The+IBS+Times_137TH+issue by Stock Yard

ISSUE - 137

21st DECEMBER [WEDNESDAY]

SYNOPSIS

- SWATI VERMA

The IBS Times comes again this Christmas week to enrich you with the happenings across the globe. We try to touch on issues affecting people globally and domestically; bringing in our own perspectives to make you think in an alternative context. Gear up for yet another scintillating read. There is one question hovering around our mind- why no other Asian currency has depreciated against the dollar as much as rupee in the current global economic scenario? To address this issue RBI has steeped giving a ray of hope. The long term effectiveness of these policies is also the issue addressed through our cover story this week. The euro zone finally reached a consensus to tackle its debt crisis this week by offering more cash to the IMF and long term liquidity to the banks, also re-instating their focus on tightening the fiscal rules. But all in vain due to simultaneous downgrading by a major development ratings firm Fitch which downgraded six major global banks. Get brief insights into this matter through our focus column this week. This week all the speed lovers get ready for an awestruck journey. Yes we are talking about the first love of every man and the drop dead gorgeous ‗FERRARI‘. Gear up for the ride through the journey of this brand right from its inception through our brand track column this week. One question which we all should ask to ourselves is ‗A day of right or decade of violation?‘ There are protests against social and economic inequality, high unemployment, greed, as well as corruption, and the undue influence of corporations—particularly from the financial services sector on government. We should stop the blame game and just not be 'watch dog‘. Get our writers opinion on this issue this week through opinion column. Moreover we have our regular sections of Fast Track, Quick Bites, Market Watch and a special dose of News @ IBS to give all of you a glimpse of the happenings last week on campus!

Happy Reading! Cheers Swati Verma

EDITOR COVER

1 OPINION 2 BRAND

5 FOCUS 6 NEWS @ IBS

8 9

FAST-TRACK

3 QUICK BITES

7 MARKET

THE IBS TIMES

COVER STORY– RBI STEPS IN: DRIVING HOPES FOR ECONOMY IN DISTRESS!!

- AVLEEN KAUR SARNA

India, since the beginning of the financial turmoil in 2008 has been considered as the economy which could probably be least affected as it is mainly driven by domestic consumption. Even six months back, the rupee had appreciated and remained strong, commodity prices were on the correction mode and inflation was expected to come down after the monsoons. We had a great opportunity in the global economic adversity but we lost that and much more in fact. To begin with, the key issue to be addressed is the rupee movement as it has been in focus in recent times as no other Asian currency has depreciated against the dollar as much as rupee in the current global economic scenario. There has been no spectacular or abrupt change in the economy‘s

There has been no spectacular or abrupt change in the economy’s macro fundamentals over the last couple of months that could have possibly triggered the rupee’s fall to such an extent but there are factors both domestic and international which are responsible for the current scenario.

macro fundamentals over the last couple of months that could have possibly triggered the rupee‘s fall to such an extent but there are factors both domestic and international which are responsible for the current scenario. First and foremost is the government inaction on various reforms and policy decisions followed by scams and scandals resulting in further paralysis of corporate India following which the business sentiment took a battering and it was a natural once we got into the downward spiral, negatives such as inflation, depreciating currency and the fiscal deficit starting feeding on itself. Inflation has been ruling over 8% for the last two years and the rising inflation tends to trigger currency depreciation. Under such circumstances, the RBI finally decided to step in and it imposed restrictions on forward trading in the local currency by FII‘s and traders and capped banks exposure to the forex market. This seems to provide a ray of hope as it curbs in a way the speculation in rupee by blocking naked edges for the currency, though such an action should have been taken much earlier. A section of the market feels that RBI‘s this hand off approach to the rupee movement helped speculators have a field day. The next step followed by RBI is the unchanged policy rates on the context that inflation and inflation expectations was above the ‗comfort level‘ and maintaining the CRR (cash reserve ratio) at their existing levels which is in line with the current market expectations. Thus sending out a clear signal to the corporate India and the markets, the central bank noted that while inflation remained on the projected trajectory, downside risks to growth clearly increased. The central bank also noted the decline in the overall eco-

Under such circumstances, the RBI finally decided to step in and it imposed restrictions on forward trading in the local currency by FII’s and traders and capped banks exposure to the forex market.

nomic scenario with GDP growth slowing to 6.9% in the second quarter from 7.7% in the first and key deficit indicators worsening mainly due to higher expenditures and lower revenues while taking its decisions. Further, the liquidity conditions were tight and being consistent with the policy intent it (RBI) said, that it would conduct open market operations as and when it felt the need for them. Thus its decision to maintain ‗status quo‘ is believed to be sober and well considered as it ensures continuity in seeking to strike a balance between the often conflicting goals of reining in inflation and encouraging growth. Although, rupee rebounded after RBI‘s intervention to curb further depreciation but there are still doubts prevailing about the long term effectiveness of these moves as the attractiveness of Indian assets have dropped sharply in recent months in the backdrop of a worsening domestic economic growth outlook.

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FAST-TRACK NEWS

THE IBS TIMES -DEVANSHI PODDAR

Sachin Tendulkar, Dhyan Chand can now be given ‘Bharat Ratna’ With government making necessary changes in the eligibility criteria for a person to get India‘s highest civilian award, Bharat Ratna will now be awarded in recognition of highest order of recognition of exceptional service/performance in any field of human endeavor. These changes were made on request by the sports ministry and due to these changes Sachin Tendulkar and Dhyan Chand are now being awarded with the prestigious award for their excellent contribution in their field.

Major 7.3 quake strike Papua New Guinea : USGS Papua New Guinea was struck with a earthquake of magnitude 7.3 on Wednesday, 14 December. The quake struck at a depth of 115 kilometers southwest of the coastal city of Lae and 223 kilometers from the capital Port Moresby. The US Geological Survey said that there was no immediate warning of tsunami issued. RBI sells dollar, curbs speculation as re hits 54.3 The rupee going all time low to 54.3 against dollar, government on Thursday sold dollars through public banks and intervened many measures to curb speculation helping rupee to close on 53.65 on Thursday, 15 December 2011. RBI announced reduction in trading limits for banks and it made it mandatory for all trades to be fully delivery basis. The banks must square up their dollar position by the end of the day to prevent the overnight exchange rate risk and many other such measures.

Back India, block ISI : US senator An American Lawmaker said that the congressmen sensed that the time had come to ―side‖ ways with India to ―cut off the ISI‖ after contending that their( US) relationship with Pakistan had reached to a dead end.―US – India tie-up was ISIs horror story but time had come for it to evelve‖ – said by Senator Mark Kirik at a discussion forum by Washington-based think tank, Foreign Policy Initiative.

Fitch cuts Goldman, Deutsche, 5 other large banks Citing the increased financial market challenge, Fitch, the third-biggest of the major credit rating agency, on Thursday i.e. 15 December 2011, downgraded Goldman Sachs, Deutsche Bank and five other large banks. The major financial challenges that the banks have to face result from economic development and regulatory changes. An expert said that this was done due to concerns about the global economy rather than keeping quality of banks in mind.

Shortage of RS 2, 00,000 crore may leave power projects’ future in dark Government‘s expectation of shortfall in the funds for power projects may raise the risk of severe

shortage in 2 years and it may also highlight the need of policy intervention to resolve the crisis which would be like introduction of specialized long-tenor debt funds, dedicated fund for power projects in north-eastern sector etc.

SEBI mulls e-IPO paperless bidding by investors The capital market regulatory authority SEBI, has proposed to allow investors to invest in the IPO online, without and physical paper work. This online process will make it easier for the investors to subscribe and the companies to keep a track on the subscription as well as quicker and easier allotment for them.

Quadruple witching- A day on which contracts for stock index futures, stock index options, stock options and single stock futures (SSF) all expire. This is similar to the triple witching hour, except that the quadruple witching hour sees also the expiry of SSFs.

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THE IBS TIMES Markets may see huge volume as MSC index gets recast tomorrow With the MSCI ( Morgan Stanley Capital Index) being reconstituted, there will be several arbitrage opportunities for investors. The revamp happens every six months from now and in this revampation three stocks, SAIL, HDIL and India Bulls Real Estate will be replaced by Bharti ‗airtel, Idea Cellular and Power Finance Corp. the FIIs, like all their trade, will do the maximum trading in the last 30 min at the volume weighted average price.

Sensex to bottom by February, unless Euro crisis worsens: Deutsche Bank Deutsche Bank states that the Indian market will bottom by February unless European Market worsens. They say that there has Benn a loss in the investor confidence and this sense of uncertainty has moved them to a period of diminished expectation from an era of rising expectation. And to top it all worries over the Euro debt crisis continued to dampen their sentiments.

Japan declares tsunami-crippled Fukushima nuclear plant stable Japan‘s Prime Minister YOSHIHIKO NODA announced on Friday, 16 December 2011 that nine months after March 2011 tsunami, the Fukushima Nuclear plant has finally come to a cold shutdown mode and is no longer leaking substantial amount of radiation. But the experts say that even though it has come to a cold shutdown the plant remains vulnerable to more problems and it will decades to decommission.

Canada formally withdraws from Kyoto protocol In the last edition of The IBS Times we had spoken about Kyoto Protocol getting an extension but here is something different this time. Canada‘s environment minister Peter Kent is invoking Canada to formally withdraw from Kyoto as he thinks it is not the pat forward for a global solution to climatic change. According to him the legally binding long term commitments as a country will help them reduce the damages and moreover they realized that they would be saving can$14 billion as penalties for missing targets of Kyoto

Timeline: face book’s new design shows everything now Facebook‘s new revamped feature – TIMELINE makes the entire history of photos, links and other things shred on Facebook accessible with a single click. This, on one hand will remind one of all the embarrassing, super cool, sad etc moments shared again lively and on the other hand will make it difficult to overcome the past happenings. The users of Facebook will be able to activate it once the request for it comes on the homepage and then the Facebook of the user will automatically get updated.

Government shelves scooter India disinvestment till holistic review The Union Cabinet minister had earlier this year cleared the proposal to divest its 95.38% stake in the sick PSU – Scooter India Ltd (SIL) to a private player through strategic route. Parliament‘s nod was required for the disinvestments as the company was formed through a parliamentary Act but because of the Assembly elections scheduled next year in five states, the decision of the sale of SIL has been postponed.

Garbage fees-Unnecessary fees tacked onto mortgage closing costs by lenders to pad the lender's profit. Garbage fees may have names such as administrative fee, application fee, appraisal review fee, courier fee, document preparation fee, document review fee, loan origination fee and settlement fee.

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THE IBS TIMES

OPINION FORUM– DAY OF RIGHT OR DECADE OF VIOLATION?

-SHILPI KALWANI

As Norman Angell quoted in the past - ―The greatest service we can do the common man is to abolish him and make all men uncommon‖, became the objective of OWS Movement (Occupy Wall Street Movement). How it all started?

Occupy Wall Street (OWS) is a protest movement which began September 17, 2011 in Zuccotti park located in New York City's Wall Street financial district, which was initiated by the Canadian activist group Adbusters. The protests were against social and economic inequality, high unemployment, greed, as well as corruption, and the undue influence of corporations—particularly from the financial services sector—on government. The protesters' slogan- ―We are the 99%‖ referred to the growing income and wealth inequality in the U.S. between the wealthiest 1% and the rest of the population. The protests in New York City had sparked similar protests around the world.

Figures speak for themselves!!

The top 1 percent of income earners had more than doubled their income over the last thirty years according to a Congressional Budget Office (CBO) report. The report was released just as concerns of the Occupy Wall Street movement were beginning to enter the national political debate. According to the CBO, between 1979 and 2007 the income of the top 1% of Americans grew by an average of 275%. During the same time period, the 60% of Americans in the middle of the income scale saw their income rise by 40%. Since 1979 the average pre-tax income for the bottom 90% of households had decreased by $900, while that of the top 1% increased by over $700,000, as federal taxation became less progressive. How do politician’s stock portfolios outperform even the best hedge-fund manager’s?

Mark Twain famously wrote, "There is no distinctly native American criminal class except Congress." Peter Schweizer's new book, "Throw Them All Out," reveals this permanent political class in all its arrogant glory. The money-making opportunities for politicians are myriad, the most lucrative methods are : accepting sweetheart gifts of IPO stock from companies seeking to influence legislation, practicing insider trading with nonpublic government information, earmarking projects that benefit personal real estate holdings, and even subtly extorting campaign donations through the threat of legislation unfavorable to an industry. The list just goes on and on, and it's sickening. Astonishingly, none of this is technically illegal, at least not for Politicians. Members of Political Parties exempt themselves from the laws they apply to the rest of us. Corruption isn't confined to one political party or just a few bad apples; it's an endemic problem encompassing leadership on both sides of the aisle. It's an entire system of public servants feathering their own nests. Wall Street relocated to White House

Obama has even tried to derail aggressive bank prosecutions pursued by state attorneys general, most of them liberal Democrats. This is remarkable since a considerable number of people on Wall Street should likely be in the dock — or in jail — for systematically ruining the national, and even global, economy

Wall Street can look forward to a bank-friendly administration if Obama is reelected — and perhaps even better conditions if either of the two leading GOP contenders, Newt Gingrich and Mitt Romney, wins the White House. Despite his occasional remarks that decry ‗fat cat‘ bankers, Obama has effectively serviced the financial bigwigs. Bank prosecutions have declined markedly under Obama — to levels not seen for more than 25 years. Obama has even tried to derail aggressive bank prosecutions pursued by state attorneys general, most of them liberal Democrats. This is remarkable since a considerable number of people on Wall Street should likely be in the dock — or in jail — for systematically ruining the national, and even global, economy. Instead, financial powers have enjoyed several big bonus years and have been on a spending binge at overpriced New York restaurants and tony boutiques. Struggling homeowners of Middle America may be happy to know that the Manhattan luxury apartment market is running low on inventory. The Blame Game The Blame Game is on with the common man blaming the politicians, the politicians blaming the financial system, which blames the uncertainty in the world economy. It would be wise to wait and watch whether the Occupy Wall Street Movement really occupies the White House and brings reforms in the structure of the economy, which in turn would empower the citizens to ‗Watch the Watchdog‘.

Value deflation- When companies cut their costs without increasing prices for consumers. Value deflation occurs when retailers and service providers give out smaller portions, fewer services and generally provide less for the same price

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THE IBS TIMES

BRAND TRACK– FERRARI- FROM RACE STABLES TO THE MOST LUXURIOUS SPORT CAR COMPANY!

- POOJA DALAL

Its founder, Enzo Ferrari witnessed first-hand some of the earliest developments in motor racing in Italy when his dad took him to watch a race in 1908. Later he became a driver for Alfa Romeo and even placed second at the 1920 Targa Florio. In 1929, Ferrari formed his own racing team, ‗Scuderia Ferrari‘. But he had never dreamt of manufacturing cars, nevertheless the non-competing era of World War II presented an opportunity to try new things and Ferrari built his first car, Tipo 815 (although without the Ferrari label). The Ferrari prancing horse symbol also has a legendary tale to tell. In 1923, the parents of the heroic Italian pilot Francesco Baracca, Count Enrico and Countess Paolina Baracca, gave Ferrari their son‘s squadron badge on the charred remains of his plane, featuring the family coat of arms of a black horse. Baracca, it is said, painted the horse on his planes for good luck. And it In 1923, the parents of the worked well as Baracca had notched up 35 enemy hits before crashing to his death! And no doubt it worked the same wonders for Ferrari. heroic Italian pilot FranBut the complete journey down the lane was not exactly that cesco Baracca, Count Ensmooth. Its factories were bombed during World War II. rico and Countess Paolina Baracca, gave Ferrari their Working against hope, Ferrari set up factory in Meranello, son’s squadron badge on the Italy. And there were certain dry spells on the racing side too. There was a slump in the games won by the team twice charred remains of his in mid 1970‘s and 1980‘s. But luckily there were drivers like plane, featuring the family Niki Lauda and Michael Schumacher who got the team that coat of arms of a black much needed win simultaneously both the times. Emerging horse. Baracca, it is said, strongly after every onslaught, Ferrari built some of its best models. Ferrari won many world championships, till 1973, when Enzo decided that they should focus mainly on Formula One. Nevertheless, it occasionally still builds racing cars for those who can afford to pay for them. After a gust of successful Testarossas, in 2003, Enzo Ferrari got his due, with a 230-mph supercar named after the company's dynamic founder. On the track, the hot-blooded Ferrari cars met their match in the cool German driver Michael Schumacher, who raced Ferraris to glory (seven F1 championships between 1994 and 2004). The Ferrari cars sell for themselves, and the fact is very evident as Ferrari does not spend money in advertising. Try to recall the last time you saw a Ferrari ad that was from the company. Only dealers give its ads. This confidence springs from within the organization. Ferrari believes in pure passion, commitment and team work, that inspires leaders. After a poor season, Ferrari president Luca di Montezemolo motivated his team thus; "It will take hard work from every one of you, it will come from the ability to be perfect, to start from pole position and that After a gust of successful ability is the strength of this company. Behind amazing products there are amazing men and Testarossas, in 2003, women." He added: "All the ingredients are in place to start winning again." Enzo Ferrari got his due, In accordance with its magnanimity, Ferrari has built the largest indoor amusement park on Yas with a 230-mph supercar Island in Abu Dhabi. It has many exciting rides, restaurants, hotels and state of the art ameninamed after the company's ties. Talking of brand building, it‘s one of the most successful ventures. dynamic founder. On the track, the hot-blooded Fer- Ferrari is known for throwing most homely Christmas parties every year. So now you know rari cars met their match in where the fervor and merriment of the season await. Similar passion and excitement goes the cool German driver Mi- through in each Ferrari 360 Modena, in each Ferrari Enzo, in each 575 Maranello, in each F430 chael Schumacher who raced you drive or simply watch pass by, in the streets. Winning races, losing races, fiercely fighting Ferraris to glory . in car racing has built the legendary brand.

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THE IBS TIMES

QUICK BITES- NEWS THAT CAN’T BE MISSED !

-KRITIKA SETHI

Big Shots… Ratan Tata asks India Inc to help Dalit entrepreneurs grow. Sunil Kanoria takes charge as MD of Viom Networks. Standard Chartered appoints V Shankar Group Executive Director. McCain Foods India appoints Vikas Mittal as MD.

Company Talks… Vedanta appoints 3 directors on Cairn India board. Sanjiv Mediratta joins Amalgamated Bean Coffee Trading Company. Coal India board appoints M Viswanathan as Company Secretary. SABMiller appoints Harvey as Managing Director Asia. K Balraj conferred 'Best CFO in Engineering & Capital Goods Sector' award by ICAI. HPCL's Nishi Vasudeva elected as Vice President-Youth & Gender, World Petroleum Council. Harsha Lal to head Dell's Public-Large Enterprise business in India. UK launches pro-poor private investment programme in India with SIDBI. Autonomy limit of Rs 5000 crore for Maharatna PSUs may be revised. Top companies like RIL, SBI and Tata Motors pay lower advance tax, TCS outgo more than doubles. Retail executives turn entrepreneurs as urban consumers drive demand for niche products and services.

Economy Speaks… RBI monetary policy review: D Subbarao keeps policy rates unchanged. Fiscal deficit rise will have inflationary implications: RBI. Bill introduced by government to amend Consumer Protection Act for faster case disposal. Can't speculate on rate cuts will ensure enough liquidity: RBI. RBI changes policy stance, not growth. Eleven states to raise Rs 9,090 crore next week using RBI's window. Stronger economic ties with Russia in future: Prime Minister Manmohan Singh. Financial burden a challenge after passage of Food Bill: Sharad Pawar.

The Captains of the Ships… Prime Minister: Manmohan Singh Chairman of Tata Group: Ratan Tata Founder of Infosys: Narayan Murthy

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THE IBS TIMES

FOCUS OF THE WEEK–EURO ZONE’S FRESH NEW TAKE BUT O’ FITCH!

- AKSHAY AGARWAL

The euro zone finally reached a consensus to tackle its debt crisis this week by offering more cash to the IMF and long term liquidity to the banks, also re-instating their focus on tightening the fiscal rules. Euro zone leaders agreed on December 9 to write into national constitutions a rule that budgets have to be balanced or in surplus in structural terms. If they are not, automatic corrective measures would follow. Such rules would sharply limit government borrowing, bring down debt and, euro zone politicians hope, help restore market trust in the sustainability of public finances. Simultaneously, in a major development ratings firm Fitch downgraded six major global banks Thursday, citing increased challenges in their business and the prospect of financial turmoil ahead. Fitch lowered the long-term ratings on Bank of America and Goldman Sachs in the United States, British bank Barclays, French bank BNP Paribas, German bank Deutsche Bank and Swiss bank

Fitch on Wednesday announced it had downgraded five European financial firms citing stronger headwinds in Europe's banking sector. The agency downgraded France's Banque Federative du Credit Mutuel and Credit Agricole, Denmark's Danske Bank, Finland's OP Pohjola Group and the Netherlands' Rabobank Group.

Credit Suisse. The downgrades ―reflected challenges faced by the sector as a whole, rather than negative developments in idiosyncratic fundamental creditworthiness,‖ Fitch said in a statement. By contrast, Fitch affirmed the ratings on Morgan Stanley, Societe Generale and UBS. Fitch said the banks "are particularly sensitive to the increased challenges the financial markets face."These challenges result from both economic developments as well as a myriad of regulatory changes," the French-owned ratings firm said. Banks have been under the gun since the 2008 financial crisis, hit by regulation after they helped plunge the global economy into recession and faced with tougher market conditions. Fitch said the banks had made "significant progress" in building capital and liquidity buffers to withstand shocks. But they remained vulnerable to market sentiment and confidence. Thursday was just the latest in a series of downgrades for the global banking sector, as agencies attempt to come to terms with the possible impact of the European debt crisis. The ratings agencies were heavily criticized for failing to spot the 2008 financial crisis as it approached. Fitch on Wednesday announced it had downgraded five European financial firms citing stronger headwinds in Europe's banking sector. The agency downgraded France's Banque Federative du Credit Mutuel and Credit Agricole, Denmark's Danske Bank, Finland's OP Pohjola Group and the Netherlands' Rabobank Group. Coming back to the Europe fiasco, constitutional changes will take a year or more and markets want reassurance now that money invested in euro zone debt is safe, especially after banks were asked to accept a 50 per cent loss on their Greek bonds in October as part of a second bailout of the country which sparked the debt crisis. European leaders have belatedly insisted that the Greek case was unique and did not set a precedent.

Following the Fitch downgrade gold also fell sharply. All that is clear at the spur of the moment is a road of caution ahead.

To address market concerns that they do not have enough money to prevent the crisis from engulfing Italy and Spain, euro zone leaders brought forward by one year to July 2012 the launch of their 500 billion euro permanent bailout fund. Euro zone leaders also agreed to offer 150 billion Euros in bilateral loans to the IMF to raise its crisis -fighting capacity. Up to 50 billion Euros more might come from non-euro zone European countries and possibly more from outside Europe. There are still doubts about this scheme. Germany's Bundesbank said last week it would only contribute if non-euro zone and non-European countries did too and the level of outside commitment is not clear. Following the Fitch downgrade gold also fell sharply. All that is clear at the spur of the moment is a road of caution ahead.

Gapping- To employ a gap strategy an investor can scan the morning prices for a gap and watch to see what the stock does in the first couple hours of the trading day. In general, if the price goes up, it signals a buy, and if it goes down, a short. There are several variations of the gap strategy.

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THE IBS TIMES

NEWS @ IBS– ALL HAPPENINGS IN IBS HYDERABAD!

- ANKIT SHARMA

V.A.P.S-AAVEG 2.0 IBS Hyderabad hosted the second inter B-school sports meet Aaveg 2.0 wherein various B-schools from across the country competed for the coveted Aaveg trophy, over 3 days. V.A.P.S the sports club of IBS Hyderabad had organized the event(on behalf of the college) and it was covered extensively by Newswire and Nazaria (photography club). The event had all the sports ranging from football to Counter Strike. IBS Hyderabad won football, basketball, table tennis, counterstrike, volleyball and tennis and were close runners up in squash and badminton, losing to ISB Hyderabad in the finals. The Football team of IBS Hyderabad deserves a special mention as they went on to win the tournament without conceding a single goal. They scored more than 5 goals in every match and Mangal Rawat was their top scorer scoring 10 goals in the tournament. The Basketball and Volleyball teams were not far behind either, both the teams won with huge a lead. IBS Hyderabad was declared the overall winners. The winners and runners-up were presented with certificates, medals and cash prizes.

MAVERICK-‘GOOGLE STORY’ GUEST LECTURE BY PROFESSOR G.K.SHRIKANT Maverick the marketing club of IBS Hyderabad organized a guest lecture by Prof G.K.Shrikant on Google. The Google story, as the event was called, basically talked about how google was started by Sergey Brin and Larry Page while they were pursuing their Ph.D programme at Stanford University. Professor Shrikant elaborated how nobody was willing to finance the project initially as they doubted the logic and mechanism behind the search engine and how an Indian venture capitalist Vinod Khosla was the first person to finance the project. Prof. Shrikant also talked about how Google thought ahead of its times and poached employees from Apple because they knew that the future was not desktops but tablets and phones. He also talked about how well Google takes care of its employees and how much revenue they generate for Google.

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THE IBS TIMES MARKET WATCH

- SWATI VERMA

Stock markets across the world witnessed yet another week of negative returns. Continuing concerns of Europe's debt crisis and downgrading of France's debt rating by Fitch led to disappointment across the markets. Fitch is in the process of reviewing the ratings of other European nations like Italy, Belgium, Slovenia, Ireland, Cyprus and Spain. It may in fact, downgrade these by the end of January. The Reserve Bank of India (RBI) said on Friday it has set up a working group to examine and suggest ways of increasing secondary market liquidity in government bond and interest rate derivative markets. The rupee jumped more than 2 percent on Friday and was on track to post its biggest single-day rise in more than two years after the central bank took steps to stem the currency's plunge to a series of record lows. India's food inflation eased to 4.35 percent, its lowest reading since late February 2008 from an annual 6.60 percent rise in the previous week, government data showed on Thursday. India's headline inflation has stayed above 9 percent for a year, despite 13 rate increases by the central bank since March 2010. The Reserve Bank of India, which is widely expected to keep rates on hold when it reviews monetary policy on Friday, had said in its October review that if inflationary pressures started to abate by December, more rate increases may not be needed The Indian stock market were down 4.5% during the week. Further depreciation of rupee against the US dollar was the main concern for investors. This along with slowing economy, increasing fiscal deficit, prevailing high interest rates and substantial pulling out of funds by the foreign institutional investors led to the markets reaching their 25 month lows. All the sectoral indices ended the week in the red. Capital Goods fell the most (down 10.3%) on a disappointing IIP (Index of Industrial Production) number that registered a fall of 5.2%. Consumer durables and realty stocks followed with fall of nearly 8% each.

Movers and Shakers of the week

SURGES

%Change

DOWNFALLS

%Change

WELSPUN CORP. TATA COMMUNICATION MPHASIS LTD

21.7 5.9 5.0

SINTEX INDUSESSAR OIL AREVA T&D

-31.7 -29.2 -28.0

In some more news from the economy, the Reserve Bank of India maintained status quo as regards interest rates. its latest policy review, the central bank reversed its policy stance of raising rates to tame inflation. RBI is now more worried about the slowdown in the economy than about high prices. The Reserve Bank of India reduced trading limits for banks in the foreign exchange market, making it difficult for market players to keep speculative positions open for a long time. While the measures should help reduce speculative volatility in the FX market, Morgan Stanley strategists said as long as global funding strains remain, the rupee is likely to stay under pressure. Shares of some companies such as Bharti Airtel, the country's top mobile phone carrier, gained as traders said the central bank's action will help reduce losses on its foreign debt exposure. In fact, it even hinted at lowering rates in the near future. It may be recollected that RBI had raised interest rates 13 consecutive times in the past couple of years. The energy PSU Bharat Petroleum Corporation Ltd. (BPCL) wants to diversify into the space of petrochemicals. For this it is setting up a facility in Kochi at an estimated cost of Rs 50 billion - Rs 60 billion. The company is looking out for a multinational collaboration for the said project. BPCL is also aiming to up the existing capacity .

Global Cues: World stocks rose on Friday after upbeat U.S. data and corporate results, while concerns over the European banking sector and nervousness about potential ratings downgrades in European sovereign debt underpinned German government bonds. Fitch Ratings, the third-biggest of the major credit rating agencies, on Thursday downgraded Goldman Sachs, Deutsche Bank and five other large banks based in Europe and the United States, citing "increased challenges" in the financial markets.

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THE IBS TIMES MARKET WATCH 12 DECEMBER 813NOVEMBER DECEMBER 914 DECEMBER 10 15NOVEMBER DECEMBER 11 16NOVEMBER DECEMBER 7 NOVEMBER NOVEMBER 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 Sensex Sensex

15,870.35 -

16,002.51 17569.53

15,881.14 17362.10

15,836.47 -

15,491.35

Nifty Nifty

4,764.60 -

4,800.60 5289.35

4,763.25 5221.05

4,746.35 -

17192.82 4,651.60 5168.85

DJIA DJIA

12,021.39 12068.39

11,954.94 12170.18

11,823.48 11780.94

11,868.81 11893.79

11,866.39 12153.68

HangSeng HangSeng

18,575.66 19677.89

18,447.17 19678.47

18,354.43 20014.43

18,026.84 18963.89

18,285.39 19137.17

FTSE100 FTSE100

5,427.86 5510.82

5,490.15 5567.34

5,366.80 5460.38

5,400.85 5444.82

5,387.34 5545.38

Gold Gold($/oz.) ($/oz.)

1655 1791.90

1637 1789

1572.80 1760.40

1588.20 1766.80

1599.20 1788.5

Crude($/bl) Crude($/bl)

111.08 107.33

113.79 107.65

113.13 106.88

111.67 104.60

113.76 -

INRv/s v/sUSD USD INR

49.04 53.70

49.40 54.46

49.59 55.07

50.16 55.24

50.75 54.20

INR INR EURO EURO

67.59 71.37

67.99 71.69

68.31 71.67

68.81 71.81

68.86 70.63

v/s v/s

Wall of worry- When stock prices are rising regardless of market uncertainties, the stock market is said to be climbing a wall of worry. These worries may include political or economic risks. Once the perceived risks have been resolved or have past, average market share prices tend to decline

BUSINESS JARGONS BY – POOJA DALAL

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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 TEAMAKSHAY AGARWAL, ANKIT SHARMA, AVLEEN KAUR SARNA, DEVANSHI PODDAR, KRITIKA SETHI, POOJA DALAL, SHILPI KALWANI, SWATI VERMA.

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