EDITORIAL I S S U E
1 5
F E B R U A R Y
1 4 ,
2 0 1 6
IMT prepares for Chakravyuh !! With
CONTENT Underperforming SBI
successful
closure
of
TEDxIMTGhaziabad,
IMT
college is elated to host teams coming from all over the nation.
Indian Stock Market Fall | 4
it was a insightful game for each one you. We congratulate the winners of Nivesh Mantra'16 and wish all the best to the participants and finalist of Koncentrix . As always we are ready with insightful national and international articles and much more at your disposal. Club FinNiche welcomes any comments, suggestions or criticism regarding the magazine. Please do write to us and share your ideas.
MARKET | 11
Happy Reading!
FIN-WORD | 12 STARTUP TRACKER | 13
Regards
SPONSORS | 14
Club FinNiche
1
landmark.
The club FinNiche thank all the participants of ICICI virtual trading competition and hope that
South Korea cuts utilities of InterKorean Industrial Complex | 9
PAGE
another
As with 10 days left for the 24th edition of much awaited sports event “CHAKRAVYUH“,
to provide solace in long run | 2
Sunpharma to seek US FDA reinspection on next fiscal quarter |7
achieved
The Editorial Team
NATIONAL B Y
A B H I N A
P A N D A
Underperforming SBI to provide solace in long run SNIPPETS
Downfall of SBI
The continued chaotic performance of the
for bad debts– stand taken by Reserve
country’s largest public bank
Bank of India.
somewhat
resembles the shambolic situation faced by
This is not the end . Next quarter should
Promising state
Brazil in the 2014 football WC semifinal
expect similar numbers for SBI whose
of affairs
against Germany.
stock positioned itself at 9 %, while
SBI stock –9%
The past week witnessed the worst trading
benchmark Sensex declined 6.6% and
week for the market in some seven years
shares of HDFC Bank fell 8 %.
Benchmark
and the sell off in the domestic market led
On Friday, the market cap of SBI was
to complete surrender by the SBI as the
almost equivalent to
benchmark Sensex lost 1630 points of its
bank Kotak Mahindra Bank. However,
value. The market reached a steeper
analysts and sectoral experts are not yet
support on Thursday when the 30-stock
willing to give up on SBI and ask everyone
gauge lost 800 points– its 11th biggest
to watch out for its stock.
decline in history.
The cost of liabilities of public sector
SBI, however, attributed this to the 62%
bankswill be reduced by the introduction
decline in net profits—which was its
of market-linked small savings rate which
lowest five year decline . This profit decline
will kickstart from April 1.
sensex-6.6%
HDFC Bank-8%
Clearing of bad
that of mid-sized
loans positions
could be associated to higher provisioning
PAGE
2
PAGE
3
Some investors are also of the view that
and focus on core operating profitability.
the reduction of write-offs would result
Thus, the bottom line is to study the
in substantial starting in first quarter of
current downtrend to understand the
next financial year. Hence they are
fundamentals of the SBI stock. Just wait
advising to buy this stock at the present
for one more quarter and keep patience.
time so as to improve returns.
Observe the adjusted real book value,
SBI is most preferred because of its
see how far the books get cleaned and
lowest NSL at 6.4%, better PCR of 65%
then enter the stock.
NATIONAL B Y
B H A G I R A D H
S I S T A
Indian Stock Market Fall SNIPPETS
Weak Global Cues
22,951.83, while Nifty settled 239.35
Disappointing SBI results: Bleak Q3
points
numbers from SBI, India’s largest lender,
down
at
6,976.35.
The
BSE
also
points, down at 22,930.04. The 50-share
afternoon trade. State Bank of India on
index NSE Nifty was down 240 points at
Thursday posted 67 per cent decline in
Unexpected
6,975.25 at 3.03 pm 11 February 2016.
consolidated profit to Rs 1,259.49 crore
results of SBI
Bears
on
for the third quarter ended December 31,
domestic equity markets as the BSE Sensex
2015-16, on account of higher provisioning
fell over 800 points on Thursday and Nifty
for bad loans. The SBI Group had
fell below the psychological mark of
registered a net profit of Rs 3,828.20 crore
7,000. Sensex tanked 807.07 points to end
in the October-December quarter of the
at 22,951.83, while Nifty settled 239.35
2014-15 fiscal.
points down at 6,976.35.
Falling crude: Oil slid on Thursday,
Below are some of the reasons why stock
dented by record US crude inventories at
markets fell on 11 Feb 2016.
the Cushing delivery point, worries about
Weak Global Cues: Following weak US
the demand outlook, and as Goldman
and Asian markets, Indian stock market
Sachs said prices would remain low and
opened in red on Thursday. Sell-off in
volatile until the second half of the year. In
European shares in early deals also dented
a sign that producers are still competing
market sentiments back home. A top
for market share by lowering prices, Iran
European share index plunged to its lowest
offered its crude to Asia at a discount to
level in 2-1/2 years on Thursday, led down
rival OPEC producer Saudi Arabia. Brent
by a renewed slump in banks and miners,
crude futures were down 31 cents at
with
$30.53 per barrel at 0850 GMT.
Crude Oil Slump
said she saw risks to the US economy.
Sensex was trading over 3 per cent, or 828
US Fed Statement
Sensex tanked 807.07 points to end at
Selling pressure in investors
expanded
Societe
their
footprints
Generale
sliding
after
mood
in
the
Selling pressure: High selling in power,
US Fed statement: Fed Chair Janet
realty and metal stocks contributed in the
Yellen kept options open for more US rate
market fall.
expect
to
reverse
the
rate
hike
programme that began in December but
4
market
disappointing results.
hikes. Yellen told Congress she does not
PAGE
affected
But analysts advised investors against
with the Fed chief 's comments on
deploying
slowdown in the Chinese economy,
all
their
cash
in
search
of potential winners.
uncertainty about China's currency policy
"The worst may not be over for the
and global market volatility.
market in the short term due to
Renewed
growing
global
banking industry are also keeping the
economic growth outlook, actions of
investors on the edge. Kotak's Prasad
central banks and China," said Sanjeev
said redemptions in emerging market
Prasad,
funds remain high, which will continue to
concerns
co-head
around
(strategy),
Kotak
concerns
weigh
to a 29-month low against the dollar,
especially
ending at 68.30 — down 0.65% from
institutional investors net sold shares
Wednesday's
local
worth Rs 1,100 crore on Thursday. So
currency is fast approaching its all-time
far in February, these investors have
low of 68.85, touched on August 28
pulled Rs 28,000 crore out of Indian
2013.
equities.
"As
long
as
the
The
global
risk-off
the
blue
They
stock
Europe's
Institutional Equities. The rupee plunged
close.
down
over
chips.
sold
stocks
market, Foreign
worth
Rs 83,200 crore in January.
continues, the rupee will remain under
PAGE
5
pressure. It started with concerns over
BROAD-BASED FALL
China and the exit of Gulf money, and
The bear domination was broad-based
now markets are so volatile it's difficult
with losers outnumbering gainers 2403:
to take a call," said Ashish Vaidya, head of
288
trading, treasury and markets at DBS
Exchange. The midcap index fell 3.3% and
Bank. Vaidya of DBS Bank cautioned that
the small-cap index dived 4.6%. On the
the rupee may fall to a record low.
exchange, 57 stocks slumped to all-time
Global markets were deep in the red on
lows, while 402 hit 52-week lows. Fund
Thursday after US Federal Reserve Chair
managers said worries about bad debts in
Janet Yellen highlighted risks to global
the
economy and ruled out a reversal of the
continue to weigh down shares of
rate-hike
lenders
cycle
which
started
in
on
the
domestic and
Bombay
banking the
Stock
industry
broader
will
market.
December. Though Yellen hinted at the
On Thursday, State Bank of India closed
possibility of a delay in interest rate
almost 3% lower, but off the day's lows,
increases on account of a hazy economic
after the lender's net profit in the
outlook, investors appeared to be fixated
December quarter fell 62% on account
of higher provisions. Most of the state-
"They could be significantly higher than
owned banks have reported a sharp spike
current levels over the next 9-12
in the bad loans in the third quarter of
months," he said. Others such as Pankaj
the financial year.
Sharma, head (equities), Equirus Capital,
"Some of the results from public sector
said buying stocks now is akin to catching
banks have added to the negative
a falling knife. "We will continue to see
sentiment because NPA (non-performing
the same volatility and dependence on
assets) issues have clearly jolted the
external variables would remain very
market," said Harsha Upadhyaya, CIO
high. Valuations may be good but that
(Equity),
Management.
itself is not sufficient for markets to
Analysts and brokers are divided on
perform," said Sharma. "Existing investors
whether the investors should purchase
should wait for a while. Don't try to
stocks at this point or not. Kotak's
catch falling knives like what we have
Prasad
seen with PSU (public sector) banks."
Kotak
said
Asset
large-cap
stocks
have
corrected sharply to attractive levels.
PAGE
6
INTERNATIONAL B Y
V I K A S
G U P T A
Sunpharma to seek US FDA reinspection on next fiscal quarter SNIPPETS
Sun Pharmaceutical Ltd, India’s
Business, and Emerging Markets, which
largest drug maker has recently stated that
include Active Pharmaceutical Ingredients
it would request for a re-inspection by US
(APIs).
Food and Drug Administration (FDA)
operations are focused on the following:
during the first quarter of the next fiscal
Generics
year ie. till June.
Branded generics
About Sun Pharmaceuticals Ltd.
manufacturing
Specialty Products
Over-the-counter products
1983 in Vapi, Gujarat, Sun Pharmaceuticals
Anti-Retroviral Ingredients
Active
is
currently
India’s
largest
drug
manufacturer offering medicines for a plethora of diseases. It has more than 21 manufacturing facilities in India , and it is globally present across five continents. Gaining
expertize
in
making
generic drugs over the years,
the
company’s market includes US, which includes
Western
Europe,
Canada,
Australia, New Zealand and other markets; Indian 7
Company's
in
Founded by Dilip Shanghvi
PAGE
The
Branded
Generics
Business,
including Global Consumer Healthcare
Pharmaceutical
Ingredients
(APIs). Problems with US FDA It is worthwhile that the U.S. market has been one of the most profitable ones for the
company.
The
company
entered
troubled waters when the US FDA, after the inspection of its manufacturing facilities gave a warning in September 2014 stating violation of manufacturing practices; giving them an opportunity to undo
the damage. However exactly an year
by 7% in the third quarter due to
later, an approval of SunPharma for
currency
anti-epilepsy drug was withdrawn citing
remedial measures, Sun Pharma plans to
poor standards in the Halol (Gujarat)
ask the US health regulator for an
plant. Two months later, the company
inspection in the first quarter of the next
received an ‘Official Action Indicated”
fiscal year. The US FDA warning letter
notification from the FDA mentioning
included state of the walls, ceiling and
about
floors; many of which were having leaks.
the
manufacturing
deviation practices.
from
good
8
taken
The letter also stated about the lack of
December 2015,the Halol manufacturing
authorization over the computerised
unit got a warning letter from FDA.
control system in the plant—which
the
company
surpassed the expected revenues during
PAGE
Having
in
A l th o u g h
Finally
volatilities.
means that the manufacturing process can be easily tampered with.
the third quarter of 2015, its business
"Our investigator documented
from U.S. reduced by 11% year on year
the presence of leaks in the form of
basis. As per the company, the supplies
water stains and ceiling damage in the
from the Halol plant are gradually
parenteral manufacturing area personnel
increasing..
corridor",
“We have undertaken some incremental
While the company is confident of
remedial measures to address the issues,
getting the requisite clearance the next
and we are progressing well on their
time, it would be interesting to see how
implementation” said Shanghvi.
the business gets affected till then and
SunPharma’s emerging markets sales fell
thereafter.
the
letter
had
said.
INTERNATIONAL B Y
A B H I S H E K
G U P T A
South Korea cuts utilities of InterKorean Industrial
Complex What
SNIPPETS
Inter-Korean industrial complex
Suspensions of operations at Kaesong in 2013
South Korea announced suspension of
Inter-Korean
industrial
suspended despite sanctions being imposed
complex?
by South Korea on its northern rival.
The Inter-Korean industrial complex also
In 2013, The Kaesong industrial complex was
known as the Kaesong Industrial complex,
closed for the first time after tensions
launched in 2004, is a joint venture between
increased between the two Koreas. The
the South Korea and North Korea and is
operations, which resumed after 160 days
located 10 km north of the demilitarized zone
when an
on the western side of the border.
signed, had cost $870 million to South
inter-Korean agreement was
Korean companies. This complex is known to connect the two
complex
is
nations and is the last symbol of co-operation
Kaesong industrial complex opened a shop in
North Korea
between the 2 nations. South Korea being the
the South Korean capital Seoul. The store
military takes over Kaesong
more powerful nation between the two
which sells made in Kaesong products
nations had invested about $854 million in
received a huge response from South Korean
the park which provides employment to
people. The quality of products had been
53,000
The
good as the raw material is mainly sourced
investment was made by about 124 South
from South Korea. It had helped in improving
Korean
Companies. The industrial park
the brand image of North Korean products in
allows the South Korean firms to employ
the minds of South Korean people. - See
cheap but skilled North
more at:
North
Korean
workers.
Korean workforce
while North Korea gets important foreign
http://www.newsbytesapp.com/timeline/
income in the form of wages and rent.
World/1479/8851#sthash.Hp7PgOZK.dpuf
Tensions between two nations The tensions between the two nations rose in 2010 when North drowned a South Korean ship. the
PAGE
9
However, the operations in
Kaesong industrial complex were not
minds of South Korean people.
complex and had put the complex under military control. North's response came
South Korea announced suspension
after Seoul suspended operations at
of complex
Kaesong which North termed as a "dangerous declaration of war". Seoul
On 10Feb,2016 South Korea announced
termed the seizure of assets at the
that it would suspend the operations at
factory as "illegal".
Kaesong industrial complex as a means to cut foreign money supply to North
In retaliation, South Korea has cut the
Korea. South Korea alleged that North
power
Korea used this money to pursue its
Inter-Korean industrial complex located
missile and nuclear programs. However,
in Kaesong, North Korea. It was done
the South Korean industry is opposing
after North Korea ordered a military
the decision as the move would escalate
takeover of the complex and deported all
anxiety among South Korean people
the South Korean workers. This has
besides affecting the companies.
further escalated the tensions between
and
water
supply
of
the
the 2 nations which were already at their
PAGE
10
Sooner, North Korea seized the assets
peak after North Korea launched a
of South Korea in the Kaesong industrial
satellite earlier this week.
MARKETS B Y
A L A N K R I T A
Both the indexes posted their biggest percentage declines since July 2009. 3 BEST PERFORMERS
Asian shares fell for a sixth straight session on Friday as concerns about the health of European banks further threatened a global economy already under strain from falling oil prices and slowdowns in China and other emerging markets.
Fresenius Kabi Oncology Ltd.
Fame India Ltd.
Radha Madhav Corporation Ltd.
Open
High
Low
Close
SENSEX
23060.39
23161.15
22600.39
27061.04
NIFTY
7023.65
7034.80
6869.00
8105.50
BSE SENSEX
3 WORST PERFORMERS
Just Dial Ltd.
TRF Ltd.
NCL Industries Ltd.
PAGE
11
CNX NIFTY
FIN-WORD B Y
S H I L P A
K U M A R I
Bollinger bands SNIPPETS
Bollinger Bands is one of the popular
Bollinger Bands
technical
is one of the popular
different lines are drawn, with one below and
overbought
one
selected time period moving average.
technical analysis tools
specific period moving average is denoted as
Bollinger Bands are somewhat like moving
midline to form an 'envelope'. These lines show
average envelopes, but drawing calculations for
Initially, it was
a band or a volatility range in which a particular
both is different. In Bollinger Bands, standard
called trading
security price is moving up or down. Volatility
deviation levels are considered to draw the
bands
is shown on the basis of standard deviation for
upper and lower lines, whereas for Moving
a particular security, which is denoted by upper
Average Envelopes, the lines are plotted by
and lower line/band, as standard deviation is a
taking a fixed percentage.
above
analysis the
tools, security
where price
three
volatility decreases, then the band would
line.
Its
narrow. These bands show oversold and conditions
in
relation
to
a
measure of volatility. Bollinger Bands was developed by John Bollinger in the mid 1980s
Some important points are:
and he trademarked this term in 2011. Initially,
it was called trading bands, but later on, John
chances of sharp price changes as volatility
Bollinger evolved this concept and called it
is drops
Bollinger Bands. Bollinger
Bands
shows
the
levels
of
reached in a particular duration and also its
of the current trend
When new highs and lows are made
relative strength, where highs are near to the
outside the bands followed by highs and
upper line and lows are near to lower line. In
lows made inside the bands, it shows an
other words, the price points near the edges of
imminent trend reversal
the 'envelope' formed can help us recognize a pattern at a particular moment. The bandwidth widens and narrows depending on volatility. If it's high, the band would widen and if the
12
When price line surpasses the bands' range, that a strong signal of continuation
different highs and lows that a security price has
PAGE
When bands are contracting, there are
If a move originating in one band tends to replicate on the other band too, it is useful in deciding future price targets
STARTUP TRACKER B Y
T U L I K A
apptuto.com What is it : apptuto is an education startup
Funding : apptuto has gone on to close
and
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their initial round of funding and has been
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Founded in June, 2014, apptuto provides a
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combining
Partners Capital Limited, HSBC, Google,
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company :
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Michael
worldwide to connect and prepare better.
October, 2015 it raised $500,000 in angel
It provides a social learning platform for
funding, led by 500 Startups. It plans to use
Finance
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the funding to grow its development
apptuto at present is selling to Fortune 500
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and launch Level II and Level III of the CFA
other
standardized courses as well.
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apptuto is a proud member of the CFA
aims to expand beyond the CFA program,
institutes Prep Providers Program.
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In
The company began with two simple ideas: first is that CFA exam requires extensive preparation and training to clear and second that the process of preparation needs to be simplified and thus apptuto came into being. The founders worked with FarShore to build an end-to-end technology solution, including all develop-
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Since its inception, apptuto’s user base has
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seen an increase of 30% month-on-month .
PAGE
13
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