Financial focus Fortnightly Newsletter InFINeeti ISSUE 2
Volum e 2
2014
TOP STORIES…………….1 MARKET ACTIVITY……...2 ECONOMICS.………....….. 3 FINE WORD FROM
FIN WORLD......………….. 4 POLICY RATES AND
MARKET UPDATES……... 5 WARREN BUFFETT MANAGEMENT RULES.…….5
Financial focus
A one stop guide to know about all the recent happenings in the financial world
TOP STORIES : INDIA RUPEE
REBOUNDS
FROM
13-MONTH
LOW:
India’s Rising for the first time in five sessions, the rupee on Tuesday appreciated by 29 paise to close at 63.38 against the greenback following fresh dollar selling by exporters and foreign fund inflows in domestic debt. At the Interbank Foreign Exchange (Forex) market, the domestic currency resumed lower at 63.72 a dollar from last close of 63.67. Read more...
THE YEAR OF FOREIGN CAPITAL INLOWS: Net foreign institutional flows are an aggregate $42.5 bn in the year so far, of which $16 bn was invested in equities and $26.4 bn in debt markets. Foreign institutional holdings in Indian stocks reached an all-time high, above 20% of all stocks as the Sensex was up 39% by end-November relative to end-January value, mainly driven by optimistic foreign investors. Read more...
A YEAR OF HITS AND MISSES: So much that could have happened didn’t happen this year. But December brought some hope when the Cabinet took the ordinance route to pass the Insurance Laws (Amendment) Bill, 2008. The ordinance is an interim arrangement, and the Bill will still have to be tabled in Parliament and passed when it reconvenes next. But it’s a start, and more than that, it’s a bold signal from the government that it is serious about reforms. Read more...
CHANGED LAND ACQUISITION ACT GOOD FOR FARMERS: PM NARENDRA MODI: Narendra Modi said changes in the law were required to ensure faster processing without compromising on compensation or relief. Amid a controversy over the government’s decision to make significant amendments in the Land Acquisition Act, Prime Minister Narendra Modi today said changes in the law were required to ensure faster processing without compromising on compensation or relief and rehabilitation measures for farmers. Read more...
Financial focus Fortnightly Newsletter InFINeeti
TOP STORIES : WORLD
SPICEJET FLIES INTO TURBULENCE The last week of July started happily enough for SpiceJet. On July 28, the Kalanithi Maran-promoted airline reported its elevation as the secondlargest domestic air carrier after IndiGo, underlined by its market share of 19 per cent of passengers carried by all airlines. It also reported an improved load factor, or passengers carried per seat available, of 81.4 per cent against 73.3 per cent in June 2013. Read more...
AS OIL FALLS, RUSSIA CHOKED BY MILITARY SOCIAL SPENDING Russian authorities are facing some unpalatable options as they try to keep the economy afloat - unless they can persuade President Vladimir Putin to curb massive military spending. Officials fear that without limiting the defence budget, the government will have to raise taxes, increase the pension age or print money to prevent the state deficit from running out of control
Read more...
THIRD-QUARTER U.S. ECONOMIC GROWTH STRONGEST IN 11 YEARS The U.S. economy grew at a 5.0 percent clip in the third quarter, its quickest pace in 11 years and the strongest sign yet that growth has decisively shifted into higher gear. Some of the strength appears to have been sustained, with other data on Tuesday showing consumer spending rising solidly in November, offsetting surprisingly weak durable goods orders. Read more...
MARKET ACTIVITY
ZUARI RAISES OPEN OFFER SIZE TO BUY STAKE IN MCFL TO RS. 398 CRORE Zuari group today announced plans to spend Rs 398.2 crore to buy up to 36.56 per cent stake in MCFL, about 10 per cent more stake than its earlier offer. Kolkata-based industrialist Saroj Poddar-led Zuari group has been competing with Pune-based Deepak Fertilisers for taking Read More...
IIT PREPARATION INSTITUTE RESONANCE EDUVENTURES TO TAP BOURSES 2014 may have been a lacklustre year for IPOs with barely Rs 1200 crores mopped up by five companies, but the dismal statistics have not deterred niche players to hit the primary markets in the new year. Kota, Rajathan based test preparation and coaching institute Resonance Eduventures which has 28 pan-India study centres for IIT Read More...
Financial focus Fortnightly Newsletter InFINeeti
OMC TO PROCURE RS. 97 CRORE LITRE ETHANOL The expression of interest (EoI) floated by the oil marketing companies (OMCs) on Monday to procure 97 crore litre of ethanol at Rs 42 a litre ex-mill is expected to give a big relief to the cash crunched sugar industry in the country. Read More...
ECONOMICS
INDIAN ECONOMY STARES AT DEFLATION AS INFLATION HITS ZERO IN NOVEMBER India’s economy may be staring at deflation, at least statistically, a condition where prices come down below their level a year ago with inflation rate turning negative, taking away pricing power from companies, eroding their profit, and forcing them to lay off employees.
Read more...
INDIAN FIRMS START FATCA REGISTRATION; PACT CRUCIAL TO AVOID 30% TAX PENALTY ON US REVENUES Under the FATCA regime, overseas financial institutions need to provide details about accounts held by Americans or foreign entities where the US taxpayers hold a substantial ownership interest, as also about all major transactions
Read more...
BANDHAN, IDFC TO JOIN SBI IN COMPETING FOR FINANCIAL SERVICES BUSINESS AS BANKS Micro lender Bandhan and IDFC, the two babies of Indian banking, will join the 200-year-old State Bank of India in competing for financial services business in 2015 as banks.
Read More...
DID YOU KNOW ?
Facts About Indian Economy The overall growth of Gross Domestic Product (GDP) in the first half of the 2014-15 is estimated at 5.5 per cent as against 4.9 per cent Read
More...
Financial focus Fortnightly Newsletter InFINeeti
Fine Word from Fin World CHICKEN An investor who is petrified of incurring losses from investing. A chicken will generally shun most investments, even low-risk ones, since almost any investment carries an element of risk. Treasury bills and bank deposits are favored investments for chicken investors, although they may even fret about the credit rating of the United States government or the likelihood of bank failures. Although chickens are highly cognizant of the perceived perils of investing, they may be oblivious to the insidious dangers of eschewing risk totally, particularly the loss of purchasing power during periods of moderate to high inflation. Many investors with adequate risk tolerance also turn chicken after a prolonged bear market, causing them to liquidate their holdings near the market’s bottom and miss out on the subsequent rally. The biggest risk a chicken faces is the loss of purchasing power due to inflation over prolonged periods of time. This may leave them especially vulnerable during retirement, since the steady increase in life expectancies means retirees need a greater pool of savings to sustain themselves for longer periods of time. The rule of 72 demonstrates the pernicious effects of inflation. For example, at an annual inflation rate of 3 percent, the purchasing power of a currency is slashed by half in 24 years; at a 4 percent inflation rate, it is halved every 18 years. If inflation zooms up to 8 percent annually, purchasing power is halved in less than a decade. A chicken investor may thus rue the decision to completely avoid risk in his or her younger days, since the ability to take on investing risk is inversely proportional to age. A chicken investor should therefore attempt to take on risk in measured amounts in his or her investment portfolio, and should use risk mitigation techniques to minimize risk. Tried-and-tested investment techniques like diversification can bring down portfolio risk to an acceptable level for almost any investor. Since most investors equate risk with equities, a chicken investor could venture into the realm of investing by initially getting into fixed-income instruments and convertible bonds, before investing in index funds and blue-chip stocks.
MACARONI DEFENSE An approach taken by a company that does not want to be taken over. The company issues a large number of bonds with the condition they must be redeemed at a high price if the company is taken over. Why is it called Macaroni Defense? Because if a company is in danger, the redemption price of the bonds expands like Macaroni in a pot!
Source: www.Investopedia.com
Financial focus Fortnightly Newsletter InFINeeti
POLICY RATES AND MARKET UPDATES DATE :- 31/12/2014 BANK RATE
9.00
REPO RATE
8.00
REVERSE REPO RATE
7.00
MARGINAL STANDING FACILITY RATE
9.00
SENSEX
27,500
NIFTY
8,275
WARREN BUFFET MANAGEMENT RULES : RULE 11 RULE 11 : You should be fully aware of one attitude Charlie and I share that hurts our financial performance: Regardless of price, we have no interest at all in selling any good businesses that Berkshire owns. We are also very reluctant to sell sub-par businesses as long as we expect them to generate at least some cash and as long as we feel good about their managers and labor relations. We hope not to repeat the capital-allocation mistakes that led us into such sub-par businesses. And we react with great caution to suggestions that our poor businesses can be restored to satisfactory profitability by major capital expenditures. (The projections will be dazzling and the advocates sincere, but, in the end, major additional investment in a terrible industry usually is about as rewarding as struggling in quicksand.) Nevertheless, gin rummy managerial behavior (discard your least promising business at each turn) is not our style. We would rather have our overall results penalized a bit than engage in that kind of behavior.
InFINeeti Team Adhiraj Bandyopadhyay (9088342361) Gayathri Bhuvanagiri (8274948812) Mehul Gahrana (8017041166) Suryanarayan Panda (9830351387)