ISSUE - 111
10th MARCH [THURSDAY]
EDITOR’S DESK
- TANIYA BANERJEE
The UPA government seems embroiled in yet another controversy this time around. It has yet again come under the scanner for its choice of Chief Vigilance Commissioner in Mr. P.J Thomas. From 2G scams to commonwealth, this government has continuously been in news for all the wrong reasons. Get the complete story in our Cover Story section. The Reliance and British petroleum deal has been in news for quite sometime now. Some say that the deal is a great facelift for Reliance but is it really so or is it the other way round? Read our Opinion Forum to get answers to all such questions arising in your mind. This time around in Brand Track we have tried to cover a much wider aspect! It is not just brands that we are talking about this week, we are talking about a medium that makes brands come under the purview of the general populace. Yes! I am talking about micro-blogging. The potential of this concept has made the marketing world to pause and give a look to it as the next best medium of approaching todayâ€&#x;s youth. In Focus Of the Week we are talking about the man himself this week. You guessed it right it is Warren Buffet that I am talking about. One of the most successful investors of all times. Get to know how you can develop your skills and make them equivalent to those of his, here this week. I hope all of have much fun reading this issue as well! Cheers, Taniya Banerjee Editor.
EDITOR COVER
1 OPINION 2 BRAND
5 FOCUS 6 MARKET
FAST-TRACK
3 QUICK BITES
7
8 9
COVER STORY–
He was appointed as the CVC by a high powered panel consisting of PM Mr. Manmohan Singh, Home Minister Mr. P. Chidambaram and opposition leader in the Lok Sabha, Ms. Sushma Swaraj.
This incident has been especially embarrassing for the PM who had vouched for the fact that the right person had been appointed for the post.
THE IBS TIMES
THE UPA GOVERNMENT IN A SOUP!
- TANIYA BANERJEE
The woes of the UPA government seem to be in no mood to end, starting from 2G scam to commonwealth scam, there seems no full stop to its miseries, and now yet another controversy seems to have knocked on its doors. Yes I am talking about the recent controversy over appointment of P J Thomas as the Chief Vigilance Commissioner. It has been about a year since Mr. P J Thomas was appointed as the head of India‟s anti- corruption watchdog. He was appointed as the CVC by a high powered panel consisting of PM Mr. Manmohan Singh, Home Minister Mr. P. Chidambaram and opposition leader in the Lok Sabha, Ms. Sushma Swaraj. Given the prior records held by him his appointment was opposed by Ms. Swaraj but the government had overruled her plea against the appointment. A 1973 batch IAS officer of Kerala cadre, Thomas was also the founder, director of the Indian Institute of Management Kozhikode. Moreover he has also held important assignments in Kerala as secretary in Finance, Industry, and Agriculture, Law and Justice and Human Resource Development departments. Post this he went on to become the Chief Secretary in 2007 and moved on to become the Secretary in the Ministry of Parliamentary Affairs in January, 2009 and then the Telecom Secretary. It was during his tenure as the Civil Supplies secretary in 1992 that the palm oil scandal took place, and the case was registered in 1999 accusing Thomas and others of criminal conspiracy which caused a loss of Rs.2.32 crore to the exchequer. A petition filed by the centre for Public Interest Litigation (CPIL) challenged the appointment and consequently the Supreme Court struck down his appointment. A three judge committee headed by Chief Justice of India SH Kapadia delivered its verdict on the matter delivering a major blow to the UPA government. It is because of these allegations and the consequent verdict by the SC that has invoked the ire of the entire nation. As it is the government has been labeled as weak kneeled when it comes to handling corruption and now this new feather has been added to its cap. This incident has been especially embarrassing for the PM who had vouched for the fact that the right person had been appointed for the post. Moreover this is not the only incident to have happened in a week that has raised concerns for the ruling party. Recently the DMK decided to pull out of the cabinet due to its tussle with Indian National Congress over its demand for 63 seats for the April 13 assembly polls. With all these events happening simultaneously it is imperative that the government goes into damage control mode immediately to save at least some of the glory that it had once possessed. The forefathers of this party had been people of great integrity and stature who were not only instrumental in showing this country the dawn of independence but were also responsible for giving what was long due to the people of India „a structured democracy‟. Therefore what now remains to be seen is whether the Congress will be able to gain back its lost glory to become once again the party of the „aam aadmi‟.
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FAST-TRACK NEWS
THE IBS TIMES - SHILPA MALHOTRA
Banks to stay out of CCI lens says Pranab Finance minister Pranab Mukherjee has said that banks will not come under the purview of the competition watchdog, Competition Commission of India. The finance ministry has already moved a Banking Law Amendment Bill, 2010 which seeks to give the banking regulator, Reserve Bank of India the powers to overlook M&A activity in the sector. The Reserve Bank has asked the government to keep consolidation in the banking sector outside the competition law as it would not be easy for other regulators to understand the complexities of the sector.
DMK threatens to dump UPA Tamil Nadu's ruling party DMK on Saturday ended its seven-year alliance with the Congress and pulled out of the United Progressive Alliance (UPA) government after running into roadblocks over seat sharing in assembly elections only a month away. The dramatic decision, announced after a meeting of DMK leaders including Chief Minister M. Karunanidhi, pulled out Prime Minister Manmohan Singh's government of majority support in the Lok Sabha where the Congress-led UPA coalition will now have only 256 MPs which is less than the half-way 272.
RBI to let big firms to set up banks The Reserve Bank of India (RBI) is ready to allow big industrial houses to set up banks, but only after it gets the power to supersede boards of banks that are not being run properly. RBI also wants the right to oversee the operations of the promoting company and any affiliates that will have business relationships with the bank. The central bank will issue guidelines on new banking licenses by 31 March but no banking licenses will be issued until the Act that governs banking is changed and the regulator gets the powers mentioned above.
India and ASEAN ink the much awaited services and investment pact India and the 10-member Association of Southeast Asian Nations (Asean) grouping expect to clinch their much-awaited trade agreement in services and investment by the end of this year, Malaysia‟s trade minister Mustapha Mohammed said. Indian commerce ministry officials have admitted earlier that it was a „strategic mistake‟ to conclude the bilateral trade pact with Asean without an agreement on services where India holds an advantage. The two parties aim to increase trade to $70 billion (Rs.3.16 trillion) by 2012 from $50.33 billion last year.
Rajat Gupta quits EMRI Rajat Gupta, former director of Goldman Sachs and Mckinsey, has resigned from the board of the Hyderabad-based Emergency Management Research Institute (EMRI), a public-private-partnership initiative being run by the GVK group. Gupta's resignation comes in the wake of the US Securities and Exchange Commission (SEC) initiating administrative and civil proceedings against him on charges of insider trading related to the Galleon group hedge fund headed by Sri Lankaborn Raj Rajaratnam, who was indicted earlier.
Sensex shoots 623 points in post-budget rally In the post-budget rally, the Bombay Stock Exchange 30-share benchmark Sensex, zoomed 623.10 points and closed at 18446.50 on Tuesday, its biggest single day jump since May, 2009. Nifty shot up by 189.05 points to 5522.30 from 5333.25.The race was led by automobile, bank, realty and capital goods stocks and all sectoral indices recorded handsome gains. The automobile sector index gained 5.64% to 8718.22, followed by banking index by 4.35 per cent to 12355.22. The realty sector shot up by 4.20% to 2064.81 and the capital goods index by 4.19% to 12918.87.
Bangladesh sacks Nobel laureate and pioneer of micro finance Nobel laureate Mohammed Yunus, a celebrated pioneer of micro-finance was forced out from the Grameen Bank, he founded nearly three decades ago, amid a growing spat with the Bangladesh government. Yunus was relieved of his duties as MD of the Grameen Bank, a central bank official said. The exit of the Nobel laureate came after accusations that he had violated country's retirement law.
Protective Put – A risk-management strategy that investors can use to guard against the loss of unrealized gains. The put option acts like an insurance policy - it costs money, which reduces the investor's potential gains from owning the security, but it also reduces his risk of losing money if the security declines in value.
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THE IBS TIMES Libya under deep crisis, oil exports hit badly
Libya, which sits on the largest oil reserves in Africa, has been engulfed in a four-week rebellion as militants try to oust Gaddafi after 41 years in power. Officials in the country say oil fields continue to operate, but daily exports of 1.5 million barrels could be cut off for some time.Oil prices rose to above $106 a barrel in Asia as investors worried intense fighting between Libyan government forces and rebels suggested the OPEC nation faces a prolonged cut to its crude exports.
Government likely to withdraw service tax on health care following the criticism
The government is likely to withdraw service tax imposed on healthcare services in the Union Budget for 2011-12 following a strong reaction from the public and the medical fraternity. FM Pranab Mukherjee had proposed to levy a 10% service tax, with an abatement of 50%, on treatment carried out at hospitals with 25 or more beds with central air conditioning and diagnostic test services. Presently service tax is levied only on health check-ups carried out by hospitals for employees of business entities and health services offered under insurance schemes.
A gunman kills Pakistan minister
A gunman has shot dead a provincial minister in Pakistan just as she was about to address a political meeting. Zill-e-Huma was social welfare minister in Punjab and an active member of the ruling Pakistan Muslim League. The shooting took place in the town of Gujranwala, 43 miles (70km) north of the Punjab capital, Lahore. The lone gunman has been arrested. Meanwhile in south-western Balochistan province, gunmen attacked a minister's convoy but he escaped unhurt.
Central Vigilance Commissioner PJ Thomas accused of corruption charges
The country‟s topmost anti- corruption watchdog CVC (central vigilance commissioner) PJ Thomas gets tainted as he gets accused in the palmoline export scam in Kerala. The Supreme Court said that the highpowered committee's recommendation on appointment of Thomas „does not exist in law‟. The Supreme Court on Thursday struck down Central Vigilance Commissioner PJ Thomas' appointment dealing a major blow to the Congress-led United Progressive Alliance Government.
ED interrogates Hasan Ali
Enforcement Directorate (ED) has taken real-estate businessman and stud farm owner Hasan Ali Khan, who is accused of stashing black money abroad, for interrogation after conducting a raid at his residence in Pune. Three days after issuing a 'Look Out' corner notice by the ED, its officials today raided 14 locations across the country, including the residence of Hasan Ali Khan in Pune. Though rumors are abuzz of Hasan Ali's arrest, the latter's lawyer claimed on a television show that he has been taken by ED for questioning but has not been arrested.
India beat Ireland by five wickets to top Group B
India beat Ireland by 5 wickets in ICC World Cup 2011 in Bangalore. Ireland made 207 runs for the loss of all wickets in 47.5 overs against India in Bangalore. India won the toss and decided to field. Ireland made 207 runs for the loss of all in 47.5 overs and set the target for India 208 in stipulated 50 overs. India achieved the target of 208 in 46 overs with Yuvraj Singh declared as man of the match.
Ronaldo shines in Spanish league, hits 3 goals to take on a 7-0 win
Cristiano Ronaldo scored three goals in the second half, then limped off as Real Madrid routed Malaga 7-0 to close within seven points of Barcelona in the Spanish league. After goals by Karim Benzema, Angel Di Maria and Marcelo built a 3-0 lead by halftime, Ronaldo scored in the 51st minute and Benzema made it 5-0. Ronaldo converted a penalty kick and then scored in the 77th, appearing to get hurt on the goal. Ronaldo has four three-goal games this season and one four-goal game.
Closed End Fund- A closed-end fund is a publicly traded investment company that raises a fixed amount of capital through an initial public offering (IPO). The fund is then structured, listed and traded like a stock on a stock exchange. Also known as a „closed-end investment‟ or „closed-end mutual fund‟.
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THE IBS TIMES
OPINION FORUM–DOES ’SONE KI CHIDYA’ NEED A BLACK SWAN?!
With the country growing at 8% annually, the bigots in the corporate world do not want to miss the opportunity to have a share in this growth story.
The black swan, BP could not get a better chance as it acquires 30% of Reliance’s stake in 23 of its blocks!
- SUPRIYA MAMGAIN “I think it would be a mistake to dismiss our experience of the last year simply as a „black swan,‟ a onein-a-million occurrence that carries no wider application for our industry as a whole,” Mr. Dudley told oil executives at a conference here. “I believe the industry also has a responsibility to change.” Reliance executive director P.M.S. Prasad said, "This oil major coming in is a validation of the prospectivity of the resources in the country. It brings in their great skills in exploration and production, reservoir management." With the country growing at 8% annually, the bigots in the corporate world do not want to miss the opportunity to have a share in this growth story. I say this, as the British Petroleum has decided to venture in the oil and gas sector through a $7.2 billion deal with Reliance Industries. The British major‟s name was flashed all across newspapers, television and internet due to the infamous gulf oil leak. The company‟s chief Tony Hayward paid the price as he stepped down from his position, making way for the new head Bob Dudley. The company faced criticism from the industry and public as it failed to handle the situation effectively, the Macondo oil well spewed 4.1 barrels of crude in to the gulf during the 87 days before it was capped. With the grim face the company now carries, is this deal with Reliance a move by Mr. Dudley to strengthen the confidence in its stakeholders? The fact that the company‟s increased interest to venture into Russia, India and Canada, makes me believe that the company wants to instill the calm and confidence indeed. It is on its path to reinvent its name in the industry with more than 30 projects lined up for the company from all around the world. BP entered into an agreement with a Russian company before venturing into India. The $7.8 billion deal with Rosneft has given BP a chance to drill in the arctic, it did make heads turn in the industry as this means BP has the exploration licenses to access the world‟s last oil and gas frontiers. That said the $7.2 billion deal with India‟s Reliance, owned by the richest man in the country Mr. Mukesh Ambani, shows that BP wants to prove to the world that the gulf oil turn off does not affect the company‟s growth to drill in deep water. Reliance will make use of BP‟s expertise and technology, which will help to meet the floundering output and the growing demand. India is expanding at an unprecedented growth rate, but it struggles to meet even third of the oil that it consumes while the gas use is more than 30% of the production! Therefore, this deal is important to both Reliance and BP, the technical capabilities of BP will give Reliance a chance to enhance the valuation of its existing assets. India will benefit from it as BP will help to boost its domestic demand as the production which is needed suffers from lack of infrastructure. This deal obviously has brought attention from other players in the industry as the world recognizes the abundance of resources in the country. The black swan, BP could not get a better chance as it acquires 30% of Reliance‟s stake in 23 of its blocks! The blocks produce more than 40% of India‟s total production and more than 30% of the country‟s consumption, indeed BP has got its hands on „sone ki chidya‟. All said and done, both Reliance and BP need each other to sustain as major players in this industry. India as a country will enjoy the benefits with increase production, investments, expertise and infrastructure that will be provided by this deal. But how does this story unfolds in the long term only time can tell , till then watch this space for more!!
Open End Fund– A type of mutual fund that does not have restrictions on the amount of shares the fund will issue. If demand is high enough, the fund will continue to issue shares no matter how many investors there are. Open-end funds also buy back shares when investors wish to sell.
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THE IBS TIMES
BRAND TRACK– MICRO BLOGGING: NEXT FOR BRANDS OR SOMETHING ELSE?
But viral marketing, social media marketing, etc is not just revolved around a hand full of websites like Facebook, twitter, LinkedIn, etc that we are familiar about.
-SANDEEP ASRANI
This week the Brand Track Column brings to you something entirely different from what it has brought to the table in its previous issues. I am interning in a company where my project is primarily to do with creating a Viral Marketing strategy for my organization. This is something that I am personally excited about as it is a new and a very effective mode of promotion in today‟s world. And if we talk about viral marketing then we are definitely thinking of social networking websites and it goes without mentioning about Facebook being a part of today‟s branding strategy. But viral marketing, social media marketing, etc is not just revolved around a hand full of websites like Facebook, twitter, LinkedIn, etc that we are familiar about. To my amazement there are close to 330 odd social networking websites that could be used for viral marketing. Now, viral marketing is something which we all have an idea about, but the key thing that makes a campaign viral is the ease to share it. And any website that enables a user to share content to a third party comes under this category, hence 330. This revolution of 140 characters literally replacing most of the key ways of marketing today is called microblogging. These 140 characters is the word limit that most social networking websites allow. From blogs that were usually half a page long it has shrunk to just 140 characters. This is called micro-blogging. In fact most experts believe that from websites to blogs to micro-blogs this world of marketing is only making it more challenging for the brands today and forcing them to continuously be innovative, not only in their product offering but also in the way they offer them. Recently the WongDoody Facebook Global Practices studied the top 100 brands, as determined by Interbrand's Best Global Brands 2010 rankings and found some interesting facts about brands. Interestingly 16 of the top 100 brands don‟t have a Facebook page and for the remaining 84 brands had 1,807,360 fans across the globe. Now this is a serious figure that brands need to notice. The study analyzed over 60,000 wall posts, nearly 13,000 comments, and over 119,000 "Likes" to see how companies are utilizing Facebook. The results indicated a world of missed opportunities. The average number of fan posts per month is 857, the average number of comments per post is 157, and the average number of "Likes" per post is 1,456. Only 66% of the brands actively respond to fan posts or comments, even though 82% of them flaunt their fan‟s stories and comments. That means fully a third of the corporate Facebook users are missing an opportunity. Now this makes us think as to why brands are found on Facebook but not really being so responsive. Is that they believe that it only improves visibility and not sales figures or is it that something that is free is not val-
So what ever may be the
ued? Or is because the way social networks are generally used? Because most status messages are very random: anything like “I am sure everyone has their favorite underwear” to “Maaru bham thai gyu”, and then
reason, it high time to think something VIRAL
receiving 60 odd comments on it which are completely irrelevant to brands. But well, not completely in some cases. There have been instances when twitter has saved lives, helped governments to get some valuable up-
and how could this either
dates too. Because of these random comments and status messages the world gets to information earlier than
benefit brands or mankind
it is actually official. The day is not far when a man would get poked on Facebook from his doctor, that tells
on a whole.
him that his wife has delivered a baby girl, much before the wife or the husband actually know about it. So what ever may be the reason, it high time to think something VIRAL and how could this either benefit brands or mankind on a whole. So I would request the readers to pour in their comments on how they found this column! Moreover keep a watch for this new phenomena as it is bound to change the way this world perceives marketing in times to come!
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THE IBS TIMES
QUICK BITES- NEWS THAT CAN’T BE MISSED !
- RAJAT MONGA
Big Shots… Nobel laureate Muhammad Yunus removed from the top post at Grameen Bank. In Bangladesh, Mr. Tore Johnsen is appointed CEO of Grameenphone from 1 March 2011 by Telenor. Volvo's chief executive, Leif Johansson, who is set to step down in the middle of the year, is proposed as new Chairman of the Ericsson Board of Directors. Coal India Limited has informed that Shri Partha S. Bhattacharyya on attaining the age of superannuation relinquished the charge or the office of Chairman-Cum-Managing Director of the Company with effect from February 28, 2011.
Company Talks… L&T to raise Rs 11,400 cr debt from SBI-led consortium of banks. Reliance-BP deal: Niko, Hardy give 'no-objection certificate‟. Government to infuse Rs 4,376 crores in BoB, Union Bank of India. Nano ranks last in customer satisfaction: TNS. BHEL bags Rs 3,220 crores order for thermal project. ONGC to lose Navaratna tag in rush to launch FPO next month. Vodafone Essar, Airtel, Idea a hit in MNP regime. Coca Cola launches its new global campaign 'Brrr' in India. Lifestyle aim to double turnover in 2 years. Vishal Retail Q3 net loss narrows to Rs 19.37 crores. Dr Reddy's aim at $1 billion revenue/year in next 3 years. ITC to cover 1.50 lakh hectares under social forestry. RIL launches programme to develop leaders of the future. Cognizant to embark on $285 million expansion programme across India. Economy Speaks… Indian economy expected to reach $ 6 trillion by 2020 if it sustains 9% GDP growth. Government to borrow Rs 4.17 lakh crore from markets in 2011-12. The fiscal deficit for the current year to be maintained at 5.1% of gross domestic product (GDP). Inflation likely to remain firm in short to medium terms due to spike in global commodities prices. India is not as corrupt as China and Russia, according to the global credit rating agency Fitch. India plans law to curb microfinance lending rates. Oil price crisis to have serious policy implications according to Pranab Mukerjee. China‟s economy to slowdown to single-digit growth in 5 yrs as it focuses on improving living standards to bridge the divide. The Captains of the Ships… Chairman and CEO, Kraft Foods- Irene Rosenfeld Chairman, Accenture- William D. Green Managing Director for Corporate Rating, Fitch Group- Richard Hunter President and CEO, MTS- Andrei Dubovskov
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THE IBS TIMES
FOCUS OF THE WEEK– HOW DOES WARREN BUFFET DO IT?
Warren Buffet is a man who needs no introduction. He went on by purchasing the company Berkshire Hathaway in 1965 for $10,000 which was valued at nearly $30 million (2005).
The main expertise area of Buffet is to accurately determine the ‘Intrinsic Value’. It is calculated to check if the stock is selling at a 25% discount to its real value.
- SANYA DHAWAN
This week I developed a new interest area, I thought of investing in shares. So I thought to myself, I am interning at a consultancy, maybe I can get the formula here as to how to make a „kill‟ at the market. I went around asking people for the „magic formula‟. Most people just confused me. If I may quote Warren Buffet to support my stance here, “...the reason why it isn‟t taught is because there aren‟t teachers around who know how to teach it. They don‟t know themselves…I would say that, generally speaking, finance teaching in this country (USA) is kind of pathetic‟‟. The situation is not much different here either, so I decided to visit the god himself for my answers- Warren Buffet. Warren Buffet is a man who needs no introduction. He went on by purchasing the company Berkshire Hathaway in 1965 for $10,000 which was valued at nearly $30 million (2005). While most companies on the S&P 500 (index) grew by 50 times, this company grew by leaps and bounds. This man is known for being a successful investor and a philanthropist. He is also known for his frugal ways of living in real life. He does not drive big cars, he does not own multiple jets, and his kids are not drug addict-rehabilitation centre frequenters. He lives what we call- the simple life. So, let us have a Buffet with my twist as to what to look for before investing. We would first try to look at a company with a low Price Earnings ratio. This is to ensure that we buy stocks at a lower price (something equivalent to a „bargain deal‟ at a sale at Benetton, say). Mind it; a lot of people tend to buy stocks when the PE ratio is high playing on „follow the leader‟ theory. (Think simple demand supply) To define „low PE‟ is also a task. Some proponents say lower than 8, some say lower than the industry average, historians say at about a PE of 15-16 the share is correctly valued. That is one of Buffets most important tenet. The company‟s market capitalization should ideally be above 100 crores INR as we want to invest in a company that is big enough to give a return on an investment. That is, return on equity reveals the rate at which shareholders are earning income on their shares, should be high. We must ensure that there is a low Debt Equity Ratio as earnings growth is being generated from shareholders' equity as opposed to borrowed money. A high level of debt compared to equity can result in volatile earnings and large interest expenses. The profitability of a company depends not only on having a good profit margin but also on consistently increasing this profit margin. To get a good indication of historical profit margins, investors should look back at least five years. A high profit margin indicates the company is executing its business well, but increasing margins means management has been extremely efficient and successful at controlling expenses. And a similar check on consistency regarding sales is a good idea. Do keep in mind, however, that the past performance of a stock does not guarantee future performance - the job of the value investor is to determine how well the company can perform as well as it did in the past. Determining this is inherently tricky, but that‟s what we‟ll get good at eventually. The main expertise area of Buffet is to accurately determine the „Intrinsic Value‟. It is calculated to check if the stock is selling at a 25% discount to its real value. An investor must determine the „intrinsic value‟ of a company by analyzing a number of business fundamentals, including earnings, revenues and assets. And a company's intrinsic value is usually higher (and more complicated) than its liquidation value - what a company would be worth if it were broken up and sold today. Now, since I am following the bottom up approach (company, sector, industry, economy) after short listing the stocks, it becomes imperative to see whether the company is in a good economic condition; is the sector and industry showing a growth trend and is the company meeting the demand of this growth trend, and last of all, study the state of the economy, is it in a recessionary phase, growth etc. Now, the above mentioned are the building block and are in no way comprehensive, after this there comes more jazz of the concept of Risk and return, Efficient Market Theory, CAPM, etc but I plan to bring it all down to you in the simplest form possible and explain it in plain vanilla. For more, keep reading this space. And by the way, there is no formula.
International Equity Style Box- A visual representation of the principal investment characteristics of foreign stocks and foreign stock funds. The international equity style box is a valuable tool for investors to use to determine the risk-return structures of their international stocks/portfolios and/or how these investments fit into their investing criteria. Also known as an „international stock style box‟.
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THE IBS TIMES MARKET WATCH
- SAINYAM KUMAR
All said and done about the budget, all the doubts about it being a populist one rather than a realistic one got an answer when the stock markets soared to new heights during the week the budget was announced. FMâ€&#x;s announcement about fiscal deficit being lower than the budgeted deficit (5.1% against 5.5%) and the projection for FY13 at 3.5% was welcomed by the country. The budget along with the food inflation sliding to 10.39% for the week ending February 19, 2011 improved the prospects of the economy. All the food items, apart from meat and rice, making the food basket witnessed a decline in their prices. Moving on to the BSE-Indices, Oil & Gas was the most volatile sector because of the number of cues sending signals for the future of the sector. When Mr. Pranab Mukherjee said that the oil subsidy will be brought down to Rs. 23,640 cr from Rs. 38,386 cr, it meant that the profitability of the related companies will come down but then the positive signals from West Asia hinted that crude crisis might come down. But the index ended well in green at the end. BSE-Auto rallied the most as the 2% expected rise in the excise duty was not imposed and it remained unchanged at 10%. On the corporate front, the shares of Bajaj Finserv went berserk as the news of its tie up with Berkshire Hathaway hit the market. The scrip opened at 433 on March 3 and surged to a 52 week high of 607 on March 4. The Movers & Shakers of the Week
SURGES
%Change
DOWNFALLS
%Change
ASHOK LEYLAND
14.8
MPHASIS LTD
-17.5
ITC LTD.
12.8
RELIANCE INFRA
-10.1
P&G HYGIENE
12.2
MUNDRA SEZ
PORT
&
-8.8
Global Cues: The developing economies led the way this time as all key emerging markets of Asia and Brazil ended in green while the developed nations (apart from US) were in red. The political tensions in Libya coupled with the positivity over the employment figures of US to be released next week were the reasons for such mixed sentiments across markets. Healthy employment figures will send major positive signals about the US moving comfortably on the path of recovery. .
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THE IBS TIMES MARKET WATCH Sensex
28 February 2011 17,823.40
1 March 2011 18,446.50
Nifty
5,333.25
DJIA
2 March 2011 *
3 March 2011 18,489.76
4 March 2011 18,486.45
5,522.30
*
5,536.20
5,538.75
12,226.34
12,058.02
12,066.80
12,258.20
12,169.88
HangSeng
23,338.02
23,396.42
23,048.66
23,122.42
23,408.86
FTSE100
5,994.01
5,935.76
5,914.89
6,005.09
5,990.39
Gold ($/oz.)
1,411.20
1,433.20
1,435.70
1,415.30
1,432.80
Crude($/bl)
108.50
108.27
110.84
110.48
-
INR v/s USD
46.0650
45.5106
45.2242
45.2047
45.1045
INR v/s EURO
63.3762
62.7373
62.4754
62.4115
62.6384
* Indian markets were closed on Wednesday (March 2, 2011) Equity Style Box- A visual representation of the principle investment characteristics of stocks and stock mutual funds. The style box was created by Morningstar and is a valuable tool for investors to use to determine the risk-return structures of their stocks/stock portfolios and/or how these investments fit into their investing criteria Also known as a „stock style box‟. BUSINESS JARGONS BY– ADHIRAJ SOOD
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DisclaimerThis newsletter is just a compilation of news from various sources. Thus, readers are expected to cross-check the facts before relying upon them. Though much care has been taken to present the facts without error, still if errors creep in, necessary feed back will be always welcomed. Editors will not be responsible for any undertakings. The newsletter is not meant for sale and hence, no part of the newsletter should be used without the prior permission of the editorial team.
SourcesThe Economics Times, The Hindu Business Line, Times of India, Business Standard, Financial Ex-press, Financial Times, Business Week, Business World, The Economist, Wall Street Journal, Bloomberg, Reuters, Moneycontrol.com, Vccircle.com, yahoofinance.com, Business Today, India Today, Investopedia.com, Wikipedia.com, DNA, The Deccan Chronicle, The Hindu, The Tele-graph.
EDITORIAL TEAMADHIRAJ SOOD,RAJAT MONGA, SAINYAM KUMAR, SANDEEP ASRANI, SANYA DHAWAN, SHILPA MALHOTRA, SUPRIYA MAMGAIN, TANIYA BANERJEE.
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