ISSUE - 127
22nd SEPTEMBER [THURSDAY]
EDITOR’S DESK
- TANIYA BANERJEE
The recent hike in petrol prices has landed another blow to the common man already reeling under the increasing pressures of inflation.Indian Oil Corp. Ltd (IOC) is raising its price by Rs. 3.14 per litre and Hindustan Petroleum Corp. Ltd (HPCL) by Rs. 3.16 a litre in Delhi. After the latest increase, petrol will cost Rs. 66.84 a litre at IOC outlets in Delhi, Rs. 71.92 in Mumbai, Rs. 71.28 in Kolkata and Rs. 70.82 in Chennai. What effects will it reap on the current government and people at large is yet to be seen. In the meantime catch the complete story in our Cover Story. It seems uncanny but Narendra Modi always manages to be in news. With his latest 'sadbhavna' fast, Chief Minister Narendra Modi made eager attempts to extend an olive branch to the Muslim community, aggrieved by the 2002 Gujarat communal riots. Some say that this is being done to open up new avenues in his political career or rather a step forward towards to post of Prime Minister. Catch our writerâ€&#x;s opinion on the same here this week. Monte Carlo was started under Oswal Woollen Mills Ltd. And has went on to become a brand recognized world over for its quality and finesse. Get to know how this Indian company took on the world with its different strategies on Brand Track this week. This week in Focus of the Week we are talking about Jeff Bezos, the founder of Amazon. Com. An enigmatic leader as well as an inspiration to all budding entrepreneurs, get to know more about him here this week. 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, Taniya Banerjee
EDITOR COVER
1 OPINION 2 BRAND
5 FOCUS 6 NEWS @ IBS
8 9
FAST-TRACK
3 QUICK BITES
7 MARKET
10
COVER STORY– HIKED!!
THE IBS TIMES
- AKSHAY AGRAWAL The first opinion that came to my mind when I came to know of yet another hike in the prices of fuel (read petrol), was the voice of the common man yelling “ yikes “ and that would include me as well. As the State-run oil companies on Thursday (the 15th of September) raised the price of petrol by Rs 3.14 per litre, this being the third substantial increase since January, a move thought to be aimed at stoking inflation and further upsetting household budgets. The advantage that I possess penning this column would be that of an in-depth analysis into the current petrol pricing mechanism of the Government of India and the respective state governments levying the infamous VAT & and other local levies providing us much required insight rather than just hurling abuses at the inefficiency of the UPA Government.
Free imports are permitted for almost all petroleum products except petrol and diesel. Free imports are permitted for almost all petroleum products except petrol and diesel.
The country that traditionally operated under an Administered Pricing Mechanism wherein the oil refineries, oil marketing companies and the respective pipelines were compensated for their operating costs with an assured return of 12 % post-tax on net worth gradually drifted from the administered pricing regime (read petrol since the government continues to control the prices of diesel & cooking gas) to the marketdetermined, tariff-based pricing. Free imports are permitted for almost all petroleum products except petrol and diesel. It is contemplated that in a phased manner, all administered price products will be taken out of the administered pricing regime and the system will be replaced by a progressive tariff regime in order to provide a level playing field for new investments in a free and competitive market. Now we have four schools of thought carefully working out their hypotheses each and thus having a distinct opinion. The analysts are not buying this. They say that the movement of rupee in recent days does not warrant such a steep hike, especially when inflation is near double digits. Latest data shows inflation, as measured by the wholesale price index, stood at 9.78% in August. It has remained above the 9% mark for nine consecutive months and continues to hover around the same mark without a leash. The Government argues that the deregulation and thus the consequent hike is warranted since it enables India to be a better fit in the world energy puzzle, inviting much required quality investments in the energy sector .
The executives (the Oil Companies) say every Re 1 increase in the dollar exchange rate raises their losses by around Rs 9,000 crore a year.
The executives (the Oil Companies) say every Re. 1 increase in the dollar exchange rate raises their losses by around Rs. 9,000 crore a year. The impact due to the exchange rate is 48 paise and due to increase in international prices is Rs. 1.72 per litre. The balance impact of Rs. 0.52 is due to VAT. Economists opine that the sharp depreciation of the rupee against the US dollar forced the firms to raise prices with the majority of the burden falling on the middle class using petrol driven vehicles. Re-iterating my point, the common man cannot just accept any of what the above scholars have to say, it is he who has to once again gather his hopes of still surviving on his shoe-string budget striving harder each day to make his ends meet, already being gradually eroded by the double digit inflation.
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FAST-TRACK NEWS
THE IBS TIMES - LISA T.SAMUEL
BRICS to take call on helping EU soon The BRICS grouping of Brazil, Russia, India, China, South Africa, will take a call on whether to extend support to the euro zone at the BRICS finance ministers‟ meeting on Sep 22. They are scheduled to meet on the sidelines of the meetings of the World Bank and International Monetary Fund in Washington.
LIC looks to investing Rs. 30k crore in Infra Cos
State run Life Insurance Corporation is likely to invest Rs 30,000 Crore this fiscal. The country‟s largest life insurer is planning to invest in government‟s infrastructure debt fund and take out financial schemes. The public sector insurer has already bought stocks worth Rs 15,000 crore till August, mostly through the market correction and plans to add double that amount over the next few months. As of date, the insurer won shares in as many as 413 listed companies. Out of them, its holdings exceed 10 percent in companies such as Maruti Suzuki, State Bank of India and Larsen & Toubro, among others.
Financial woes help Gold to recover from 2 week Low
Gold tumbled to a two week low on Friday as diminishing liquidity concerns prompted a bout of selling, but lingering concern about financial stability and strong physical buying interest from Asia later helped it recover. Spot Gold hit $1,761.94 a troy ounce, it‟s lowest since August 26. It was bid at $1,787.10 an ounce at 1058 GMT compared with $1,788.64 late in New York on Thursday.
NASA unveils Rocket that may go to asteroids and Mars
To push farther out into the solar system to the moon and beyond to the asteroids, eventually to Mars- NASA unveiled plans on Wednesday for a behemoth rocket that would serve as a backbone of its human space flight program for decades. The finished Rocket would be the most powerful ever to raise gravitational bonds of Earth.
Petrol price hiked by Rs. 3.14 per litre
State oil companies will rise petrol prices by Rs. 3.14 a litre from Friday, delivering another blow to households that are already reeling under near double digit inflation and provoking strong condemnation from the opposition parties. Oil companies have raised the petrol rates for the twelfth time since the fuel was decontrolled in June last year.
Google buys 1.023 IBM patents
Google bought 1,023 patents from International Business Machines (IBM) as the internet search and advertisement company bolsters its strategy of defending against smart phones lawsuits.
Denmark picks ‘Gucci Helle’ as first woman PM The left leaning leader who is slated to become Denmark‟s first female PM was once derided within her own ranks as Gucci Helle because of her taste for designer clothes and accessories. After the return of Social Democrats to power following 10 years in opposition, no one questions Helle Thorning-Schmidt‟s credentials as the leader of a party sprung from Denmark‟s labor movement in 1871.
Saina on defeat, Diju – Jwala stay on course
Saina Nehwal tumbled out of the Chinese Masters but Valiyaveetil Dijy and Jwala Gutta kept the Indian hopes alive with a 17-21, 21-19, 21-9 victory against Robert Blair of Scotland and Gabrielle White of England in the Doubles quarterfinals on Friday.
Gadfly –A slang term for an investor who attends the annual shareholders meeting to criticize the corporation's executives. A gadfly addresses many issues for the shareholders, often grilling the management by asking difficult or embarrassing questions.
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THE IBS TIMES Northeast quake: No trace of 120 people of a North Sikkim village There is still no trace of 120 residents of Bay village in North Sikkim, located between Lachung and Chungthang, after Sunday's powerful quake."We find no trace as yet of 120 people living in 14 huts at Bay Village as the area is totally devastated. There is a lot of debris and the residents have gone missing," A flash flood at Lachung Chu river has posed a threat of fresh landslides at Lachung, one of the worst-hit by the quake, according to a Geological Survey of India officer.
Afghans mourn slain ex-president on World Peace Day Afghans gathered to mourn assassinated former president and chief peace negotiator Burhanuddin Rabbani on Wednesday, World Peace Day, as fears mounted that his death could deepen ethnic divisions and nudge the country towards civil war. Rabbani, perhaps the most prominent Afghan to be killed since the fall of the Taliban in 2001, died at his home on Tuesday when an insurgent he was due to hold talks with detonated explosives concealed in a turban.
European Stocks Drop as U.S. Equities, Treasuries Little Changed European stocks fell after officials said they need to return to Greece to complete a review of the economy, while U.S. equities and Treasuries were little changed before a Federal Reserve policy statement. The Stoxx Europe 600 Index lost 0.9 percent at 9:30 a.m. in New York and the Standard & Poorâ€&#x;s 500 Index swung between gains and losses. The Dollar Index advanced 0.2 percent. The pound dropped 0.7 percent versus the dollar after the Bank of England said officials considered ways to add stimulus to the economy. Ten-year U.S. Treasury yields were little changed at 1.94 percent, near a record low of 1.877 percent set Sept. 12. The German two-year note yield fell two basis points.
Typhoon Headed for Stricken Japanese Nuclear Plant A powerful typhoon struck Japan Main Island on Wednesday, stranding thousands of commuters in Tokyo and threatening to pour heavy rain on the stricken Fukushima Daiichi nuclear plant in the nations tsunami-ravaged northeast. Evacuation advisories went out to more than 1 million people across the main island of Honshu as torrential downpours caused flash floods in low-lying areas. As of Wednesday evening, five people had been found dead and four others were missing, according to Japanâ€&#x;s national broadcaster, N.H.K.
Sensex ends flat; markets await Fed move on U.S. economy The BSE Sensex on Wednesday ended lower by 34 points witnessing range bound trading. Markets are expected to take cues from the FOMC meet, which ends today, announcing steps for recovery of the US economy. The Fed is expected to announce a plan to swap shorter-maturity government securities for longer-dated ones. The lackluster trade on the BSE saw country's largest two-wheeler maker Hero Moto Corp closing lower by 3.06 percent. Largest private sector firm Reliance Industries Limited also fell by 1.97 percent. Nifty ended 0.14 percent lower or at 5133.25 points with analysts predicting that markets are likely to remain range bound in the next two to three months. 26 out of 50 stocks ended lower on the index.
Lancashire win first county title since 1934 Lancashire won their first English championship title since 1934 when they defeated Somerset by eight wickets on the final day of county season on Thursday. Lancashire have finished second eight times since 1934.They shared the Surrey in 1950.
Gazump-A situation in which the price for real estate or land is raised to a higher price than what was previously verbally agreed upon.
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THE IBS TIMES
OPINION FORUM– CAN NARENDRA MODI LEAD TO ‘LOTUS REVOLUTION’?
Modi became the Chief Minister of Gujarat when its economy was shrinking and the domestic growth was stagnant.
For this ‘Lotus Revolution’ to take place, BJP needs to project itself as a national alternative of the Congress.
-AVINASH ROY "God is great," tweeted Gujarat Chief Minister Narendra Modi, conveying his sense of relief over the Supreme Court order directing the Special Investigation Team to file its final report on the 2002 Gulberg society riots case before the trial court in Ahmedabad. BJP leaders, including L.K. Advani, Sushma Swaraj and Arun Jaitley hailed the order saying the party which had maintained that allegations against Modi were false, stood vindicated. Congress refuted by saying that the court's verdict of not monitoring the Gujarat riots case further was "in no way" a clean chit to Modi, a view shared by the Left. For Modi, who has tried to put behind the post-Godhra riots controversy that has been haunting him and focus on development issues, the court's refusal to pass any order to him could have several ramifications. Assembly elections in the state are scheduled to be held next year. Though Modi, one of the most captivating orators in the party, has brushed aside all questions on whether he saw himself as BJP's prime ministerial candidate, the apex court's order could shape his role in the party on the national stage. Modi became the Chief Minister of Gujarat when its economy was shrinking and the domestic growth was stagnant. Faced with massive economic losses, he re-organized the government's administrative structure and embarked upon massive cost-cutting exercises. As a result of the administration's efforts, Gujarat registered a GDP growth rate of over 10% during his first tenure. This was the highest growth rate among all the Indian states. As a Chief Minister, Modi started various 'yojanas' or plans. What happened in Gujarat during the Godhra riots is something we as a nation will pay a heavy price for. But the fact is that time has moved on, as has Narendra Modi. He is not the only politician in India who has been accused of communalism. It is strange that the whole country venerates the Congress Party as the secular messiah but it was that party that presided over the riots in 1984 in which over 3,500 Sikhs died: thrice the number killed in Gujarat. The fact of the matter is that...there is no better performer than Narendra Modi in India‟s political structure as of now. So, summarizing all what our nation has gone through over the last 4-5 years, can we say that we are moving towards a new „Lotus Revolution’? The current regime at the center under the leadership of the Congress party doesn‟t instill the confidence that it can rule the country anymore. Days after days, we are angered with news of scams and how the powerful people inside the government guided the scamsters with their leadership. The blood boils when some other friends of the scamsters support the activity in full public view. As the year of scams 2010 ended, everyone in this country had hoped that the New Year would be a different one. Highly wished wish remained a wish only and the New Year was no better. With ministers reportedly involved in a series of scams, one would expect the top leaders take action against them and show the sign of confidence to the people. This is well evident by the way people turned around and supported Anna Harare regarding the famous Jan LokPal Bill. If scams weren‟t enough, the pathetic leadership got us into a serious inflationary condition in which price rise and inflation is justified saying these conditions will stay along with India‟s growth. What a handicapped ‘Bharat Nirman’ is being done! The economist PM, the Planning Commission chief Montek Singh‟s deadlines for reducing inflations passed silently as the prices remained high. So what‟s the way to rein this unruly government? For this „Lotus Revolution‟ to take place, BJP needs to project itself as a national alternative of the Congress. The only way to the power in New Delhi is by winning the Indian Vote bank (and not any specific religion, caste, region or income group‟s votes) which is quite easy considering the anger among the general public. Presently, the ammunitions in the hand of BJP are more due to the Govt.‟s inactivity than the opposition‟s activity. It must get its acts together and start its preparations for the ‘Lotus Revolution’ in the 2014 from NOW. Can Narendra Modi make Vajpayee‟s lines “Andhera Hatega. Suraj Nikalega. Kamal Khilega” true?
Gilt Fund- A mutual fund that invests in several different types of medium and long-term government securities in addition to top quality corporate debt. Gilts originated in Britain.
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THE IBS TIMES
BRAND TRACK—MONTE CARLO: CHANGING TIMES
-GAURAV MALIK
Fashion has been the latest value addition which today‟s customer wants to perceive. Earlier consumers were not concerned about their clothes or makeup, but now with increasing awareness and commercialization people have started thinking in fashionable terms and are now more conscious and aware about what are the latest trends and styles that have been brought into the fashion world and people want to get updated with them and do not want to be left out. Fashion plays a major role as it involves all the age groups and has the potential or power to change perceptions, mindsets, retail economies and even an entire generation. Very few brands are there who actually think about taking care of the changing fashion needs of the people and that too of every age group.
Monte Carlo has been majorly known for its pullovers all over the world especially in Asian and European countries.
The most being that revenues of the year march .
There is one such brand which caters to all the fashion needs of the consumers around the globe and which I personally admire is Monte Carlo. It has literally become the other name for fashion and it is being followed and admired everywhere. The Ludhiana- based fashion powerhouse named MONTE CARLO FASHIONS originated in 1984 under the leadership of Oswal Woollen Mills Ltd. which has been a flagship company of the (2,500 crore) US $520.80 Nahar Group that offers a plethora of diversified domains such as Knitting, Fabric Processing ,Hosiery garments and Knitwear. OWM owns the most loved brand Monte Carlo and Canterbury. The company also boasts of a variety of product range which includes diverse type of Woollen Viscose & Acrylic Tops, Textile Fabric, Woolen Knitwear, Acrylic and Synthetic blended Yarns, Lambs Wool Yarn and Cotton Garments.
Monte Carlo has been majorly known for its pullovers all over the world especially in Asian and European countries; the major differentiator from the other brands has been that the pullovers are so warm and cozy that they protect you even from the harsh and chilled climatic conditions. Also the various styles, trends, colors and high quality wool being imbibed into these pullovers also adds value to the brand. These are not only famous with men, women and girls but also teenagers, who did not liked to wear pullovers before because of their bulky size and odd-looks have also started liking it now. The other product line which has gained immense popularity and acceptance has been the woman thermals, usually targetted at working women who find it difficult in winters to move from one place to another wearing sweaters and pullovers, these are normally worn under normal clothes and keep the body warm throughout the day. In India, it has been a strong brand in the northern belt and is known for its woollen wear which contributes around 70% of its revenues. The most recent reports being that it has earned revenues of Rs. 300 crores for the year ended 31st March. Apart from these, the brand also offers a Monte Carlo Privilege Club which provides the customers membership cards that endeavors convenience to the customers of having an exhilarating shopping experience in their respective cities by purchasing from the local Monte Carlo stores. It also recent reports has a belt of distribution network as it is already selling through more than 800 multi brand outlets init has earned cluding Shoppers Stop and Planet Fashion that makes it unique and they are having other different types 300 crores for of place networks like Exclusive Brand Outlet (EBO), Factory Outlets and the upcoming stores which ended 31 st are coming up at places like Tripura, Chennai, Haridwar etc. The brand has undergone a change as it was valued at Rs. 1200crores from Rs. 300 crores as its estimated value after being hived-off from its parent company Oswal Woollen Mills (OWM) into a separate company. After the demerger, Monte Carlo is left with garment manufacturing facility and the retail business, the company is also in the process of setting up a factory of Rs. 130 crores for which it plans to raise through debt this year in its existing plant in Ludhiana. Although the brand has extended its collection to non-woollen clothes such as shirts, T-shirts, Lenin, Denim, Alpha and Sportswear but it has to further broaden its offerings in order to take on the competition accordingly .The road ahead would not be easy as they would have to comply with both national and international players. „Woollen wear‟ for how long fill the foot halls as the brand needs to position itself strongly in the non-woolen segment also.
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THE IBS TIMES
QUICK BITES- NEWS THAT CAN’T BE MISSED !
- KISLAY KUMAR
Big Shots… Telenor, the biggest Nordic phone company, asked Unitech to name a replacement for Unitech Wireless Chairman Sanjay Chandra. Dinesh K. Sarraf took over as the CEO and Managing Director of ONGC Videsh Ltd. (OVL), the overseas investment arm of ONGC.
Company Talks… L&T‟s shipyard to become operational by January 2012. Steel Ministry for hike in iron ore export duty to 30%. Future Group to promote „Brand Himachal‟. BGR bags Rs.3,600 cr NTPC contract. Future Group targets 1000cr sales from Himachal pact. Government clears Vodafone‟s stake buy in JV with Essar. ICICI Securities will focus on expanding its institutional broking business, at a time when competition in this space has intensified, with the entry of more players. Sensex dips 188 points on high rates, low growth worries.
Economy Speaks… The combined market capitalization (M-cap) of seven of the country‟s top 10 companies advanced by Rs 31,319.21 crore. Pranab Mukherjee onexuded confidence that the world leaders will be able to find a solution to the European economic crisis at the G-20 finance ministers' summit scheduled in November. PMEAC chairman says rate increase by RBI may have some impact on economic growth. US President will propose a “Buffett Tax” on people making more than $1 million a year as part of his deficit recommendations to Congress. Euro Minister Spar on Collateral for Loans. RBI hiked the policy repo rate by 0.25 percentage point for the 12th time to 8.25 percent. .
The Captains of the Ships.. Prime Minister Economic Advisor - C. Rangarajan Rural Development minister - Jai Ram Ramesh Reserve bank of India Chief - D. Subbarao President and MD ,CSC - Brian J Manning
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THE IBS TIMES
FOCUS OF THE WEEK– AMAZONIAN DREAMS OF JEFF BEZOS COMES TRUE
He started on the mission, with a road trip from Texas to Seattle (he typed the business plan, while his wife-Mackenzie drove the car), to find pool of computer talent and book trading expertise.
Jeffery Bezos is one of them, still successful and still hungry for more.
- POOJA DALAL
Displaying startling mechanical aptitude even as a toddler, he would dismantle his crib with a screwdriver, make an electrical alarm to drive out his younger sibling out of his room, converted his parent‟s garage into a laboratory for his science projects. Bright as he was, Jeffrey Bezos (born Jeffery Jorgensen) not only changed his life by the discovery he made, he changed the history of internet. Born in New Mexico, he then moved to Texas (with his parents) and then to Miami. He took training at the University of Florida and then moved to Princeton University for taking up physics. But instead he landed up doing Bachelor of Science in electrical engineering and computer science. After graduation he worked for various companies like Fitel, Banker‟s trust and D. E. Shaw & Co (on the Wall Street, in the computer science field). While working with the computers and internet, he felt the need for more efficient E-Commerce (as he discovered that internet usage was already increasing at 2300%). And he found out that books were one commodity that did not have a mail order system despite the fact that almost all book sellers had digitised databases of all the books they owned and sold. Thus he thought of an online site where the buyers and the sellers could come together and make trade transactions. He took the idea to his employers, but they were apprehensive about it and turned him down. He knew he would have to do it alone. He started on the mission, with a road trip from Texas to Seattle (he typed the business plan, while his wife-Mackenzie drove the car), to find pool of computer talent and book trading expertise. The company would be named Amazon after the giant South American river. First website backend site was a two bedroom house, with almost all technical devises being setup by Jeff himself. When the site was ready, he requested relatives to test the site. It performed well and thus on July 16 ‟95, the site was opened to common public. By September it was doing a business of $20,000 a week. The company went public in 1997 (Jeff told his original investor‟s that there was 70% chance that they lose all their money). But investor‟s (mostly his relatives) were sure, not about the company, but about Jeff‟s ability. Jeff‟s ambitions‟ could not be satiated so easily and he wanted his company to go from „Earth‟s biggest Bookstore‟ to „Earth‟s biggest anything store‟. For attaining it he continually emphasized the "Six Core Values: customer obsession, ownership, bias for action, frugality, high hiring bar and innovation." Thus in line with its goal, the company started partnering with CD, DVD sellers, garment makers etc. And as we know, today Amazon is the „world‟s largest retailer‟. In 2004, Jeff gave shape to his space flight dreams; he founded an aerospace company- Blue Origin with its ultimate goal as „the establishment of an enduring human presence in outer space‟. No ignoring people‟s terrestrial requirements, Jeff introduced a handheld reading device (with features like wifi, G3) in 2007, to facilitate reading of books, documents, their purchase and access. This is revolutionising the way people buy and read books. And it is priced much below i-pad (introduced by Apple in 2010). Everyday new ideas strike millions of minds in this world. But there are only a few who also have the courage to work for them. And when they do, they do it with complete faith in themselves. They are thus rewarded for their unfailing will with „Amazonian‟ results. Jeffery Bezos is one of them, still successful and still hungry for more.
Lipper Indexes- It is a series of indexes that tracks the financial performance of different types of mutual funds. Lipper, which is owned by Reuters, allows investors to benchmark the performance of a mutual fund investment against an index of 30 funds that also belong in that investment category.
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THE IBS TIMES
NEWS @ IBS– ALL HAPPENINGS IN IBS HYDERABAD!
- SWATI VERMA
The past week, IBS campus witnessed all the varied colours of India in all its hues. From dance performances to hard core, mud splattering Kabaddi matches, the week was surely a respite from the hectic schedule of lectures and assignments. Here is a quick glance at the three major events that took place the last week:
SAMAVESH – COLOURS OF INDIA The event commenced with Ganesh Vandana –seeking blessings from the Almighty; reinstating the belief of remembering Lord Ganesha before beginning any auspicious occasion. The event lined up various dance performances from different parts of the country like Lavni from Maharashtra, Garba from Gujarat and the very energetic Bhangra from Punjab. The event also brought forward budding singers who presented soulful music from various genres and varied languages. The event ended with the entire Samavesh team coming together to sing the Vande Mataram - that culminated the essence of the entire event – India in its various shades. V.A.P.S – KABADDI TOURNAMENT V.A.P.S brought out the true „Indian‟ from each student at IBS by organising Kabaddi matches throughout the weekend. Various pools were made, each of which comprised of 3 teams namely Avinash Tiwari‟s Team, Kuch Kuch Hota Hai, Nomads, IBS Surmaas, Ram Bharose and Back Benchers. With emotions running high and each team putting in their best to clinch the title, the event proved to be a huge success. SPEAK UP – COURTYARD OF SENSES The event organized by Speak Up was a refreshing experience. The event basically aimed at judging the contestant‟s soft skills and their ability to comprehend visual presentations. Video clips were shown to the contestants and questions regarding the same were put to them. Also some jumbled up words were given which were to be rearranged to formulate a story. The game put to test each team‟s five senses; making it an event worth attending.
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THE IBS TIMES MARKET WATCH
- KRITIKA SETHI
Keeping an eye on the major economic developments during the week, RBI continues with its hawkish stance. The Central bank has now hiked Repo rate and Reverse Repo rate for the 12th time since Marchâ€&#x;10 to 8.25% and 7.25% respectively. The very obvious reason is persistence of hike in inflation rate which is out of the comfort range of Central bank. Index of Industrial Production is all time low at 3.3% and companies are facing pressures of rising interest rates and input costs, which is adversely affecting the profits of the companies. The question arises as to whether the monetary tightening measures adopted by RBI will be able to tame the market or not. The adhoc rises in the petrol prices to the extent of Rs 3.14 at the end user level has caused under recovery losses for state oil retailers as well as subsidy burden for companies like ONGC. This can further stoke inflation in the economy. Sensex closed on 16934 points whereas Nifty on 5084 points. Coming to sectoral indices, IT is up by 3.1% and Oil and Gas observed maximum gains of 1.5%. It increased inspite of the hike in petrol prices. Realty and Auto closed on the bearish note due to concerns regarding the sudden rate hike by RBI which deferred the consumer purchases. Capital Good stocks were also down due to delays in industrial CAPEX pertaining to rate hike.
The Movers & Shakers of the Week
SURGES
%Change
DOWNFALLS
%Change
GLT LTD.
19.8
PANTALOON LTD.
13.8
TULIP TELECOM
8.1
MARICO LTD.
12.3
MADRAS CEMENT
7.9
KOUTONS RETAIL
11.9
As per the recent survey, power companies may default on the loans. Companies like Power Finance Corp, Rural Electrical, Tata Power, and Reliance Power are reeling under problem of low tariffs, scarcity of fuel and problem of land acquisition. They are also likely to default on loans of Rs. 1,350 billion due to non operation at the targeted capacities. RBI and other banks are becoming cautious in granting loans. Infosys is the front runner to acquire health care business of Thomas Reuters for $700 million. SAIL is also planning to increase its production capacity to about 38 tonnes.
Global Cues:
Positive global cues overweighed the persistent rate hike concerns with Indian shares registering gains for the consecutive 3rd week. Renewed optimism amongst the European bankers has tried to ease the hue and cry of sovereign debt crisis. Developed markets portrayed the healthy growth against the emerging markets that ended on flat note. U.S. markets were up by 4.7% for the five consecutive days. But there is an uncertainty regarding the continuity of momentum gained. Germany and U.K. were up by 7.4% and 2.9% respectively during the week. Whereas Singapore, China and Hong Kong closed the week in red with 1.3%, 0.7% and 2.1% falls respectively.
S E N S E X
17000 16800 16600 16400 16200 16000 15800 15600 15400 15200 15000
16876.54 16709.6 16501.74
16467.44 11433.18
11061.12
12-Sep-11
11105.85
13-Sep-11
11246.73
14-Sep-11
15-Sep-11
12500 16933.83 12300 12100 11900 11700 11509.09 11500 11300 11100 10900 10700 10500 16-Sep-11
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D J I A
THE IBS TIMES MARKET WATCH 12 Sept’11
13 Sept’11
14 Sept’11
15 Sept’11
16 Sept’11
Sensex
16501.74
16467.44
16709.60
16876.54
16933.83
Nifty
4946.80
4940.95
5012.55
5074.70
5084.25
DJIA
11061.12
11105.85
11246.73
11433.18
11509.09
HangSeng
19030.54
*
19045.44
19181.50
19455.31
FTSE100
5129.62
5174.25
5227.02
5337.54
5368.41
Gold ($/oz.)
1831.48
1833.98
1814.40
1767.80
1812.50
Crude($/bl)
107.86
108.42
107.91
109.58
-
INR v/s USD
47.02
47.58
47.63
47.57
47.16
INR v/s EURO
64.49
64.94
65.419
65.60
65.62
Bogey- A buzzword that refers to a benchmark used to evaluate a fund's performance. The benchmark is an index that reflects the investment scope of the funds investment. Comparing a fund's performance to a benchmark index gives investors an idea of how well the fund is doing compared to the market.
BUSINESS JARGONS BY– LISA T.SAMUEL
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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 AGRAWAL, ANKIT SHARMA, AVINASH ROY, AVLEEN KAUR, GAURAV MALIK, KISLAY KUMAR, KRITIKA SETHI, LISA T.SAMUEL, POOJA DALAL, SWATI VERMA.
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