nishka october issue 2011

A F I N A N C I A L N E W S L E T T E R F R O M C U I M K E N G E R I A F I N A N C I A L N E W S L E T T E R F R O M C U I M K E N G E R I

DATE 5th OCTOBER 2011 ISSUE18

INDEX

ECONOMIC ROLLERS 3

RBI COLUMN 4

CONTEMPLATORS 6

WHAT HAPPENED TO WORLD amp INDIAN EQUITIES 6

INFLUENCE OF PLASTIC MONEY 8

DEPRECIATING RUPEEhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip10

NISHKA EQUITY RESEARCHhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip11

FINANCE BUZZ 13

PHOTO FIND 15

FINANCE QUIZZ 16

CROSS WORD 17

CAMPUS POLL 18

VERIFY YOURSELF 20

3

In

ECONOMIC ROLLERS

Repo Rate 825

Reverse Repo Rate 725

CRR 60

SLR 24

CBLO (as on 26nd Sep 2011) 789bps

Inflation as on Sep 2011

WPI 978

Food inflation 913

Forex Reserve (as on 26th Sep 2011) $2863 billion

IIP (for Aug 2011) +56

91 Days T bills (as on 24st Sep 2011) 84364

10 year G- Sec Yield (as on 26th Sep 2011) 820

Exports during Aug 2011 $2431 billion

Imports during Aug 2011 $3835 billion

Source Finance Ministry Office of Economic Advisory HDFC Securities Reports Ministry of Commerce

BY

PRATEEK LAKHMANI

II MBA C

4

Information Technology Solutions

RBI COLUMN

CDS INTRODUCED BY RBI BOON OR BANE

Credit default swaps (CDS) are most widely used type of credit derivative and a powerful force in the world markets The first CDS contract was introduced by JP Morgan in 1997 and by mid-2007 the value of the market had ballooned to an estimated $45 trillion according to the International Swaps and Derivatives Association - over twice the size of the US stock market Read on to find out how credit default swaps work and the main uses for them How They Work A CDS contract involves the transfer of the credit risk of municipal bonds emerging market bonds mortgage-backed securities or corporate debt between two parties It is similar to insurance because it provides the buyer of the contract who often owns the underlying credit with protection against default a credit rating downgrade or another negative credit event The seller of the contract assumes the credit risk that the buyer does not wish to shoulder in exchange for a periodic protection fee similar to an insurance premium and is obligated to pay only if a negative credit event occurs It is important to note that the CDS contract is not actually tied to a bond but instead references it For this reason the bond involved in the transaction is called the reference obligation A contract can reference a single credit or multiple credits As mentioned above the buyer of a CDS will gain protection or earn a profit depending on the purpose of the transaction when the reference entity (the issuer) has a negative credit event When such an event occurs the party that sold the credit protection and who has assumed the credit risk may deliver either the current cash value of the referenced bonds or the actual bonds to the protection buyer depending on the terms agreed upon at the onset of the contract If there is no credit event the seller of protection receives the periodic fee from the buyer and profits if the reference entitys debt remains good through the life of the contract and no payoff takes place However the contract seller is taking the risk of big losses if a credit event occurs Hedging and Speculation CDS have the following two uses A CDS contract can be used as a hedge or insurance policy against the default of a bond or loan An individual or company that is exposed to a lot of credit risk can shift some of that risk by buying protection in a CDS contract This may be preferable to selling the security outright if the investor wants to reduce exposure and not eliminate it avoid taking a tax hit or just elimi-nate exposure for a certain period of time

ldquoALWAYS BORROW

MONEY FROM A PESSIMIST HE DOESNT

EXPECT TO BE PAID BACKrdquo

5


The second use is for speculators to place their bets about the credit quality of a particular reference entity With the value of the CDS market larger than the bonds and loans that the contracts reference it is obvious that specula-tion has grown to be the most common function for a CDS contract CDS provide a very efficient way to take a view on the credit of a reference entity An investor with a positive view on the credit quality of a company can sell protection and collect the payments that go along with it rather than spend a lot of money to load up on the companys bonds An investor with a negative view of the companys credit can buy protection for a relatively small periodic fee and receive a big payoff if the company defaults on its bonds or has some other credit event A CDS can also serve as a way to access maturity exposures that would otherwise be unavailable access credit risk when the supply of bonds is limited or invest in foreign credits without currency risk An investor can actually replicate the exposure of a bond or portfolio of bonds using CDS This can be very helpful in a situation where one or several bonds are difficult to obtain in the open market Trading While most of the discussion has been focused on holding a CDS contract to expiration these contracts are regularly traded The value of a contract fluctuates based on the increasing or decreasing probability that a ref-erence entity will have a credit event Increased probability of such an event would make the contract worth more for the buyer of protection and worth less for the seller The opposite occurs if the probability of a credit event decreases A trader in the market might speculate that the credit quality of a reference entity will deteriorate some time in the future and will buy protection for the very short term in the hope of profiting from the transaction An investor can exit a contract by selling his or her interest to another party offsetting the contract by entering another contract on the other side with an-other party or offsetting the terms with the original counterparty Because CDSs are traded over the counter (OTC) involve intricate knowledge of the market and the underlying assets and are valued using industry computer programs they are better suited for institutional rather than retail investors Market Risks The market for CDSs is OTC and unregulated and the contracts often get traded so much that it is hard to know who stands at each end of a transaction There is the possibility that the risk buyer may not have the financial strength to abide by the contracts provisions making it difficult to value the contracts The leverage involved in many CDS transactions and the possibility that a widespread downturn in the market could cause massive defaults and challenge the ability of risk buyers to pay their obligations adds to the uncertainty Conclusion Despite these concerns credit default swaps have proved to be a useful portfo-lio management and speculation tool and are likely to remain an important and critical part of the financial markets

BY MADHAV A

II MBA B

6

Information Technology Solutions CONTEMPLATORS

WHAT HAPPENED TO WORLD amp INDIAN EQUITIES

These days we often hear words like Double dip recession debt crisis

bailout and stimulus package etc These words are not important for a

common man but they are very powerful for world stock indices The previ-

ous month was very crucial for stock mar-

kets The Dow Jones and S amp P Indices of US

collapsed 7-9 The condition of European

and Asian indices are even worst and fell 10

-11 The Indian indices also lost more

than 1200 points on Sensex and the analyst

predict that soon we can see nifty tumbling

down to 4700 or 4500 The biggest prob-

lem of the entire last month is Rupee that has depreciated more than 7-9

The main reasons for Rupee depreciation is soaring inflation and increasing

current and fiscal account deficit If we look at the short term prospective the

main trigger for European and US economy to instill a negative sentiment to

entire world economy is that Foreign Institutional Investors (FII) have

sucked $18 billion from Indian Stock Markets which is highest since October

2008 FIIrsquos are inclined towards investing in the asset class like Gold ETF and

Bonds which giving good return than the equity market

There are some significant global events which took place namely FEDrsquos

quantitative easing RBI monetary policy etc Fed announced that it would

sell short-term government debt and purchase $400 billion in long-term

Treasury securities The main reason to purchase these bonds is to reduce

the current short term fluctuation in US economy and thus condense the fear

of a bailout of American Banks The mission of the FOMC is to promote

effectively the goals of maximum employment stable prices and moderate

long-term interest rates In US most of the banks stock fell more than 5

Moodyrsquos Investors Service cut its credit ratings on Bank of America Citigroup

and Wells Fargo stating that Washington was now less likely to bail out the

banks Standard amp Poor cut Italys credit rating by one notch that is also a

big shock for Europe

The RBIrsquos monetary policies hiked Repo rate and Reverse Repo Rate by 25

BPS The main reason of the hike is to curb the rising inflation which is

around 95 averages As the inflation is rising but there is no credit and

investment growth RBI is expecting that interest rate will come down in

second half of the fiscal year but this have also lowered the growth rate

7


The Morgan Stanley Capital International Index (MSCI) is the index of all 6000

stocks of all over the world mostly developed counties This index provides a

glimpse of the entire world economy because the performance of the

companies listed here reflects the performance of economic growth MSCI has

also provided a negative sentiment to the market and the CBOE (Chicago Board

Options Exchange) volatility index also shot up more than 21 and Indian VIX

up by 15 These volatility indexes show the intraday fluctuation in the stock

market As the volatility index increase investors are very cautious and there is

no stability in the markets Individual investors are skeptical to purchase in the

market and it remains with traders and derivative market Thus short term

trader can make money in this market but for long term investor it is very

difficult to play with the volatility There is heavy shorting in Index and stock

futures even the Put- call ratio is also at higher side 15 shows still market is

not over sold yet

The commodity market has also not provided any kind of support as world

commodities fell sharply The PMI (Purchasing Manager Index) index of Japan

Germany France and China declined which is negative for commodity and

Equity markets Gold fell from $1780 per ounce to $ 1650 per Ounce and sliver

is $40 to $32 An unexpected rise in euro-zone inflation for September also

moderated talk that the European Central Bank would cut interest rates The

euro fell sharply to close its worst quarter against the US dollar since mid

2010

Now the next shift for markets is quarterly result of companies which is going

to start from next month and the how US and Europe and Greece utilize the 110

billion euro to save it from bankruptcy Revival of Greece and Italy there can be

a hope for world equities as Dow Jones and Samp P are at the crucial level of

10400 and 1130 Many analysts still believe that China South Korean and

Indian market will be get affected by all these because of strong economic

banking policy and saving policy October is normally a month of consolidation

where market trade in a narrow range With all these uncertainty whether we

see a double dip or triple dip recession only time can tell that but all these is

very adversely affecting the Indian economy by way of influencing employ-

ment Exports IT industry and Investment Banking sectors

BY

RITESH KEJRIWAL

I MBA B

ldquoMODERN MAN DRIVES

A MORTGAGED

CAR OVER A BOND-

FINANCED HIGHWAY ON CREDIT-CARD

GAS ldquo

8


INFLUENCE OF PLASTIC MONEY

A year before economic reforms kicked off in 1991 Citibank stole a march

ahead of its competitors and became the first bank to launch a credit card in

India Fifteen years later the pioneer has been upstaged by a home grown

player ICICI Bank which has raced to the top position in less than four years

with more than 3 million cards Thatrsquos a wild and energetic market for you

The New York based major has been beaten but not disgraced With about 25

million card holders Citibank is at second place Standard Chartered Bank at

third spot has issued about 178 million cards and plans to extend its reach to

25 cities by the end of 2005 Close on its heels is State Bank of India (SBI) which

has crossed 15 million cards within two years of launching the card HDFC

Bank is at fifth place with a million cards on its books HSBC is fighting hard to

be in the reckoning with over 900000 cards

Economy driving spends

A thriving economy substantial increase in disposable incomes and consequent

rise in consumer expenditure growing affluence levels and consumer

sophistication have all led to a robust growth in credit cards and each of the

players mentioned above have posted an enviable annual growth rate of more

than 100 over the last two years

There is no doubt that more and more middle class Indians are letting plastic

rule their day to day lives Five years ago there were 43 million credit cards

being used in the country That zoomed to 65 million in 2002 A year later that

shot up once again to around 9 million credit cards

Standout features

An explosive growth in volumes has neither dented quality nor profitability

and the Indian card market is at par with the best in the world Here are some

indicators

Convenience You need not carry large bundles of cash with you while travel-

ling or transacting Simply a credit card is needed to take care of all your

expenses without getting worried about theft or loss In fact all third party

transactions can also be made sitting in your comfortable place and without

standing in a queue

Profitability and growth Credit cards can be used online with a separate

security number to prevent misuse

9


Growing reach Indian Railways which runs one of the largest travel book-ing sites in Asia and offers door-delivery of train tickets if booked online us-ing credit or debit cards Credit cards are now being used to pay for even school fees and hospitalization expenses Safe and sound Safety standards followed by players to prevent misuse about the best in the world For example any transaction above a particular sum is automatically referred to the issuing bank which calls up the card-holder in a matter of seconds on the mobile phone to confirm the purchase Feature-driven Product features too match the best anywhere in the world Almost all credit cards come with standard frills such as free accident insur-ance medical insurance at a heavy discount and much more The cardholder is offered the option of converting a big purchase made on credit card into a loan at a lower rate of interest spread over a long period Banks now offer details of expenses incurred on credit cards under different heads ndash such as food clothes and jewellery ndash to enable easier tracking by the customer E-mail alerts and mobile alerts on credit card details are commonplace Aggressive marketing Banks have not only raised the bar in quality and services but they have also devised aggressive growth strategies to notch up higher spends on cards ICICI Bank for example launched three no-holds-barred campaigns simultaneously during the high festival sea-son in the last three months of 2004 ndash a 5 cash back on all purchases over Rs 2000 a lucky draw for a couple to the seven wonders of the world and a chance to win a Mercedes E 240 Result the bank saw spends shoot up by 36 during the last three months of 2004 Not that competition has been staying quiet As soon as ICICI Bank came out with the cash back scheme Citibank decided to introduce a new cash back card on the lines of its popular Citibank dividend card in the US Other players too have already announced their plans to take on the top two Growing beyond metros The growth in spending has so far been spearheaded by the burgeoning mid-dle class in major cities where consumer spending is concentrated on more towards lifestyle and luxury goods However rural class is still not affected by this By issuing credit cards at 107 cities ICICI Bank has established the largest reach SBI the largest bank in the country with over 9000 branches has broadened its credit card business in 45 cities When the plastic revolu-tion spreads many farmers could be using credit cards to buy seeds and ferti-lisers

10


Huge market remains untapped The most heartening part of the growth is that so much still remains to be covered Compared to other Asian markets Indian credit card market is still at a nascent stage Credit cards per bankable population in India is 003 per person against 3 in South Korea 266 in Taiwan 2 in Hong Kong 11 in Singapore and 04 in Malaysia According to Mr VVaidyanathan senior gen-eral manager and head ndash retail products ICICI Bank an average Indian credit cardholder spends less than $500 on his card annually compared to around $800 in Sri Lanka and over $3000 in Hong Kong and Singapore

Outstanding dues on credit card (which are the money spinner for any card issuing bank) are the lowest in the region The outstanding balance in India is at $15 billion compared to $90 billion in Korea $10 billion in Hong Kong and US $25 billion in Malaysia In other words the credit card market in India could continue to register the current blistering growth in the medium to long term That should be music to the ears of banks looking for a slice of an in-creasingly affluent Indian consumer

BY

NIDHI JAISWAL

I MBA B

DEPRECIATING RUPEE

The awareness about the fall in Rupee value is not new but now itrsquos the threat about the Rupee value going all the way down to $50 that looms large The fall in Rupee started from August 1 and is continuing since then The purchasing power of Rupee vs Dollar is determined by the demand and sup-ply of Rupee in international market So the main effected sectorscommodities are petroleum products pulses cooking oil fertilizers steel etc and the basic gainers are exporters specially IT companies and textile companies

Now RBIs reducing rates to increase money supply in market so deposit rates will also move downwards But the basic reasons for it are

Dollar is in demand Dollar is the sole functionary Collapse of international trade

The other reason is the on-going Euro Zone Crisis (as Greece owes approxi-mately $400 billion in debt of which it has to pay $123 billion by 2014 Ac-cording to Standard ampPoorrsquos Greece is rated as ldquoTriple Crdquo the lowest in the world thus resulting in increased fiscal deficit The short ndash term interest rate is increasing as an effect of the depreciating

Rupee Thus corporate India is borrowing from overseas resulting in compa-

nies with foreign debt who will need more rupees to repay their loans in dol-

lar Hence they have an increase in debt and decrease in profit

BY

KUMAR ANIKET

I MBA D

ldquo THERE IS

NEVER

ENOUGH

GOLD TO

REDEEM ALL

THE

CURRENCY IN

CIRCULATION ldquo

11

In-

Opto Circuits India Ltd Opto Circuits (India) Ltd (OCI) is an MNC in the business of design

development manufacture and marketing of healthcare equipment and medi-

cal interventional products The product profile includes USFDA-listed

CE-marked cardiac and vital signs and cardiology monitoring systems

anesthesia and respiratory care equipment automated external defibrillators

stents catheters body implants and consumables It holds 168 patents and 53

pending patent applications Markets ndashmore than 100 countries predominant

in North America Europe and BRIC It has manufacturing and RampD facilities at

USA (Wisconsin Deerfield Waukesha Rhode Island) India(Bengaluru

Chennai Vizag Kolkata Parwanoo) Malaysia( Johor) and Germany (Bonn)

Itrsquos product portfolio includes Non invasive -Patient monitors (Oximeters vital

signs cardiology respiratory and anesthesia care) Defibrillation (AEDs) PAD

Diagnostics Consumables and Invasive-Cardiac (Bare metal stents Coated

stents and balloons)Peripheral coated balloons Replacement implants

Catheters

Target customers are Primary Care Physicians Specialty Practices Surgery

Centres Catheterization Labs Cardiac Rehabilitation Veterinary Facilities

Community Centres Government Cen-

tres amp Offices Schools amp Athletics

Nursing Homes Clinics Offices Mili-

tary amp Veteran Clinics

For the first quarter ending June 30

2011 (Q1 FY12) Net Sales stood at

Rs 52081 Crore as against Rs 29198

Crore in the same period last year It

reported a growth of 78 in net

sales EBITDA margin has come down by 58 to 275 due to increase in

employee expenses and other expenses which increased to 85 and 11 re-

spectively

There is 475 growth in operating profit Though PATM has come down to

223 PAT stood at Rs 116 Crore with growth of 40 as against the same

period last year

International accounts for 98 of the total revenue of the company where

there is significant growth of 79 against same period in last year Recent

international and domestic acquisitions by the company results an increase in

operating cost but it is expected to give good volume growth and long-term

growth for the company

NISHKA EQUITY RESEARCH

12

In-

Acquisition of Cardiac Science Corporation

Opto Circuits acquired US -based Cardiac Science a company that develops

manufactures and markets a family of advanced diagnostic and therapeutic

cardiology devices and systems

Acquisition of NS Remedies Pv t Ltd

Opto Circuits acquired Kolkata (India) based NS Remedies Pvt Ltd The

Company has an advanced facility for stent manufacturing and Research amp

Development The Company has the required capabilities to produce stainless

steel and cobalt chromium stents

Acquisition of Unetixs Vascular Inc

Opto Circuits acquired 100 percent of the capital stock of US -based Unetixs

Vascular Inc a specialist in the detection of peripheral arterial disease (PAD )

Unetixs Vascular designs develops and markets a full line of world class US

FDA ndashapproved vascular diagnostic systems and accessories to help in the

detection of PAD Cardiac Science fully owned subsidiary launched a new web

-based lsquoishoprsquo for online shopping of all Cardiac Science productsrsquo accessories

and supplies


Mkt Cap 4120Cr 52W High 324

PE 1686 52W Low 212

PB 388 EPS 1311

CMP 221 Target 280

Stop Loss 185 BUY

BY

LALIT GOEL

II MBA A

13


FINANCE BUZZ

1) ALLIGATOR PROPERTY In real estate when the cost of mortgage payments property taxes insurance and maintenance on a rental property is greater than the income it brings in If this situation is not corrected it will eat up all of the owners profit leaving him or her with negative cash flow 2) BOIL THE OCEAN To undertake an impossible task or project or to make a task or project unnec-essarily difficult Boiling the ocean generally means to go overboard 3) CAPITULATION When investors give up any previous gains in stock price by selling equities in an effort to get out of the market and into less risky investments True capitula-tion involves extremely high volume and sharp declines It usually is indicated by panic selling 4) CHAMPAGNE A slang term used to describe a stock that has appreciated dramatically A champagne stock is one that has made shareholders a great deal of money Alt-hough champagne stocks can come from any industry and sector bubble stocks have made and lost shareholders quite a bit of money before those bubbles burst 5) CATS AND DOGS A slang term referring to speculative stocks that have short or suspicious histories for sales earnings dividends etc The origin for this term may have stemmed from the use of dog to refer to an underperforming stock 6) COOKIE JAR An accounting practice in which a company uses generous reserves from good years against losses that might be incurred in bad years Cookie jar accounting is a sign of misleading accounting practices 7) ELEVATOR PITCH A slang term used to describe a brief speech that outlines an idea for a product service or project The name comes from the notion that the speech should be delivered in the short time period of an elevator ride usually 20-60 seconds In the financial world the speech refers to an entrepreneurs attempt to convince a venture capitalist that a business idea is worth investing in 8) FAT CAT A slang word used to describe executives who earn what many believe to be unreasonably high salaries and bonuses These top executives also receive generous pensions and retirement packages consisting of extra compensation not available to other company employees

14


9) IN THE PINK Money that flows regularly between financial markets as investors attempt to ensure they get the highest short-term interest rates possible Hot mon-ey will flow from low interest rate yielding countries into higher interest rates countries by investors looking to make the highest return These fi-nancial transfers could affect the exchange rate if the sum is high enough and can therefore impact the balance of payments 10) JANUARY BAROMETER A theory stating that the movement of the SampP 500 during the month of January sets the stock markets direction for the year (as measured by the SampP 500) The January Barometer states that if the SampP 500 was up at the end of January compared to the beginning of the month proponents would expect the stock market to rise during the rest of the year 11) LOVE MONEY Seed money or capital given by family or friends to an entrepreneur to start a business The decision to lend money and the terms of the agreement are usually based on qualitative factors and the relationship between the two parties rather than on a formulaic risk analysis 12) WASH TRADING An illegal stock trading practice where an investor simultaneously buys and sells shares in a company through two different brokers 13) YUPPIE A slang term denoting the market segment of young urban professionals A yuppie is often characterized by youth affluence and business success

BY SATHYA R I MBA A

15


The given below are the celebrities in the corporate world Find out who they are

1) _______________________ 2) ________________________

3)_______________________ 4) ________________________

5) _____________________

PHOTO FIND

16

In- FINANCE QUIZZ

1) The IMF has cut its forecast for UK economic growth in 2011 to what

percentage

2) Which country did not receive financial assistance from the IMF and

World Bank during the Asian contagion crisis of 1997

3) What percentage of the IMFrsquos budget comes from the US

4) Who has been charged with the alleged pound23bn fraud at bankers UBS

5) Which central bank recently said that it would peg its nationrsquos currency

to the euro

6) China holds the largest chunk of US Treasury debt at roughly $16

trillion Which country ranks second

7) How many nations are members of the IMFWorld Bank

8) Which noted economist is considered one of the founders of the IMF

9) The President of the EU has called for a tax on financial transactions

What is this tax called

10) Which major UK business announced 3000 job losses in September

2011

11) Which firm was named O2 Smarta Business of the Year for 2011

BY SHILPI KUMARI II MBA B

17

In-

CROSS WORD

1 A period where the stock or market is catching its breath after a decline char-

acterized by a flat trading range without any noticeable trend 6 International clearing company formed in 2000 from the merger of CEDEL and

Deutsche Bank Clearing 7 Exchange rate between USD and GBP 9 An indicator system that can be used to determine whether or not a stock is

trending and the strength of its trend 10 Long or short position which is not hedged by a corresponding opposite position

2 Ability of borrowers to meet their payment obligations 3 Trading in large packages of securities 4 Checking value-at-risk calculations and investment and hedge strategies against

historic data 5 Mutual offsetting of claims and liabilities from identical types of transaction be-

tween two parties 8 A slang term for the FTSE 100 stock index

Across

Down

BY SKANDAN Y N

II MBA A

18

In

As per the survey conducted results are as follows

Q1)

Best Response China is widely seen to be taking the lead among the so-called BRICS countries (Brazil Russia India China and South Africa) in helping to relieve the pressure on the European Union which is groaning under the weight of its sovereign debt problems Even with its huge foreign exchange reserves of more than $32 trillion its doubtful whether China can be counted on to act as a lone white knight and slay the eurozone debt dragon However repeated displays of confidence in European economies and the eurozone indicated by increased purchases of European government bonds have helped instill a degree of calm in the global capital markets and provided much needed stability for the euro The BRICS countries should not be seen as saviours with unlimited

resources to bail out those European countries hit by the sovereign debt

crisis according to Wang Weihua of the department of international

affairs at Shanghai International Studies University

NISHKA CAMPUS POLL

19


BY

NEIZELM SOUZA

II MBA A

Q2)

Best Response Faced with protests from farmers the government today decided to lift the ban on onion exports The decision to permit shipment of onions was taken by the Empowered Group of Ministers (EGoM) on Food headed by Finance Minister Pranab Mukherjee here Ban on onion exports has been lifted Union Minister for Science and Technology Vilasrao Deshmukh said Those who attended the crucial meeting included Agriculture Minis-ter Sharad Pawar and Food and Consumer Affairs Minister KV Thomas The government had imposed a ban on onion exports on September 9 to check its spiralling prices which touched Rs 25 a kg in retail in the national capital The Minimum Export Price (MEP) on onions has been fixed at $475 per tonne the same level when the government decided to prohibit the shipment of onion Deshmukh said The situation will be reviewed after a fortnight he said While the ban on exports had an in-stant impact in bringing down the wholesale prices of the onions by Rs 2-5 per kg in Delhi the decision had triggered protests from farmers in the key producing regions of Maharashtra and Karnataka Farmers in Nashik district and Bangalore had refused to bring their produce to mar-kets protesting the drop in their profit level due to ban on onion exports The farmers agitation forced the government to take a fresh look on the onion exports ban

ldquo LIFE SHOULDNT BE PRINTED

ON DOLLAR BILLSrdquo

20


VERIFY YOURSELF

PHOTO FIND

1Vinod Rai CAG of India

2 Montek Singh Ahluwalia Dy Chairman of Planning Commission

3Murali Manohar Joshi Chairman of PAC

4Hari Narayanan J Chairman of IRDA

5 Meg Whitman CEO of HP

ANSWERS FOR FINANCE QUIZZ

1 11

2 Vietnam

3 Kweku Adoboli

4 The US is the largest contributor to the IMF with a quota of 167

percent which amounts to approximately $58 billion

5 The Swiss National Bank announced on Sept 6th 2011 that it would

be pegging the Swiss franc with a value of 12 francs per euro

6 With holdings of more than $900 billion Japan is No 2

7 187

8 John Maynard Keynes the father of Keynesian economics and Ameri-

can Harry Dexter White are widely considered the founding fathers of

the IMF

9 Tobin tax

10 BAE System

11 Naked Wines ldquo A FINANCIER

IS A

PAWN-BROKER

WITH

IMAGINATION rdquo

21


1 BASINGmdashA period where the stock or market is catching its breath

after a decline characterized by a flat trading range without any no-ticeable trend

6 CLEARSTREAMmdashInternational clearing company formed in 2000 from the merger of CEDEL and Deutsche Bank Clearing

7 CABLEmdashExchange rate between USD and GBP 9 AROONmdashAn indicator system that can be used to determine whether

or not a stock is trending and the strength of its trend 10 NAKEDPOSITIONmdashLong or short position which is not hedged by a

corresponding opposite position

2 SOLVENCYmdashAbility of borrowers to meet their payment obligations 3 BLOCKTRADINGmdashTrading in large packages of securities 4 BACKTESTINGmdashChecking value-at-risk calculations and investment

and hedge strategies against historic data 5 NETTINGmdashMutual offsetting of claims and liabilities from identical

types of transaction between two parties 8 FOOTSIEmdashA slang term for the FTSE 100 stock index

Across

Down

22

ABOUT ldquoNISHKArdquo

NISHKA is a monthly finance magazine brought by the students of the finance club

of CHRIST UNIVERSITY Institute of Management Kengeri Campus The Idea behind

coining the issue of this magazine is to establish a learning among the students

which helps them to gain an insight about the world of finance

- TEAM NISHKA

FACULTY CO-ORDINATORS Prof Anirban Ghatak Dr Jeevananda CAMPUS POLL CO-ORDINATORS Neizel M Souza Flavia Deepika Tellis Praveen Kumar CH Azhagumathivanan R ARTICLES EDITORS Anish Kumar Singh Divyashree R Aarthi K Madhav B Neha Singh CREATIVE amp DESIGNING RETROSPECTION Gowthaman N Manish Santani ECONOMIC ROLLERS CROSS WORD Prateek Lakhmani Skandan Y N STOCK ANALYSIS QUIZ Lalit Goel Shilipi Kumari

INDEX

ECONOMIC ROLLERS 3

RBI COLUMN 4

CONTEMPLATORS 6

WHAT HAPPENED TO WORLD amp INDIAN EQUITIES 6

INFLUENCE OF PLASTIC MONEY 8

DEPRECIATING RUPEEhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip10

NISHKA EQUITY RESEARCHhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip11

FINANCE BUZZ 13

PHOTO FIND 15

FINANCE QUIZZ 16

CROSS WORD 17

CAMPUS POLL 18

VERIFY YOURSELF 20

3

In

ECONOMIC ROLLERS

Repo Rate 825


CRR 60

SLR 24



WPI 978

Food inflation 913








BY

PRATEEK LAKHMANI

II MBA C

4


RBI COLUMN



ldquoALWAYS BORROW



5



BY MADHAV A

II MBA B

6







































7















not over sold yet








2010












BY

RITESH KEJRIWAL

I MBA B


A MORTGAGED

CAR OVER A BOND-


GAS ldquo

8

























Standout features



indicators





standing in a queue



9



10




BY

NIDHI JAISWAL

I MBA B

DEPRECIATING RUPEE








BY

KUMAR ANIKET

I MBA D

ldquo THERE IS

NEVER

ENOUGH

GOLD TO

REDEEM ALL

THE

CURRENCY IN

CIRCULATION ldquo

11

In-















Catheters














spectively



period last year







12

In-

















and supplies



PE 1686 52W Low 212

PB 388 EPS 1311

CMP 221 Target 280

Stop Loss 185 BUY

BY

LALIT GOEL

II MBA A

13


FINANCE BUZZ


14



BY SATHYA R I MBA A

15



1) _______________________ 2) ________________________

3)_______________________ 4) ________________________

5) _____________________

PHOTO FIND

16

In- FINANCE QUIZZ


percentage






to the euro








2011



17

In-

CROSS WORD








Across

Down

BY SKANDAN Y N

II MBA A

18

In


Q1)





NISHKA CAMPUS POLL

19


BY

NEIZELM SOUZA

II MBA A

Q2)




20


VERIFY YOURSELF

PHOTO FIND







1 11

2 Vietnam

3 Kweku Adoboli






7 187



the IMF

9 Tobin tax

10 BAE System


IS A

PAWN-BROKER

WITH

IMAGINATION rdquo

21











Across

Down

22






- TEAM NISHKA


3

In

ECONOMIC ROLLERS

Repo Rate 825


CRR 60

SLR 24



WPI 978

Food inflation 913








BY

PRATEEK LAKHMANI

II MBA C

4


RBI COLUMN



ldquoALWAYS BORROW



5



BY MADHAV A

II MBA B

6







































7















not over sold yet








2010












BY

RITESH KEJRIWAL

I MBA B


A MORTGAGED

CAR OVER A BOND-


GAS ldquo

8

























Standout features



indicators





standing in a queue



9



10




BY

NIDHI JAISWAL

I MBA B

DEPRECIATING RUPEE








BY

KUMAR ANIKET

I MBA D

ldquo THERE IS

NEVER

ENOUGH

GOLD TO

REDEEM ALL

THE

CURRENCY IN

CIRCULATION ldquo

11

In-















Catheters














spectively



period last year







12

In-

















and supplies



PE 1686 52W Low 212

PB 388 EPS 1311

CMP 221 Target 280

Stop Loss 185 BUY

BY

LALIT GOEL

II MBA A

13


FINANCE BUZZ


14



BY SATHYA R I MBA A

15



1) _______________________ 2) ________________________

3)_______________________ 4) ________________________

5) _____________________

PHOTO FIND

16

In- FINANCE QUIZZ


percentage






to the euro








2011



17

In-

CROSS WORD








Across

Down

BY SKANDAN Y N

II MBA A

18

In


Q1)





NISHKA CAMPUS POLL

19


BY

NEIZELM SOUZA

II MBA A

Q2)




20


VERIFY YOURSELF

PHOTO FIND







1 11

2 Vietnam

3 Kweku Adoboli






7 187



the IMF

9 Tobin tax

10 BAE System


IS A

PAWN-BROKER

WITH

IMAGINATION rdquo

21











Across

Down

22






- TEAM NISHKA


4


RBI COLUMN



ldquoALWAYS BORROW



5



BY MADHAV A

II MBA B

6







































7















not over sold yet








2010












BY

RITESH KEJRIWAL

I MBA B


A MORTGAGED

CAR OVER A BOND-


GAS ldquo

8

























Standout features



indicators





standing in a queue



9



10




BY

NIDHI JAISWAL

I MBA B

DEPRECIATING RUPEE








BY

KUMAR ANIKET

I MBA D

ldquo THERE IS

NEVER

ENOUGH

GOLD TO

REDEEM ALL

THE

CURRENCY IN

CIRCULATION ldquo

11

In-















Catheters














spectively



period last year







12

In-

















and supplies



PE 1686 52W Low 212

PB 388 EPS 1311

CMP 221 Target 280

Stop Loss 185 BUY

BY

LALIT GOEL

II MBA A

13


FINANCE BUZZ


14



BY SATHYA R I MBA A

15



1) _______________________ 2) ________________________

3)_______________________ 4) ________________________

5) _____________________

PHOTO FIND

16

In- FINANCE QUIZZ


percentage






to the euro








2011



17

In-

CROSS WORD








Across

Down

BY SKANDAN Y N

II MBA A

18

In


Q1)





NISHKA CAMPUS POLL

19


BY

NEIZELM SOUZA

II MBA A

Q2)




20


VERIFY YOURSELF

PHOTO FIND







1 11

2 Vietnam

3 Kweku Adoboli






7 187



the IMF

9 Tobin tax

10 BAE System


IS A

PAWN-BROKER

WITH

IMAGINATION rdquo

21











Across

Down

22






- TEAM NISHKA


5



BY MADHAV A

II MBA B

6







































7















not over sold yet








2010












BY

RITESH KEJRIWAL

I MBA B


A MORTGAGED

CAR OVER A BOND-


GAS ldquo

8

























Standout features



indicators





standing in a queue



9



10




BY

NIDHI JAISWAL

I MBA B

DEPRECIATING RUPEE








BY

KUMAR ANIKET

I MBA D

ldquo THERE IS

NEVER

ENOUGH

GOLD TO

REDEEM ALL

THE

CURRENCY IN

CIRCULATION ldquo

11

In-















Catheters














spectively



period last year







12

In-

















and supplies



PE 1686 52W Low 212

PB 388 EPS 1311

CMP 221 Target 280

Stop Loss 185 BUY

BY

LALIT GOEL

II MBA A

13


FINANCE BUZZ


14



BY SATHYA R I MBA A

15



1) _______________________ 2) ________________________

3)_______________________ 4) ________________________

5) _____________________

PHOTO FIND

16

In- FINANCE QUIZZ


percentage






to the euro








2011



17

In-

CROSS WORD








Across

Down

BY SKANDAN Y N

II MBA A

18

In


Q1)





NISHKA CAMPUS POLL

19


BY

NEIZELM SOUZA

II MBA A

Q2)




20


VERIFY YOURSELF

PHOTO FIND







1 11

2 Vietnam

3 Kweku Adoboli






7 187



the IMF

9 Tobin tax

10 BAE System


IS A

PAWN-BROKER

WITH

IMAGINATION rdquo

21











Across

Down

22






- TEAM NISHKA


6







































7















not over sold yet








2010












BY

RITESH KEJRIWAL

I MBA B


A MORTGAGED

CAR OVER A BOND-


GAS ldquo

8

























Standout features



indicators





standing in a queue



9



10




BY

NIDHI JAISWAL

I MBA B

DEPRECIATING RUPEE








BY

KUMAR ANIKET

I MBA D

ldquo THERE IS

NEVER

ENOUGH

GOLD TO

REDEEM ALL

THE

CURRENCY IN

CIRCULATION ldquo

11

In-















Catheters














spectively



period last year







12

In-

















and supplies



PE 1686 52W Low 212

PB 388 EPS 1311

CMP 221 Target 280

Stop Loss 185 BUY

BY

LALIT GOEL

II MBA A

13


FINANCE BUZZ


14



BY SATHYA R I MBA A

15



1) _______________________ 2) ________________________

3)_______________________ 4) ________________________

5) _____________________

PHOTO FIND

16

In- FINANCE QUIZZ


percentage






to the euro








2011



17

In-

CROSS WORD








Across

Down

BY SKANDAN Y N

II MBA A

18

In


Q1)





NISHKA CAMPUS POLL

19


BY

NEIZELM SOUZA

II MBA A

Q2)




20


VERIFY YOURSELF

PHOTO FIND







1 11

2 Vietnam

3 Kweku Adoboli






7 187



the IMF

9 Tobin tax

10 BAE System


IS A

PAWN-BROKER

WITH

IMAGINATION rdquo

21











Across

Down

22






- TEAM NISHKA


7















not over sold yet








2010












BY

RITESH KEJRIWAL

I MBA B


A MORTGAGED

CAR OVER A BOND-


GAS ldquo

8

























Standout features



indicators





standing in a queue



9



10




BY

NIDHI JAISWAL

I MBA B

DEPRECIATING RUPEE








BY

KUMAR ANIKET

I MBA D

ldquo THERE IS

NEVER

ENOUGH

GOLD TO

REDEEM ALL

THE

CURRENCY IN

CIRCULATION ldquo

11

In-















Catheters














spectively



period last year







12

In-

















and supplies



PE 1686 52W Low 212

PB 388 EPS 1311

CMP 221 Target 280

Stop Loss 185 BUY

BY

LALIT GOEL

II MBA A

13


FINANCE BUZZ


14



BY SATHYA R I MBA A

15



1) _______________________ 2) ________________________

3)_______________________ 4) ________________________

5) _____________________

PHOTO FIND

16

In- FINANCE QUIZZ


percentage






to the euro








2011



17

In-

CROSS WORD








Across

Down

BY SKANDAN Y N

II MBA A

18

In


Q1)





NISHKA CAMPUS POLL

19


BY

NEIZELM SOUZA

II MBA A

Q2)




20


VERIFY YOURSELF

PHOTO FIND







1 11

2 Vietnam

3 Kweku Adoboli






7 187



the IMF

9 Tobin tax

10 BAE System


IS A

PAWN-BROKER

WITH

IMAGINATION rdquo

21











Across

Down

22






- TEAM NISHKA


8

























Standout features



indicators





standing in a queue



9



10




BY

NIDHI JAISWAL

I MBA B

DEPRECIATING RUPEE








BY

KUMAR ANIKET

I MBA D

ldquo THERE IS

NEVER

ENOUGH

GOLD TO

REDEEM ALL

THE

CURRENCY IN

CIRCULATION ldquo

11

In-















Catheters














spectively



period last year







12

In-

















and supplies



PE 1686 52W Low 212

PB 388 EPS 1311

CMP 221 Target 280

Stop Loss 185 BUY

BY

LALIT GOEL

II MBA A

13


FINANCE BUZZ


14



BY SATHYA R I MBA A

15



1) _______________________ 2) ________________________

3)_______________________ 4) ________________________

5) _____________________

PHOTO FIND

16

In- FINANCE QUIZZ


percentage






to the euro








2011



17

In-

CROSS WORD








Across

Down

BY SKANDAN Y N

II MBA A

18

In


Q1)





NISHKA CAMPUS POLL

19


BY

NEIZELM SOUZA

II MBA A

Q2)




20


VERIFY YOURSELF

PHOTO FIND







1 11

2 Vietnam

3 Kweku Adoboli






7 187



the IMF

9 Tobin tax

10 BAE System


IS A

PAWN-BROKER

WITH

IMAGINATION rdquo

21











Across

Down

22






- TEAM NISHKA


9



10




BY

NIDHI JAISWAL

I MBA B

DEPRECIATING RUPEE








BY

KUMAR ANIKET

I MBA D

ldquo THERE IS

NEVER

ENOUGH

GOLD TO

REDEEM ALL

THE

CURRENCY IN

CIRCULATION ldquo

11

In-















Catheters














spectively



period last year







12

In-

















and supplies



PE 1686 52W Low 212

PB 388 EPS 1311

CMP 221 Target 280

Stop Loss 185 BUY

BY

LALIT GOEL

II MBA A

13


FINANCE BUZZ


14



BY SATHYA R I MBA A

15



1) _______________________ 2) ________________________

3)_______________________ 4) ________________________

5) _____________________

PHOTO FIND

16

In- FINANCE QUIZZ


percentage






to the euro








2011



17

In-

CROSS WORD








Across

Down

BY SKANDAN Y N

II MBA A

18

In


Q1)





NISHKA CAMPUS POLL

19


BY

NEIZELM SOUZA

II MBA A

Q2)




20


VERIFY YOURSELF

PHOTO FIND







1 11

2 Vietnam

3 Kweku Adoboli






7 187



the IMF

9 Tobin tax

10 BAE System


IS A

PAWN-BROKER

WITH

IMAGINATION rdquo

21











Across

Down

22






- TEAM NISHKA


10




BY

NIDHI JAISWAL

I MBA B

DEPRECIATING RUPEE








BY

KUMAR ANIKET

I MBA D

ldquo THERE IS

NEVER

ENOUGH

GOLD TO

REDEEM ALL

THE

CURRENCY IN

CIRCULATION ldquo

11

In-















Catheters














spectively



period last year







12

In-

















and supplies



PE 1686 52W Low 212

PB 388 EPS 1311

CMP 221 Target 280

Stop Loss 185 BUY

BY

LALIT GOEL

II MBA A

13


FINANCE BUZZ


14



BY SATHYA R I MBA A

15



1) _______________________ 2) ________________________

3)_______________________ 4) ________________________

5) _____________________

PHOTO FIND

16

In- FINANCE QUIZZ


percentage






to the euro








2011



17

In-

CROSS WORD








Across

Down

BY SKANDAN Y N

II MBA A

18

In


Q1)





NISHKA CAMPUS POLL

19


BY

NEIZELM SOUZA

II MBA A

Q2)




20


VERIFY YOURSELF

PHOTO FIND







1 11

2 Vietnam

3 Kweku Adoboli






7 187



the IMF

9 Tobin tax

10 BAE System


IS A

PAWN-BROKER

WITH

IMAGINATION rdquo

21











Across

Down

22






- TEAM NISHKA


11

In-















Catheters














spectively



period last year







12

In-

















and supplies



PE 1686 52W Low 212

PB 388 EPS 1311

CMP 221 Target 280

Stop Loss 185 BUY

BY

LALIT GOEL

II MBA A

13


FINANCE BUZZ


14



BY SATHYA R I MBA A

15



1) _______________________ 2) ________________________

3)_______________________ 4) ________________________

5) _____________________

PHOTO FIND

16

In- FINANCE QUIZZ


percentage






to the euro








2011



17

In-

CROSS WORD








Across

Down

BY SKANDAN Y N

II MBA A

18

In


Q1)





NISHKA CAMPUS POLL

19


BY

NEIZELM SOUZA

II MBA A

Q2)




20


VERIFY YOURSELF

PHOTO FIND







1 11

2 Vietnam

3 Kweku Adoboli






7 187



the IMF

9 Tobin tax

10 BAE System


IS A

PAWN-BROKER

WITH

IMAGINATION rdquo

21











Across

Down

22






- TEAM NISHKA


12

In-

















and supplies



PE 1686 52W Low 212

PB 388 EPS 1311

CMP 221 Target 280

Stop Loss 185 BUY

BY

LALIT GOEL

II MBA A

13


FINANCE BUZZ


14



BY SATHYA R I MBA A

15



1) _______________________ 2) ________________________

3)_______________________ 4) ________________________

5) _____________________

PHOTO FIND

16

In- FINANCE QUIZZ


percentage






to the euro








2011



17

In-

CROSS WORD








Across

Down

BY SKANDAN Y N

II MBA A

18

In


Q1)





NISHKA CAMPUS POLL

19


BY

NEIZELM SOUZA

II MBA A

Q2)




20


VERIFY YOURSELF

PHOTO FIND







1 11

2 Vietnam

3 Kweku Adoboli






7 187



the IMF

9 Tobin tax

10 BAE System


IS A

PAWN-BROKER

WITH

IMAGINATION rdquo

21











Across

Down

22






- TEAM NISHKA


13


FINANCE BUZZ


14



BY SATHYA R I MBA A

15



1) _______________________ 2) ________________________

3)_______________________ 4) ________________________

5) _____________________

PHOTO FIND

16

In- FINANCE QUIZZ


percentage






to the euro








2011



17

In-

CROSS WORD








Across

Down

BY SKANDAN Y N

II MBA A

18

In


Q1)





NISHKA CAMPUS POLL

19


BY

NEIZELM SOUZA

II MBA A

Q2)




20


VERIFY YOURSELF

PHOTO FIND







1 11

2 Vietnam

3 Kweku Adoboli






7 187



the IMF

9 Tobin tax

10 BAE System


IS A

PAWN-BROKER

WITH

IMAGINATION rdquo

21











Across

Down

22






- TEAM NISHKA


14



BY SATHYA R I MBA A

15



1) _______________________ 2) ________________________

3)_______________________ 4) ________________________

5) _____________________

PHOTO FIND

16

In- FINANCE QUIZZ


percentage






to the euro








2011



17

In-

CROSS WORD








Across

Down

BY SKANDAN Y N

II MBA A

18

In


Q1)





NISHKA CAMPUS POLL

19


BY

NEIZELM SOUZA

II MBA A

Q2)




20


VERIFY YOURSELF

PHOTO FIND







1 11

2 Vietnam

3 Kweku Adoboli






7 187



the IMF

9 Tobin tax

10 BAE System


IS A

PAWN-BROKER

WITH

IMAGINATION rdquo

21











Across

Down

22






- TEAM NISHKA


15



1) _______________________ 2) ________________________

3)_______________________ 4) ________________________

5) _____________________

PHOTO FIND

16

In- FINANCE QUIZZ


percentage






to the euro








2011



17

In-

CROSS WORD








Across

Down

BY SKANDAN Y N

II MBA A

18

In


Q1)





NISHKA CAMPUS POLL

19


BY

NEIZELM SOUZA

II MBA A

Q2)




20


VERIFY YOURSELF

PHOTO FIND







1 11

2 Vietnam

3 Kweku Adoboli






7 187



the IMF

9 Tobin tax

10 BAE System


IS A

PAWN-BROKER

WITH

IMAGINATION rdquo

21











Across

Down

22






- TEAM NISHKA


16

In- FINANCE QUIZZ


percentage






to the euro








2011



17

In-

CROSS WORD








Across

Down

BY SKANDAN Y N

II MBA A

18

In


Q1)





NISHKA CAMPUS POLL

19


BY

NEIZELM SOUZA

II MBA A

Q2)




20


VERIFY YOURSELF

PHOTO FIND







1 11

2 Vietnam

3 Kweku Adoboli






7 187



the IMF

9 Tobin tax

10 BAE System


IS A

PAWN-BROKER

WITH

IMAGINATION rdquo

21











Across

Down

22






- TEAM NISHKA


17

In-

CROSS WORD








Across

Down

BY SKANDAN Y N

II MBA A

18

In


Q1)





NISHKA CAMPUS POLL

19


BY

NEIZELM SOUZA

II MBA A

Q2)




20


VERIFY YOURSELF

PHOTO FIND







1 11

2 Vietnam

3 Kweku Adoboli






7 187



the IMF

9 Tobin tax

10 BAE System


IS A

PAWN-BROKER

WITH

IMAGINATION rdquo

21











Across

Down

22






- TEAM NISHKA


18

In


Q1)





NISHKA CAMPUS POLL

19


BY

NEIZELM SOUZA

II MBA A

Q2)




20


VERIFY YOURSELF

PHOTO FIND







1 11

2 Vietnam

3 Kweku Adoboli






7 187



the IMF

9 Tobin tax

10 BAE System


IS A

PAWN-BROKER

WITH

IMAGINATION rdquo

21











Across

Down

22






- TEAM NISHKA


19


BY

NEIZELM SOUZA

II MBA A

Q2)




20


VERIFY YOURSELF

PHOTO FIND







1 11

2 Vietnam

3 Kweku Adoboli






7 187



the IMF

9 Tobin tax

10 BAE System


IS A

PAWN-BROKER

WITH

IMAGINATION rdquo

21











Across

Down

22






- TEAM NISHKA


20


VERIFY YOURSELF

PHOTO FIND







1 11

2 Vietnam

3 Kweku Adoboli






7 187



the IMF

9 Tobin tax

10 BAE System


IS A

PAWN-BROKER

WITH

IMAGINATION rdquo

21











Across

Down

22






- TEAM NISHKA


21











Across

Down

22






- TEAM NISHKA


22






- TEAM NISHKA


nishka october issue 2011

Economy & Finance