EDITORIAL A D Y A
J H A
Editorial CONTENT FUTURE: MOBILE WALLET/CASH | 2 SUUTI DIVESTMENT | 5 HOW BREXIT AFFECTS US |7
At FinNiche we always strive to improve and innovate and this year we start with the introduction of a few new sections in our revamped version of FinXpress. We have introduced the section ‘FinApp’ with which we will keep you updated about the apps which bring relevant financial information straight to your mobile devices; the ‘Did you know’ section deals with interesting financial facts and events which may be hitherto unknown to you. For all those who love humor and appreciate things in a lighter vein, we are introducing the ‘Cartoon Corner’ which will give you a light hearted take of the events in the financial world. In addition to these, FinQuiz has been introduced where you can judge your financial acumen. Our special new section ‘An Evening With…’ would be the cherry on the cake in which we will be talking to some eminent personalities and publish their interviews.
IS IT THE RIGHT TIME TO INVEST IN EMERGING MARKETS | 10 FINHUMOUR | 12 MARKET | 13 START UP TRACKER | 15 FINAPP | 17 FINWORD | 19 DID YOU KNOW 21
Club FinNiche welcomes the new batch of IMT, Ghaziabad. With the committee recruitment processes finally over, the campus is buzzing with a plethora of committee activities. FinNiche applauds everyone who has been taking an active part in the activities and congratulates the budding managers for completing their first month of the IMT life. We all had heard the phrase – “IMT never sleeps”, but experiencing it first hand was a completely different yet enriching experience. With a myriad of intra and inter-college activities lined up, including Survivor, Mahindra War Room Season 9, Maverick, etc, this fresh batch seems all geared up to unleash their potential.
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FINQUIZZ | 22
In this edition, we are covering a wide array of articles. In International section, we have raised the question whether it is the right time for investing in the emerging markets, and also how Brexit affects us. On the national front, we have discussed about the future of mobile wallet in India and also about SUUTI Divestment, Mass Asset transfer and strategies. In FinApp, we will be reviewing the Moneycontrol app, which has proven to be highly useful and successful. We hope that everyone likes the revamped version of magazine. Club FinNiche welcomes any comment, suggestions or criticism regarding the magazine. Please do write to us and share your ideas. Happy Reading! Regards The Editorial Team Club FinNiche
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NATIONAL A M A N
A N A N D
Is Mobile Wallet the future or is cash still king in the Indian context? Growing up in India in the 90’s, the term cashless economy was almost unheard of. And yet we’re slowly moving towards a cashless economy and the emergence of Mobile Wallets is one indication of this trend. Mobile Wallet systems such as Paytm and MobiKwik have seen tremendous growth in India; estimated to grow from $86 million in 2011 to $1.15 billion in 2016, with a compounded annual growth rate (CAGR) of 68 percent, according to estimates.
SNIPPETS EMERGENCE OF MOBILE WALLETS IN INDIA AND HOW THEY ARE PROVIDING CONSOLIDATED SERVICES
ANALYSE THE CHALLENGES FACED INCLUDING U.P.I.SERVICE BY THE RBI AND FIGURE OUT IF AND HOW MOBILE WALLETS WILL SUCCEED IN INDIA
What explains this tremendous growth? The increased usage of cellphones in India is one such reason with smartphones becoming the preferred medium of online transaction and interaction. The upgradation of telecom services in India with operators offering 3G/4G at reduced rates and the majority (nearly 50%) of Indian smartphone users belonging to the 18-30 demographic has led to higher growth curve for digital payments. Stimulated by all these factors, mobile e-commerce transactions now constitute 40% of the total e-commerce transactions. In 2014-15, more than 255 million transactions were registered, with a combined value of transactions of INR 8,184 Cr. This is a 137 per cent increase from 107.61 million transactions during 2013-14. However, India remains, largely, a cash-led economy. Cash constitutes 68 percent of consumer payments (in value terms), according to analysts AS Venkata Krishnan, Alpesh Mehta and Dhaval Gada
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from Motilal Oswal Securities in a March 2016 digital banking report. Although Mobile wallets show a consistent increase in the number of adoption and usage, there arises a question- Is Mobile Wallet the future or is cash still king in the Indian context?
Challenges faced by Mobile Wallets To answer the question, we need to ask ourselves the scope of mobile wallets now and in the near future. Although mobile wallets started as a means to pay recharges of mobile phones, it quickly expanded to DTH and then to even payments household and electricity bills. Paytm ventured into the e-commerce business and now mobile wallet companies are targeting payment of online cab services as well. All this points towards a synergy of services that these digital wallets are providing to make sure that they remain relevant in the near future. Digital wallets, just like every millennial technology need to keep upgrading themselves in order to stay ahead of the competition, aping the technology companies like Apple and Microsoft who changed their business models to Phones (and tablets) and Enterprise Solutions respectively to remain relevant. A recent challenge emerged in the form of Unified Payments Interface (UPI) through the National Payments Corporation of India (NPCI). The NPCI is a primary body
governing all retail payment systems in India. What UPI brings to the table is that a user only needs his UPI ID for various transactions and no sensitive information like card details and passwords are shared. Also, unlike a mobile wallet, one does not need to set aside funds upfront in an account. UPI is a pet project of the RBI and by July 31 15 banks including private and public banks, will be part of UPI . Another 15 banks, including State Bank of India and HDFC Bank, will become part of UPI by the end of September. NPCI expects all the banks to become part of UPI by March 2017 and make it a revolutionary digital payment system. One more thing to factor in UPI is that UPI does not have a limit in the amount of transaction as is the case with digital wallets. With the impetus on quick adoption and the services provided UPI seems like a tough challenger for Mobile Wallets in India. We need to understand the impacts of UPI on both payment at food outlets or paying by cash on delivery. Cash on delivery, the big driver behind the ecommerce boom, will probably die a natural death for people with smartphones. They can use the UPI app to pay after receiving the goods. All they need to know is the unique ID of the ecommerce firm. Similarly suppose you are eating out and want to split the bill. One person pays and others can directly transfer the money to his account without any cash or IFSC code required. Another challenge faced by mobile wallets is that the bulk of business and sales in India are done in small scale shops where the shopkeepers and businessmen do not have the capital to invest in mobile wallet solutions. For mobile wallet to succeed in India, we
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need usability of mobile wallets in every nook and corner of the country. Govind Rajan, COO of FreeCharge says that Freecharge is working on payment solutions that can be adopted by every merchant, without even investing a rupee. “We envisage simple and easy to on-board system for nnew merchants. As we build this acceptance, we can dramatically increase the salience of digital payments,� says Govind. In my opinion a viable business model would be to invest in an infrastructure to support extensive Mobile Wallet in the country and if it takes off, recover the cost of the infrastructure by charging other mobile wallets to use it. That way your offering would be the most cost friendly and your profit margins would be higher too. Another issue would be that although internet adoption is increasing with leaps and bounds, the internet speeds are not up to the mark in most cases. In fact according to a global survey conducted by Akamai India stands at 114th position with an average internet speed of 2.8 Mbps. This coupled with even slower speeds in the rural areas where the people can only afford 2G connection, internet speed is not up to the mark to support fast and secure transactions. There is also the fear of lapse of security regarding mobile wallets since the number of cases of cybercrimes are on the increase in the country. Customers prefer the 2 step authentication process as recommended by RBI using debit/credit cards, although that process is cumbersome and time consuming. This fear stems from the lack of knowledge of the customers and Mobile Wallets face the challenge to educate customer on the benefits of their offering.
Can Mobile succeed??
Wallets
With mobile phones replacing hand-held devices and now even laptops with the amount of efficiency, portability and ease of use it provides, the day is not far when mobile phones would serve as our wallets too. And with the RBI pushing for a
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cashless economy, mobile wallets face a tipping point where either they can conquer the market or can fade into oblivion. As Abhijit of Ezetap said“Payments by mobile is inevitable�, I believe that the question of contention is not whether mobile wallets will succeed in India but when ?
NATIONAL A N K I T
S U R A N A
SUUTI DIVESTMENT: STRATEGIES AND MASS ASSET TRANSFER After the flagship fund of Unit Trust of India (UTI), US-64 collapsed in 2003, UTI was restructured. It was divided into UTI Asset Management Co, where all net asset value (NAV) based schemes were transferred and SUUTI or Specified undertaking of Unit Trust of India, which gained the large equity holdings along with other assets like assured return schemes and Real Estate for assets monetization.
SNIPPETS SELLING THE SHAREHOLDING OF EQUITY SHARES BY SUUTI
3 PARTS OF SUUTI DIVESTMENT PROGRAM
Company
Shares holding
Axis Bank ITC Ltd L&T Ltd
(in %) 11.93 11.17 8.32
Group A, which includes ITC, L&T and Axis Bank whose divestment was kick started Group B, includes eight unlisted firms in which SUUTI owns shares Group C, holds remaining 40 listed firms
SUUTI is intended to sell the shareholding of equity shares in various companies either through Block Sale, Bulk Sale, OFS,
Shares held
Total share price
274,840,905 1,345,113,810 75,926,462
(in crore) 14,818 33,908 12,057
Table 1: SUUTI Blue-chip shareholding as on July 25, 2016 Government considered selling SUUTI's assets several times, but the plan never took off. Now that the government is struggling to fill coffers by selling its share in public sector enterprises and failing to meets its target,it intent to sell entire equity investment of SUUTI. SUUTI has holdings in 43 listed and 8 unlisted listed entities including major stakes in blue chips like ITC, L&T and Axis Bank; holdings big enough to impact market prices of these scrips or even overall market movement. In 2014, the government sold 9% in Axis Bank to raise Rs. 5,500 crores.
Regular Sale or other such mechanisms. For this, SUUTI is seeking to appoint up to three merchant bankers/advisers/selling brokers for advising on the SUUTI Holdings for a period of three years, as stated in the Reason for Purpose (RFP). Applicants are invited from merchant bankers while the sale process is expected to take 3 months in compliance with SEBI guidelines.
These merchant bankers will be liable to prepare notices, assisting in all approval procedures, marketing in all possible manner, doing surveys and market research, transfer of funds etc. Also, they are accountable for many other processes as mentioned SUUTI has split the divestment program in RFP. into three parts:
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This divestment programme is planned to split in two to three tranches. In which, companies from Group A will initiate the process. Then selling will move ahead with eight companies from Group B, which will be followed by remaining 40 companies of Group C. The market sentiment is also positive for the divestment. In recent times, there have been several developments like easing of FDI norms that have a positive influence
shares of ITC Ltd i.e. to the state-run insurance firms, which are already its current shareholders like LIC (14.47%), Oriental Insurance Company (1.50%), and New India Assurance Company (1.84%) etc. This is due to board of directors of the tobacco giant are likely to oppose for any new institutional buyer. As announced in the budget, these insurance firms are aligned for listing and this acquisition of stakes will help in that. But there are few hurdles also like, although LIC is the strongest contender to purchase but it already has 14.47% shares, while the limit is 15% to buy up. Also, British American Tobacco has a stake of 29.7% in ITC but it cannot pick more, as in India FDI is not allowed in tobacco.
Although divestment of stocks in Group A is easier as these are the companies with higher market demand but for the rest from Group B and C, it will definitely be harder. But Government initiatives like revised RPF which has done away with the clause of investment banks participating in on the market. Coming on the heels of SUUTI stake sale process being prohibited these announcement, this would have a from accepting mandates from companies positive impact on the asset valuation. competing with SUUTI portfolio firms; to The government can fetch around Rs. just requiring merchant bankers to intimate 60,785 crores through the sale of Group A SUUTI and the government about firms alone if it decides to divest the potential conflict of interest has created a whole portfolio. The process might start conducive marketing environment. with the inter-institutional selling of the
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INTERNATIONAL A N S H U M A N
N A N D W A N A
How BREXIT affects us? There are a lot of uncertainties looming around the world. On the western side there’s Trump and Clinton going head to head. In UK, there’s a full government overhaul under the presidency of Theresa May. Fail coups are happening in Turkey. India in itself is in midway of conflicts on passing of GST and having a good monsoon. Well, there’s a lot of happening like this and here we go with gauging effects of the biggest of them – Brexit
SNIPPETS INDIAN COMPANIES WILL BE BACKED WITH A DUAL BENEFIT FOR INVESTMENTS IN UK POST BREXIT . FIRST BENEFIT BEING THE FALLING POUND AND THE SECOND ONE BEING FALLING COST OF INVESTMENTS INDIAN COMPANIES PERCEIVE UK AS THE GATEWAY FOR ENTERING INTO EUROPE AND THEY WOULD BE HAVING A
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June 24 was the day when Britain came out with a unanimous voice suggesting Britain to part away with the European union. The results of referendum might not be seen as a surprise because things have been radically changing in that part of the world. Sluggish growth of EU has been extensively being hit by various factors making it more sluggish. Global growth is already slumping, European Banks are already under large debts because of continuous fall in prices of oil and energy, refugee insurgence in some of the EU countries had made the matter worse. This all made Britain people believe that EU in itself is going down in a drain and it’s better to get off this sinking ship. With referendum results came a show of gloomier outcomes. GDAXI and FCHI each fall 7 percent to 8 percent. Italian .FTMIB and Spanish .IBEX markets posted their sharpest one-day drops ever, falling more than 12 percent. Italy's Unicredit (CRDI.MI) fell 24 percent while Spain's Banco Santander (SAN.MC) fell 20
percent. London’s .FTSE as well dropped 3.2 percent. What can be much worse for an already underperforming economy? Well, it has been over a month since results are out and many of the markets have regained what they had lost after this turmoil. India is glowing as one of the brightest spots again. Well, how are things going to be in future for India? How is all this going to affect us? Well, this write-up tries to gauge up all of this
.
Let’s start first of all with the benefits of the same, and yes, there are a lot of them. Firstly, falling pound pr ovides with more purchasing power with every rupee spent. This benefits India in two different ways, first one being that it will now be much cheaper for Indian Companies to invest in Britain. They will be backed with a dual benefit. First one being falling pound and second one being falling cost of investments. For example, cost of an already functioning food processing factory which previously costed 1 million pound would be equal to 1 million multiplied by 98(EUR/INR May 2016), approximating to 98 million INR. The same factory will now cost for .8 million (fall in price) multiplied by 87(EUR/INR July 2016) appropriating to 69.6 million rupees. Hence, investments got cheaper approximately about 30 percent. Looks like a grab isn’t it? Indian companies could leverage this to best of their abilities .
Secondly this could be seen as a shopping opportunity for Indian companies where they can increase imports for certain viable machineries, raw materials, technology and goods which they would not have been able to procure till recent times due to high exchange rates Not only goods but they can have services contracts as well with UK based companies
.
With Brexit, many of Foreign Investments Institutions are looking to squeeze out their investment partly from UK as well as other European countries and finding out other territories where their investments can be more fruitful and seem to be profitable again. This gives India a go-ahead as it’s already in the limelight of the world for its better opportunities. Companies can shed off their investments to India directly/ indirectly resulting is better inflow of capital and money. Companies which tend to invest for longer durations may also help India realize better job opportunities and overall growth.
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Another benefit of falling pound will be that it will help many students who are currently taking education in UK or are looking for the same. The student visa restrictions as well as post-study work visa rules may also be relaxed as the flow of EU students into the UK will slow down and British institutions will face a decline, opening doors to Indians. Some also hope that Brexit might give a boost to trade ties between India and the UK. Considering that exports will fall for UK extensively because European countries is one of the biggest importers for UK based products, UK will be in a dire need for to strengthen trade relations with other countries so that they can dump their inventories and further productions without much losses. This may result in easing of policies for import and export and will certainly benefit India. Exports and imports between the two countries have been already growing
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Talked a lot of benefits and you seem to be impressed. But with a lot of good comes a bit of bad as well. The first and the foremost is for the Indian Companies which are already there in UK. Traditionally, Indian Companies perceived UK as the gateway for entering into Europe and they would be having a great hit because of Brexit. Take example of Land Rover owned by Tata, it incurs twenty percent its sales by volumes from Europe. Brexit will surely hit them. Tata also cancelled its plans for sealing its UK steel business for the reason that they are not getting impressive bids. Infosys has already cut their revenue estimated for next fiscal year because of falling pound price as they will not get the same return in form of INR they excepted a couple of
months ago. Another drawback of falling pound is that any future investments you make; you’ll get less returns in form of INR from it. The elated feeling of investing is now disappearing and there are no tangible benefits of the same, until and unless companies invest in industries which will be further growing irrespective of Brexit happening. At last, one question remains in front of all of us. Is Brexit really going to happen? And even if it happens would the impacts
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be the same as projected? Is UK really going to act on this referendum? To my personal opinion, Brexit would happen but with terms and conditions. Yes. UK would be playing clever on Brexit. They’ll carve out policies in such a manner that all the drawbacks which it currently feels being in EU are negated (like excessive immigrations) and all the benefits that it is reaping from EU currently remain intact. Let’s keep our eyes on what happens in the future.
INTERNATIONAL H R I S H I K E S H
G U L K O T W A R
Is it the Right Time to Invest in Emerging Markets? SNIPPETS EMERGING MARKETS HAVE MORE POSITIVE RETURNS AS COMPARED TO THE ESTABLISHED ONES MARKET GROWTH PROJECTIONS DEPENDENCIES ON CHINA’S ECONOMIC POLICY
What to invest? When to invest? Where to invest? Many answers, many mantras, many opinions. But is it so easy that one invests based on some opinions read online or heard on TV………. Nah! But what one can understand from these is the ‘vibes’ of the market. Roped in here are certain facts published by well-known sources and statements by highly qualified individuals to give you an understanding of the vibes of emerging markets. How safe is it to invest in the emerging economies with markets being so volatile? Post the recession of 2008, only a few have come out of recession and provided favorable environment for investment. Economies such as Italy & Spain are still crippling and the wealth gap divide is ever increasing. So the question of identifying the potential lotus in this pond is the challenge of the day. Looking into emerging markets, such as that of Venezuela which has been bled dry of funds due to the falling crude prices, investors have lost faith in the economy to sustain itself. This is similar to the kind of situation faced by Brazil in 2002, a time at which their new President Luiz Inácio Lula da Silva was elected, and brought in a raft of changes. Investors like Geoff Dennis (Head of Global Emerging Markets UBS Investment Bank) saw this as an opportunity and it paid them well. The Lula Govt. & their Central Bank brought a positive feeling
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among investors with through raft of policy changes. A recent stat put up by Money (CNN News) show that a record of $4.9 billion have flowed in as emerging market bond fund & $4.7 billion in to stocks between 14 Jul’16 to 20 Jul’16 in to markets of Brazil, South Africa & India. The emerging market index - MSCI rates emerging markets at 9.7% as against 2.6% for the MSCI World. Apart from Lira (Turkish currency) all other currencies have held their own or have grown with respect to the US Dollar, say for example Ruble (Russia) is up 13%, Real (Brazil) 21% & Rand (South Africa) 9%. Some reasons for the above may be
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the result of US federal reserve indication of keeping low interest rates
rising commodity prices
availability of stocks at lower prices compared to their future earning potential
Latest growth projections of economies as mentioned in table ( Source: IMF) provides further insight into which markets are on the growth path. The ASEAN- 5, India etc are rated highly as compared to established, and one needs to focus on the sectors that the policies in such economies support. The NN investment partners report – growth momentum indicator, is positive for the first time since 2014. As per
reports from IMF, the growth gap between the developed and developing nations was narrowing since 2011 but, has again started to widen. Another reason to rejoice for the emerging economies is that, Brexit might force Britain to make trade deals with these markets, as they are likely to provide much competitive pricing policy as compared to developed ones. But there’s this other side of the coin, wherein some experts believe that the emerging markets have topped up. Economies such as that of Kenya are heavily dependent on Britain for the purchase their flower produce. So much that Rand (Kenya Currency) had fallen by 8% by the end of the week Britain voted ‘leave’. China is the biggest player in emerging markets. It itself is going through a turmoil and any change in its policies can be a big shake to the world. The recent devaluation in Yuan has led to US stocks getting hammered. But the impact is still less than those of emerging markets that relied heavily on commodity
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exports. A report in US news website clearly states about the Standard & Poor emerging market BMI index, which has taken a fall of 20% over the last year & 5 % dip in S&P 500. But a look into the data will tell you that these were those economies which relied heavily on resources such as Iron Ore & Coal etc. For instance, a decrease in Yuan will lead to currency devaluation by other exporting countries to be competitive. Even developed economies Like Canada & Australia take a hit because they rely heavily on agriculture and mining. Thus it is not about throwing the cash based on the economy but also about studying the possible growth path of industries and carefully investing in them. However, how things evolve one can only guess and wait. Thus a fitting end to the article may be - Emerging Markets aren’t a haven but they seem to be a better bet than the developed ones - albeit when invested with a sound decision
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FinHumour S R I K A N T
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S I N G H
MARKET K R I S H A N T
K A U L
Public sector banks lagging behind private sector banks in the second quarter.
SBI reported a drop of 35% in profit.
PNB reported a drop of 52.56% in profit.
BoB reported a drop of 10.24% in profit.
Private sector banks fared much better
ICICI banks net profit rose by 20.24%
Axis bank profits rose by 21.2%
HDFC bank profits rose by 27%
The Reserve Bank of India (RBI) announced the issuance of the fourth tranche of sovereign gold bonds, which can be purchased on both the BSE and the NSE, on 5th August. The applications for the bonds will be accepted from 18th July to 22nd July. In an attempt to prune fuel subsidy, the Indian government signaled the oil companies to increase kerosene price by 25 paise per month till April 2017, a move that has not been publicly announced. Investors are hopeful that the Rajya Sabha will take up the Goods & Services tax (GST) bill for discussion next week. The GST will facilitate a uniform tax levied on goods and services across the country. It will help GDP of India grow by 2 percent. The Cabinet Committee on Economic Affairs (CCEA) approved the proposal to sell 15% stake in National Buildings Construction Corporation (NBCC), in an anticipation to garner Rs 1,706 crores from the stake sale. India’s retail inflation increased to 5.77% in June from 5.76% in May, while wholesale inflation increased to 1.62% in June from 0.79% in May. India’s export rose 1.27%(to $22.5 billion in June), while imports fell 7.3%(to $30.6 billion in June) resulting in a trade deficit of $8.1 billion in June compared to $6.27 billion in May. Centre will not raise the foreign direct investment (FDI) limit on newspapers and periodicals from 26% to 46%. Sagarmala Development Company (SDC) was approved by the cabinet under the companies Act, 2013, with an initial authorized share capital of Rs 1,000 crore and a subscribed share capital of Rs 90 crore.
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Last fortnight market scenario. (15/07/2016 to 29/07/2016) OPEN
HIGH
LOW
CLOSE
BSE SENSEX
27,966
28,240.20
27,637
28,051
NIFTY
8,565
8,674
8,476
8,638
BSE SENSEX
NIFTY
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Start Up Tracker N I D H I
K U M A R
SNIPPETS INDEPENDENT PRICE COMPARISION WEBSITE VARIOUS PRODUCT CATEGORIES LEAD GENERATOR FOR BIG COMPANIES 100+ EMPLOYEES 12 MILLION CUSTOMERS EACH MONTH
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InGovern is India’s first proxy advisory startup which was incorporated in 2010 and is headquartered at Bengaluru, India . Its estimated revenue is less than $1M .It assists financial institutions and investors and gives them exposure to public-listed companies in India by providing corporate governance reports, proxy analysis, and proxy voting solutions. The services that it offers are : Proxy Vote Recommendations ,Corporate Governance (CG) Scorecards ,Risk Monitoring Services , Vote Execution Platform. It also helps the companies to enhance their corporate governance practices. Corporate governance here, refers to the systems and processes by which corporations are controlled and directed . It received its investment from Infosys veteran Mohandas Pai and since then has been able to maintain a reputable name for itself in the industry. It aims to enhance shareholder activism of institutional investors. It publishes its proxy season reports and analyzes patterns in theresolutions proposed by the Indian listed companies. Its coverage universe consists of 585 companies which represent over 96% of the market capitalization of Indian listed companies. Its clients include FII’s , custodians, companies and others. It is headed by Mr Shriram Subhramanian, a who also holds a Masters in Financial Engineering from Nanyang, Singapore and Carnegie and
PGDM from XIM, Bhubaneshwar. As far as the Business Model is concerned , it charges its clients on a subscription basis based on the effort and expertise involved in the research/analysis. It also shares a strong tie with Broadridge which is the world leader in proxy vote processing and helps InGovern’s vote recommendations to reach its clients via ProxyEdge ,their proprietary platform. It urges institutions to go and vote at shareholder meetings and raise their voice against errant behavior by promoters of companies. It also helps its clients to mitigate risks in their investments by proper risk monitoring. Its competitors include Risk-Metrics and Institutional Investors Advisors Service started by Mr Anil Singhvi who also played a defining role in making of Ambuja Cements in August 2011. It has also developed a world class technology platform called “Corporate Governance platform” that enables its clients to track shareholder meetings, access research & events and has other very rich functionality. It uses “Governance Radar” framework to arrive at an objective view on shareholder meetings . Mr. Shankar Jaganathan, a corporate governance expert and advisor to comments:" In the corporate world, in addition to electing directors, shareholders are required to vote on
specific resolution. This needs specialists who analyze each resolution and evaluate it for the shareholders to choose. performs this critical service. Just as the strength of a democracy is measured by the percentage of votes cast, the quality of
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corporate governance is reflected in its active shareholder base. Shareholders get the transparency they demand. helps shareholders get superior transparency that is vital for good governance".
FinApp R I S H I
S A X E N A
Moneycontrol App Markets: Power ed by moneycontr ol.com, the app brings real-time stock quotes of Indian as well as global indices like Nasdaq, FTSE, Nikkei, Hang Seng etc on your Offered by: Networ k18 fingertips. Moreover, one can watch Live TV (CNBC TV18, CNBC AWAAZ Live Rating: 4.3 on Play Stor e, 88 % and CNBC Prime HD) for analysis of financial markets, economy and businesses. It recommendation on mouthshut.com also has a section for market movers which has top gainers, top losers for any period Downloads: Over 1 million and specified. The currency section has counting exchange rate for all major currencies and currency converter from rupee to any major currency and vice versa. Initial Public Offering (IPO) shows live details of listed IPOs and a snapshot of S&P BSE IPO along with latest news of the IPO sector. Platform: Andr oid, BlackBer r y, iOS, Symbian, Windows Mobile
News: Moneycontrol App also comes with a News section where one can find top news related to business, mutual funds, stocks, commodities and management talks. Live TV gives users access to market major news channels like CNBC-TV18, CNBC AWAAZ, CNBC BAJAR, CNBC PRIM HD as well as videos on demand containing popular videos from market section. Fig-1 Screengrab of moneycontrol app
In this fast paced world, markets are no more limited to televisions only. The cut throat competition requires users to remain updated about every move in market. In such a case Moneycontrol app comes in handy for novices, experts, traders or investors to gather financial news on the go and learn tricks of trade
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.
My Stocks: It helps in managing/tr acking your investment profile and getting in-depth knowledge of the financial markets. The user can make a portfolio with moneycontrol username and can track all his investments, cash flow and assets, through LIVE price updates. Through Portfolio, user can also look at the transaction history, stock watch list, capitalgains, SIP tracking, Mail and SMS alerts etc. So My Portfolio is like a personal financial advisor offered by moneycontrol app.
Apart from above listed news moneycontrol provides assistance in personal finance like planning and investing, insurance, tax, loans, property, retirement, credit card related financial news and views. We can also save an article for offline reading. Thus
moneycontrol app gives its users a power to have whole market in a single app and with flexibility and portability. It is a must have app for those into share market and also for beginners. So the next time when you think of market, just download the moneycontrol app and have markets on the go .
Fig-2: My Portfolio in moneycontrol
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FinWord– LIBOR S A M A R T H
What is LIBOR?
SNIPPETS LIBOR IS AN AVERAGE INTEREST RATE AT WHICH MAJOR BANKS AROUND THE WORLD BORROW FROM DIFFERENT BANKS LIBOR TAKES INTO ACCOUNT A TOTAL OF FIVE CURRENCIES AND SEVEN MATURITY PERIODS
LIBOR (London Interbank Offered Rate) is an average interest rate at which major banks around the world borrow from each other. Any change in LIBOR impacts banks (borrower) and consumers who borrows from different banks. Along with consumer loans, it has been the basis of credit card interest rates, car loans, adjustable mortgage rates in different countries around the world. Basically any movement in LIBOR, which is a measure of short-term interest rates, affects ease of borrowings among banks, companies and consumers. Who regulates LIBOR? ICE LIBOR (Intercontinental Exchange LIBOR) is the group which is behind the administration of LIBOR. On 1st February 2014, the responsibility of administering LIBOR was shifted from BBA LIBOR (Banker’s association) to Intercontinental Exchange LIBOR. LIBOR is a benchmark which serves as a basic step to calculate interest rates on various loans across the world.
A G A R W A L
which will set a benchmark for interest rates of credit cards, home loans and mortgages. Intercontinental Exchange LIBOR takes into account a total of 5 currencies i.e., pound sterling, US Dollar, Euro, Swiss Franc and Japanese Yen for calculating LIBOR rate. These 5 currencies further serve 7 different maturities, starting from 1-day maturity to 1-year maturity. The most common and widely used LIBOR is 3-month US Dollar rate. So every business day, a total of 35 LIBOR rates (5 currencies multiplied by 7 maturity periods) are published by Thomas Reuters. The below diagram gives an overview of process behind publishing LIBOR rates-
How is it calculated? Every day at 11:00 am, the Intercontinental Exchange LIBOR asks different banks of the world about the rate at which they can borrow the money from other banks.
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What does LIBOR really signify?
Between 11:00-11:45 am, banks respond with the rate at which they can borrow if they need money.
It tells us about the health of banking system. Banks have the task of assessing credit-worthiness of other banks on daily basis.
At 11:45 am, the Intercontinental Exchange gathers the borrowing rates quoted by several banks. It excludes highest and lowest quartiles and calculates the average from the remaining figures and thus, it publishes LIBOR,
If the LIBOR is high, it means there is a sense of skepticism among the banks, as they are charging a higher interest rate on short-term loans given to other banks. It is similar to the situation where banks charge a higher interest rate on student
loans if the student is studying in a college, which has less credibility and thus implying that there are less chances, he or she will be able to repay. So banks work the same way with each other. On the other hand, if the LIBOR is low, it can be assumed that there is a great
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sense of credit-worthiness among the banks as they are happy with less returns on loans disbursed by them to other banks. The flip side of this case also suggests that banks may be trying to display a faรงade of credit-worthiness among each other in order to set the good sentiments in the markets.
Did You Know?
S H U B H A M
A R O R A
Indian Currency
Rs 5000 and Rs 10000 notes were in circulation during the period from 1954 to 1978
After independence, Pakistan used Indian currency with Pakistan stamp on it, until it was able to print sufficient notes
Rs 1 notes are issued by ministry of finance and signed by secretary of ministry of finance
Nepal also uses Indian currency for exchange of goods and services
Rs 500 and Rs 1000 notes are banned in Nepal
Cost of minting Rs 10 coin is Rs 6.10
An Indian currency note has value of note written in two languages on the front side i.e. English and Hindi and value of note written in 15 other languages on the backside of note
In 1917 value of Rs 1 was 13 USD
If you have a torn note or more than 51% of the note then you can get it exchanged from any commercial bank
Reserve Bank of India has got Indian currency printed from foreign countries due to shortage in the past
All notes carry imprint of something Indian on it. For instance Rs 20 note has imprint of Andaman and Nicobar islands
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FinQuizz P R A N A V
G O Y A L
1)Who is the Vice president of Niti Aayog? a) Arvind Panagariya
b) Arvind Subramanian
c) Urjit Patel
d) Bibek Debroy
2)When will India host the BRICS summit..? a) 2018
b) 2016
c) 2022
d) 2020
3)Other things being equal, which of the following will cause an increase in value of a bond? a) Decrease in terms of maturity
b) Increase in required rate of return on maturity
c) Decrease in discount on the bond on issue
d) Increase in premium on maturity of bonds
4)Which of the following is a liquidity ratio? a) Acid test ratio
b)Debt equity ratio
c) Return on investment ratio
d) Return on equity ratio
5)Jabong has recently been acquired by which e-commerce company?
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a)
Snapdeal
b)
Myntra
c)
Amazon
d)
Shopclues
6)Which among the following is a Direct Tax? a) Service Tax
b) Excise Duty
c) Income Tax
d) Customs Duty
7)In which city is the Headquarter of World trade organisation located? a) Geneva
b) London
c) New York
d) Hong Kong
8) NASDAQ is a stock exchange of which country?
CONTNT
a) U.S.A c) China
b) U.K Jd) apan
9)Raghuram Rajan served how many years as the Governor of Reserve Bank of India? a) Five
b) Four
c) Two
d) Three
10) Which among the following is not the part of G-20 countries? a) South Africa
b) India
c) Malaysia
d) Argentina
Answers:
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1) a
2) b
3) d
4) a
5) b
6) c
7) a
8) a
9) d
10) c