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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The Department of Revenue has withdrawn the 4% special CVD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 ([email protected])
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 [email protected]
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