capital edge volume2

8/8/2019 Capital Edge Volume2

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CAPITAL EDGE

Brought to you by FINesse


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CONTENTS

From the Editorial Desk Pg 2 India: Boom or Gloom? Pg 3

Headlines Pg 5

The Brand New Rupee Pg 6

When Innovation Hits Finance Pg 7

Heard on The Street Pg 9

Win With Fin !!! Pg 10


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From the Editors DeskGreetings to everyone, the fact that you opened this page, makes us at FINesse,

the finance club of SIIB grateful to you. Your fortnightly newsletter- CAPITAL EDGE

is in its nascent stages and we would like your support to make this a success.

Capital Edge is your update on the latest financial news and views. We intend to

appeal to those who are well versed in Finance and those who wish to learn more of

Finance.

The second volume of Capital Edge looks into Indian business scenario in India:

boom or gloom? We also have the Implications of the new Rupee symbol in The

Brand New Rupee. Innovation hits Finance teases our imagination of the future of

finance. Heard on the Street, acts as a constant from issue to issue, but certainly is

dynamic, giving us the fortnightly analysis on the stock market.

Apart from Capital Edge, we will be posting various items of Finance related topics

on the notice board every fortnight. Do keep your eyes open, but more importantly

keep your minds open.

We are very grateful to Dr. Madhvi Sethi for her guidance, support and timely inputs

for FINesse and Capital Edge.

We have also included Win with Fin (Finance Quiz) .Last weeks answers

are given & The lucky winner is Dinesh Bhat . Kindly send your answer for

this weeks Quiz [email protected].

We ourselves are undergoing a trial by fire with Finance, any mistake, error and faux

pas in the newsletter is deeply regretted. We invite articles from those with

knowledge in Finance, and even for those without. Please feel free to contribute for

the next volume i.e. Volume 3 to be released on 14th

Aug,2010. We would like you

to provide us with your suggestions and comments by mailing us at siib-finance-

[email protected].

Edge out your competition with Capital Edge
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India : Boom or Gloom ?

A note to the reader: The following article may put you to sleep, bore you to an

early demise...or enlighten you with new knowledge. I have deliberately left out

statistics and kept the language simple as I dont wish to throw up anycomplications in your wonderful day. You may find over 264909323 articles

such as this, but I assure you this is original and was not a result of the tried

and tested copy-paste methodology. Beware of cheaper, easily readable

imitations.

India has not always been the best place for business opportunities. It has

suffered nearly 200 years of colonial rule and a further 50 years of inward

economic orientation. Free trade was a foreign word to us, much like Coca Colaor Nike. The Indian business sphere started off the way a tortoise would take

its first step-slow but sure. Nehru and Mahalanobis devised a strategy to keep

our country on the path of development. The Tata, The Ambani, The Birlas all

ruled India Inc. during the period of 1960s to 1990s, due to lack of competition.

They grew and so did India...or did it?

The 1960 and 1970s was characterized by Disco, Drugs and Amitabh Bacchan

films, but the Economy did not see much growth. Business opportunities and

encouragement from the government was rare. Narrow mindedness

bureaucratic procedure was a major deterrent for foreign investment.

1990-cometh the year,cometh the man-Manmohan Singh. Yes,for those of

who didnt realize, the current Prime Minister of our Country was the erstwhile

Finance Minister. He brought a new revolution for the Indian Economy with his

Reforms package. The reforms package proved to be the next best thing to

sliced bread for the financial state of India. Industries grew, the Stock market

rose to peoples expectations as the Indian financial market was flooded with

FIIs and Amitabh Bacchan was replaced with the Khans.

The 1990s was good but the turn of the millennium proved even better.

Government support ensured that India was established as a financial

destination for Indian entrepreneurs as well as foreign corporate houses.

Corporates like Vodafone, Google, Citibank from varied sectors all bought into

India Inc. You must be wondering why everyone use India Incorporated these

days, its simply because India has become a hub for global financial wealth.


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The growth opportunities and business boom has now shifted from the west to

the east. As much as we may criticize our government or our PM, we should be

grateful to them that today we can choose whether we want to buy a Dell

Laptop or an HP laptop, whether we want to shop at Lifestyle or Central,

whether we wish to wash our clothes with Surf or Tide, banking with Citi or

HSBC. India is the place to be for Investment and opportunity.

The challenge that the US faced in the 1900s is now thrust upon India. Can we

as stakeholders of India Inc. make our country rise higher ? Can we enable our

company India Inc. to sustain this boom and not let it falter into gloom ? Can

we bring about a Financial revolution which will ensure that India achieves its

rightful place in the Global market ?

I encourage free thought and would like your opinion.Please give me yourfeedback and suggestions [email protected]

By Rahul Dey
mailto:[email protected]:[email protected]:[email protected]:[email protected]


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Headlines

Sensex on 24 July closed at 18,130.98, its highest closing level since 6

February 2008.

RBI raises Repo rate 25 Bps and Reverse Repo rate 50 Bps to fight

inflation

IPO of Hyderabad-based microfinance firm SKS Microfinance was

subscribed 10.5 times by 30 July, last date of bidding.

Fortis exits Parkway, makes Rs 350 cr.

RIL Q1 net jumps 32% aided by sale of gas from KG basin Rs 4,851 crore. Central Vigilance Commission (CVC) widens tele probe, dual licences

under lens.

Reliance Comm set to divest tower biz to GTL Infra in $6-billion cash-

cum-stock deal.

By Ankur Rustagi & Summant Bhatnagar


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The Brand New Rupee!!!!!!

On 15th

of July the Indian Rupee got its long awaited dynamic Symbol joining

the elite club of the dollar, the pound, the euro and the yen making Indian

Rupee only the 5th

currency in the world having a uniquely distinguished

symbol, till now the Indian rupee has been denoted by Rs leaving the scope for

misinterpreting it with the Rupees of other country like that of Pakistan rupee,

Indonesian rupiah, Srilanka rupee, Nepalese rupee etc. Till now to

differentiate it with other similar sounding currency in international marketINR was being used that is the abbreviated form of Indian National Rupees.

With the new symbol the Rupee is ready to incept the mind of the

people. Whenever we being asked to tell any foreign currency, the first

currency which pops in our mind is definitely dollar followed by pound, euro

and yen, Do we ever wondered whats common between them?? Its their

symbol apart from the fact they are economic biggies, they have been

penetrated deep within our mind with their symbols, they have some brandvalue (as we know Brand is a thought that lives in people mind ),so similarly

with the new symbol will definitely enhance the image of the Indian currency

and the perceived value of Indian currency will be magnified. In simple terms it

is a rebranding exercise in action reflecting the Indias large, growing and

confident economy (India is the fourth largest economy of the world in terms

of purchasing power parity and the second fastest growing economy).

Will the rupee become stronger with the new symbol? Opinions are dividedanswer may be a yes and no. Yes for the perceived value or the perception of

Indian currency across the world will become stronger and that will in turn may

in the long turn increase the acceptability of Indian Rupee in Foreign Exchange.

The most interesting thing about the new symbol is that its a combination of

Devnagri and the Roman R without the stem and also the parallel lines at

the top and the gap between them makes an allusion of our national tricolor

flag. By Vinay Prabhakar


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When Innovation hits Finance!

What do you think is driving force that makes different kinds of industries to

sustain in the real world? Is it the motive to make profit? Is the management of

the company? Or is it the innovations that happen in that industry? Well, whilethe former could be one the reasons, Innovation is one of the most essential

factors for any industry to survive, and our financial world is full of such great

innovations! Today we will see what the implications of the innovations are

and what the impacts of these innovations on the economy are. We shall first

look into what the central bank does.

Monetary control is necessary to achieve desired level of growth and sustain

price stability in the economy. Central Banks are responsible for conductingmonetary policy to achieve these goals. Therefore, Central Banks use some

instruments; also determine some targets on monetary variables. Achieving

targets and slowing the rate of inflation increase economic agent's confidence

to the Central Banks therefore credibility of Central Banks increase.

Financial innovations defined

Innovation is normally defined as the introduction of a new product to a

market or the production of an existing one in a new manner. Financial

innovations occur because market participants are constantly searching for

new ways to make greater profits.

The spawning of financial innovations!

Financial system is composed of The Central Bank, financial institutions such as

commercial banks, finance companies and nonfinancial institutions such as

cooperatives, thrift institutions, pension funds. Objective of the financial

institutions is to make profits. If the actions of the Central Bank, regulations

restrict operations of these institutions, they immediately search an alternative

way to realize profit maximizations. Therefore, whenever monetary authorities

restrict the economic agent's behaviour, new financial instruments

are brought into view.


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Financial innovations & economy

Financial innovations can have profound effects on the economy of a country

depending upon what type of innovation it is. It can make a countrys grow th

rise or recede, of course there is a huge risk factor involved in innovating these

ideas and implementing them into economy of a country!

The innovations like Credit Default Swaps practically were unheard of till

2000,it is because of these innovations that financial institutions were able to

be more dynamic. We shall dig more into this topic by looking at the

advantages, disadvantages, long term consequences in our next issue. If you

love money you ought to love finance !

By Adarsh Kumar


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Heard on streetTOP 5 WEEKLY GAINERS

COMPANY PREV. CLOSE CURRENT PRICE % CHANGE

IRB INFRASTRUCTURE 260.30 292.85 +12.50

ORIENTAL BANK OF COMMERCE 364.10 403.30 +10.77

JET AIRWAYS 614.10 678.85 +10.54

LIC HOUSING FINANCE 1,035.25 1,136.45 + 9.78

BAJAJ AUTO 2,469.10 2,688.05 + 8.87

TOP 3 WEEKLY LOSERS

COMPANY PREV. CLOSE CURRENT PRICE % CHANGE

MMTC. LTD (STOCK SPLIT Rs 10 TO Re 1) 30,012.95 1,741.65 -94.20

EVEREST KANTO CYLIND 134.65 117.15 -13.00

MARUTI SUZUKI 1,358.25 1,198.15 -11.79

INDIAN BANK 251.50 224.35 -10.80

JAIPRAKASH ASSOCIATES 128.60 118.25 -8.05

STOCK RECOMMENDATIONS FOR NEXT WEEK

COMPANY ACTION STOP LOSS TARGET

LANCO INFRATECH BUY 63 69

IFCI LTD. BUY 61 67

FORTIS HEALTHCARE BUY 153 175

By Mohit Jindal & Kunal Ohre


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Win With Fin !!!!!!1. Which Asian country did China overtook to become the worlds second

largest economy after United States? As remarked by the countrys chief

currency regulator published last Friday.

2. On Friday Mr V Vaidyanath resigned from the position of chief executiveand managing director, which company did he belong to?

3. Who did Bharati Airtel appointed as the Chief Marketing Officer for its

African operations?

4. Which brand emerged as the worlds most valuable brand int eh Top

valuable brand listed by the Forbes magazine?

5. According to the report in the Wall Street journal, who is the best paid

CEO of the decade?

6. Which Indian company is in talks to acquire the three of Royal Dutch

Shells European refineries?

7. To whom did the Walt Disney Co sold its film studio Miramax?

8. Which Indian origin personality, an expert in international finance and

law has been appointed as Senior Advisor for the Outreach in the South

and Central Asia bureau of State Department to help Indo-US

partnership?

9. Which of the firms have been selected for implementation of Aadhaar aprogram by Unique Identification Authority of India (UIDAI)?

10.Which cell phone maker said it would provide free phones preloaded

with information on agriculture, education and entertainment, to over

500 households in five villages of Uttar Pradesh.

By Manish Sonowal and Lam Zoulian


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FINesse

Our team consists of :

1. Priyam Narayan

2. Vinay Prabhakar

3. Adarsh Kumar

4. Rahul Dey

5. Manish Sonowal

6. Mohit Jindal

7. Tushar Agarwal

8. Ankur Rastogi

9. Lam Zoulian

10.Shshank Jain

11.Kunal Ohre

12.Sumant Bhatnagar

Email us [email protected]
mailto:[email protected]:[email protected]:[email protected]:[email protected]

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