy as the revenue mop up will help the government cut its fiscal deficit to nearly 4.9 per cent from 5.5 per cent of GDP projected in the Budget. Few telecom operators like Reliance Communications are even planning to sell a strategic stake in order to fund its foray in 3G telephony. Thus, we see that the allocation of 3G spectrum to private telecom operators will lead to mass rollouts of 3G services in the country which is expected to bring a paradigm shift in the Indian telecom industry.

“Disclosure of conflicts of interest” has been a point of debate for so long as there is a very thin line between moral obligation and legal obligation of disclosing every possible conflict of interest. Someone alleged of a conflict of interest may simply deny that a conflict exists because he/she did not act improperly. In fact, a conflict of interest can exist even if there are no improper acts as a result of it. But whether this is religiously followed or not by most of the companies is a question that remains unanswered. Our cover story for this month takes up this issue and talks about Wall Street’s most powerful firm Goldman Sachs and Co which is accused by US government of selling mortgage investments without telling the buyers that the securities were crafted with input from a client who was betting on them to fail. The repercussions of this are in front of us. Investors lost heavily whereas the client of Goldman made fortune out of the subprime crisis.

Hope you all find this issue an interesting read. Your feedback and suggestions will be highly appreciated.

Stay Invested for the good times ahead.

Bhavit Sharma
(Editor-Niveshak)

(click on image or here to view)


...Read more

Niveshak May 2010 Issue

Posted by Bhav on Monday, May 31, 2010 , under , , |



My Dear Fellow Niveshaks

Have we ever given a thought on why do we, “The investors”, invest in various financial instruments? Well yes. Most of us know the obvious reasons of savings, returns and reducing tax liabilities; which in turn garner our financial health. One financial instrument which has gained popularity off late is ULIP (Unit linked Insurance Plan). But the recent turmoil in the insurance industry caused due to the turf war between market regulator SEBI and insurance regulator IRDA has raised a question before us that whether ULIPs are good or not for our financial health as well as for the whole insurance industry per se. While we are familiar with the benefits, some of the facts about it do throw light on the other side of the coin.

Many investors complain about ‘misselling’ and report that insurance agents guide them towards ULIPs. However, this is not true. Agents’ behavior is driven by the commissions paid on various products. In order to avoid compliance with SEBI’s low cost and high transparency regime, insurers dress up market linked products as insurance products by adding a small percentage of insurance to it. An article in this issue delves deep into this topic to provide you the finer details and intricacies of this bone of contention between the two regulatory bodies. Whether the government will come to the rescue of ULIP victims or whether the powerful insurance industry will succeed in maintaining the status quo remains to be seen. However, regardless of what happens, I see the recent events as a great step forward for the Indian investor.

Our Sensex and other major global indices took a hit few days back when Greece’s economic crisis sent shivers of apprehension across the globe over concern that it could spread like wildfire through Europe and beyond. This crisis makes us ponder over a point that whether fiscal deficits do matter or not given the fact that India has run fiscal deficits of up to 10% of GDP for three decades, yet has enjoyed record growth. On the other hand, European countries that ran high fiscal deficits in good times, and went for even bigger deficits to provide a Keynesian stimulus out of the Great Recession — Greece, Portugal, Spain, Ireland and Italy — are in serious trouble. Our cover story gives a comprehensive coverage of this crisis including its origin, spread, debt restructuring and the impact on the euro.

For the current issue, I, on behalf of the whole team Niveshak, welcome Mr. Rajeev Karwal, CEO and Founder Director of the venture catalyst firm “Milagrow”. Known for his strategic abilities and excellent execution, Mr. Rajeev has worked on startups, turnarounds and more in a career spanning over 25 years. His contribution to the start-ups of Onida, LG and Reliance Retail has given the world a peek into his scale-up and start-up expertise. Winner of India’s Young Manager Trophy 2001, awarded by Confederation of Indian Industry, he has many such laurels under his belt. In the interview with Team Niveshak, he talks of how did he come up with the idea, philosophy and mission of Milagrow. To know more about his views on Micro, small and medium enterprises and their roles in the economic growth of a country, turn to “HeSpeakth” section.

Happy Investing.

Bhavit Sharma
(Editor-Niveshak)

(click on image or here to view)

...Read more

Niveshak April 2010 Issue

Posted by Bhav on Friday, April 30, 2010 , under , , |



Dear Niveshaks

It was January 2008 when our sensex touched its peak of 21000. Then came the scary October 2008 when it slid to 8000 mark. And now, again, it has swiftly taken a big leap to pat the 18000 mark. What a roller coaster ride it has been. One of the important pulling factors behind this upside swing has been the drastic monetary steps such as slashing CRR by 300 basis points taken at that point of time which infused confidence as well as liquidity in the market. However, looking at it in a short frame of time, I see that the things are a bit unusual. In an ever-volatile stock market, I find it tough to recall the last time, when the broad based indices — Nifty and Sensex — remained stagnant for the past six months. But this has been the case with Indian stock market since October last year. It has been lurking roughly in the same range of 17000 to 18000. Another food for thought for many Niveshaks is the fact that Sensex is not really far from its all time high. And at the same time, many stocks especially in the information technology, banking and pharmaceutical industries have already reached their all time highs. That leaves investors and people like us confounded to the future course of the market.

The euphoria is not restricted to India only. World stocks are also slowly inching close to their respective 18 months’ high on signs of improving global growth but the Europe remains on the backseat due to prevailing worries about Greece’s debt problems. The recently released strong U.S. data from jobs to manufacturing has spurted hopes that the world’s biggest economy will come out of woods soon. In addition to this, the present dynamics of global oil price movement and currencies’ exchange rate is expected to have a lasting impact on the global economy.

Strengthening U.S. dollar has brought some correction in the oil price which had reached its 18 month high of 87 dollars a barrel. Rising rupee against dollar will also give import based Indian companies an advantage but it may come in the way of RBI’s monetary policy tightening if it chooses to slow down this rise. All of these factors along with the recently released strong IIP numbers and annual reports by Indian firms make us believe that the Bull Run is here to stay.

In continuation with our sustained endeavour to get the latest insights from the corporate, we welcome Ms Deepali Bhargava, India Economist for ING Vysya Bank as the guest of this issue of Niveshak. An illustrious economist - Deepali has to her credit, consistent & accurate directional calls on inflation, interest rates and INR. In a special session with her, she has talked about the Indian economy's recovery path, recent RBI's monetary policy and some issues related to exchange rate policies.

This issue of Niveshak brings to you some more interesting and insightful topics. In the contemporary fierce competition in markets and race for showing higher profits and growth, many companies manipulate their financial position and results to hide the true picture of their financial health. The repercussions of this are in front of us. We saw numerous accounting scandals resulting in bankruptcies and fall of some major firms like Enron, WorldCom etc in the recent past. But the question arises as to what are the different means of manipulating financial statements. So our cover story addresses this question by elaborating various ways of fudging financial accounts and statements and means to detect such abnormalities. Hope you find this issue an interesting read.

Stay invested with us.

Bhavit Sharma
(Editor-Niveshak)

(click on image or here to view)

...Read more

Niveshak March 2010 Issue

Posted by Bhav on Tuesday, March 30, 2010 , under , , |



Dear Niveshaks

Our Indian markets have been looking upbeat since the day they gave a thumbs-up to the budget which was presented by our warhorse Mr Pranab Mukherjee last month. BSE and NSE are hovering at their respective peaks and have come a long way since the time they went into a tailspin in 2008. A slight plunge in the sensex after the railway budget by Didi failed to meet the market expectation of government’s doubling its this year’s order for railway wagon, later, paved the way for resurrection when sensex rose by 400 points reflecting the ecstatic sentiment and relief that the finance minister has rolled back only part of the fiscal stimulus in the union budget. The positive sentiments among us, the common Indian middle class, by this union budget were preceded by the populist stand taken by Mamta Banerjee when she ignored planning commission’s advice to raise passenger fares and left it unchanged. But I have my grave concerns about this, given the rot in finances as indicated by the fall in revenue and operating margin of Indian railways in the last one year.

We have finally got the answers to the questions posed in the last month’s issue when Mr Mukherjee picked the cards of prudence and caution to sustain growth as well as to rein in fiscal deficit through his 6th (5 full-scale budgets and 1 interim) budget 2010-11. It was indeed a please-all budget. Through broadening income tax slabs, he has endeavoured to make some 25 million income tax payers, including you and me, happy. We can expect that this move, which is primarily being done to boost consumption, will pull tax to GDP ratio to as high as 11 percent. However, in order to consolidate the fiscal deficit boundary, the policy planners have gone all out to increase custom duty on crude import and excise duty which, I suppose, will have a deep impact on inflation especially on wholesale price index. The hue and cry from oil firms is expected to continue as the decision of freeing oil prices will be taken up by minister of petroleum in due course. So taking all this into consideration, the long term effect of this budget, its salient features, and its expected and imminent repercussions on various sectors along with its comparison with expectations and growth parameters have been discussed in detail as the cover story of this issue.

I, on behalf of the whole team Niveshak, welcome Mr. Manas J Sharma, AVP Abu Dhabi commercial Bank (UAE) as the guest of this issue of Niveshak. In a special session with him, he has talked about the recent challenges faced by SME sector in UAE and implications of global downturn on UAE’s SME. The interview also revolves around the role of SME sector in any economy and the ways with which SMEs are coping with the recession in the UAE.

In the current issue, we have few articles that go around our cover story and supplement it. A different perspective on the rollback of stimulus has been presented in an article by students of NITIE. The growth path followed by India has been criticized a lot as it fails to pass on the benefits to the rural parts of the country. So an article on financial inclusion throws some light on this as well. I hope this issue continues the tradition of Niveshak of bringing the latest insights of finance world closer to you.

Stay invested for the good times ahead.
Happy New Financial Year 2010-11.

Bhavit Sharma
(Editor-Niveshak)

(click on image or here to view)

...Read more

Niveshak February 2010 Issue

Posted by Team Niveshak on Thursday, February 25, 2010 , under , , |



Dear Niveshaks

Here comes the month of February- a month which is long awaited by many of us to witness the balance sheet and income statement of our own – India Inc. Yes!! I am talking about the Union budget which is expected to be released on 26th Feb by our finance minister Mr Pranab Mukherjee. His first budget may not have been accepted well by Indian citizens, but this time the old warhorse is leaving no stone unturned. He is expected to target on the GDP growth rate as this budget will be very critical for India to lead the recovery from the global economic crisis. However, looking at the Reserve Bank of India’s (RBI) recent review of the monetary policy, we can predict that the forthcoming Budget will reverse the expansionary fiscal policy and rein in fiscal deficits. After two years of runaway deficits, surely, the time is ripe for the finance minister to initiate the fiscal consolidation process in the forthcoming Budget. Besides this, the Railway Budget 2010-11 is also scheduled to be presented to the Lok Sabha on February 24 after the Budget session of Parliament begins on February 22.

The “January effect” on the sensex also seemed to have faded away by the fag end of January 2010, when our benchmark BSE sensex broke by 490.6 points on a single day due to global cues and fears of tightening monetary measures by central bank. As per the expectations, RBI launched a battering on inflation by increasing the cash reserve ratio by 75 basis points to 5.75 percents. We hope that this move brings cheers to the aam aadmi by dampening the momentum of sharp surge in food prices and uneasy price escalation which has been a cause of worry for all of us. However, there have been some positive results too against the backdrop of this RBI’s decision. The manufacturing sector seems to be poised for revival after the HSBC Markit Purchasing Managers Index (PMI), one of the most reliable indices tracking the health of the manufacturing sector, climbed to its highest level in one-and-half years to 57.6 in January, 2010. We also see IIP numbers reaching new heights. The Indian IT sector, on the contrary, might get perturbed after US president Obama’s decision to end tax breaks to American firms that outsource jobs overseas. But it needs to be seen if the president can afford to walk his emotional talk.

Now as we are speeding on a road to recovery, a question arises in front of us is – Are we achieving this economic recovery at the cost of fiscal deficits and inflation? So to throw a word of caution on this, we have our cover story which highlights some of the inherent financial problems like huge fiscal deficits in India, and which shows a possible way ahead for us in this edition. This reading also provides a primer on the resurgence of mergers and acquisitions post recession and an article on “Calendar Spread” along with some arbitrage trading strategies for Index spread trading. Let us go through some really insightful articles that our friends from across all B-Schools have penned down. Hope this issue would prove to be an interesting read for you.

Wishing you all a very Happy Holi!!!

Happy Investing
Bhavit Sharma
(Editor-Niveshak)

(click on image or here to view)

...Read more

Niveshak January 2010 Issue

Posted by Team Niveshak on Monday, January 25, 2010 , under , , |



Dear Niveshaks

The advent of 2010 brought a remarkable change in the functioning of the two major Indian exchanges – BSE & NSE, when they started the new trading yearby advancing market hours by 55 minutes to 9 a.m. As many of us must have predicted, this move saw a widespread opposition from many small brokers, however there were positive responses from institutional and retail investors. These indices have been flat for the time being but with lots of FII money expected to pour in, we can predict the triggering of a bull run. The fiscal tightening by Peoples Bankof China has had its effect on capital markets across the world but its effect seems to have faded away. So we expect the bull to prevail over the bear for most part ofthe year. Strong quarterly results for the last two quarters of FY 09-10 will surely takethe markets on an upward spiral. But if you say that is not real growth, we have the success story of Bihar, a state that has long been epitomized as the worst governed state. The state registered a miraculous growth rate of 11.44% in 2008-09 for which its Chief Minister Mr. Nitish Kumar got the Business reformer award. Add to this, the strong IIP numbers of last quarter and the growth posted by many states indicate that the economy could be out of the woods now. With this ecstatic news, we welcome you all to the year 2010!!

But the first edition of 2010 will be incomplete if we don’t have a glimpseon what happened in 2009 and how the year 2010 is going to shape up in the context of finance. Our cover story shall carry a broad perspective and foresee the future prospects of financial world and economy of India in the coming months of 2010. At the same time, the article will also highlight some of the crucial events like the Dubai crisis and the trends followed by sensex & inflation of the country during 2009.

In the present issue, we bring to you an insight on the agriculture insurance scenario in India along with a proposed product in the same industry. The article also features the problems in the current system of agriculture insuranceand inherent risks of the agriculture sector. As we stand at the doorstep of a new decade now, we take a look at some of the key learnings from financial misfortunes and various crises which left their marks in the last decade. We also introduce you to pension funds of India and try to acquaint you with the need of pension fund reforms for capital market development in India. Owing to the overwhelming responses for the recently introduced “Nivesh” from so many B school students across India, we have decided to continue Nivesh for this edition also.

We, the new team, feel fortunate to be associated with the illustrious Niveshak, brainchild of the first team Niveshak including Amit, Biswadeep, Nilesh, Sareet,Sarvesh, Sujal & Tripurari, who, with the support of the whole MBA fraternityof top 50 B schools of India, took Niveshak to that height where it is today - theonly monthly finance magazine from a business school. It is a delight and pleasurefor us to carry forward the legacy fashioned by our seniors but at the same time it brings in a big responsibility of living up to the standards set by the brand “Niveshak”.We promise that with your support and appreciation, we will try to meet your expectations and build a bigger platform to facilitate knowledge sharing forall the finance enthusiasts of India.
Hope you find this issue an interesting read.

Stay invested for the good times ahead.
Bhavit Sharma
(Editor-Niveshak)

(click on image or here to view)

...Read more

. Powered by Blogger.