Editorial O C T O B E R
CONTENT
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CLEAN OR NOT SO CLEAN | 2 FROM RAGHURAM RAJAN TO URJIT PATEL | 4 RUSH OF CHINESE INVESTMENT IN EUROPE’S TECH MARKETS | 7
“A book is simply the container of an idea—like a bottle; what is inside the book is what matters”- Angela Carter We stand in solidarity with families of 18 martyrs of our brave Indian army As the nation fights back with surgical strikes on enemy posts, UNGA address of MEA Sushma Swaraj to issues like whether Fawad Khan deserves Indian visa. A lot has happened in past two weeks. India has transformed into “we will give you back” country. Coming together of two big brothers of Indian telecom industry, Rafale deal for 36 jets in our kitty, SAARC summit called off due to India’s stand were some major highlights from our country. Anxiety and nervousness grappled students as our college witnessed start of summer placements and as with term 2 swiftly approaching its end, IMT NEVER SLEEPS lived up to its reputation.
US PRESIDENTIAL ELECTION— CANDIATE AGENDA | 10
While all this was happening our hard working team toiled out to bring another edition of FinXpress with insight into “Swachh Bharat Mission”, road ahead for Urjit Patel, the recent surge of Chinese investment into European’s tech market, US presidential elections and much more.
FINHUMOUR | 13
Hoping for your constant support towards FinXpress.
On Gandhi and Shastri Jayanti let’s pledge to take “One step towards cleanliness”
MARKET | 14
Happy reading fellas!
STARTUP TRACKER | 16 FINAPP | 18
Regards,
FINWORD | 19 DID YOU KNOW | 20
The Editorial team
FINQUIZZ | 21 OUR SPONSORS | 23
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Finniche @ IMT Ghaziabad
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NATIONAL N I D H I
K U M A R
Clean or Not so Clean SNIPPETS 2nd Oct marks the anniversary of SBM No Data Availability Little attention to IEC activities
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Prime Minister Shri Narendra Modi exhorted people to fulfill Mahatma Gandhi's vision of Clean India. The 'Swachh Bharat Abhiyan' is a massive mass movement that seeks to create a Clean India. Cleanliness was very close to Mahatma Gandhi's heart. October 2 marks the second anniversary of the Swachh Bharat Mission (SBM). The aim of SBM was to eliminating open defecation by 2019 but now that we are 40 per cent through India’s flagship sanitation campaign, it is a good time to assess how much progress the SBM has made. But it is very difficult to answer this question because we do not have enough data to verify the same . Although the Swachh Survekshan Report, released recently by the Ministry of Drinking Water and Sanitation, presents statistics claiming to report latrine use, the survey methodology is not credible. Surveyors did not ask a question that makes respondents feel comfortable saying they defecate in the open, Moreover the individual patterns with in the household went unnoticed, Tracking the recently released budget brief about SBM allocations and budget ,it can be found that from fiscal year 2014-2015, when the SBM started, to fiscal year 2016-2017, allocations to SBM more than tripled. Sadly, most of it is going towards latrine construction, and very little towards Information, education, and communication (IEC). The fraction of spending on IEC has actually fallen since the SBM started, from three per cent of total expenditure in 2014-2015 to one per cent in 2015-2016. This is a matter of concern especially in rural area .government. Many rural Indians do not want the kinds of latrines promoted by the government suggests that IEC would have to be a key
part of promoting latrine use in rural India. Unfortunately, it appears that the little attention paid to IEC activities translates into very low awareness of the goals of the SBM. According to a latest survey , Most people thought the goal of the SBM was general cleanliness of houses and public spaces. There was little awareness that an important goal of the SBM is to eliminate open defecation: Only five per cent of respondents in Delhi NCR and three per cent of respondents in UP mentioned that the SBM has something to do with latrines. Where one part of the population is aware about the serious health and cultural hazards of filth and dirt, the other part are still there, who are unaware and neglect
cleanliness. In the past, we have seen many such initiatives by various governments for instance under Rajiv Gandhi was launched the Central Rural Sanitation Program in 1986 and under Atal Bihari Vajpayee was launched the Complete Sanitation Campaign in 1999 but, the lack of awareness and commitment shown by the governments and people led to failure of the initiatives.
At its current rate of progress, the SBM is unlikely to achieve the elimination of open defecation. Missions without proper education are irrelevant . We have come a long way and with proper education , this aim can be achieved . The current estimated results
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are that Between April 2014 and January 2015, 31.83 lakh toilets were built. Karnataka led all States in construction of toilets under the program. As of August 2015, 80 lakh toilets have been constructed and 10 districts were ODF.
National P R A N A V
G O Y A L
From Raghuram Rajan to Urjit Patel The 23rd Governor of the Reserve Bank of India, Raghuram Govind Rajan took charge of India's central banking institution on September 5, 2013 succeeding Duvvuri Subbarao
SNIPPETS Foreign Exchange Reserves and Rupee
Graduation IIT Delhi
Post Graduate Diploma, IIM Ahmedabad
PhD ,MIT Sloan School of Management
Monetary stability
Rich men, companies
poor
Inflation (Wholesale to Consumer Targeting)
As Rajan puts it, India was deemed in the eyes of the global investor community as one of the “Fragile Five”. For the RBI governor, the way of achieving monetary stability was through “low and stable expectations of inflation”. The primary way he achieved this was by hiking interest rates, setting a medium inflation-term target, and changing the metric by which inflation should be viewed by the central bank. A committee that he set up early in his tenure recommended that the RBI moved away from using the wholesale price index as an indicator of inflation (which was the norm) and instead adopted the consumer price index (CPI) as a metric through which the central bank should tackle inflation.
THE ROAD THAT LIES AHEAD…
Unlike the wholesale price index, CPI measures the changes in prices of goods and services used by households; a more wholesome indicator. Over the course of Rajan’s inflationtargeting tenure, the CPI dropped from 9.52% in August, 2013 to 5.24% in April, 2016 – helped in no small measure also by a welcome drop in global commodity prices during the same period.
Foreign Exchange Reserves and Rupee
In September 2013, when Rajan assumed charge, he had two related issues. One, the rupee had weakened sharply against the dollar, hitting almost Rs. 69 to the dollar. Secondly, India’s currency reserves had hit a three-year low.
What the central banker essentially did at that time was offer discounted currency swaps to banks in order to spur inflows: specifically, a scheme was announced for FCNR (B) deposits raised by commercial banks that incentivized them to sell those deposits aggressively. These banks ended up raising a total of $34 billion in the three month swap window opened by the RBI in 2013, which helped shore up reserves as well helped protect the-then vulnerable rupee.
In his three year tenure, foreign exchange reserves have risen from $249 billion in September 2013 to $359.76 billion as of April 1, 2016.
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Their licenses, at least five of them will launch operations by mid-2017.
Bank licences
During Rajan’s tenure, two new banks (Bandhan Bank and IDFC Bank) became licensed. Not only, new licenses were handed out, but also, groundwork for an “on-tap bank licensing” mechanism was laid and licensing of “differentiated banking entities” was also allowed.
On-tap bank licensing, which excludes large conglomerates from applying, is important as India has always had a more ad-hoc, “start-and-stop” means of licensing new banks; as evidenced by the fact that while Rajan handed out 23 new licenses in his tenure, only 12 licenses had been issued in the previous 20 years.
The concept of differentiated banks, while not new, is equally important. While Rajan has referenced “wholesale” and “custodian” banks, the most popular form of differentiated bank for which licenses were handed out were payment banks which potentially could increase financial inclusion. Eleven licenses have been handed out so far, and while a few entities have returned their licenses, at least five of them will launch operations by mid-2017.
What he left unstated: Rich men, poor companies
Curiously enough, Rajan doesn’t highlight in his farewell letter what was perhaps the issue he came out very strongly on during interviews and public discussions: how large, corporate defaulters have been causing damage to the system without paying a price for it.
In interviews shortly after taking charge, he’s stated that “promoters do not have a divine right to stay in charge regardless of how badly they mismanaged their companies” and as many have noted, he strongly believes that there is need to bridge the trust deficit between India’s public sector banks and India Inc.
Over the last six months, the RBI conducted a first-of-its-kind asset quality review (AQR) that forced banks to classify poorly performing and visibly stressed assets as NPAs (non-performing assets). This exercise resulted in a GNPA (gross NPAs) jump of nearly Rs. 2,00,000 crore in just one quarter. At the end of the December 2015, quarter, total GNPAs stood at Rs. 4,00,000 crore and at the end of the AQR, total GNPAs stood just shy of Rs. 6,00,000 crore.
A key part of this AQR was the creation of a new class of “non-cooperative borrowers” besides the existing “wilful defaulters” which has gone a long way in stemming the rise of bad loans and plugging the loopholes exploited by corporates in the loan recovery process.
Much of the clean-up work, which also doesn’t fall solely on the RBI’s shoulders, still remains. Last week the RBI announced provisions that would allow public sector banks to convert at least half of these bad loans into “long-dated equity instruments”; these new “strategic debt restructuring rules” also allow banks to turn over the management of a company should the lenders need to.
THE ROAD THAT LIES AHEAD… A soft-spoken person of Gujarati origin who has kept a low profile throughout his term at RBI. He has been heard rarely in the media and analyst conferences, barring a few media interviews.
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Bachelors, London School of Business
MPhill, Oxford University
Doctorate, Yale University
An economist by profession, Urjit Patel has his work cut out as the next RBI Governor to keep inflation under check without hurting growth — but he will have to do that without being seen as an interest rate hawk, a title incumbent Raghuram Rajan had to carry unwillingly. Redemption of FCNR (B) deposits The Reserve Bank of India (RBI) raised about $35 billion through these deposits in SeptemberNovember 2013. Most of the deposits are getting due this year and the central bank has guided that the resultant dollar outflow (about $20 billion) year and the central bank has guided that the resultant dollar outflow (about $20 billion
) could create temporary liquidity crisis in the market
Outgoing governor Raghuram Rajan though, has guided that it should not be a challenge if managed well. Nevertheless, for the new governor, FCNR (B) deposits remain a daunting challenge that could destabilize the domestic exchange rate and push rupee towards record lows.
Inflation Inflation has started inching up, led by food prices even as global commodity prices particularly that of oil has started picking up. June CPI rose to a 22 month high of 5.77 per cent, much higher than RBI’s comfort zone of 5 per cent and seriously jeopardies RBI’s efforts in containing long term inflation at 4 per cent. As per the monetary policy framework’s inflation targeting model, Patel has an inflation target of 4 per cent for March 2018, with legroom of two percentage points on either side.
Growth push Rajan was criticized for his stern take on inflation and not reducing rates enough. The new governor may have to cut rates sharply to let growth take place in a broad based manner. Certainly, this is what the government and the industry body wants.
Asset quality resolution Public sector banks’ gross bad debt neared Rs 6 lakh crore at the end of fiscal 2015-16 as banks reported heavy bad debts under RBI’s asset quality review. The challenge that remains now is how the central bank will go about with the resolution process as RBI’s previous schemes have not been very effective.
Public sector bank capitalization Indian banks need more capital to meet credit demand at a growing economy. For now the capital is adequate, but has seen serious erosion with the rise in bad debts. The erosion was even higher than government’s capital infusion of about Rs 25,000 crore.
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International R I S H I
S A X E N A
Rush of Chinese investment in Europe’s tech markets SNIPPETS
Deal Making:
After a customer canceled a large order at the last minute, shares in Aixtron, a German high-tech company, sank fast. Months later, with the stock still reeling, a Chinese investor agreed to buy the company.
Chinese Group to Buy Europe’s Aixtron for $752 Million
Financial filings and public statements indicate a web of relationships among the customer, the buyer and the Chinese state. The links highlight the blurred lines between increasingly acquisitive Chinese companies and Beijing’s long-term industrial policy.
Chip companies have been consolidating to bolster
History:
profits
A group of Chinese investors agreed to buy Aixtron SE, a German supplier of semiconductor equipment, for about 670 million euros, giving the manufacturer a chance to boost sales by expanding in Asia. The deal values Aixtron at 6 euros a share, the equipment maker said Monday in a statement. That’s 25 percent more than the closing price of 4.79 euros on May 20 in German trading. The offer is being made through a unit of Fujian Grand Chip Investment Fund that is 51 percent owned by Zhendong Liu, a Chinese businessman, Aixtron said.
Allows Aixtron access to the Chinese market
The purchase may allow Aixtron access to the Chinese market and funds to further develop its product portfolio, after losing its largest customer last year. Aixtron’s shares plunged as much as 43 percent on Dec. 10 after the company said Chinese client Sanan Optoelectronics Co. canceled orders, forcing Aixtron to reduce its sales outlook. Dragon’s policy and world’s reaction: “The Aixtron case makes it very clear, it is not regular investment that is at work here,” said Sebastian Heilmann, president of the Mercator Institute for China Studies, a think tank based in Berlin. “Instead, we see governmental-program capital working behind the scenes.” Chinese leaders have made clear their intention of using state funds to acquire technological capabilities overseas and bring them home, and a series of purchases in recent years have highlighted that strategy. That has led to questions about how to treat bids that cross between private investment and state-orchestrated takeovers. It has also fed into broader suspicions about the fate of the takeover targets, and whether national champions will ultimately be absorbed into the supply chain in China. Aixtron, targeted by a surge in Chinese overseas investment provides a case study.
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A university spinoff, it employs hundreds of highly skilled engineers and has a decades-long history of making the advanced tools needed to make semiconductors. Its systems can deposit layers of chemicals just atoms thick that grow the crystals needed to make chips and light emitting diodes. It was facing a broad slowdown in demand in 2015 when San’an Optoelectronics, based in the eastern Chinese city of Xiamen, canceled a large order at the last minute. The decision sent Aixtron’s share price crashing. By May of this year, it had agreed to sell itself to a Chinese investment fund, Fujian Grand Chip. Yet in a twist that shows the conflicting interests that can lurk behind Chinese deals, San’an has a number of connections to Fujian Grand Chip, including a common investor and an existing financial relationship. Fujian Grand Chip is 51 percent controlled by Liu Zhendong, a businessman the Mercator Institute said most likely had government connections but was otherwise hard to track. The rest is held by Xiamen Bohao, a local government investment fund that itself has links to San’an. A financial filing showed that at the end of 2014, San’an owed Bohao 300 million renminbi, now worth about $45 million. The following year, another filing showed Bohao owed San’an 240 million renminbi. While there is no explanation given for the fund flows, they appear to be related to financing provided to San’an by Bohao. There are other links as well. Another state-run investment firm based in Xiamen holds stakes in both companies. And a broader national investment fund is providing a loan facility, through a subsidiary, for the takeover of Aixtron while holding a stake in San’an. Just three days after the Aixtron bid was announced, a new company was registered at an address in Quanzhou along the Taiwan Strait. San’an was an investor in the company, and the address was the same as that listed by Fujian Grand Chip in its Aixtron offer. The connections do not necessarily indicate wrongdoing. Still, they raise questions about the independence of Chinese companies that have been on a global high-tech spending binge. “It is the goal of Chinese outbound industrial policy programs to replace foreign technology leaders in the medium term — not just in China but also in global export markets,” Mr. Heilmann said. He echoed the complaints of American and European officials, who say that while Chinese companies — including those backed by the state — are able to mount takeover bids for companies in the West, the opposite is not typically allowed within China. In an August conference call with analysts, Aixtron’s chief executive, Martin Goetzeler, said there no was current investment link between San’an and Fujian Grand Chip, a relationship that was first reported in the German magazine Capital. Bids for companies like Aixtron reflect a shift in Chinese investment patterns that goes back a number of years. Chinese companies bearing checkbooks have generally been welcomed in Europe. They have provided a source of fresh capital for ailing European enterprises, like the Swedish carmaker Volvo, the Italian tire maker Pirelli, the French resort operator Club Med, and the port in Piraeus, Greece. But deals over the past two years — which last year hit a record 20 billion euros, or $22.4 billion, according to a survey by Rhodium Group and the Mercator Institute — have begun targeting leading-edge companies with crucial technologies and iconic brand names. Anxieties
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are perhaps most acute in Germany, which has had Aixtron and the well-known robotics company Kuka — whose technology is ubiquitous in German car factories — both go to Chinese bidders this year. Largely because of those two deals, Germany has become the largest recipient of Chinese investment in Europe thus far in 2016, according to the Mercator Institute. In the United States, a number of Chinese bids for chip companies have been undone by regulatory concerns. Regulators thwarted an overture by San’an for an American semiconductor company, and the Treasury Department’s Committee on Foreign Investment in the United States is reviewing the Aixtron bid. By contrast, European laws give politicians few avenues to block acquisitions, though that has not stopped them from trying. President François Hollande of France has warned the Chinese hotel group Jin Jiang against trying to acquire a majority in the French hotel chain Accor. And last month, Prime Minister Theresa May of Britain delayed approval of a nuclear power plant because of security concerns about Chinese companies involved. In Germany, the takeover of Kuka — frequently cited by politicians as emblematic of the country’s future economic development — has drawn particular attention. “People fear that foreign investors will just transfer the know-how and have no interest in keeping the facilities.”
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International S A M A R T H
A G A R W A L
US Presidential Election—Candidate Agenda US Presidential Election is scheduled in November and as we all know it is a battle between Hillary Clinton & Donald Trump. There is a continuous debate and tough fight between the two, what is important is to understand the key agenda of the main candidate and its impact on India in either instances. SNIPPETS
Key Agenda of Each Candidate:
Donald Trump:
US presidential candidates
Donald Trump's main economic focus is towards tax reforms which includes:
Key agenda
Steps to Rationalize the Tax Bands,
Impact in US
Draw Marginal Tax Rates for Both Individuals and Businesses, Increase the Standard Deduction Limits, Eliminate the Alternative Minimum Tax (AMT), All these measures will be undertaken and still the tax rate would be maintained at the lowest since before the World War II. Further the corporate tax rate is proposed to be capped at 15% and corporates who hold cash overseas will be offered a discounted 10% tax rate for repatriation. Apart from the taxation ramp up, on the fiscal side Donald Trump's agenda does not speak of a specific boost to infrastructure development (which Hillary Clinton's campaign speaks about it. On trade and USD, Trump has a protectionist stance. On multiple forums, Trump has spoken about "bringing jobs back to America" and "trade-reform" between US and China forms the key point of his foreign policy. As per his agenda, "the Trump Plan" is to designate "China as a currency manipulator" with which the agenda states will put into force countervailing duties on Chinese products. However, it may be difficult to impose duties given the nature of various trade commitments under the World Trade Organization (WTO). On the dollar there is no mentioned agenda but what Donald Trump highlighted in one of his speeches was that dollar (strength) was "hurting" the US and leading to "huge disadvantages" for companies' competitiveness. On the monetary policy front, Donald Trump is generally not in favor of a rate hike and the concern is more related to USD strength. This apart, on immigration Donald Trump has taken extreme positions especially against countries like Mexico (building a wall). Specifically, on the H-1B visa, Donald Trump has spoken of specifically tightening visa norms Overall though it must be argued that Donald Trump has a more neutral position to an emerging market like India vis-a-vis Mexico and China. On Wall Street regulations specifically, Donald Trump has said that dismantling the Dodd- Frank rule would be his priority as "DoddFrank has made it impossible for bankers to function". As far as 'big banks' are concerned, Donald Trump has said that the breaking big banks may not be the ultimate solution as US banks are still smaller than their German or Chinese counterparts and they "may not be able to compete".
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Impact of Donald’s Proposal on Various Aspect in US:
Trade: Companies with international supply and assembly chains may have to rethink locations; prices of consumer goods and business inputs likely to rise; internationally exposed large companies likely to be hurt the most
Healthcare: ACA (Affordable Care Act) repeal likely to hurt hospitals and HMOs (Health Maintenance Organization) as they lose subsidies; pharmaceutical companies are likely to benefit as pressure to lower drug prices is diminished
Infrastructure: Significant disagreement between Republican factions; highway restoration bill likely and would benefit industrial firms
Energy: Less regulation of energy extraction could open up new areas for energy exploration; energy transporters likely to benefit as Keystone and other similar projects are likely to be approved
Consumer: Simplified consumer tax code could increase consumer spending; firms paying minimum wage likely safe from a mandated wage increase
Financial Markets: Lower corporate tax rates could boost earnings for corporations; increases in federal debt could push interest rates higher
Security: Private security firms and prisons would likely be called in to assist with immigration policy changes
Banks: Regulatory relief likely for small and community banks; tax increases on certain activities likely
Gold: Heightened global risks and higher federal deficits likely to make gold more attractive as a safe asset
Hillary Clinton: On the taxation front, Hillary Clinton has not proposed any simplification of the tax brackets but on the personal taxation front one of the steps is likely to include 4% surtax on income over USD 5mn and the implementation of “Buffet rule”. On the corporate side, there are not many proposed changes apart from imposing anti-inversion rules and providing tax relief for small businesses. Hillary Clinton has also proposed "Rising Incomes, Sharing Profits" which entails a two-year tax credit to companies that share profits with their employees, with a higher credit for the small businesses. On the broader economy front however there are many proposed reforms. Hillary Clinton has proposed to invest $275 billion over five years in a broad range of projects including highways, rail, sea, air, and broadband expansion. This amount also includes a seed fund to create a National Infrastructure Bank. She is also planning to re authorize a Build America Bonds program to help finance the infra rebuilding. Hillary Clinton has also supported raising the federal minimum wage On trade while Hillary Clinton has also advocated a protectionist stance her position is less aggressive as compared to Donald Trump. She has stated that she would refuse to grant China a "market-economy" status and that there is a need apart from monitoring to "expand our toolbox to include effective new remedies, such as duties or tariffs and other measures".
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On monetary policy and dollar, that as a policy she supports Fed's dual mandate -the legal requirement that it focus on full employment as well as inflation and that she will appoint "Fed governors who share this commitment and who will carry out unwavering oversight of the financial industry". One point to note here is that Fed governors are generally independent of the White House and there have been instances of self-professed Republicans like Alan Greenspan who was re-nominated during the tenure of the previous Democratic government under Bill Clinton's presidency. Hillary Clinton also advocates greater oversight on Wall Street including closing the loophole in Volcker's rule which still allows banks to invest through the hedge funds. In recent debates and press briefings, Hillary Clinton has said that “there is authority in Dodd-Frank to break up banks that pose grave threat to financial stability". However, she has a benign stand against ‘big-banks’. Increased oversight on Wall Street has been one of the key agenda points of Democrats and further tightening of norms could be a dampener as far as the carry trade in risk assets are concerned. Impact of Clinton’s Proposal on Various Aspect in US:
Trade: Current agreements remain in place; potential for action on new version of Trans Pacific Partnership (TPP), but anti-trade wing of the Democratic party will stall any TPP action
Health care: Congress will keep ACA (Affordable Care Act) subsidies in place, benefiting hospitals, Medicaid HMOs (Health Maintenance Organisation); pharmaceutical companies will face pricing pressure and drug costs will be targeted
Infrastructure: Infrastructure spending is likely to rise, increasing demand for raw goods and construction expertise; any infrastructure deal is likely to contain a large boost for information infrastructure, potentially benefiting some technology companies
Energy: Increased regulation of fossil fuels, especially on fracking; possible increase in federal spending on alternative energy development
Consumer: Expanded earned income tax credit and maintained safety net programs to boost spending by low income households; a federal minimum wage hike could increase consumer spending but would also hurt retailers and restaurants
Agriculture: Immigration reform could increase supply of, and bring certainty to the legal status of, temporary laborers
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FinHumor A N S H U M A N
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N A N D W A N A
MARKET S H U B H A M
Hey there! There is a certain euphoria in the air; stocks are bouncing, rupee is gaining, bonds are buoyant! In one stroke, the US Fed seems to have added new life to the financial markets. Here on Dalal Street, analysts are trying to do some crystal ball gazing as to where do we go from here. And you can trust us to bring you all of that buzz first hand in this BLOG. Stay hooked to stay up to date.
Global markets
Oil futures on Friday were under pressure, briefly pitching higher, after a report indicated that Saudi Arabia is ready to cut production in a bid to stabilize prices if Iran agrees to an output freeze.
The pound resumed its slide on Friday, heading sharply lower after U.K. Foreign Secretary Boris Johnson said he expects his country will start formal Brexit negotiations early next year.
U.S. stock futures edged lower Friday, putting the equity market on track to catch its breath after three straight days of gains. European stocks moved decisively lower on Friday, pulling back from the prior days rally after the latest round of economic data painted a mixed picture of the regions recovery.
Asian shares were mixed, some markets boosted by central banks deciding to stick
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A R O R A
with easy-money policies, with Japanese stocks weighed down by a strong yen.
Indian markets
The government on Thursday announced additional incentives worth Rs 1,500 crore for exporters to help them fight the continued slowdown in global demand. The Merchandise Exports from India Scheme (MEIS) has been beefed up with the number of tariff lines or export products covered going up from 5,012 to 7,913. The rate of incentives has also been increased for certain products.
Economic Affairs Secretary Shaktikanta Das says the government would be prepared to present the Budget up to four weeks in advance. The veteran policymaker also says that the fiscal deficit target for the year will be achieved despite the Pay Commission burden and the disinvestment and that spectrum auction targets will be met.
CLOSING BELL (24/09/16) Sensex slips 105 points Nifty50 below 8,850 Axis Bank slides 6%, RIL advances 1%. The domestic market tracked weak cues from European markets which fell after Purchasing Managers' Index of the Eurozone missed estimates.
MARKET AT DAY'S LOW (24/09/16) Sensex falls over 100 points while the
broader Nifty50 is below 8,850 level. Banking stocks lead the fall with Axis Bank and ICICI Bank losing 6 per cent and 2 per cent respectively.
Graph 1: S&P BSE Sensex Summary for Sep 16 to Sep 30
Graph 2: Nifty Summary for Sep 16 to Sep 30
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Start Up Tracker S R I K A N T
SNIPPETS

Big data nalysis tool for evaluation of borrower credit worthiness
Lendingkart Technologies Private Limited is a fin-tech (Finance facilitated by technology) startup in the working capital space. The Company has developed technology tools based on big data analysis which facilitates lenders to evaluate borrower’s credit worthiness and provides other related services. It was founded in 2014 by ex-banker, ISB Hyderabad Alumnus, Harshvardhan and ex-ISRO scientist, IIM Bangalore Alumnus, Mukul Sachan. Lendingkart group has built a technology platform to service the working capital financing needs of SMEs in India. It has partnered with leading online marketplaces and various industry and trade associations to serve both online and offline SMEs and their financial needs and offers loans ranging from Rs. 50 thousand to 10 lacs. Currently, the startup is lending from its subsidiary NBFC AadriInfin Limited. They have grown their employee strength five teams and have 45 partners including Flipkart, Snapdeal, Craftsvilla, Voonic and Paytm. To apply for a loan, at first, an applicant needs to visit its website and upload their background information. The documents are then handed over to their subsidiary NBFC that verifies and transfers to its analytics team to determine the intent of the applicants to repay the loan amount. The entire process is integrated with technology and the NBFC disburses loan within 72 hours from the time of application. Management Team Harvarshvardhan Lunia (Cofounder and CEO): -- He is a Chartered Accountant and pursued his Post Graduation from ISB (Indian School of Business,
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S I N G H
Hyderabad). He started his career with large private sector and multinational banks in their small loan divisions. Early in his career he was intrigued by passion of small business owners who in spite of being credit worthy were not served by existing lenders. Credit decisions in banks take months. His vision is to implement Big data credit scoring with analytics and artificial intelligence. He drives the primary aspect of business by designing innovative credit solutions and delivering them in the simplest and efficient manner to SMBs. Mukul Sachan (co-founder and COO): -- After his B.E. in E&C, he pursued his MBA from IIMBangalore and had the experience of working with top management on Strategy, BD and Finance. He derives the skills from his prior experience of working as a Scientist at ISRO. As Director of Portfolio Management in a reputed firm from Bangkok, he managed the portfolio of properties in Bangkok and New Zealand. He handles the function of designing the Decision System and the Operations at Lendingkart. Revenue Generation and funding They levy one-time processing fee equal to 1% of the sanctioned amount. The offer the options of bi-weekly and monthly repayments at an interest rate depending upon the amount sanctioned. It takes less than half an hour to get the loan sanctioned with proper information where credibility of the SME is checked by extracting data from its ecosystem which is making it popular among the small and medium size businesses. It raised $10 million in series A
round of funding from Saama Capital, Mayfield Fund, angel investor Shailesh Mehta, and Ashvin Chadha. In the series B of funding in June 16, it raised $32 million from Bertelsmann India Investments (BII), with participation from Darrin Capital Management, India Quotient, and existing investors — Mayfield India and Saama Capital.
operation or Capital Float which already is another marketplace partner of Flipkart, it has become difficult for the companies in the Lending club to survive. Still, Lendingkart is making its way with the series of fundings coming one after another. It has the capacity to remain as well as bloom in the market for several coming years. The reason is the USP of the company which processes a loan CHALLENEGS application in less than 15 minutes and With several startups coming on board with provides the loan to the needy SME almost the same kind of model such as entrepreneur. CapZest which has recently started
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FinApp A D Y A
J H A
Prosper Daily Platform: Android 4.0 and above Current Platform: 3.0.21 Offered By: BillGuard, Inc. Rating- 4.4 on Google Play Store (Rated by 22,055 users) Installs - 500,000 - 1,000,000 Download link- Google Play Store Size: 28 M This is an app where you can view all your accounts in one place, and that too for free. It’s an easy and secure way to manage your budget your money. Prosper Daily organizes activities and balances on your debit cards, credit cards and bank accounts into one Smart Inbox. Detailed spending analytics, charging details, transaction maps and alerts to suspicious activity that your bank missed are recognized. Your credit score can be tracked daily in Prosper Daily as it is an essential personal finance health indicator. Track it in Prosper Daily, and find out the factors contributing to your score. No credit card is required for this. It is an advanced ID theft protection app which does 3-Bureau credit monitoring, Black Market Surveillance and gives SSN fraud alerts. KEY FEATURES TRACK your spending and credit: All your charges from all your accounts, organized intelligently in one Smart Inbox Free credit score, plus see the factors which contribute to it Know exactly what you’re spending, and by category Export all your transactions, and crunch your data the way you like PROTECT your cards from fraud and unfair charges: Location-based fraud alerts notify you if your card is used at a store or ATM when you are not there Data breach alerts tell you when a hacker may have access to your cards Suspicious charge alerts are also provided Credit card bill reminders help you to avoid late fees SAVE money with smarter tech: Get alerts of unfair and fraudulent charges Bite-sized, real-time budgeting PAGE
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FinWord A F R O Z
H U S A I N
Escrow An account held by an impartial third party on behalf of two parties in a transaction. Amid the home-purchasing process, the purchaser will store a predetermined sum in an escrow account that the seller can't touch until the terms of the agreement, for example, passing an examination, have been satisfied and the deal is finished. An escrow account can likewise hold cash that will later be utilized to pay your mortgage holder's insurance and property taxes. You can put money in escrow every month, so that when your premiums and taxes are due, you have enough to cover those bills.
at the end of a warranty period
deposits for a property rental, where the money is released after the tenant moves out
provision of construction services, where the money may be released when the building work is complete to a defined standard, or when defined parts of the work are complete
Examples of escrow are:
purchases of a second hand car, where the money may be released
Umbrella Insurance A type of policy that provides additional liability coverage beyond what your home, auto or boat insurance may provide. You might consider umbrella insurance if you’re at risk for being sued for property damage or other people’s injuries, such as if you hire a maid or other employees to regularly work in your home. Umbrella insurance can also protect your assets if someone sues you for slander or defamation of character. Other examples of liability that an umbrella policy may cover that a homeowner's policy often excludes include are false arrest, libel & invasion of piracy 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.
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On the other hand, if the LIBOR is low, it can be assumed that there is a great 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 façade of credit-worthiness among each other in order to set the good sentiments in the markets.
Did You Know? A M A N
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A N A N D
According to the forecast of Asian Development Bank (ADB), Indian Economy is expected to grow at 7.8 in the FY 2015 -16 and 8.2 in the FY 2016 -17.
The note with the highest value printed by Reserve Bank of India was the Rs.10,000 note in 1938.
Do you know why coins have ridges on the ends? It is to prevent counterfeiting.
Warren Buffett's net worth of $63.3 billion is greater than the combined 2013 GDP of Ghana and Cambodia.
99% of Buffet’s wealth was earned after his 50th birthday.
A dollar bill only lasts 18 months before it wears out.
The total assets under the supervision of J P Morgan is $2.2 Trillion. More than the GDP of India
FinQuizz U T K A R S H
1.
The First Indian woman CEO of a foreign bank was? A) Indira Nooyi C) Tarini Vaidya
2.
C) State Bank of India
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B) RoseValley Corporation D) Satyam
B) Philippines D) Malaysia
Which of the following are not in the list of the top five IPOs in history? A) Alibaba C) Facebook
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B) Bear-Bull Market D) Moose Market
Which is the only country to have no coins as currency? A) Vietnam C) Iceland
7.
B) The Industrial And Commercial Bank Of China D) HSBC
This Company floated controversial financial instruments in 2008 and went on to collect Rs. 19000 Cr till 2011? A) UB C) Sahara
6.
B) McGraw Hills D) CRISIL
When there is no significant movement in the stock market, it is said to be A) Bull-Bear Market C) Chicken Market
5.
?
Which is the largest bank of the world in terms of net worth? A) Bank Of America
4.
B) Chanda Kochar D) Shikha Sharma
What is the parent company of Standard and Poors A) Government held C) Fitch Group
3.
S U R E K H A
B) ICBC Bank D) VISA Inc.
8.
Which of the following are not one of the big three in the credit rating industry? A) S&P C) DBRS
9.
B) Moody’s D) Fitch group
Which of the following is not a valid method of charging depreciation? A) Straight Line Method C) Insurance Policy Method
10.
B) Depletion Method D) Scrap Value Method
Which is the oldest stock exchange in the world? A) London Stock Exchange C) Amsterdam Stock Exchange
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B) New York Stock Exchange D) Bombay Stock Exchange
1) c
2) b
3) b
4) c
5) c
6) a
7) c
8) c
9) d
10) c
Sponsors Tagore Road, Block L, Kavi Nagar, Ghaziabad, 201002
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