LITIGATION FINANCING

Ishan Khare | MBA 10 | 2022-24

Retail investors, who were once considered a small segment of the investing population, have gained prominence in recent years, particularly in India. Retail investors refer to individuals who invest their own money in the stock market, rather than institutional investors like mutual funds, hedge funds, or banks In India, retail investors have experienced a significant rise in numbers over the past few years, and their impact on the country's economy and the stock market has been noteworthy.

The rise of retail investors in India has been a notable trend in recent years. Retail investors are individuals who invest their money in financial markets such as stocks, mutual funds, and bonds, among others, with the aim of generating returns on their investment

Historically, the Indian stock market has been dominated by institutional investors. However, with the growth of the Indian middle class and increased accessibility to the internet, retail investors have emerged as a powerful force in the market. In 2020, the number of retail investors in India reached 6.8 crore (68 million), a significant increase from 3 5 crores (35 million) in 2015 This surge in retail participation has been facilitated by technological advancements, such as the introduction of online trading platforms, which have made it easier and more convenient for retail investors to participate in the stock market.

The impact of retail investors on the Indian stock market has been profound Firstly, their increasing participation has led to greater liquidity in the market, making it easier for companies to raise capital through the sale of their shares This has also made it easier for retail investors to enter and exit positions in the market. Moreover, retail investors have had a significant impact on the valuation of certain stocks In many cases, stocks that were once undervalued have seen a surge in prices due to increased demand from retail investors

Retail investors have also brought about a change in the investment landscape in

India Traditionally, Indian investors have favored investing in real estate and gold, considering them as safe investments. However, the rise of retail investors in the stock market has led to a shift in the mindset of Indian investors, with more people opting for equities as an investment option

This has been driven by the high returns that equities have provided over the past few years In fact, in 2020, the Indian stock market witnessed a significant rally, with the benchmark index, the BSE Sensex, increasing by over 15%.

One of the reasons why retail investors have been able to have such a significant impact on the Indian stock market is the low penetration of institutional investors in India According to a report by Edelweiss Securities, institutional investors account for just 10% of the total market capitalization in India, compared to 40-50% in developed markets like the US and Japan This means that retail investors have a larger share of the market, which gives them more power to influence stock prices.

The impact of retail investors on the Indian stock market is not limited to the equity market. In recent years, retail investors have also shown increased interest in other investment avenues like mutual funds, initial public offerings (IPOs), and exchange-traded funds (ETFs). In fact, the mutual fund industry in India has witnessed a surge in retail participation, with assets under management (AUM) growing from Rs. 11.06 lakh crore in February 2020 to Rs 33 04 lakh crore in February 2022. The increase in retail participation in mutual funds has been facilitated by the growth of systematic investment plans (SIPs), which allow investors to invest small amounts of money regularly.

While the rise of retail investors in India has had a positive impact on the stock market, it has also raised concerns about the potential risks associated with increased participation from inexperienced investors. Retail investors often lack the expertise and resources of institutional investors, and may be more prone to making emotional or irrational investment decisions. This can lead to increased volatility in the market and may result in losses for investors

Source: Edelweiss Securities

Reasons For Rise

There are several reasons for the rise in retail investors in India:

Increased awareness: There has been a significant increase in financial literacy and awareness among the general public in India More people are now aware of the benefits of investing and are seeking ways to grow their wealth.

Easy access: With the advent of technology, investing in the stock market has become more accessible to the general public. Online trading platforms and mobile apps have made it easier for retail investors to invest in stocks, mutual funds, and other financial instruments

Growth of the middle class: The rise of the middle class in India has led to an increase in disposable income, which has in turn led to more people investing in the stock market.

Government policies: The Indian government has taken several measures to encourage retail investment, such as tax incentives and the introduction of investment-friendly policies

Demographic dividend: India has a large population of young people who are tech-savvy and have a higher risk appetite. This demographic dividend has played a significant role in the rise of retail investors in the country in the number of retail investors investing in stocks, mutual funds, and other financial instruments.

Conclusion

The rise of retail investors in India has been a significant phenomenon in recent years

The advent of technology and the democratization of information have made it easier for individuals to participate in the stock market, which has traditionally been dominated by institutional investors

The impact of retail investors in India has been both positive and negative. On the positive side, retail investors have increased market liquidity, brought in new capital, and helped to diversify the investor base They have also played a key role in driving up the stock market, which has created wealth for many individuals

However, there have also been some negative consequences. Retail investors, who may not have the same level of experience or access to research as institutional investors, may be more prone to making emotional and irrational investment decisions This can lead to increased volatility in the market and potential losses for individual investors.

Alternative investments: With interest rates on fixed deposits and other traditional investment options declining, more people are looking for alternative investment options. This has led to a rise

Overall, the rise of retail investors in India has been a significant development, and it is likely that their influence will continue to grow. As the Indian economy continues to expand and the middle class grows, more individuals are likely to become interested in investing in the stock market.

Trusple is an international trade and financial service platform powered by AntChain, Ant Group's blockchain-based technology solutions. Ant Group is a provider of open platforms for technologydriven inclusive financial services and the parent company of China's digital payment platform, Alipay. Trusple aims to make it easier and less costly for all participants –especially Small-to-Medium Enterprises (SMEs) – to sell their products and services to customers around the world. It also reduces costs for financial institutions so they can better serve SMEs in need

Trusple was unveiled at the Inclusion Fintech Conference's Blockchain Industry Summit The conference, organized by Ant Group and Alipay, aims to promote a global dialogue on how digital technology can aid in the creation of a more inclusive, environmentally friendly, and sustainably developed world

Trusple has teamed with a number of top international financial organizations, including BNP Paribas, Citibank, DBS Bank, Deutsche Bank, and Standard Chartered Bank, to help streamline cross-border procedures

The system, which is built on the idea of "Trust Made Simple," creates a smart contract after a buyer and a seller upload a trading order to the site The smart contract is automatically updated as the order is fulfilled with important details like order placements, logistics, and tax refund possibilities Banks for the buyer and seller will automatically handle the payment settlements via the smart contract using AntChain This automated approach not only reduces the laborious and timeconsuming procedures that banks typically use to track and confirm trade orders, but it also makes sure that the data is unaltered Also, by completing transactions successfully on Trusple, Businesses can increase their creditworthiness on AntChain, which makes it simpler for them

To Get Funding From Financial Institutions

With the launch of Trusple, the company hopes to make cross-border trading safer, more dependable, and more effective for buyers and sellers as well as for the financial institutions that serve them, much like when Alipay was introduced in 2004 as the online escrow payment solution to foster trust between buyers and sellers

It has historically been challenging for many SMEs to conduct business due to a lack of confidence among international trading partners. This lack of confidence between buyers and sellers can cause delays in shipments and payment settlements, which puts pressure on SMEs' financial situation and cash flow. The longstanding difficulty of confirming the validity of orders has driven up the cost of banking for banks that serve SME international trade. Trusple uses AntChain's core technologies, such as AI, the Internet of Things (IoT), and secure computation, to address these issues in international trade by fostering trust between various parties.

Benefits

Enhanced security: Trusple leverages

AntChain's blockchain technology to ensure secure and tamper-proof transactions The use of blockchain ensures that all transactions are recorded and verified, reducing the risk of fraud or cyberattacks.

Improved efficiency: Trusple can enhance efficiency through

The

use of smart contracts and automation The platform can automate many steps of the trade process, such as customs clearance and logistics, which could significantly reduce the time and cost of cross-border transactions.

Increased transparency: The use of AntChain's blockchain technology also ensures transparency throughout the entire trade process. All parties involved in a transaction can access the same information in real-time, which can help improve trust and reduce disputes.

Scalability: AntChain's technologies offer Trusple the potential to scale quickly and handle large volumes of transactions This could make the platform more attractive to businesses looking to expand their international trade.

Customizable solutions: AntChain provides customizable solutions to businesses, which can be integrated with Trusple to meet their specific needs This could help businesses optimize their supply chain management and increase their efficiency.

About Antchain

Ant Group's blockchain venture is called AntChain Ant Group has the most published blockchain-related patent applications from 2017 to the six months ending June 30, 2020, according to IPR Daily and the patent database IncoPat Since the founding of Ant Group's blockchain division in 2016, the company has led the way in theuse of AntChain in over 50 blockchainrelated business applications and use cases, including supply chain financing, cross-border remittance, charitable giving, and product provenance

The three layers that make up the AntChain platform are the open Blockchain-as-aService foundation, asset digitalization, and asset circulation Over the twelve months ending June 30, 2020, the AntChain platform generated over 100 million daily active items, including patents, vouchers, and warehouse receipts

VigneswaranS|MBA-03|2022-24

Abhigyan Verma| MBA 3 | 2022-2024

Introduction

Islamic Finance

Ltcm Crisis

Islamic finance is a type of financial activity that must comply with the Sharia (Islamic law) It also refers to the investments that are permissible under sharia. Although the formal practice of Islamic banking and finance started in the 20th century, it has its roots and came into existence along with the foundations of Islam. Islamic finance can be considered a form of socially responsible investment, as it includes deliberately refraining from investing in sin goods and services, say, alcohol or gambling.

Sharia does not permit receipt and payment of interest, betting, gambling, short selling, or any financial activity that it considers harmful to society. These practices are considered haram, which means prohibited, as it is considered usurious and exploitative It says that the parties should share the risks and rewards of a business transaction and that the transaction should have a real economic purpose without undue speculation and not involve exploiting either party.

Islamic law views lending with interest payments as a relationship favoring the lender, who charges interest at the borrower's expense Islamic law considers money as a measuring tool for value, not an asset. Therefore, it requires one to be unable to receive income from money alone

HOW DO ISLAMIC BANKS MAKE MONEY?

The primary source of revenue for a bank is the interest that it gains when it lends money to its customers, retail, or businesses alike. But since this isn’t possible for Islamic banks, how do they make money?

There are broadly five ways in which they generate profit –

Islamic banks use an equity participation system, which is similar to profit sharing Equity participation means if a bank loans money to a business, the business will pay back the loan without interest and instead give the bank a share in its profits If the business defaults or does not profit, the bank also does not benefit. Of equal importance is the concept of ‘Gharar’ It refers to the ambiguity and deception that come from selling items whose existence is uncertain. An example of ‘Gharar’ would be to buy an asset. This asset is then sold after adding a markup to the customer The customer purchases the asset with deferred payments. For example, if I want to buy a phone for ₹ 1 lakh, but I don’t have the cash, the price for the phone would be ₹ 1 2 Lakhs, and I would make the payment in the form of an EMI.

Wakala is used in Islamic finance to describe a contract of agency or delegated authority under which the customer appoints an agent (bank) to carry out a specific task Here, the bank works like an individual agent The bank lends its expertise and manages investments on behalf of the customer for a particular duration to generate an agreed-upon profit

Salam is similar to forward financing. The bank pays the customer a purchase price for an upfront purchase of a commodity that will be delivered on a deferred basis by the customer. The customer will purchase the item to be delivered to the bank through a broker

In conclusion, Islamic banking is a banking system that operates according to Islamic law principles. It is based on fairness, social justice, and ethical conduct and encourages cooperation and risk-sharing Islamic banking is growing in popularity and has several advantages over traditional banking, including focusing on actual economic activity, social responsibility, and access to financial services for marginalized communities. As such, Islamic banking is an important and valuable addition to the global financial system

DE-DOLLARIZATION BY ASIAN COUNTRIES

Introduction

De-dollarization is the process of reducing a country's dependence on uses of dollars, creating substitute of USD or reduce dollar dominance as a medium of exchange for domestic or international trade, transactions as well as reducing dollar in reserves. The reason behind dedollarization can be reducing risk associated with the US dollar, such as fluctuations in its value or reduce their dependence on the USD.

It can be done in various ways such as diversifying the currencies held in a country's foreign exchange reserves, encouraging the uses of other currencies in international trade or introducing a new currency to compete or replace the US dollar.

REASONS BEHIND DE-DOLLARIZATION

Asian countries that depend on the USD for for transactions, may want to reduce their currency fluctuations risk connected with dollars, which previously negatively impact their economies De-dollarization can help to avoid dollar fluctuation risk and diversifying the currencies used in international trade, and also can help in ignoring US regulation and sanctions

The dominant role of United State Dollar (USD) at global stage allows US to influence

Source: FXC intelligence other countries economic growth and political stability and it can be used as a tool for achieving US foreign policy goals.

Countries may de-dollarization their reserve by considering geopolitical tensions, trade disputes or war by promoting or encouraging the use of alternative currencies or creating new regional currencies Countries using local currencies in domestic and international trade, investment can reduce transaction costs and increase economic cooperation and growth

Major Asian countries have been move toward de-dollarization as to promote regional currency and economic integration because a lack of confidence in the local currency may lead investors to prefer using dollars, but this can lead to a drain of national currency value and make it harder for the country to manage its economy

History Of Dollar Growth And Dominance

U.S. dollar's dominance began from World War II, when Bretton Woods Agreement was signed in 1944 Under this agreement, the U S dollar was established as the global reserve currency and which means that other countries have to hold large amounts of dollars in their foreign exchange reserves or could exchange their dollars for gold at a fixed rate for international trade.

growth A deal signed between oil rich countries and U.S. for using Dollar for trading oil and fluctuations in currency exchange rates can also lead to dollar growth

HOW DOLLAR BECAME A VALUABLE CURRENCY?

The United States dollar became the world's most valuable and dominant currency primarily due to its uses as standard currency for international trade, as well as extreme role of the United States in the geopolitics and global economy and international trade.

Dollar has been the continuous reserve currency for many central banks around the world holding large amounts of dollar for protecting their foreign exchange reserves and stability That has created a constant demand for USD and has help to maintain its value over period of time. Dollar is the most common currency use in international trade by countries, most commodities such as oil, gold and other financial securities which priced in dollars. That’s why many countries need to hold more US dollars reserve for purchasing these goods

DE-DOLLARIZATION BY ASIAN COUNTRIES

Overall encouraging more and more bilateral trade agreements and deals with countries for using USD lead to significant dollar

Asian countries want to develop an alternative payment and settlement systems that does not depend on the U.S. dollar or Western financial institutions That’s why India, Russia, China and other Asian countries move toward de-dollarization by promoting the use of its own currency in domestic, international trade and investment across borders.

India

India has started de-dollarization by reducing its dependence on the U S dollar in bilateral trade and international trade and by increasing its holdings of other currencies in its foreign exchange reserves. India has been developed an alternative payment and settlement systems that are not depend on the USD such as Reserve Bank of India (RBI) has set up NEFT and UPI to facilitate electronic payments in rupee across countries as well as India has been promoting the uses of its own currency, Indian rupee, in international trade. India has signed currency swap agreements with many countries, which allows for the exchange of rupees with other currencies in trade and investment. Currently RBI has approved 60 Special Rupee Vostro Accounts in domestic and foreign banks in more than 18 countries for trading in Indian rupee. In March 2022, India- Russia started trading in Rupee- Ruble and more countries show their interest in using rupee for international trade In December 2022 Sri Lanka and Mauritius start using rupee in trade.

Russia

De-dollarization has also been a main goal of Russia to reduce its depend on the USD due to impact of U S and western sanction on its economy Russia has started holdings other currencies in its foreign exchange reserves such as Chinese Yuan, Indian rupee, Japanese yen and gold and promoting use of its own currency ruble in international trade. sia cut down uses of dollar backed assets by 16% in 2021 and also reduce payment of USD in Russia exports to BRICS, by 95% in 2013 to 10% in 2020.

Source: CBR

On 23 march 2022 Russia signed an order with non friendly countries for buying oil and gases in other currency

China

In 2011, China start shifting from USD to Chinese Yuan and IMF has already considered Yuan as its SDR (Special Drawing Rights) in 2016. China aggressively promotes De-dollarization in recent years by the internationalization of its own currency, the Yuan or Renminbi (RMB) China also promoting use of the Yuan in its bilateral trade agreements, especially with countries involved in its Belt and Road Initiative

In conclusion, de-dollarization by Asian countries is a growing trend that shows their growing economic and financial power along with geopolitical importance as well as choice of independence and self dependent.