tag:blogger.com,1999:blog-95786462024-03-14T08:08:53.436+05:30The Finax LedgerAccounts of the latest in finance, balance sheet of issues , records of all opinions, notes to hotspots!
<br> To contribute mail: finax *AT* xlri.ac.in.
Contributions can come from current and past students of XLRI, Jamshedpur as well as the faculty membersFINAXhttp://www.blogger.com/profile/07258053144932106830noreply@blogger.comBlogger22125tag:blogger.com,1999:blog-9578646.post-39313928590177158292008-08-05T22:43:00.003+05:302008-08-05T22:55:59.191+05:30Growth at Risk for Inflation Management: Review of Credit and Monetary Policy for the year 2008 – 09<div style="text-align: justify;"><span style="font-family: georgia;">As expected after the release of Macro Economic and Monetary Development survey report, Reserve Bank of India (RBI) had continued to take harsh measures to check demand to control inflation in the country. In its survey report on the eve of release of much awaited first quarter review of annual statement on Credit and Monetary Policy for the year 2008 – 09, RBI had mentioned that an adjustment of overall aggregate demand is needed. </span><br /><br /><span style="font-family: georgia;">The RBI in its survey had painted a gloomy picture for the economy. A survey conducted by the central bank said India’s gross domestic product (GDP) would grow 7.9 per cent this year against the earlier projection of 8.1 per cent. Adding to the grim forecast was the RBI’s assessment that the inflation rate would remain a concern, owing to high global oil and food prices. The government’s finances are also expected to be under strain on the back of high oil and fertilizer subsidies, farm debt waiver and the implementation of the Sixth Pay Commission recommendations. </span><br /><br /><span style="font-family: georgia;">The Centre has budgeted for a fiscal deficit of 2.5 per cent of GDP and global rating agencies have already raised concerns over the government missing the target. The bad news doesn’t end here. The RBI’s Industrial Outlook Survey of private sector manufacturing companies pointed out that fewer respondents expected the overall situation to improve in the July-September quarter. The only good news is a better forecast for export and import growth. But even that came with a rider of a higher trade deficit. Another cause of concern is the outstanding balance on credit cards rose 87 per cent till the end of May to Rs. 26,600 Crore, raising worries for bankers during a period of economic slowdown. </span><br /><br /><span style="font-family: georgia;">Aimed at bringing down inflation from the present around 12 per cent to 7 per cent by March 2009, the central bank increased the Cash Reserve Ratio (CRR) for the fourth time and raised short term lending rate to banks (Repo rate) third time this fiscal. In the background of unrelenting inflationary pressure, RBI had announced stringent measures of hiking mandatory cash reserve of the banks by 25 basis points to 9% (CRR = Cash reserve ratio) and its short term lending rate to them (Repo Rate) by 50 basis points to 9%, to suck up an estimated Rs 20,000 Crore from the market. RBI is still optimistic on inflation when it assures that inflation has almost peaked and is expected to move sideways from hereon. I think that inflation is still to see the peaks unless, crude oil and commodity prices declines. The above way to curtail down the inflation measures can’t be a welcome move for current UPA Government, which has to face general election in 2009 as in short run these measures can’t be more effective. </span><br /><br /><span style="font-family: georgia;">Above move will increase EMI’s on Home, Consumer and other loans with RBI’s hawkish credit policy as I expect at least 0.5% up trend in the banks lending rates. At the same time in its Quarterly Review of Annual Policy Statement RBI wiped out any hopes of interest rate easing in the near future. Increase in CRR and Repo rate would derail India Inc’s programme of borrowing for their industrial expansion and modification, as the cost of borrowing would go up. This will also make difficult to achieve GDP growth target which was earlier forecasted between 8 – 8.5% and revised by RBI in its review to 8%. </span><br /><br /><span style="font-family: georgia;">This move is double whammy for banks, it just means a direct increase in fund cost and liquidity is being squeezed, interest margins, loan growth and credit losses of the banks will be under severe pressure after this policy. RBI in its post policy review, made it amply clear that banks would need to take the profitability pressure in their Income Statement. With the upward movement in CRR and Repo rate, there is a dual negative impact on the banks bottom line. Roughly at new level of CRR bank has to keep additional around Rs 2,60,000 Crore more with RBI, considering an average 9% yield, that mean Rs 23,400 crore is the reduction of profit in a year. The negative impact on banks financial statements doesn’t end here; the bond values are also not taking the key rate changes with optimism. As increase in CRR and Repo rate lead to macro deterioration with bond yields going up and bond value sliding. In the first quarter bonds have managed to hold their bottomlines, but I don’t think they can do the same now. I think that increase in CRR and Repo rate will not only affect banks, their lending’s, but also stock markets, manufacturing, agriculture and realty sectors, besides equally adversely affecting deposits. Reaction of the above can also be seen in the sharp negative movement in sensex on the day when the policy is announced. </span><br /><br /><span style="font-family: georgia;">By the increase in CRR and Repo rates the RBI seems to be telling the banks to increase lending rates. As banks are not paying attention to the RBI’s repeated appeals to moderate lending growth which was a cause of concern for supervisor. Credit growth till July 4, on a year-on-year basis, was almost 26%, compared to 24.6% during the same period last year. This, coupled with lower deposit growth this year, has led to a rising credit deposit ratio. As abnormal growth in credit deposit ratio could mean that banks are over stretching themselves to keep their income intact. </span><br /><br /><span style="font-family: georgia;">A high credit-deposit ratio also indicates that a bank is not paying adequate attention to asset liability management. If many banks are indulging in this, cumulatively it poses a threat to overall systemic stability. </span><br /><br /><span style="font-family: georgia;">One good point about this policy review is the clarity of central bank to move ahead in a single-point agenda of controlling inflation, unlike in the past when inflation control was balanced with economic growth. </span><br /><br /><span style="font-family: georgia;">Besides the pressures from global commodity markets, the economy may also have to bear the burden of higher subsidies, loan waivers and increased salaries of government employees once the Sixth Pay Commission recommendations are implemented. With the downward movement in the GDP growth, Governments commitment for higher subsidies, loan waivers and increased salaries of government employees under Sixth Pay Commission is questionable. </span><br /><span style="font-family: georgia;">When on one hand RBI is going ahead in the direction of Financial Inclusion and emphasizing on credit quality and credit delivery for employment – intensive sectors and on the other hand borrowing cost is increasing with an increase in CRR and Repo rate. I doubt how two issues contrary to each other can be resolved. </span><br /><br /><span style="font-weight: bold; font-family: georgia;">Conclusion: When the capital market is not encouraged, bond values are sliding, banks income statement is having a negative impact, growth numbers are coming down and inflation is not targeted in the short run, then I don’t consider playing with CRR and Repo rate will result into what is targeted out of them. I think this is not the correct thing to do now as it will have its negative affect on growth momentum, which is the only hope in the current economic scenario.</span><br /><br />Dr Gourav Vallabh<br />Professor (Finance)<br />XLRI School of Business and Human Resources<br />Jamshedpur - INDIA<br />gvallabh@xlri.ac.in<br /><br /><br /></div>FINAXhttp://www.blogger.com/profile/07258053144932106830noreply@blogger.com6tag:blogger.com,1999:blog-9578646.post-50997781208168563142008-07-17T05:53:00.003+05:302008-12-12T01:57:40.592+05:30FINAX - Associate Members 2008-09<div>A new year.... A new team.... Finally Team FINAX is back to full strength with the addition of 6 associate members from the Batch of 2008-10.</div><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEigaxhyphenhyphenzQMFB6YynKtVDiXrP04X2ZaIFzaxo9NRsF2HsxzrD_1f0iDGJrvSPwq49t72zYpOGtxJLDtqt9kAKmQzsdbBPAO7J4WkyGcpzB5MJwXSVMPMv-CurQQM99mHRqRnmlkh/s1600-h/FINAX_AssociateMembers_small.jpg"><img id="BLOGGER_PHOTO_ID_5223772648863532978" style="CURSOR: hand" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEigaxhyphenhyphenzQMFB6YynKtVDiXrP04X2ZaIFzaxo9NRsF2HsxzrD_1f0iDGJrvSPwq49t72zYpOGtxJLDtqt9kAKmQzsdbBPAO7J4WkyGcpzB5MJwXSVMPMv-CurQQM99mHRqRnmlkh/s400/FINAX_AssociateMembers_small.jpg" border="0" /></a><br /><div> </div><div>- Team FINAX</div>FINAXhttp://www.blogger.com/profile/07258053144932106830noreply@blogger.com0tag:blogger.com,1999:blog-9578646.post-88703045764830083992008-05-22T08:25:00.005+05:302008-05-22T08:45:06.008+05:30Evolution of the Infrastructure sector<p class="MsoNormal" style="margin-bottom: 12pt; text-align: justify;"><span style="">We keep hearing a lot about dynamics, industry dynamics and how a whole sector has evolved over a period of time. Infrastructure has been one such sector which has seen a paradigm shift in the recent times. The infrastructure that we talk about is not just limited to real estate but encompasses a diverse range of sub-sectors like Telecom, Roads, Airports, Ports, Highways, Oil and gas, Metals, Irrigation and Mining.<br /><br />The government was quick to realize the fact that if the Indian economy is to grow at a pace of 9% annually then the spending in infrastructure should grow at about 12%. To speed up the growth it could not rely on its executing arms, so they thought of a novel way to rope in private participation and came up with BOT (Build-Order-Transfer) model of awarding projects.<br /><br />Earlier the construction space used to be a low risk and a low return business, but with the XI five year plan envisaging a massive investment in the infrastructure arena, the game has changed altogether. The government plans to set up UMPP (Ultra mega power projects), the NHDP program divided into six phases plans to construct more than 53000 kms of road. A large number of private ports are also being developed by various private construction giants; an area which up till now was only dominated by the government agencies.<br /><br />To put in an more structured format the whole new paradigm shift can be attributed to the following four factors<o:p></o:p></span></p> <ol start="1" type="1"><li class="MsoNormal" style="margin-bottom: 12pt; text-align: justify;"><b><span style="">Increase in Number of projects:</span></b><span style=""> The construction companies are being awarded bigger projects than ever before. The average length of the roads used to be between 10-20 kms on a cash contract basis to the constructor. Now the average road length awarded is to the tune of 100 kms on a BOT basis. More than 38000 kms of road construction needs to be awarded according to the NHDP on a BOT basis. Power sector has also seen a lot of new projects coming up in the form of merchant power plants and UMPP's. With the increase in the size of the project there is a requirement for larger working capital and a bigger balance sheet to fund the activities and sustain the business.<o:p></o:p></span></li><li class="MsoNormal" style="margin-bottom: 12pt; text-align: justify;"><b><span style="">Complexity of the projects:</span></b><span style=""> With time, the complexity of the projects have increased. It is difficult to construct and maintain a 100 km highway as compared to a 10 km one. Smaller companies are thereby being forced to enter into contracts with the larger companies in order to qualify the technical requirements for the bidding process.<o:p></o:p></span></li><li class="MsoNormal" style="text-align: justify;"><b><span style="">Trend of commodatization:</span></b><span style="">There has been a constant increase in the prices of two major expenses of these companies<o:p></o:p></span></li></ol> <p class="MsoNormal" style="margin-left: 0.75in; text-align: justify; text-indent: -0.25in;"><span style="font-size: 10pt; font-family: Symbol;">·</span><span style="font-size: 7pt;"> </span><b><span style="">Material cost:</span></b><span style=""> Steel, cement, bitumen and aggregators make up most of the material cost for these companies and the constant increase in the prices of these raw materials is making life difficult for these players and is compressing the margins.<o:p></o:p></span></p> <p class="MsoNormal" style="margin-left: 0.75in; text-align: justify; text-indent: -0.25in;"><span style="font-size: 10pt; font-family: Symbol;">·</span><span style="font-size: 7pt;"> </span><b><span style="">Personnel Cost:</span></b><span style=""> The IT boom and the compensation packages paid by the IT companies cannot be paid by the these companies due to which there is a constant attrition of people and these days it is becoming more and more difficult for these players to get civil engineers into the business.<o:p></o:p></span></p> <ol start="4" type="1"><li class="MsoNormal" style="text-align: justify;"><b><span style="">Own Equipment</span></b><span style="">: More and more companies have now started to own the equipment rather than relying on subcontracting. This has led to a margin expansion for these companies.<o:p></o:p></span></li></ol> <p class="MsoNormal"><span style="">Now the only question that remains to be answered is - will the focus of the coming governments be in alignment with the present government. A difference in focus of the next government can sound a alarm bell ringing for these companies.<br /><br /><span style="color: rgb(0, 0, 153);"> MAY THE GOVERNMENT BE WITH THEM :)</span><br /><br /> - Vivek Jain<br />Student, Business Management (2007-09) <o:p></o:p></span></p>FINAXhttp://www.blogger.com/profile/07258053144932106830noreply@blogger.com0tag:blogger.com,1999:blog-9578646.post-68386664139728877992008-04-30T01:03:00.003+05:302008-12-12T01:57:40.811+05:30Short sales make a come back in India – will it work?<p class="MsoNormal" style="text-align: justify;">India saw the reintroduction of the short sales and corresponding stock borrowing and lending program on 21<sup>st</sup> April 2008 which had so famously been banned in 2001 after the stock market scams. For the uninitiated, short sales refer to selling stock without holding it and buying back later. To complete the settlement the player doing the short can borrow stock and hence the need for stock borrowing and lending program. However, that’s not the only utility of the SLBM (stock lending and borrowing mechanism).</p> <p class="MsoNormal" style="text-align: justify;">I had been following this news for quite some time as the discussion has been happening for some years now. However, when the final picture came out, I was a touch disappointed. It is therefore no surprise that more than a week later, we see that the program hasn’t taken off at all with absolutely no interest in the SLBM (check <a href="http://www.nseindia.com/">www.nseindia.com</a> for daily trades under this category). Much of the focus in the recent past has been on the earnings (as this is not just the quarter end but year end as well), inflation, monetary policy and the derivatives losses that companies are facing (along with the courtroom drama), that’s not the only reason for short selling and SLBM to escape the eye of the big investors.</p> <p class="MsoNormal" style="text-align: justify;">To start with, short selling is allowed only in selected scrips which are also traded in the F&O section. The SLBM is a exchange traded order driven mechanism unlike its OTC counterparts in many parts of the world. Trading is allowed only 1 hour everyday in the morning and there is a fixed settlement cycle of T+7. To add to that margins apply to the institutional investors as well (to bring them to a level playing field with retail investors). The question is when F&O are available, what extra benefit would short sales and SLBM bring especially in the light of complex margin requirements. One of the reasons could be reverse arbitrage where prices in the cash market are at a discount to the futures prices in which one would like to borrow securities, sell in cash market and buy in the futures market. However, this is not possible as SLBM works only for 1 hour in the morning and it cannot be anticipated whether reverse arbitrage opportunities would be present. Also, in these uncertain times, no one would like to commit to a fixed settlement time frame of T+7</p> <p class="MsoNormal" style="text-align: justify;">I also read that banks and insurance companies are not allowed to short as this amounts to speculation. That further takes away a large chunk.</p> <p class="MsoNormal" style="text-align: justify;">So, it is hard to imagine the SLBM taking off in the current shape and though SEBI and exchanges are calling them teething issues similar to the ones faced at the time for compulsory demat trading, I believe more would have to be done to bring the players to the table.</p> <p class="MsoNormal" style="text-align: justify;"><o:p> </o:p></p> <p class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;">- Saurabh Bagrodia<br />Student, Business Management (2007-09)</p><br /><p class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;">The post can also be accessed by clicking at the image <a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEipyVVXr0wj4owmIfe6t4dBiEzJ0P31juPJdAgSA5B1SJmmkCGvlel6RfNeDoeJMsZBwlzI9fSv8tBbzUaRJUHwbyupCSVX48t1fWff3hqwg30LhbfAXdBRaVOK7gXL1Wyll8xW/s1600-h/Saurabh_ShortSales_30Apr08.jpg"><img style="cursor: pointer; width: 35px; height: 56px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEipyVVXr0wj4owmIfe6t4dBiEzJ0P31juPJdAgSA5B1SJmmkCGvlel6RfNeDoeJMsZBwlzI9fSv8tBbzUaRJUHwbyupCSVX48t1fWff3hqwg30LhbfAXdBRaVOK7gXL1Wyll8xW/s400/Saurabh_ShortSales_30Apr08.jpg" alt="" id="BLOGGER_PHOTO_ID_5194753452869714354" border="0" /></a></p><p class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: justify;"><br /></p>FINAXhttp://www.blogger.com/profile/07258053144932106830noreply@blogger.com1tag:blogger.com,1999:blog-9578646.post-57196279508541141162008-04-13T12:55:00.004+05:302008-12-12T01:57:41.088+05:30Reward and Risk!! - The India Volatility Index (VIX)<div style="text-align: justify;">Risk and Reward go hand in hand. One need not be an ‘MBA’ to discover that. However, what exactly is risk? Talking to a friend who’s been actively trading in the equities (and now FnO) markets for the past few years, I realized few people have an answer to what exactly risk is or how to quantify it. After a couple of courses on financial management and a few readings of some sections of Brearly and Myers later, I have a bit more clear answers to the question on risk than I had a year back. However, what if i hadnt joined XLRI or had not known about the greatness of Mr Brearly and Mr Myers?<br /></div><p style="text-align: justify;" class="MsoNormal">If everyone knows returns and risk go hand in hand and there is no point talking about one in isolation with the other, why is it that everyone just talks about the rise and fall of sensex (or any other index depending on the country you are; or all the major global indices if you are an MBA student) without giving heed to how volatile (or risky) the movements have been? I happened to meet an old friend at CCD last evening, for the first time after he has completed MBA from a global Indian Bschool (which now also ranks pretty high in FTs list of global Bschools) and he said the risk is also included in the index as the underlying valuations which form the basis of an index take risk into account. While he’s right in a way, the question is not on the valuation or levels of the index, but on the overall returns vis-à-vis the volatility (risk) of the index itself.</p><div style="text-align: justify;"> </div><p style="text-align: justify;" class="MsoNormal">NSE, the premier Indian stock exchange seems to have opened its eyes to this fact and thus the recent introduction of VIX, India’s own Volatility Index. So, what exactly is this VIX? In the words of NSE, “<span style="font-style: italic;">Volatility Index is a measure of market’s expectation of volatility over the near term</span>”. The Indian markets have not just been amongst the best performing over the last few years in terms of the returns, they have also been pretty open to changes and in the introduction of new products. We have come quite a way since the inception of futures and options less than 10 years ago. The volumes have been on the rise, the mini contracts have been introduced and we have also been listed on other exchanges. So, it came as no surprise when NSE decided to introduce the VIX. </p><div style="text-align: justify;"> </div><p class="MsoNormal" style="margin-bottom: 0.0001pt; line-height: normal; text-align: justify;">I’m staying away from explaining what VIX is, how is it calculated and what is its interpretation as I am in process of understanding the interpretations myself. However, in short, VIX is a measure of the implied volatility in the near term (30 days) calculated using the near and mid month option prices. The calculation methodology is exactly same as used by CBOE. However, the VIX figures in their brief history raise a few questions.<br /></p><p class="MsoNormal" style="margin-bottom: 0.0001pt; line-height: normal; text-align: justify;">The VIX in India fell 16% on 7<sup>th</sup> Apr, went up 21% a couple of days later and again fell by 20% the very next day to rise 10% again a day later. If the VIX keeps behaving the same way, one would have to take a call on the utility of the index or NSE would have to figure out ways to find better methods than just simply copying the CBOE. Also, no wise investor would trade into such a ‘volatile’ ‘volatility’ index. CBOE introduced the VIX in 1993 and it took them 11 years to start trading into the VIX. Are we ready for the index in its current form and calculation methodology? Is the options market liquid enough (especially the mid month contracts) to give a meaningful figure? NSE has also said “<i style="">There is no intention to introduce tradable products based on the India VIX in the immediate future. Once market participa</i><i style="">nts are comfortable, India VIX futures and options contracts can be introduced in the Indian markets, based on regulatory approvals, to enable investors to buy and sell volatility and take positions based on the movement of India VIX</i>”.<br /></p><p class="MsoNormal" style="margin-bottom: 0.0001pt; line-height: normal; text-align: justify;">My take would be India VIX would not require 11 years (may be not even half that number) to start trading. But the options market would have to become more liquid or the methodology redefined (or maybe even both) before we find any meaning in the index.<br /></p><p class="MsoNormal" style="margin-bottom: 0.0001pt; line-height: normal; font-weight: bold; color: rgb(255, 0, 0); text-align: justify;">On more futuristic thoughts, I’d like to believe we would also see the exotic volatility indices, the ones that measure the volatility of the volatility indices :) Happy investing!! <span style=""> </span></p><div style="text-align: justify;"><br /><br />- Saurabh Bagrodia<br />Business Management, 2007-09<br /><br />The post can also be viewed here <a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiK_Jp7G0u48qrEEGJouF3TP26t2S2xQls5y0aC1Bx3ApOLjRQ4hyphenhyphenImv3bKbOsxvmMxGei07v7WW6LmfHMmyZRjMGw7dTkDZH5kr8LT5u2psYKbLUVBcdkBEQtx5vec6ZLEjliI/s1600-h/Saurabh_VIX_13Apr08.jpg"><img style="cursor: pointer; width: 30px; height: 42px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiK_Jp7G0u48qrEEGJouF3TP26t2S2xQls5y0aC1Bx3ApOLjRQ4hyphenhyphenImv3bKbOsxvmMxGei07v7WW6LmfHMmyZRjMGw7dTkDZH5kr8LT5u2psYKbLUVBcdkBEQtx5vec6ZLEjliI/s400/Saurabh_VIX_13Apr08.jpg" alt="" id="BLOGGER_PHOTO_ID_5188636000363724082" border="0" /></a> </div>FINAXhttp://www.blogger.com/profile/07258053144932106830noreply@blogger.com4tag:blogger.com,1999:blog-9578646.post-29289641578921991602008-03-21T00:01:00.008+05:302008-12-12T01:57:41.314+05:30Union Budget 2008-09 - Comments on the agricultural sector<div align="justify"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjQFgPGKbeBRVqb5e8_H9M3LGLqLWTg1YU7Tj4bygmxtPdoS660ODM6CkER096sje1gvpkeLIx6nC91pQ78O-MFfSGnIiLa1yBuGDoFx_j4Tr9eykljP29n5YtHS2bnRMrXky5w/s1600-h/INDIAN+UNION+BUDGET-+Agricultural+Sector.jpg"></a><strong>INDIAN UNION BUDGET (2008-09) (PART-01)</strong><br /></div><div align="justify"></div><div align="justify">We start with our analysis of the Union Budget by doing the sectoral analysis of the most important sector in Indian context – Agriculture. Some may claim that agriculture has lost its importance over the years but the fact remains that more than 60% of the Indian population is still dependant on agriculture either directly or indirectly. With the focus on SELF RELIANCE & SUSTAINABILITY the Budget essentially considers the following problems & thereby increases allocations in the following-<br /></div><div align="justify"><strong></strong></div><div align="justify"><strong>Problems</strong><br />Inefficient support systems<br />Low levels of technology & infrastructure<br />Marketing and warehousing bottlenecks<br />Low capital formation<br />Degradation of land and water resources<br /><br /><strong>Increased Allocation For<br /></strong>Food storage and warehousing<br />Soil and water conservation<br />Agriculture research and education<br />Irrigation and flood control<br /><br />The situation <span class="blsp-spelling-error" id="SPELLING_ERROR_0">isn</span>’t too promising as average yield per hectare in India (1.8 tonnes) is far lower than that of China (4.3 tonnes) and Japan (4.8 tonnes), surface water irrigation efficiency ranges b/w 25-40% in India; b/w 40-45% in Malaysia; and 50-60% in Japan. In the past three decades of Green Revolution, area under agriculture increased at 0.4% as compared to 3% increase in agricultural production. There have been stagnated yields and wide price fluctuations. There happens to be a strong relationship between per hectare yields of food grains and rural development. </div><div align="justify"><br />ACTUAL PRODUCTION RELATIVE TO TARGETS (MISSING THE MARK)<br /><strong>CROP - AVERAGE (%)</strong><br />Rice - 94.7<br />Wheat - 91.4<br />Coarse cereals - 94.6<br />Pulses - 87.7<br /><span class="blsp-spelling-error" id="SPELLING_ERROR_1">Foodgrains</span> - 93<br /><span class="blsp-spelling-error" id="SPELLING_ERROR_2">Oilseeds</span> - 85.3<br />Sugarcane - 98.7<br />Cotton - 93.7<br /><br />The budget proposals relevant for the agricultural sector:<br />* National Commission on Agriculture has recommended market facilities for farmers within a radius of 5 km i.e. one market for every 80 sq km. Hence, density of markets/<span class="blsp-spelling-error" id="SPELLING_ERROR_3">mandis</span> needs to increase nearly five and half times<br />* Trading platforms like <span class="blsp-spelling-error" id="SPELLING_ERROR_4">NCDEX</span>, <span class="blsp-spelling-error" id="SPELLING_ERROR_5">MCX</span> needs further boost<br />* Cold storage units exist only in 9% of the regulated markets as of now </div><div align="justify"><br />So, WHAT WOULD THE <span class="blsp-spelling-corrected" id="SPELLING_ERROR_6">GOVERNMENT</span> DO ABOUT THE ISSUES? Would it be only limited to policies, allocations, huge sums of money and no transparency??? Or is the condition going to improve. Would Indian agriculture really become SELF RELIANT & SUSTAINABLE??<br />These are some of the issues which need to be addressed, but at this point they don’t seem to be getting the attention they deserve. Probably one year from now (by the time of next budget) we might be in a situation to analyze these issues in greater depth and comment on-<br /><em><strong><span style="color:#000099;"></span></strong></em></div><div align="justify"><em><strong><span style="color:#000099;">“Whether promises would remain promises or this time the government would really make a difference.”</span></strong></em> </div><div align="left"></div><div align="left"><em><span style="font-size:85%;">Alternately, double click on the picture to see the article</span></em><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgtfeRKPGOXE_NjEdDf5_vHXAmf7i2AQLtuwVOJ4QumfsZxoV15CVAChT3Tqa1SgS38JS_43q2-R8apfxIIiz4V7kHLYxmt-Fke18WYnC8MWaN6XRq-YE82pDiy9hhrJ75LU4pQ/s1600-h/INDIAN+UNION+BUDGET-+Agricultural+Sector.jpg"><img id="BLOGGER_PHOTO_ID_5180023785352868082" style="WIDTH: 20px; CURSOR: hand; HEIGHT: 31px" height="102" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgtfeRKPGOXE_NjEdDf5_vHXAmf7i2AQLtuwVOJ4QumfsZxoV15CVAChT3Tqa1SgS38JS_43q2-R8apfxIIiz4V7kHLYxmt-Fke18WYnC8MWaN6XRq-YE82pDiy9hhrJ75LU4pQ/s400/INDIAN+UNION+BUDGET-+Agricultural+Sector.jpg" width="93" border="0" /></a><br /><br /><em>For Team <span class="blsp-spelling-error" id="SPELLING_ERROR_7">FINAX</span></em><br /><span class="blsp-spelling-error" id="SPELLING_ERROR_8">Ashutosh</span> <span class="blsp-spelling-error" id="SPELLING_ERROR_9">Taparia</span> </div>FINAXhttp://www.blogger.com/profile/07258053144932106830noreply@blogger.com7tag:blogger.com,1999:blog-9578646.post-53705120234243871002008-03-19T16:02:00.007+05:302008-12-12T01:57:41.588+05:30New Members - 2008-09<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhIVOOBR1G-HtqVdKHbEoYAkwleEDWWOh_JfqrdNiPI6d_FY6kdlSxHyjO0pVycmF-fCc0I0-ZEBBuiTX-8A-F60NJK0S8HzN8-txnzyL8gPCGc9mwaeoqUhTHW9CsmBT1f6SmC/s1600-h/FINAX_NewTeam.jpg"><img id="BLOGGER_PHOTO_ID_5179399506026961538" style="DISPLAY: block; MARGIN: 0px auto 10px; CURSOR: hand; TEXT-ALIGN: center" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhIVOOBR1G-HtqVdKHbEoYAkwleEDWWOh_JfqrdNiPI6d_FY6kdlSxHyjO0pVycmF-fCc0I0-ZEBBuiTX-8A-F60NJK0S8HzN8-txnzyL8gPCGc9mwaeoqUhTHW9CsmBT1f6SmC/s320/FINAX_NewTeam.jpg" border="0" /></a><br /><div>As promised a few days back, the new senior executive members of the committee have been elected and they have assumed office. The committee is by no means complete yet as we await the other executive members who would be chosen from the batch of 2008-2010.</div><br /><p><em>Please click on the image to see a larger view.</em></p>FINAXhttp://www.blogger.com/profile/07258053144932106830noreply@blogger.com0tag:blogger.com,1999:blog-9578646.post-53548143927759527932008-03-09T12:32:00.000+05:302008-03-09T12:38:36.460+05:30XLRI takes a big leap with huge offers<div align="justify">XLRI Jamshedpur’s final placements for the batch of 2008 drew to a close with 298 offers being made to 180 students. A total of 12 international offers were made at an average of $90,000, with the highest offer coming in at $100,000. Domestic offers scaled a high of Rs 28 lakh while the average domestic offer stood at Rs 14.75 lakh. First-time recruiters on campus included the likes of JM Financial, Barclays, Kotak, 8 Capital Hedge Fund, Centrum and Aptivaa among others. 8 Capital Hedge Fund recruited exclusively from XLRI. As expected, finance ruled the roost with around 31% of the offers made in this domain by global and domestic biggies like Lehman Brothers, Goldman Sachs, JP Morgan Chase, JM Financial, Edelweiss, HSBC, Citibank, Barclays, Deutsche Equities, Standard Chartered, 8 Capital Hedge Fund, ICICI Bank, Icra, Kotak and Centrum among others. “Some even chose to offer treasury roles at their offices in London, Toronto, and Bahrain,” said XLRI placement committee chairman Uday Damodaran. </div><div align="justify"> </div><div align="justify">Consulting roles too, were offered in plenty by names like McKinsey, Accenture, The Hay Group, Ernst & Young, KPMG, Mercer, PWC, Hewitt Associates, Deloitte and Aptivaa. Around 21% of the students accepted these offers which were spread across verticals like strategy, banking and financial services, human resources, risk management, among others. Global FMCG majors too lined up for placements with companies such as Procter and Gamble, Hindustan Unilever, Johnson and Johnson, Colgate Palmolive, Nestle, Cadbury, Asian Paints, Reckitt Benckiser, Marico, Glaxo Smithkline and ITC offering positions to 23% of the batch in sales, branding and marketing (with international locations). Notably, global sales and strategy were offered as lateral entry positions by such IT majors as Infosys and HCL Technologies. General management roles also proved popular with names like TAS, Al Ghanim, The Aditya Birla Group, The Hinduja Group, Essar and The Murugappa Group, offering both national and international roles. Approximately 14% of the batch snapped up offers in this arena. Another 11% were made lucrative offers by technology sector companies like Microsoft, HCL, Infosys, Cognizant and Wipro, who offered lateral roles for students with previous experience in handling information services. </div><div align="justify"> </div><div align="justify">Source: Placement Committee @ XLRI</div><div align="justify"> </div>FINAXhttp://www.blogger.com/profile/07258053144932106830noreply@blogger.com0tag:blogger.com,1999:blog-9578646.post-78312833416423455452008-03-09T12:09:00.001+05:302008-03-09T20:33:26.999+05:30Revival of the blog!!!<span style="font-family:georgia;">Finance Association @ XLRI (FINAX) started this blog a few years back to express the views of finance enthusiasts @ XLRI on the various financial events happening around the world. However, somewhere along the line, it got forgotten due to priorities elsewhere.<br /><br />The new team for the year 2008-09 is about to take over. The names and pics would be posted soon. However, the revival of the blog has started.<br /><br />The blog would serve as a platform to showcase the original works of the students of XLRI, their views on the happenings across the globe, update on events etc. These are just for a start, basically everything under the sun (or moon or sky) remotely related to the area of Finance would be eligible for a posting here.<br />Keep visiting the place :)<br /><br />Saurabh Bagrodia<br />Secretary<br />FINAX</span>FINAXhttp://www.blogger.com/profile/07258053144932106830noreply@blogger.com0tag:blogger.com,1999:blog-9578646.post-4471420851615538432008-03-09T01:40:00.002+05:302008-12-12T01:57:41.923+05:30XLRI Finance Seminar 2008<span style="font-size:85%;"><img id="BLOGGER_PHOTO_ID_5175624745169853026" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 251px; CURSOR: hand; HEIGHT: 217px" height="173" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiJeX0n068f2s5Zk56Vz8pGfFRtYlZTZL8A_kaDMZrmw6YzaJAD9mmxsxCNii9rwrGVnCZF4H5DUrq5xjGsqhZAm9iUlEq41Kgr7QZ5ecR484lj21aw0Sx-_BMrfZg52aFTAdHB/s320/IMG_1067.jpg" width="264" border="0" /></span><span style="font-size:85%;">XLRI Jamshedpur, in association with The Institute of Cost and Works Accountants of India organized the ‘XLRI Finance Seminar 08’. Conducted and arranged by FINAX, the Finance association @ XLRI, the seminar provided an insight to management students about different aspects of Risk Management, a topic of utmost relevance in the present day business scenario.<br />Various dignitaries came together on a common stage and enriched the discussions with their vast experience and vision. The dignitaries included Dr. A.K. Sarkar , Director (Finance) - Central Coalfields Limited, Mr. N. K. Mishra, Group Head (Mergers & Acquisitions), Tata Steel, Mr. Robin Roy, Associate Director- PriceWaterhouse Coopers, Mr. C.E.S.Azariah, CEO-FIMMDA, Mr. D Ravishankar, Ex-Director, Investment & Risk Management-CRISIL, Dr Venkatachalam, Ex Director-Bangalore Stock Exchange. Delegates from Tata Steel, ICWAI and local banks in Jamshedpur and students from ICWAI also attended the seminar. <a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjxbCH4ecWDLE5xyTPAawT6tY8kek1268QZ1WGPRQ118rWNDD27UTN2yV0BAyWgv5lMEpmJmghU0aWK4bhTPGtqN8C9E_V0u0W8xLKw-XFtEhL6Up3QtkOFuWwu-KlK4s_ooChx/s1600-h/IMG_1070.jpg"><img id="BLOGGER_PHOTO_ID_5175626188278864498" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 306px; CURSOR: hand; HEIGHT: 240px" height="239" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjxbCH4ecWDLE5xyTPAawT6tY8kek1268QZ1WGPRQ118rWNDD27UTN2yV0BAyWgv5lMEpmJmghU0aWK4bhTPGtqN8C9E_V0u0W8xLKw-XFtEhL6Up3QtkOFuWwu-KlK4s_ooChx/s320/IMG_1070.jpg" width="258" border="0" /></a></span><br /><span style="font-size:85%;">“This seminar exposed the management students and other participants present, about the various specialized activities related to risk management,” said Dr. Gourav Vallabh, an eminent XLRI faculty from the finance area.<br />The inaugural address was given by the guest of honour Mr. Chandra Wadhwa, President ICWAI while Dr. A.K Sarkar, the chief guest for the seminar delivered the keynote address.<br /></span><br /><span style="font-size:85%;">Dr. D Ravishankar, enlightened the gathering on the topic of Risk Management in Banking Industry. He explained the various types of risks faced in banking industry and then also spoke about Basel II and the risk management architecture and framework.<br />A session on Interest and Foreign Exchange Risks and was taken by Mr. C.E.S.Azariah. He explained the 10 year G-Sec yield movements and also went on to demonstrate the change in the behavior of banks with the change in interest rate trends.<br />A panel discussion on Mergers and acquisitions (M&A) was one of the key events of the seminar. The panelists included Mr N.K. Mishra, Dr Venkatachalam and Mr Venkataraman with Dr Gourav Vallabh acting as the moderator. The panelists discussed on how corporate restructuring strategies are an important aspect of the corporate finance world and can dictate the fortunes of the companies involved for years to come. As industry structure moves towards more consolidation it becomes imperative for upcoming managers in India to understand the process of due deliberation and its importance in working out a deal.<br />Mr. Robin Roy, Associate Director, PriceWaterhouse Coopers, in his session on ‘Enterprise Wide Risk Management’ discussed about enterprise risk systems and their relevance in today’s global economy.<br />The participation level and discussion with students and faculty alike at the seminar re-established the strength and expertise of XLRI in the area of finance. The seminar was sponsored by ICWAI and co-sponsored by Tata Steel, Larsen &Toubro Ltd., Taxmann Publications and Karvy Stock Broking Ltd. </span>FINAXhttp://www.blogger.com/profile/07258053144932106830noreply@blogger.com32tag:blogger.com,1999:blog-9578646.post-1154863864322596562006-08-06T17:01:00.000+05:302006-08-06T17:07:39.980+05:30The Real Estate craze<a href="http://finax.blogspot.com/">The Real Estate craze</a><br /><br /><br />The Real Estate market in India is currently experiencing an unprecedented boom. Rates in newly developed and hip places (Gurgaon, Navi Mumbai, Bangalore.....) have increased by leaps and bounds. And also in not so hip places where the increase is not so much but still quite high by any reason. I am often surprised whenever I ask anyone casually about the current real estate price in Gurgaon (that’s the only place I am able to remain updated about) because each time the increase in like mind-boggling (and I am not exaggerating). There are many reasons given for this continuous rise in rates. But............<br /><br />I am currently going through a book called A Random Walk down Wall Street . The book is quite interesting as the author (a real big shot in international finance scene) discusses his point of view about stock markets..<br /><br />Anyway one thing which I was surprised to see there was the resemblance (although not to that extent) of this rise with the infamous Florida Real Estate Craze.<br /><br />The points used to justify the craze that time were mostly centered on the super rate at which US was growing, it being the land of opportunity and the next biggest economy. And one big support was the easy interest rate regime which they were following at that time. There were statements flowing that this market don't has downside risk.....what happened ultimately was one of the biggest crash in WORLD (ya world) history.<br /><br />Although the probability of such a thing happening in India is quite remote due to the sane presence of RBI (one of the few institutions working)....but the sagely advices of our honorable Finance minister about having low bank rates do give me jitters sometimes.<br /><br />Mukul Garg<br />XLRI (Business Management 2005-07)FINAXhttp://www.blogger.com/profile/07258053144932106830noreply@blogger.com3tag:blogger.com,1999:blog-9578646.post-1151588104714855132006-06-29T19:05:00.000+05:302006-06-29T19:07:32.593+05:30Market Blues hit Regulators<a href="http://www.finax.blogspot.com/">The Finax Ledger</a><br /><br /><br />There is a thin line of difference between being market regulator and being party to the market mayhem. Indian authorities seem to forget that time and again. Mr. P.Chidambaram crossed all limits on the Black Monday of May ’06, offering advice to retail investors to stay invested when many had lost their shirts. At one time during the day, many in Mumbai’s financial sector were left wondering about the role of regulators, as they saw Chidambaram seeking to talk up the market. Next day there was an editorial in ET (Mumbai edition) criticising PC for the same. <br /><br />“…..So overwhelming was the alacrity shown and the scale of the ministry’s involvement that some may have wondered if this was the same minister who had in the past shrugged off stock market blues.” <br /><br /> 2 days after that PC tried to clarify his position by writing a letter to editor (which was published in ET) saying that he only wanted investors to be cautious and tried to warn retail investors to look into the fundamentals. I thought the sense has prevailed and we are back to normal. <br />Exactly 1 month after the black Monday I saw Manmohan Singh’s statement on CNBC – Awaaz that after a one month long free fall in the market now the P/E ratios have returned to OK levels. It was followed by a statement by Mr. Damodaran in a seminar that now Indian FI and MFs should stand against FIIs as a counterforce. Nowhere in the world would FM and PM indulge in such remarks about the markets. Nowhere in the developed financial markets will regulatory authorities show signs of irritation and exasperation when stock prices tumble. And we read in innumerable articles that Indian capital markets and regulatory systems are well-developed (often quoted as a strong plus point while comparing India with other emerging markets). It seems market blues have hit regulators.<br /><br />Ravikiran Surana<br />BM 2005-07FINAXhttp://www.blogger.com/profile/07258053144932106830noreply@blogger.com0tag:blogger.com,1999:blog-9578646.post-1122151930811913252005-07-24T02:20:00.000+05:302005-08-05T17:45:24.433+05:30Yuan AppreciationYuan Change In one of the most anticipated changes of a currency regime in years, China on Thursday said it would end a decade-old fixed exchange-rate peg between its yuan and the U.S. dollar and target a basket of world currencies instead. China's mini-revaluation of its yuan currency, by itself, is unlikely to cut Beijing's trade surpluses or correct global economic imbalances. Even so, policy-makers and economists reckon it's a start.The shift comes three months after the Group of Seven economic powers called for "vigorous" action to correct world economic imbalances -- code for the ballooning U.S. current account deficit of some 6 percent of U.S. national income.The move, which will involve a small initial rise against the dollar of 2.1 percent, is far smaller than calls in the United States for a revaluation of 20 percent or more.But fingers were crossed that the more flexible basket system may mean incremental yuan appreciation will become easier to engineer, while avoiding any pounding of China's economy, now a critical engine of the global economy. Shortly after China's move, Malaysia also said it would drop a seven-year fixed exchange rate peg to the dollar. Speculation that South Korea, Indonesia and others allow their currencies to rise will help bring the dollar lower against Asia currencies in general, economists say.China is the third-largest trading partner of the United States and its sixth-biggest export market. But while it accounts for 12 percent of U.S. imports, Pacific Rim countries as a whole are the origin of a full third of U.S. imports.The 2.1 percent initial yuan rise will barely scratch China's manufacturing competitiveness. Average manufacturing wages in China, for example, are about $1 a day compared with $16 an hour in the United States. And more than 70 percent of Chinese exports to the U.S. are made up from imports from other Asian countries.THE ONLY POSITIVE ECONOMIC IMPACT OF THE INITIAL MOVE MAY BE TO DEFUSE INTERNATIONAL TRADE TENSIONS.That would be a relief to many investors, corporate planners and economists who feared a tit-for-tat trade war with the United States over the issue.<br /><br />(Source : Reuters website)<br /><br />Contribution by:<br />Akshay Sureka<br />IR 2005-07FINAXhttp://www.blogger.com/profile/07258053144932106830noreply@blogger.com4tag:blogger.com,1999:blog-9578646.post-1110542280014216682005-03-11T17:06:00.000+05:302005-03-11T17:28:00.016+05:30Finance Steals Show<p class="MsoNormal"><span style="font-family: Verdana;">March being the placement season at XLRI Jamshedpur, the first week of the month saw hectic activity in preparation for the day of reckoning of MBA grads. The various streams of MBA at XLRI viz. Marketing, HR, Finance, Systems and Operations saw their respective students building up hopes of their stream garnering most and best jobs for the institute.<o:p></o:p></span></p> <p class="MsoNormal"><span style="font-family: Verdana;">The process ran smoothly and the outcome was not surprising. The final statistics brought smiles to the faces of the finance enthusiasts at XLRI, both in the senior and junior batch. An excerpt from the Press Release of the Placement Committee would show why.<o:p></o:p></span></p> <p class="MsoNormal"><b style=""><i style=""><span style="font-family: Verdana;">“The biggest recruiters this year were GE and IBM, which picked up 11 students each. Banks / Financial Institutions and IT / ITES sectors were tied at the top with 36 accepted offers each. Banks, Financial Institutions and the Insurance Sector accounted for 31% of the batch, reaffirming the strong Finance base that XLRI has created over the years.”<o:p></o:p></span></i></b></p> <p class="MsoNormal"><span style="font-family: Verdana;">The proof of the pudding is in the eating—said a wise man. This is the first time in recent years that finance has taken the top spot in placements at the campus and the trend is only likely to gain strength.<o:p></o:p></span></p> <p class="MsoNormal"><span style="font-family: Verdana;">The most notable fillip that the finance stream has received in XLRI is the increasing strength of good faculty in this area—faculty that excels not only it’s fundamentals and industry experience but also in stirring first year students to cultivate a deep interest in finance.<o:p></o:p></span></p> <p class="MsoNormal"><span style="font-family: Verdana;">And finally, the involvement of students in the activities and issues handled by Finax has been tremendously productive, giving a broad base and high utility to these activities.<br /></span></p> <p class="MsoNormal">On behalf of FINAX<br />Abhishek Tripathi<br /><span style="font-family: Verdana;"><o:p></o:p></span></p>FINAXhttp://www.blogger.com/profile/07258053144932106830noreply@blogger.com0tag:blogger.com,1999:blog-9578646.post-1109391303728521502005-02-26T09:37:00.000+05:302005-02-26T09:45:03.736+05:30February FinOpinion<div align="justify"><span style="font-family:verdana;"><strong><u>India’s energy security and geo-political fallouts</u></strong></span></div><div align="justify"><u><span style="font-family:Verdana;">(non-technical article)</span></u></div><div align="justify"><span style="font-family:verdana;"></span> </div><div align="justify"><span style="font-family:verdana;">Abstract: Global realities of 21st century have added newer dimensions to the definition of national security and increasingly energy security is gaining greater importance over the other components of national security. India being at the forefront of the emerging economies is increasingly feeling the importance of having a long term strategic energy security policy to sustain the economic growth through uninterrupted supply of essential energy resources. This has led to a radical change in its policy towards investing in foreign energy assets (mainly oil fields and natural gas fields) and gaining foot hold in regions which are diverse in terms of culture, religion and political affiliation. This article aims to explore the reason for this new shift in India’s energy policy and geo-political games that are being played out by different players.<br />India’s total oil bill for the year 2003-04 is $20.3 billion dollar that’s an increase from $17.6 billion dollar that we forked out last year. Now there are two factors that have contributed to this increase in oil bill. One most obvious reason is the increased International Oil Price. However the reason which is perhaps more fundamental and long term in nature is the growth that Indian Economy is experiencing. With an annual average growth rate of 7-8% it is obvious that India’s energy demand is also going to follow her economy closely. Now the big question is do we have a sustainable long term strategy in place which is going to ensure us that there will be no shortage of this essential body fluid of economy i.e. Oil in coming days, so that our economy can experience a continuous growth for the next few decades without really bothering about energy being one of the constraints? The answer is a big NO. However if we put the question in this way that “are their any initiatives that are being taken by India in recent days to address this issue”-the answer will be a big YES. I will come back to those initiatives later but before that let’s try to answer one question. The question is why we are all of a sudden so desperate to secure our energy supply? There are quite a few reasons that can be lined up.<br />With demand for fuel growing rapidly in China, India and other developing nations, the world is entering a period of runaway growth in demand for fossil fuels, at the same time; growth in the supply of the most desired fossil fuel - oil - is slowing. No major oil fields have been discovered in nearly three decades. And despite record revenues, oil companies are barely increasing their production capacity. As a result the price of oil is going to be primarily northward moving at least for most of our life time with occasional short term downward movement for seasonal adjustments. Secondly, the world for long has been too dependent on Middle East as the prime source of oil. The nation's intransigent addiction to oil and gas has entangled us in the long-contentious Middle East, whose oil field countries continue to try to dominate, at great cost in lives and fortunes. The over dependence on one particular region for such a precious commodity is fundamentally unstable and giving rise to speculative premium to oil price. So whenever a single bullet is fired in Middle East oil price has a chance to move upwards. This whole situation is really making the life of countries like India, China and Brazil extremely difficult. Because on one hand these countries are experiencing explosive growth rate which makes the demand for oil higher and higher and on the other hand being a net importer of oil, their net oil bill is also increasing thereby becoming a major resource drainer which could otherwise be saved and used for other purposes. So what is the next best thing to do? Well off course diversify and hedge yourself against uncertainty and major economies around the world are right now doing just that only by investing heavily on alternative sources of oil spread throughout the world namely Sudan, Libya, Russia etc. And India is also participating in that diversification exercise through the state owned oil majors, mainly ONGC Videsh. In the last two years this particular arm of ONGC is actively bidding for the rights of foreign oil and natural gas wells and has been quite successful in getting the development and exploration rights of oil fields in Libya, Sudan and Russia. Now the entire bidding exercise is more of geo political gamesmanship rather than pure money based decision making. So the countries which are involved here are redefining their existing relationships to break grounds. For example US lifted the sanction on Libya and it’s not a surprise that very soon majority of the development rights of Libyan oil fields went to US Companies. On the other side Russia after the Yukos fiasco and US adverse reaction to that is not too keen on giving rights to US giants and is looking more favorably to Indian and Chinese giants even at an economic cost. India is also clubbing bidding offer with better market access and political affiliations. It is also planning to team up with one time enemy China to bid jointly for oil wells. In this great battle of energy security the battle lines have just been drawn. Past animosities are becoming new found friendships. Newer world orders are emerging and India being an active player in this is gaining quite a lot of traction and attention in the entire exercise. As the events are unfolding we are witnessing more of newer strategies which has long term implication for our country not only in securing energy but also in defining relationships with friends. Let hope we emerge as a winner here.<br /><br /><br />Ref: </span><a href="http://www.ongcindia.com/"><span style="font-family:verdana;">http://www.ongcindia.com/</span></a><br /><span style="font-family:verdana;"> </span><a href="http://economictimes.indiatimes.com/articleshow/998680.cms"><span style="font-family:verdana;">http://economictimes.indiatimes.com/articleshow/998680.cms</span></a><span style="font-family:verdana;"> </span><a href="http://www.list.org/~mdoyle/issues.html"><span style="font-family:verdana;">http://www.list.org/~mdoyle/issues.html</span></a></div><div align="justify"> </div><div align="justify">Prithviraj Deb</div><div align="justify">Business Management (2004-06)</div>FINAXhttp://www.blogger.com/profile/07258053144932106830noreply@blogger.com0tag:blogger.com,1999:blog-9578646.post-1107669095455293132005-02-06T11:21:00.000+05:302005-02-06T11:21:35.456+05:30FINAX organizes Talk on 'Careers in Finance'<br /><a href='http://photos1.blogger.com/img/142/3442/640/Toronto1.jpg'><img border='0' style='border:1px solid #006600; margin:2px' src='http://photos1.blogger.com/img/142/3442/400/Toronto1.jpg'></a><br /><span style='font-size: 8pt;'>Posted by FINAX</span>FINAXhttp://www.blogger.com/profile/07258053144932106830noreply@blogger.com0tag:blogger.com,1999:blog-9578646.post-1106923698528348802005-01-28T20:13:00.001+05:302005-01-28T21:51:29.690+05:30China: A Startling Insight<div align="justify"><strong><span style="font-family:verdana;color:#000000;">Business World: Jan 31, 2005</span></strong></div><div align="justify"><strong><span style="font-family:verdana;color:#000000;">In Depth-China's New Left </span></strong>
<br /><strong><span style="font-family:Verdana;"></span>
<br /></strong><span style="font-family:verdana;color:#000066;">The magazine has come out with a new insight into the invisible effects of China's scramble to economic powerhouse status. And the simmering in the cauldron is beginning to get critical.</span>
<br /><em>
<br /></em><span style="font-family:verdana;color:#000000;">This is a country "caught between the two extremes of misguided socialism and crony capitalism, and suffering from the worst of both systems," says Wang Hui, a professor of literature at Beijing's Tsinghua University, whose passionate denouncements of China's market reforms are partly credited with energising China's New Left intellectuals. "We have to find an alternate way. This is the great mission of our generation."</span>
<br /></em><span style="font-family:verdana;color:#000000;">Questions like this have led to more than 50,000 protests rocking China in the past year, for causes as diverse as cuts in social services, unpaid pensions, and
<br />illegal demolitions. Emboldened by such tumult, Wang and other Chinese intellectuals in the New Left have stepped up their criticism of China's market reforms. Their message is simple:
<br />China's failed 20th century experiment with communism cannot be undone in the 21st century by embracing 19th century capitalism.</span>
<br />
<br /><span style="font-family:verdana;color:#000066;">And the startling reality about China's economic fundamentals and boom of exports.</span>
<br /><em>
<br /></em><span style="font-family:verdana;color:#000000;">"(This is a government) more focused on helping export manufacturers than agriculture and rural welfare," which affect far more people, says Cui Zhi Yuan of Tsinghua University. "The largest expenditure item in (China's) budget is not education or healthcare or even the military, but tax rebates to exporters. So essentially, the government is returning money to (domestic and multinational) exporters while cutting welfare programmes."
<br />Such incentives have swelled China's exports to 30 per cent of its GDP, as opposed to about 15 per cent in the US and Japan. With many domestic manufacturers essentially being suppliers to exporters, some economists estimate that exports account for almost 60 per cent of China's GDP. That has brought wealth to about 300 million of China's 1.2 billion people, but it has also meant the Chinese government is less concerned with raising domestic consumption and domestic wages of the other 900 million, Cui says.</span>
<br /></em>
<br /><span style="font-family:verdana;color:#000000;"><strong>To know more, grab a copy of this Business World issue (31st Jan).</strong></span>
<br /><span style="font-family:verdana;color:#000000;"></span>
<br /><span style="font-family:verdana;color:#000000;">On behalf of FINAX</span>
<br /><span style="font-family:verdana;color:#000000;">Abhishek Tripathi</span> </div>FINAXhttp://www.blogger.com/profile/07258053144932106830noreply@blogger.com1tag:blogger.com,1999:blog-9578646.post-1106675839167936952005-01-25T23:13:00.000+05:302005-01-28T21:50:22.103+05:30Managing the banker's bank: Treasury <span style="font-family:verdana;">Bankers in emerging markets often view treasury activities that are common in the developed world—securities trading or the development of derivatives contracts, for example—as casino finance. As a result, these banks have lagged behind developed-market competitors in managing risk and creating profitable treasury units.</span>
<br /><span style="font-family:verdana;"></span>
<br /><span style="font-family:verdana;">This thought outlines the following article that talks about the risk aversion of banks in emerging market countries and it attempts to give a dose of advice and commentary on this issue. You can not help but feel that it was high time our banks did something about this i.e. if they are already not doing it. <a href="http://web.ask.co.uk/redir?bpg=http%3a%2f%2fweb.ask.co.uk%2fweb%3fq%3dMcKinsey%2bQuarterly%26o%3d38302770%26page%3d1&q=McKinsey+Quarterly&u=http%3a%2f%2ftm.ask.co.uk%2fr%3ft%3dan%26s%3da%26uid%3d2ca8c9386ca8c9386%26sid%3d3ca8c9386ca8c9386%26qid%3dCA9FF13985DC044DB45533EB171C6996%26io%3d0%26sv%3dz6f065bac%26o%3d38302770%26ask%3dMcKinsey%2bQuarterly%26uip%3dca8c9386%26en%3dte%26eo%3d-100%26pt%3dThe%2bMcKinsey%2bQuarterly%253a%2bThe%2bOnline%2bJournal%2bof%2bMcKinsey%2b%2526%2bCo.%26ac%3d24%26qs%3d2004%26pg%3d1%26ep%3d1%26te_par%3d102%26te_id%3d%26u%3dhttp%3a%2f%2fwww.mckinseyquarterly.com%2f&s=a&bu=http%3a%2f%2fwww.mckinseyquarterly.com%2f&qte=0&o=38302770&abs=Finance+2.0%3a+An+interview+with+Microsoft" complete="1" cat="wp&purl=" tit="'The+McKinsey+Quarterly%3a+The+Online+Journal+of+McKinsey+%26+Co.&bin="><span style="color:#336666;">Read the article.</span></a> <strong>You will need free registration to access complete article.</strong></span>
<br /><span style="font-family:verdana;"></span>
<br /><span style="font-family:verdana;">On behalf of FINAX</span>
<br /><span style="font-family:verdana;">Abhishek Tripathi</span>
<br />FINAXhttp://www.blogger.com/profile/07258053144932106830noreply@blogger.com0tag:blogger.com,1999:blog-9578646.post-1105902928414132222005-01-17T01:40:00.000+05:302005-01-17T02:25:07.776+05:30FC: In this edition<span style="font-family:verdana;">The Finance Club is an informal discussion forum started by FINAX. The objective is to get the students interested in finance to asemble and share their knowledge, opinions and curiosities with each other. The idea of letting students learn by helping each other has caught on.</span>
<br /><span style="font-family:verdana;">The regular meets of Fin Club have been a constant source of invigoration for the sharp minds of XLRI and many a greenhorn has 'made his bones' there.</span>
<br /><span style="font-family:Verdana;"></span>
<br /><span style="font-family:Verdana;">For the latest edition, the club had chosen the topic 'Mergers & Acquisitions' and the seniors helped the juniors thrash out the fine points involved viz. mergers, acquisitions, amalgamation, golden parachute, hostile takeover, swap ratio, Co-insurance etc.</span>
<br /><span style="font-family:Verdana;"></span>
<br /><span style="font-family:Verdana;">On behalf of FINAX</span>
<br /><span style="font-family:Verdana;">Abhishek Tripathi</span>
<br />FINAXhttp://www.blogger.com/profile/07258053144932106830noreply@blogger.com0tag:blogger.com,1999:blog-9578646.post-1104853831310824142005-01-04T21:15:00.000+05:302005-01-17T02:32:22.846+05:30The Great Asian DebateThe Great Asian Debate
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<br />India and China have of late been the number one storm raisers, what with the world 's economic intelligentsia worrying itself about the difference of their approaches to growth. But the difference is only as remarkable as is the speculation about which approach will succeed in the long run. Theories are flying by like locusts in action and pages after pages are being churned on the issue. So what's the need of another essay?
<br />A very valid question, but the answer to which can only be found in this piece of clear-cut analysis. Sample this:-
<br />"China and India are both developing quickly but with vastly different approaches. China's growth has been driven by manufacturing, and the country's planned economy has tapped into domestic savings and foreign investment to build an impressive infrastructure. India, by contrast, owes much of its progress to private businesses. Without much assistance from the government, they serve companies in the West's knowledge-based industries, such as software, IT services, and pharmaceuticals. The difference between the two models prompts debate about whether one country has a better approach to economic development than the other and which will eventually emerge as the stronger"
<br />To find out more about the likelihood of India drubbing China in the long run, take a scoopful of time out from your schedule and <a href="http://www.mckinseyquarterly.com/article_abstract.aspx?ar=1487&L2=19&L3=67&srid=110&gp=0"><span style="color:#336666;">read this essay</span></a> that features in the McKinsey Quarterly. <strong>You would need a free registration to read the complete article.</strong>
<br />
<br />On behalf of FINAX
<br />Abhishek Tripathi
<br />
<br />Link contribution by
<br />Akshay Gupta
<br />FINAXhttp://www.blogger.com/profile/07258053144932106830noreply@blogger.com0tag:blogger.com,1999:blog-9578646.post-1104834200325413972005-01-04T15:52:00.000+05:302005-01-04T15:54:58.206+05:30From the Secretary's desk<span style="font-family:verdana;">The FINAX BLOG
<br />
<br />Welcome to the Finax Blog, a place we, the finance association at xlri, hope will become a watering hole for all those looking for fresh ideas in finance. Here you will find useful links to web resources, articles from students, professors, and guest writers, and the odd post on anything that we might find interesting in the world of finance. Feel free to add your comments to anything that interests you in these pages. If you wish to contribute to this blog with any research, news analysis or opinion please send in your contribution to </span><a href="mailto:finax@xlri.ac.in"><span style="font-family:verdana;">finax@xlri.ac.in</span></a><span style="font-family:verdana;"> with your name, organization and designation.
<br />We hope this blog becomes a useful addition to your list of information resources. Happy blogging!
<br />
<br />Secretary
<br />Finax</span>
<br />FINAXhttp://www.blogger.com/profile/07258053144932106830noreply@blogger.com0tag:blogger.com,1999:blog-9578646.post-1104310892701050462004-12-29T14:29:00.000+05:302005-01-17T02:33:43.120+05:30The tremors beneath<span style="font-family:verdana;">The banking sector is cornering a lot of mind space these days and it is perfectly reasonable also. After the meteoric rise of the IT, ITES and BPO industry, the acclaimed inception of the pharmaceutical success and then the subsequent excitement around the auto-ancillaries and tier II suppliers, it is high time that the financial and banking sector of India showed some signs of hidden potential breaking through.
<br />
<br />Well, sample this and you might agree that the giant is finally stirring and responding to the pebbles of time:
<br />“A look at the international scene suggests that, size does matter. To put things in perspective; State Bank of India is three times the size of Bank of America (BoA). SBI is reaching 90 to 100 m customers while BoA has 30 m customers. But if you look at assets, BoA has more than a trillion dollar of assets as against SBI’s asset size of Rs 4,000 bn. That gives BoA the muscle to cut costs and amplify earnings.” –equitymaster.com
<br />Feeling interested? Then go on and <a href="http://www.equitymaster.com/detail.asp?date=12/24/2004&story=2"><span style="color:#336666;">find out more</span></a> about how Indian banks could hope to equal the global money monarchs.</span>
<br />
<br />On behalf of FINAX
<br />Abhishek Tripathi
<br />
<br />Link contribution by
<br />Akshay Gupta
<br />FINAXhttp://www.blogger.com/profile/07258053144932106830noreply@blogger.com0