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SEPTEMBER, 14 | 2014 | A FINNICHE INITIATIVE
Movement in the FAO Food Price Index | 2
Do write to us at: finniche.imt@gmail.com
The “Performance” till now: 1 year and 100 days | 4
Stock Split | 6
Vishal Sikka |11 Xbox One “Are you ready to play the game” |12
September, 14 | 2014 | Volume 12
Club FinNiche revamped its weekly magazine with a new structure. It brings to you very interesting sections like international markets, inspirational personalities apart from infocus and opinion. A non finance section is also included which will update you with the changing technologies. Movement in the FAO food price index
The Performance till now:1 year and 100 days
Stock split
With the senior batch having their exams, FinNiche launches yet another edition of FinXpress with the In Focus section putting light on ‘Movement in the FAO food price index’ which makes a comprehensive coverage about the trends in food prices. The Opinion gives an overview of ‘Performance till now: 1year and 100 days’ which is about policies taken by the NDA government. The term of the week describes “Stock Split", a decision by the board of the directors to increase the number of outstanding shares by dividing the shares, keeping the total value of shares same. Do have a look at the revamped market section which has included international markets and Tech world which brings to you Xbox One. Hope everyone likes the revamped version of magazine. Club FinNiche welcomes any comments, suggestions or criticism regarding the magazine. Please do write to us and share your ideas. Best wishes to the Senior Batch. Happy Reading! Regards The Editorial Team Club FinNiche
Vishal Sikka
Xbox One
Disclaimer: FinXpress takes no responsibility for the opinions expressed in the magazine.
- By Priti Sureka
meat costs in Australia, where crowd revamping has decreased fare supplies, and proceeded with solid import request in Asia, China. Normal
As per data given by FAO, world
food
prices
quotations for poultry had minimal change, while
have
those for porcine and bovine meat fell back to a
dropped to the lowest in last
certain degree.
four years.
The FAO
Dairy Price Index averaged 200.8
points, down 25.3 points from the previous Worldwide
generation
month. This decline of 25.3 points indicates
of
export availability and reduction in import
commodities was assessed to surpass consumption by an edge of around 20%.
demand
resulting
in
market
uncertainty.
World food prices have dropped to 196.6
Russia's restriction at the start of the month on
points in August, 2014, the lowest in four years
imports of dairy items from a few nations and
since September, 2010. According to the
loosening imports of entire milk powder by
statistics given by the Food and
China helped in discouraging costs.
Agricultural
Organization, the monthly food price index was The FAO Oil and Sugar price index is also down, meat prices remain strong due to solid
slumped by 3.6% from the previous month.
The FAO Cereal Price Index also dropped by
Except for meat, costs for the majority of the
2.8 points standing at 182.5 points in August,
items measured by the record dipped uniquely.
2014. The Index has been falling constantly
import demand.
since May, to a great extent on crop prospects FAO is an agency of the United Nations which
and plentiful supplies of wheat and coarse
serves the developed and developing countries
grains.
in agriculture, forestry, ensuring food security
worldwide inventory of all the cereals are
and food nutrition. The FAO Food Price Index is
assessed to rise to reach the highest level in
a measure of month to month change in
coming 15 years and good weather conditions
universal costs of a basket of commodities. The
will boost this. By the end of the 2015 season,
FAO Meat Price Index reached to 207.3
the world cereal
points in August which was 2.5 points more
million tons, 12 million tons higher than the past
than its amended quantity for July. The expand
gauge and 6% more than the beginning of the
essentially reflected a solid ascent of bovine
2014-15 season.
However,
according
to
FAO,
the
market could achieve 616
The FAO Vegetable Oil Price Index of August was the lowest level since November 2009.
The FAO Vegetable Oil Price Index showed a
Mixed import and export decisions taken and
decrease of 14.5 points standing at 166.6 points
restrictions put by countries such as China,
in August this year. This was the lowest level
Brazil, India, Thailand, Russia etc. helped in the
since November 2009.
drastic movement in the international prices of such commodities.
A significant part of the decline in August reflects the pattern of palm oil prices which have debilitated under the joint impact of enhanced
Narendra
Modi
with
JosĂŠ
Graziano da Silva is making efforts to promote India's food security
and
sustainable
agricultural improvement.
creation prospects in South East Asia and lower than foreseen import request, fundamentally from China and India. The other oils namely soy, rape and sunflower additionally stayed on a descending pattern. The FAO Sugar Price Index arrived at 244.3 points in August, down by 14.8 points from July, yet at the same time 2.2 points or 1% higher than in August 2013. The critical drop in costs was activated by improved production prospects in India, European Union and the Russian Federation. Furthermore, reports of lower than anticipated import request by China weighed
One of the major concerns of the India’s Prime
contrarily on universal costs. Apart from that the
Minister, is that international trade agreements
decrease in production of sugar in Brazil,
may have an impact on fight against food hunger
helped the downward price pressure.
and setting up of strategic food stocks.
Public and private investment in agriculture in
In a recent meeting, Mr. Narendra Modi and
developing
declining
FAO Director-General, JosĂŠ Graziano da Silva
relatively and therefore, crop yield growth
have decided on how to reinforce and strengthen
became
efforts to promote India's food security and
countries stagnant
developing countries.
or
has
been
declined
in
most
sustainable agricultural improvement.
- by Saksham Kumar
opening of these sectors to FDI will add Delivery of financial services at
about 1-1.5 percentage points to the overall
affordable costs to the low-
GDP growth.
income
segments
of
the
Jan Dhan Yojana: The biggest financial
society.
inclusion program of the new government which promises to give banking access to Mahatma
nearly 7.5 crore households in the country.
Gandhi National
Rural Employment Guarantee Act) It is an act to guarantee
Decisive push to the Aadhar based
100 days of wage employment
transfer: Modi has set the target of One-
in a year to a rural household.
Coincidently, National Democratic Alliance’s (NDA) 100 days and (RBI) governor Raghuram Rajan’s one-year term in their respective offices have occurred more or less together. Did they live up to the expectations of 1.25 billion people who are influenced by them in a great way? Are their respective terms enough to assess their performance till now?
His performance so far is considered one of the most productive governments till now. And why India
has
seen
benefit transfer schemes under MNREGA, pension,
scholarship,
public
distribution
system and LPG subsidies. Narendra Modi has also established a new ministry
for
Water
Resources,
River
Development and Ganga Rejuvenation in his cabinet.
First, let us discuss on the 100 days of NDA.
not?
billion people linked to Aadhar based direct
the
most
effective
Parliament sessions. Let’s first look at the policies initiated by the government. Foreign Direct Investment (FDI) in Railways, insurance and defence: FDI in railways is proposed to be raised to 100 percent while in insurance and defence to 49 percent from the current 26 percent. Estimates suggest that
Building strong foundations of relationships
with
our
neighbours:
Till now
Narendra Modi has been successful in maintaining healthy relations with countries like Nepal and Bhutan. His recent visit to Japan was one the highs of the NDA regime till now. It will be interesting to see what China will offer when President Xi Jinping visits India on September 17 2014.
one of the most important which Rajan bought is the quick transition from being a Central Bank which targeted both growth and Wholesale Price Index (WPI) based inflation The purchase or sale of assets
to one that is now primarily focused on tar-
that are worth more than 50
geting retail inflation. High Interest rates have
percent of a listed company’s
attracted foreign funds into bonds with flows
total or net amount of assets.
crossing $17 billion in 2014 so far Rajan is also successful at giving freedom to banks on setting up branches and developing a way for differentiated licenses.
The
ratio
of
Net
non-
performing assets
to loans
(advances)
used
measure
.It overall
bank’s loan book.
is
quality
Source: Bloomberg
of
The
performance
of
a
Central
Bank’s
governor is judged on two criteria: a) their
to
Turning now to the RBI governor, Raghuram
record to maintain the value of currency b)
Rajan. Is one year long enough to assess the
systematic reforms which they undertake
performance as Central Bank’s governor?
during their tenure. Rajan has done well on the first criteria and his strategy indicates that
When Rajan was appointed as the governor of
he is on the right track for the second criteria
RBI in last September the rupee was at its all
also. There are five pillars of his strategy to
time low against the dollar. RBI offered banks
transform the Indian economy, which are:
concessional swaps to raise foreign currency
A new monetary policy framework
More competitive banking sector with
deposits, which brought in $34 billion and thereby eased the demand in the currency
differentiated licenses
market. The exchange rate has appreciated by around Rs 8 to a dollar since its August 2013
Deepening liquidity in financial markets
low.
Financial inclusion
Improving the ability of banks to deal
RBI has raised the key policy rate by 75 basis points to 8 percent in phases. This was done to ensure that retail inflation is within striking distance of the January 2015 target of eight percent. A report published by Ambit says that
with stress Rajan’s next big challenge is to restore the health of public sector banks, which have seen a sharp rise in bad asset quality.
- By Arihant Jain
So, in a 1:5 stock split, every shareholder with one stock is given 4 additional shares and the price of the share is divided by 5 to
A decision by the company's
keep the total market capitalization at the
board of directors to increase
same level as before.
the number its outstanding shares by dividing the shares,
But, why does a company go for a split
keeping the total value of
stock? Companies choose to for go for
shares same as before.
stock
splits
when
their share
prices
become very high, especially in a rising market. High prices lead to fears of stock The degree to which an asset
becoming inaccessible to regular investors,
or security can be bought or
as only institutions or high net worth
sold in the market without
individuals could move the stock price. A
affecting the asset's price.
wide shareholding helps in reducing the chances of sharp rise or fall in share ICICI Bank, the country’s largest private sector
prices. A stock split also results in increase
A corporate action in which a
lender, recently announced that its board had
in
company reduces the total
approved the splitting of each equity share into
decrease due to split, since many small
number
five. Earlier this year, J&K Bank also announced
investors who think the stock is affordable
a sub-division of share in the ratio of 1:10. In
buy the stock and end up boosting the
fact, since the beginning of the year 2014, 48
demand and therefore pushing the prices
companies have decided to split their stocks. So
up. According to financial experts, stock
let’s understand what does it mean and why
split creates a positive image of the
does companies split their stocks.
company.
When a company declares a stock split, the
Similar to a forward stock split, reverse
number of shares of a company increases but
stock split is also done by the companies.
the market capitalization remains the same.
Under
This happens because the split did not add any
reduces the number of its outstanding
real value and only the value of the share is
shares
decreased but the underlying value remains the
Companies normally execute
same.
stock split in order to retain their listing on
shares.
of
its
outstanding
price
of
shares
reverse by
stock exchange.
stock
immediately
split,
consolidating
after
company shares. reverse
INDIAN MARKETS This week started with the Indian markets reaching their all time highs (Sensex-27,355 and Nifty—8180.20). The markets retreated from theirs highs immediately, as the traders booked profits in the recent out-performer stocks amid caution of the coal block case hearing of Supreme Court. The downslide in market continued through the week, with the market recording biggest drop in a month. Sensex regained the 27000 points on Friday, as participants started selective buying ahead of the industrial data to be released. India’s
GDP
growth
will
accelerate to 6.5%by end of
Open
High
Low
Close
SENSEX
27026.70
27354.99
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27061.04
NIFTY
8132.95
8180.20
8068.25
8105.50
2015: Moody’s
July IIP (Index of Industrial Production) at 0.5% versus
BSE SENSEX
3.4% in June.
India focused hedge funds up 28.17% year to date.
CNX NIFTY
COMMODITIES Commodity
Unit
Rs / Unit
% Change
Gold
10 grams
26899.00
-0.32
Silver
1 kg
41325.00
0.13
Crude Oil
1 bbl
5669.00
0.64
FOMC meet September 16-17, Wall Street expects a hawkish message.
EXCHANGE RATES INR/ 1 USD
60.79
INR /1 EURO
78.69
INR/ 100 JAPAN YEN
57.00
INR / 1 POUND STERLING
98.89
US Jobless claims rise above 300K,
remain
near
pre
recession levels.
US, EU ready sanctions to stop oil hunt in Russia.
INTERNATIONAL MARKETS
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Low
Close
NYSE Comp
11059.25
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NASDAQ
4087.30
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S&P 500
2006.10
2006.86
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FTSE 100
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CAC
4484.63
4489..02
4411.09
4441.70
DAX
9770.00
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9651.03
NIKKEI 225
15723.00
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15948.29
SSE 50
2326.43
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Hang Seng
25237.00
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India to revise GDP measurement next year India will soon revise the way it measures gross domestic product to reflect under-represented and informal economic sectors, two government sources said, in an initiative that is expected to show the economy is larger than previously thought. India usually revises the method of calculating national accounts and other macro data every five years, bringing in a newer base year and adjusting for changes in the economy. The 2010 revision almost doubled the estimated The Government is expected to draw the road map for bank
contribution to the economy made by coaching and tuition and gave substantially more weight to the construction, trade and hotel industries. The importance of beauty salons, communication and
capitalization on the basis of
railways declined. Any upward revision this time will be a big boost for new Govt. who is trying to
performance of state-run banks
meet a fiscal deficit target of 4.1 percent of GDP and convince global rating agencies like
in the second quarter of this
Standard & Poor to upgrade India's sovereign ratings.
fiscal. SBI may take over a subsidiary to kick start mergers plan
Aug retail inflation eases to 7.80 percent y/y Easing prices of vegetables, cereals and petroleum products brought down Consumer Price is
Index (CPI) based inflation marginally to 7.8 per cent in August, government data showed on
entry
Friday. However, food inflation during the month under review rose to 9.42 per cent over 9.36 per
strategy in key markets with
cent in July, an official release states. The rate of price rise in vegetables stood at 15.15 per cent
Korean unit Ssangyong Motor
in
and
alliance
its products turned lower at 7.39 per cent and that for fuel and light it came down at 4.15 per cent.
Swedish
However, prices of fruits during the month went up with 24.27 per cent rate of inflation. Inflation in
carmaker Saab and Peugeot
milk and milk products increased to 11.70 per cent during the month under review. Also, pulses
Citroen of France,
and its products were costlier at 6.88 per cent.
Mahindra working
& out
Mahindra a
joint
exploring
opportunities
with
Rel Jio inked Pact with Israel's Airspan
for
low
powered,
short-range towers to deploy 4G .
August as against 16.88 per cent in the previous month. Rate of price increase in cereals and
Bharti Airtel to Sell 3,500 Mobile Towers in Africa Sunil Mittal-led Bharti Airtel will sell more than 3,500 of its mobile towers in six African countries to tower operator Eaton Towers in its bid to reduce costs, exit non-core businesses and raise cash in the run-up to the upcoming spectrum auctions. India’s No. 1 mobile carrier will lease back the towers from Eaton under a 10-year pact, both companies said in a joint statement on Monday, although they did not disclose the size of the 3,500-plus towers sale deal. The deal size would be close to $900 million (about Rs5,400 Crore). Malawi, Niger, Ghana, Burkina Faso, Uganda and Kenya are the countries where Airtel’s towers, which are part of the agreement with Eaton, are located.
Amazon Rolls Out Wholesale Plans for India Amazon is preparing to launch a portal for wholesale merchants in India, the first country outside the US where such an initiative is being planned by the Seattle-based company. The initiative could be led by Samir Kumar, who is at present the company's director of category management, said a third source. The wholesale team will report to Amazon India's country head Amit Agarwal. The India wholesale portal will be similar to Amazon Supply, its online site in the US focused on Companies spending on relief material meant for flood-hit J&K, which is facing a humanitarian disaster
of
enormous
business consumers. The India platform will also target small and medium enterprises. However, it is not clear yet whether the company will offer all categories of products under its wholesale platform. For instance, Amazon Supply does not sell apparel and other soft lines such as furnishings
proportions, will be allowed to count this toward their mandatory 2% spending on CSR initiatives
Wilful Defaulters Face SEBI, RBI Heat
under the Companies Act,
The government and financial regulators appear to have declared war on wilful defaulters as a rising tide of bad loans threaten to derail the banking system and condemn banks to months of Sistema
piffling or modest growth. The Securities and Exchange Board of India or SEBI may bar wilful
Shyam Teleservices plans to
defaulters from raising equity as part of a tough series of measures aimed at deter ring promoters
target India's top builders with
from defaulting on payments even when they have the money . While SEBI is still formulating its
`smart home' solutions to grow
policy, the Reserve Bank of India has moved to tighten its own rules on wilful defaulters. Group
its data services business.
companies who have failed to honor guarantees provided to a defaulting company within the
Telecom
operator
group can also be classified as a willful defaulter, the regulator said.
The
government
kicked
off the big-bang disinvestment programme it announced in the budget
with
the
cabinet
committee on economic affairs (CCEA) clearing stake sales in Coal
India,
ONGC
and
hydropower utility NHPC. This disinvestment
is
expected
to
meet budget target of Rs 43,425
Car Sales Grow for Fourth Straight Month Car sales grew more than 15% in August, the fastest pace so far this fiscal year, helped by big discounts and new launches and also clearly signaling improving consumer sentiment as the festival season begins. The local auto market has not exactly come to its real potential, but data released on Wednesday by the Society of Indian Automobile Manufacturers reflect positive sales across most segments of vehicles. In the commercial vehicle segment, sales have increased after nearly two and-half years, while in cars, August was the fourth straight month when the numbers have risen. According to Siam data, the automotive industry posted total local sales of 16.6 million vehicles last month, the highest for the month of August ever. With an array of recent launches in the passenger-vehicle segment demand is expected to improve further in the usually buoyant fiscal second half starting next month.
- By Anshul Tyagi
Infosys
Technologies
is
an
iconic
company that has been, in last 33 years,
1 June 1967
one of the pioneering
companies in the
IT industry. The world around Infosys is profoundly being reshaped by software. A
Stanford University (Ph.D.)
world where on one hand clients have
Syracuse University
challenges
Maharaja Sayajirao University
to
renew
the
existing
landscape in moving applications and
of Baroda
systems on cloud, opening them up to analytics and big data, bringing them in connection
SAP
with
mobile
devices
and
connecting these to internet. At the same time augmenting in the renewal of their legacy of infrastructure and landscape
Husband, Dad, Son, Brother, Friend,
Student,
with completely new areas of business
Visitor,
Thinker, Innovator, CEO & MD, Infosys, Occasional Surfer on
Infosys on 12 June, 2014 declared Vishal Sikka
life's waves
as CEO and MD of Infosys Technologies.
- is the way he
defines himself.
Vishal Sikka and his views Infosys, with impeccable training Centre at Mysore, believes in ability to learn and hence rightly call it as learnability. Vishal’s main goal is to improve business by augmenting it with innovation. He wants to lay out the directions for the organization keeping the work and ability of founders in mind For
A study in psychology says that beyond a certain level, we lose count of how many people we engage and at what level. What matters is how one structures things, create processes and tools. Vishal, in accordance with this theory, is working on these structures so that he can effectively manage and structure a large organization like Infosys. As a manger, he believes in decentralization,
empowerment,
accountability and trust at all levels. In this universally accessible world, leader is not
Infosys he believes— We, the people are
a person with knowledge, leadership is a
Infosys and not buildings.
collective individual.
process
done
by
every
- By
Abhinay Gandotra
premium with Xbox being rolled out in the market. Xbox is a video gaming brand
For starters, PS4 has a sleek and slanted
created by Microsoft .
design weighing 2.8 kg whereas Xbox One is 10 percent larger than its predecessor and weighs 3.18 kg. The controller comparison is more of
Playstation (PS3 and PS4) is a
choice based in the gaming world. Some people
video gaming brand created by
prefer Sony’s parallel dual analog sticks whereas
Sony.
for others, offset analog sticks of Xbox universe is the way to go. Microsoft
is
launching
its
latest
console
Trade of a commodity through
generation Xbox One in India after seven long
In terms of power and graphics, the topmost
distribution
which,
years on September 23rd. The launch is going to
priority on the list of hardcore gamers, PS4 fares
unofficial,
be big but the impact it creates is yet be to be
better than Xbox One. The distant textures,
unauthorized, or unintended by
seen in the Indian market. For a change this time
moving objects appear softer and there is more
the original manufacturer .
Microsoft will be selling its Xbox One only online
clarity in PS4.
while
legal,
channels are
and that too via just one vendor Amazon. The reason behind going fully online is to keep the
Xbox One though has its own advantages. Its
grey market out.
available with Kinect through which one can control the console, swiping in the air to perform
In its previous launch Microsoft gained the early
commands. Xbox One is more entertaining with its
bird advantage from Sony by a whopping 8
variety of apps. For instance, it has access to 4oD
months. In terms of price also Microsoft had an
which is not available with PS4.
advantage with
its model Xbox 360 priced at
23,900 INR in comparison to Sony’s PS3 priced
Microsoft has promised to launch a preview
at 39,990 INR. This time though there is a
version of DirectX3D 12 graphics toolset his year.
complete turnaround.
This will make up for the slow RAM and the graphic limitations of Xbox. With time the gaps
Sony this time has enjoyed an identical 8 month
between these two new consoles will narrow down
head start with its offering of PS4 and the
further and both the systems will provide the next
features for both Xbox and Sony are similar. Now,
generation gaming experience. So is India ready
we need to see if Sony PS3 can enjoy the same
for the next level of gaming ….