Financial focus Fortnightly Newsletter InFINeeti ISSUE 2 2014 Volume 2 TOP STORIES…………….1 MARKET ACTIVITY…..….2 ECONOMICS.………....…. 3 DOPPELGANGER (SPOT THE DIFFERENCE)..…..... 4 POLICY RATES AND MARKET UPDATES…….. 5 WARREN BUFFETT A one stop guide to know about all the recent happenings in the financial world TOP STORIES : INDIA RBI BEGINS REVIEW OF JAN DHAN ROLLOUT A week aſter the official launch of the Prime Minister’s Jan Dhan Yojana, the Reserve Bank of India has begun a review of the financial inclusion mis- sion. A senior RBI official said the regulator was focusing on performance of banks’ state wise and in and in each district. Read more... Financial focus GOVT DETERMINED TO PUSH TAX, FINANCIAL SECTOR REFORMS: PM MODI Narendra Modi today expressed government's determinaon to push tax and financial sector reforms to improve business environment. "Prime Min- ister Modi underlined his determinaon to further improve the business environment in India, including through tax, administrave and financial regulaons, in order to boost investment," said a joint statement issued INDIA AND AUSTRALIA SEAL CIVIL NUCLEAR DEAL FOR URANIUM TRADE Australian Prime Minister Tony Abbo sealed a civil nuclear deal to sell ura- nium to India on Friday and also offered to increase supplies of convenonal fuel to help it overcome chronic shortages. "We signed a nuclear coopera- on agreement because Australia trusts India to do the right thing in this area, as it has been doing in other areas," Abbo told reporters. Read more... FIVE-DAY VISIT TO JAPAN HIGHLIGHTS GROWING ECONOMIC AND DIPLOMATIC TIES BETWEEN SHINZO ABE AND NARENDRA MODI Narendra Modi and Shinzo Abe are holding formal talks in Tokyo to cement a blossoming relaonship between India and Japan cemented with a shared conservave agenda. Modi, who hopes his market-focused policies will boost India's floundering economy, could walk away with almost half a bil- lion dollars' worth of loans for much-needed infrastructure projects, reports said. Read more...
Transcript
Financial focus Fortnightly Newsletter
InFINeeti
ISSUE 2 2014 Volume 2
TOP STORIES…………….1 MARKET ACTIVITY…..….2
ECONOMICS.………....….3
DOPPELGANGER (SPOT
THE DIFFERENCE)..…..... 4 POLICY RATES AND
MARKET UPDATES…….. 5
WARREN BUFFETT
A o n e s t o p g u i d e t o k n ow a b o u t a l l t h e r e c e n t h a p p e n i n g s i n t h e f i n a n c i a l w o r l d
TOP STORIES : INDIA
RBI BEGINS REVIEW OF JAN DHAN ROLLOUT
A week after the official launch of the Prime Minister’s Jan Dhan Yojana, the Reserve Bank of India has begun a review of the financial inclusion mis-sion. A senior RBI official said the regulator was focusing on performance of
banks’ state wise and in and in each district. Read more...
Financial focus
GOVT DETERMINED TO PUSH TAX, FINANCIAL SECTOR REFORMS: PM MODI Narendra Modi today expressed government's determination to push tax and financial sector reforms to improve business environment. "Prime Min-ister Modi underlined his determination to further improve the business environment in India, including through tax, administrative and financial regulations, in order to boost investment," said a joint statement issued
INDIA AND AUSTRALIA SEAL CIVIL NUCLEAR DEAL FOR URANIUM TRADE Australian Prime Minister Tony Abbott sealed a civil nuclear deal to sell ura-nium to India on Friday and also offered to increase supplies of conventional fuel to help it overcome chronic shortages. "We signed a nuclear coopera-tion agreement because Australia trusts India to do the right thing in this
area, as it has been doing in other areas," Abbott told reporters. Read more...
FIVE-DAY VISIT TO JAPAN HIGHLIGHTS GROWING ECONOMIC AND DIPLOMATIC TIES BETWEEN SHINZO ABE AND NARENDRA MODI Narendra Modi and Shinzo Abe are holding formal talks in Tokyo to cement a blossoming relationship between India and Japan cemented with a shared conservative agenda. Modi, who hopes his market-focused policies will boost India's floundering economy, could walk away with almost half a bil-lion dollars' worth of loans for much-needed infrastructure projects, reports
MODI EFFECT: DALA STREET ADDS 10% OR $400 BILLION TO GLOBAL MARKET CAP SO FAR THIS YEAR
India has become a dominant force when it comes to building global equity wealth. This year as the global market cap hit $66 trillion, it did so with the help of the tailwind generated by a strong domestic market performance. Global equity market cap has risen 6.06% to $66 trillion so far in 2014 and India's market cap has grown the fastest to $1.5 trillion from $1.1 trillion. Read More...
OIL STEADIES NEAR $102, HEADS FOR WEEKLY DROP ON
DOLLAR
Brent crude oil steadied near $102 a barrel on Friday, heading for a third weekly drop in four as a strong dollar depressed demand, though data showing lower crude stocks in the United States floor under prices. Oil
prices on both sides of the Atlantic fell nearly $1 Read More...
TOP STORIES : WORLD
ECB CUTS RATES, LAUNCHES NEW CREDIT SCHEME AS GROWTH EVAPORATES
The European Central Bank (ECB) cut interest rates to a fresh record low on Thursday and launched a new scheme to push money into the flagging Euro zone economy. In a series of measures underscoring growing concern about the currency bloc’s health, the ECB cut its main refinancing rate to 0.05 per cent from 0.15 per cent previously and drove the overnight deposit rate
deeper into negative territory. Read more...
ALIBABA SEEKS TO RAISE MORE THAN $21 billion IN RECORD U.S. TECH IPO
Alibaba Group Holding Ltd seeks to raise more than $21 billion in an IPO that will value the Chinese e-commerce giant at up to $163 billion and rank as the largest-ever technology debut in the United States. Alibaba expects to price its initial public offering between $60 and $66 per American Deposito-
ry Share, valuing the company at about $162.69 billion. Read more...
U.S. JOB GROWTH BRAKES TO EIGHT-MONTH LOW, LABOR FORCE SHRINKS U.S. employers hired the fewest number of workers in eight months in Au-gust and more Americans gave up the hunt for jobs, providing a cautious Federal Reserve with more reasons to wait longer before raising interest rates. Nonfarm payrolls increased 142,000 last month after expanding by
212,000 in July, the Labor Department said on Friday. Read more...
(Difference between similar sounding Financial terms)
LIQUIDITY & SOLVENCY RATIOS
Solvency and liquidity, both of the terms refer to any enterprise’s condition regarding financial health, but they have subtle differences between them. On one hand solvency refers to the capacity of an enterprise meeting its long-term financial obligations, whereas on the other hand liquidity refers to the ability of an enterprise meeting its short-term commitments; the term also suggests the capability of the enterprise to sell its assets quickly to convert into cash. To keep it simple, a solvent company is the one that owns more than it owes to others; in other words, it has positive net worth and a debt load which can be managed easily. On the other hand, a company which has sufficient liquidity probably have enough available cash to pay all its bills, but again it might be heading towards a financial disaster down the time. There are financial ratios which are used to measure a company’s liquidity and solvency.
#Solvency Ratios: Debt to equity, Debt to assets, Interest coverage ratio etc
#Liquidity Ratios: Current ratio, Quick ratio, Days sales outstanding etc
LIBID AND LIBOR
The terms LIBID and LIBOR are two of the most important terms when one talks about International Finance scenario. Both LIBID and LIBOR (London Inter Bank Offered Rate) are the rates which are primarily used by the banks in the Interbank market of London. The London interbank market is the wholesale money market in London where the banks exchange currencies either directly or sometimes using the electronic trading platforms. The acronym LIBID stands for London Interbank Bid Rate. It is the bid rate which the banks are willing to pay for Euro currency deposits in the London interbank market. Euro currency deposits mean money in the form of bank deposits of a currency outside the country that issued the currency. However, euro currency deposits can be of any currency in any country. The most common currency deposited as Euro currency is the US dollar. For example, if US dollars are deposited in a Euro-pean bank or any bank outside the U.S, then the deposit is called a euro currency. To put it in simple words, LIBOR is the interest rate at which banks borrow money from other banks of the London interbank market. The interest rate is published for five different currencies: US Dollar, UK Pound Sterling, European Euro, Japanese Yen and Swiss Franc. The LIBOR is set on a daily basis by the British Bankers' Association. It is published for 7 different maturities: overnight (1 day), 1 week, 1 month, 2 months, 3 months, 6 months and 12 months. A total of 35 different interest rates are posted every day
WARREN BUFFET MANAGEMENT RULES : RULE 5 Rule 5 :Because of our two-pronged approach to business ownership and because of the limitations of conventional accounting, consolidated reported earnings may reveal relatively little about our true economic performance. Charlie and I, both as owners and managers, virtually ignore such consolidated numbers. However, we will also report to you the earnings of each major business we control, numbers we consider of great importance. These figures, along with other information we will supply about the individual businesses, should generally aid you in making judgments about them. To state things simply, we try to give you in the annual report the numbers and other information that really matter. Charlie and I pay a great deal of attention to how well our businesses are doing, and we also work to understand the environment in which each business is operating. For example, is one of our businesses enjoying an industry tailwind or is it facing a headwind? Charlie and I need to know exactly which situation prevails and to adjust our expectations ac-cordingly. We will also pass along our conclusions to you. Over time, the large majority of our businesses have exceeded our expectations. But sometimes we have disappoint-ments, and we will try to be as candid in informing you about those as we are in describing the happier experiences. When we use unconventional measures to chart our progress – for instance, you will be reading in our annual reports about insurance “float” – we will try to explain these concepts and why we regard them as important. In other words, we believe in telling you how we think so that you can evaluate not only Berkshire’s businesses but also assess our ap-proach to management and capital allocation.
