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Wealth Incorporation Presents

There are Only Three Colors, 10 Digits and 7Notes. It is what we do with these isImportant- Ruth Ross

National Headlines Indias total foreign debt rose by 22.6% to $155 billion in 2006-07, as

companies went overseas to borrow on account of cheaper credit.

HDFC announced a special interest rate of 10.50% for customers availing

home loans at floating rate of interest. This is 75 basis points lower than the

regular rates.

The National Hydroelectric Power Corporation (NHPC) signed three

memoranda of agreement with the Power Finance Corporation for Line of

Credit aggregating to Rs 3000 crore for project financing in Himachal

Pradesh, West Bengal & Jammu-Kashmir.

The Department of Revenue has withdrawn the 4% special CVD

(countervailing duty), on VAT paid imports.

Exchangeable Bonds (EBs) will have to face withholding tax on the interest

payments to the bond holders. EBs , a much awaited financial instrument,

are an innovative tool that will allow corporate to raise foreign funds againsttheir holding in group companies

International Headlines

Diversified manufacturer Emerson Electric agreed to buy a Motorola unit thatserves the telecommunications, medical and defense industries for $350million in cash.

Euro zone inflation rebounded in September above the European CentralBank's target for the first time in a year but market turmoil depressedeconomic sentiment, making another ECB interest rate rise less likely

Japan set to privatize mammoth postal system

Goldman Sachs has abandoned its bullish view on the global economy. It hasbecome bullish on the U. S., Japanese and the European economies

China has unveiled a series of measures to tighten property lending in itslatest attempt to cool the country's overheating real estate market and curbmortgage lending risks

Germanys unemployment improves during the month of September

1st OCT 2007

Volume 1, Issue 3

..Tracking the Economy

The business schools reward difficult complex behavior more than simple behavior, but simple behavior is more

effective Warren Buffett

Inflation 4.12% , IIP 7.8 %

Issue Attractions

NationalHeadlines

1

InternationalHeadline

1

CorporateInterview

2

Quiz 2

Special column 3

Student Editorial 3

Pearls of Wisdom 4

15 days Movements

CHAANAKYACHAANAKYACHAANAKYACHAANAKYA

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Corporate Interview

Quiz

Columbus did not seek a new route to the Indies in response to a majority directive. . Milton Friedm

1. The First Finance Minister of Pakistan Ghulam Mohammed was the co-founder of which Indian company? After his mov

to Pakistan and Indian attaining independence the company changed its name

2. Name the bank founded by Mr. G.D Birla, after the historic "Quit India" movement in 1942.

3. Which is Indias first PSU?

4. Name Indias first film producing company to go public that was set up by a Chartered Accountant?

5. Which organization was the first pressure group ever formed in the country that claimed to represent the whole of Ind

Business in the early 1920s?

(Answers will be published in the next issue)

Answers to the previous issue

1. LIC's `Jeevan Bharti'. The policy offers a critical illness benefit that covers female illnesses 2. Zavata Inc

3. Corporate governance 4. Air Deccan and Apollo Hospital 5. Canara Bank and oriental bank of commerce

An Interview with Mr. Syed Musheer, Deputy Manager FuturesFirst.

Chaanakya: The crude oil prices are almost touching $ 80 per barrel, but in India petrol prices are constant. What wilthe short term impact on PSUs oil companies?

Mr. Syed: Oil has been trading above $75 since long. The PSUs have been making loses. Since, Oil is mainly tradeddollars, oil companies are also losing due to the depreciation in dollar value. And due the government regulations the pr

hike of petrol and diesel is not being transferred to the final consumer. So, they are being compensated by issuPetroleum Bonds.

Chaanakya: The turnover of Commodity futures dipped 27% in Sep07 for the first time in 2007. What are the reasons?

Mr. Syed: It is noticed that when there is very high volatility then the volume of trade is low due to the high risk associawith it. In the month of September volatility was at an all time high over the past 5 years. Hence, the turnover would hfallen. And, the US sub prime is also another reason which would have led to the fall in turnover as the credit markets wcautious. In the long run the market is Bullish.

Chaanakya: Metal prices in particular Gold and Silver are on a surge due to the upcoming festival season. What do ycomment?

Mr. Syed: India is the largest consumer of Gold and Silver and one month before Diwali the price of the Gold and Silverexpected to rise. But there is always a direct relationship between the prices of Gold and Silver and Petroleum Prices.

always noticed that when the prices of oil rises then the prices of Gold and Silver are bound to rise as Oil is the main infor mining of Gold and Silver. Hence, this rise in prices of Gold and Silver is also the effect of rise in prices of Oil.

Chaanakya: Of late MCX and NCDEX are playing a proactive role in development of commodity markets in India. Are tcomparable to the likes of CBOT and CBT?

Mr. Syed: CBOT and CBT have merged now and the volume of trade is highest in the world. In terms of turnover it take time for MCX and NCDEX to compete with CBOT and CBT. Our commodities markets are not fully mature and it take a minimum of 5 more years for it to make any mark globally.

Chaanakya: Do you think the interference of the government is a hindrance for the development of Commodities markThis is with reference to its interference in the wheat futures market.

Mr. Syed: It has its pros and cons. In the present day we dont have a strong regulatory body which can monitor commodities market like the SEBI for stock market. Hence, there is a need for the government interference to protect

poor and the needy. But once the markets mature, the government will automatically stop from interfering.Chaanakya:Any suggestionsfor students who want to take up trading as a career?

Mr. Syed: One should have the ability to withstand stress and handle their temper. One should not be stubborn, should

a smart risk taker, decent amount of intelligence and high amount of discipline. It involves 90% attitude and 1

intelligence. There is no special skill that one needs to learn before taking up this career. It is all about risk taking abi

discipline, intelligence and passion for the job

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Did you Know?

US Airways makes $

million each year fro

ads on tray tables a

napk ins in the

airplanes. Low-fa

carrier AirTran charg

companies as much

$50,000 a month advertise on napkins

RELIANCE INDS,

BSE-500325 , NSE RELIANCE

CMP- Rs.2058

TARGET PRICE- Rs.2298

OPTO CIRCUITS,

BSE-532391, NSE-OPTOCIRCU

CMP- Rs.512.65

TARGET PRICE- Rs.555

HT MEDIA ,

BSE-532662, NSE HTMEDIA

CMP- Rs.215

TARGET PRICE- Rs.250

KALPATARU POWER,

BSE-522287, NSE-KALPATPOW

CMP- Rs.1497.5

TARGET PRICE- Rs.1788

(CMP Current Market Price)

Stock Ratnas

Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participa

in it. . Warren Buffet

In light of the recent Federal Reserve rate cut, experts believe that India too will

come under the influence of the interest rate cut of 50 basis points to 4.75%. Theiropinion can be summarized as below:

Overall effect will be positive for emerging equity market due to increase in foreign institutional

flows - Liquidity concerns that emerged due to sub-prime crisis will get offset

India to be among the out performers in the emerging markets - Lower dependency on exports -

Domestic consumption growth remains intact (more so backed by good monsoon) - High real

interest rates - RBI is in good position to counter any adverse developments with contained

inflation

Rupee to strengthen following dollar weakness - Positive for FII in view of higher dollar return -

Negative for export oriented sectors

Fed action more aggressive than the expectation highlights risk of US slowdown which will

adversely affect global demand - Commodities likely to see correction on the base of demandslowdown

Experts continue to recommend overweight on domestic consumption and infrastructure related

plays and underweight on export oriented plays. Their top picks are ITC, SBI, PNB, Bharti,

L&T and DLF among large caps. Experts are :

Positive for sectors such as: Industrials/Infrastructure, Financial services, Real estate,

Telecom, FMCG

Negative for sectors such as: IT, Textiles, Auto components, Metals

Neutral for sectors such as: Health care, Consumer discretionary, Cement

Impact of fed rate cut in IndiaBy Aishwarya Wiswanath

Did you Know?

Only three companhave reached tcoveted No. 1 spot Fortune 500 since 195GM, Exxon Mobil a

Wal-Mart.

Major Macro waves and their IndicatorsBy Mathew

Did you Know?

If you are a sin

income family with t

children in Slovak

s u b s i d i e s t h

government provid

actually makes your n

income tax (-5.3%) your income.

Denmark, the sa

family would pay 25.4

Macro wave Indicators

Inflationary tiger Consumer Price Index

Producer Price Index

Employment Cost Index

Recessionary bear

The Jobs report

Consumer confidence

Personal income and credit

Retail sales

God of economic growth and the businesscycle GDP

Car and truck sales

Capacity utilization

Housing starts and construction spending

S&P's DRI forecasting

Archangel of productivity Productivity and cost

Budget deficit dragon Treasury budget report

Trade deficit trap Merchandise trade balance

Import and export prices

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Tag Lines:

Now You Are Flying - Cathay Pacific

Its Your World, Take Control - AMX

Building Networks For People - D-Link

Oh What a Feeling - Toyota

a. Reserve Bank of Australia b. Ford Equity Research

c. Luxembourg Stock Exchange

d. Australian Stock Exchange

e. Allianz Investment Banking f. Scotia Bank

g. US Security and Exchange Commission h. Royal Bankof Scotland

i. DCB j. Think Equity Research

D E Shaw specific:

Aptitude in derivatives, general awarenessfinancial market activities is very important.

Interview:

The stress is on accounting theory, knowledge companys financial reports, derivatives, Financmanagement and SAPM (Security analysis aportfolio management).

Another key area of focus during interview is summinternship.

Pearls Of WisdomSanil Antony (sanilpantony@gmail.com)

Analyst , D E Shaw

Job description:

Analysis with financial research team. Corporate action, financialreports, Mergers and Acquisitions, dividend policy, country specificmicro & macro study.

General guidelines

Depending on company specific marketing and financial productsknowledge is important. Pure finance company looks for financial

concepts, summer internship projects, as well as past academic

background.

Please mail your valuable feedbacks, reviews at chaanakya.ccim@gmail.com

Buzz Word

Assimilation - The absorption of the stock by the public from

a new company.

Baby Bells - A common nickname given to the US regional

telephone companies that were formed from the break up of

AT&T in 1984, which was done to create more competitionwithin the industry.

Churning - A period of heavy trading with few sustained price

trends and little movement in stock market indices.

Contagion - The likelihood of significant economic change in

one country spreading to other country. This can refer to either

economic booms or economic crises.

Management Mantras

Don't let your entrepreneurial spirit get killed

the emergence of a business giant in yo

vicinity. You can always be smarter, faste

wiser, and more appreciated than a slo

changing, and often less popular business bul

Success is the one thing you work for aft

having defined it yourself. Obtaining it w

depend on your own input, the choices y

make, and the degree to which you want

stretch yourself