Institute Of Management Technology Ghaziabad Inside this issue: Company in Focus:
StartUp in focus: NOVEMBER 06, 2011
RISCON: ANNUAL RISK MANAGEMENT CONCLAVE
WILL GREECE TAKE OTHERS DOWN TOO!!
Sacona Entertainment Markets this Week
News of the Week
CAN YOU SOLVE IT?
Sources of Data:
HDFCsecurities Economic Times The Hindu Rediff Money MoneyControl.com Financial Express Indiapetro
RISCON’11– ANNUAL RISK MANAGEMENT CONCLAVE FinNiche, the finance club of IMT-Ghaziabad, one of the premier B-schools in India, is organizing its flagship event National Risk Management Conclave, Riscon ’11 on 12th-13th November, 2011. Riscon is an initiative with a purpose to identify and obtain possible solutions to risks deeply associated with various aspects of the financial/business world. The journey for Riscon started one years ago. After capturing and influencing the minds of people, Riscon this year has evolved from the general recession mindset that had engulfed the market and focuses on the risks that are involved in many of the contemporary issues such as the 'Euro zone debt crisis', 'Efficacy of RBI's monetary policy to tackle inflation' and ‘Impact of the devaluation of Indian Rupee on the markets’. Earlier, Riscon’10, organized by FinNiche was a resounding success. The conclave set its own benchmark with the amount of popularity it garnered, the stature of the speakers who made their presence felt, the contemporary issues that it brought into focus & the enormous amount of footfall it received from other reputed B-schools. The conclave, this year, is an attempt to provide a platform for sharing, addressing the various concerns in economic and financial domain and analyzing more innovative and effective ways for assessing the associated risks. It aims to achieve it through a series of knowledge sharing sessions and panel discussions by industry experts. The two day conclave will have three technical sessions, a panel discussion based on “Impact of the Euro Debt Crisis on global economy” and Shreyas Nidhi, an Inter B-School event based on Mutual Funds. The eminent speakers who will be addressing the students during the event are: Mr. Ajay Sahai, CEO & Director, Federation of Indian Export Organisation Mr. Rajeshwar Rao, Chief General Manager, Reserve Bank India Mr. J. K. Mallik, Director, Department of Economic and Policy Research, Reserve Bank India The panel discussion to be held is based on the “Impact of the Euro Debt Crisis on Global Economy”. Some of the dignitaries who’ll grace the discussion are: Mr. Sunil Nair, Deputy General Manager, Reserve Bank of India Mr.C.M.Khurana, Genral Manager, oriental Bank of Commerce Mr. P.T.Giridharan, Director, ICAI Mr. Vishesh Srivastava, Assistant General Manager, Punjab National Bank Mr. Jagannathan Thunuguntla, Equity Head, SMC
Company in Focus : RESERVE BANK OF INDIA The Reserve Bank of India is the central banking institution of India and controls the monetary policy of the rupee as well as US$300.21 billion of currency reserves. It was established on April 1, 1935 in accordance with the provisions of the Reserve Bank of India Act, 1934.The Central Office of the Reserve Bank was initially established in Calcutta but was permanently moved to Mumbai in 1937. The Central Office is where the Governor sits and where policies are formulated. Though originally privately owned, since nationalisation in 1949, the Reserve Bank is fully owned by the Government of India. The central bank till now was governed by 21 governors. The 22nd, Current Governor of Reserve Bank of India is Dr. D. Subbarao. The Preamble of the Reserve Bank of India describes the basic functions of the Reserve Bank as: "...to regulate the issue of Bank Notes and keeping of reserves with a view to securing monetary stability in India and generally to operate the currency and credit system of the country to its advantage." FUNCTIONS FINANCIAL SUPERVISION The Reserve Bank of India performs this function under the guidance of the Board for Financial Supervision (BFS). Some of the initiatives taken by BFS include: restructuring of the system of bank inspections introduction of off-site surveillance, strengthening of the role of statutory auditors and strengthening of the internal defenses of supervised institutions. ISSUER OF NOTES Under Section 22 of the Reserve Bank of India Act, the Bank has the sole right to issue bank notes of all denominations. The distribution of one rupee notes and coins and small coins all over the country is undertaken by the Reserve Bank as agent of the Government MONETORY AUTHORITY The Reserve Bank of India is the main monetary authority of the country and beside that the central bank acts as the bank of the national and state governments. It formulates, implements and monitors the monetary policy as well as it has to ensure an adequate flow of credit to productive sectors. MANAGER OF EXCHANGE CONTROL The central bank manages to reach the goals of the Foreign Exchange Management Act, 1999. Objective: to facilitate external trade and payment and promote orderly development and maintenance of foreign exchange market in India. MINIMUM RESERVE SYSTEM - PRINCIPAL OF CURRENCY NOTE ISSUE RBI can issue currency notes as much as the country requires, provided it has to make a security deposit of Rs. 200 crores, out of which Rs. 115 crores must be in gold and Rs. 85 crores must be FOREX Reserves. This principle of currency notes issue is known as the 'Minimum Reserve System'. RELATED FUNCTIONS Banker to the Government: performs merchant banking function for the central and the state governments; also acts as their banker. Banker to banks: maintains banking accounts of all scheduled banks.
StartUp in Focus : SACONA ENTERTAIMENT Sacona Entertainment Who they are? Sacona Entertainment is a firm striving towards excellence in customer service through its innovative products and services. Saconaâ€™s mission is to create a highest quality audio & video concept, designed around privacy, comfort, technology, and choice of content. Started in the year 2007, Sacona Entertainment is a two year old firm and is advancing steadily towards being a befitting service provider in the arena of entertainment. What do they do? Over the years, several entertainment units have aspired to cater to the diverse entertainment related needs of a user like audio playing, movie playing, television, video conferencing, gaming, and internet browsing. These devices have become more sophisticated over time with the advent of new technologies but still most of them are specialized only to cater to needs of a user. A user has to, typically, access to a number of different devices to satisfy all of his entertainment related needs. The existing systems do not provide a one stop solution to all entertainment needs of a user. Also another issue of privacy arises when the user is seeking entertainment outside the house. Thus a need was felt for an entertainment system which addresses the above mentioned limitations of the present devices. Sachin Bharadwaj, the CEO of Sacona Entertainment India, pursued his passion for wholesome entertainment and decided to venture to fill in a void in the entertainment industry i.e. the missing combination of movie watching, gaming, listening to music, conferencing and just relaxing in a private exquisite environment. Being an electronics engineer and having experience from the consumer electronics industry, he could successfully apply his innovation and knowledge to fill the gap in the arena of wholesome entertainment. During October 2007, the idea of renting a theatre was conceived by Sachin. He wanted to provide the home theatre entertainment in an exclusive and exquisite environment for a small group of 10 people. The idea was to open at least two such theatres in a busy street where people in groups could watch movies of their choice in this specialized environment. The idea then evolved to provide an even more private environment for a smaller group of just two people. This entertainment unit was christened eO, which stands for entertainment inside an "O". During Jan 2008, the idea of an eO was conceived by Sachin and he worked his way to create a rough demo piece just within a week of hitting upon this new concept. The first piece was a box of ply wood with a normal door like entrance. A PC with a 21 inch monitor was housed in it to enable movie watching. Next an Xbox was added to play games as well. Kids loved to get into it because they thought it to be a â€˜doll houseâ€™. Sachin then conceptualized a very high end environment for the unit. Acoustics was studied and materials were pasted all over inside this unit to create an effective and impressive sound environment. During March 2008, the basic idea had been translated into a real box equipped suitably to watch movies and play games in a great environment. Soon after, Sachin started work with a design house in Bangalore to create the new look of the unit and lo! the eO was conceptualized! The next task was to build a complex device like an eO without moulds and patterns and still make it look as great as the eO that was conceptualized. It took six long months to get the eO ready for the demo purpose. By end of Dec 2008, the prototype of the eO took off. It looked a lot like the eO in the concept and the team at Sacona was proud of it!
Markets this week Markets this week had overall negative sentiments with Sensex ending in red in 3 out of 5 trading sessions. However there was something to cheer during the last two days as markets bouced back on hopes that Greek referendum may not happen. Sensex was down with loss of 1.4% while Nifty too ended the week 1.4% lower closing at 17562.21 and 5284.20 respectively. The top gainers during the week were Shree Ashtavinayak, Nelco, Allahabad Bank and Allied Digital gaining 21%, 16.7%, 15.8% and 15% respectively. The top losers were JP Infratech, Whirlpool, Sterlite Industries and Tata Motors, which fell by 14.2%, 9.7%, 8.9% and 8.8% respectively. All the sectoral indices except FMCG, Power and Realty ended the week in red. The top losers were Auto, Metals, Consumer Durables and Oil & Gas, which lost 3.4%, 2.5%, 1.7% and 1.7% respectively. FMCG, Power and Realty rose by 0.7%, 0.5% and 0.1% respectively. Food Inflation rose to 12.21 for the week ended October 22. It rode on escalating prices of tomato and protein-based items due to supply shortage that aggravated amid surging demand during the festival season. Key Highlights during the week
India's exports grew by 36.3% on an annual basis to $24.8 billion in September, 2011, demonstrating impressive year-on -year expansion despite a slowdown in the US and Europe.
India has cut its forecast for fuel demand in the current fiscal by nearly 1% to 146.9 million ton because of a slowdown in economic activity.
With rising input costs and high interest rates, growth in eight key infrastructure sectors slowed down to 2.3% in September from 3.3% a year ago.
India's service sector contracted for a second straight month in October, as new business grew at its weakest pace since May 2009, a survey showed on Thursday, dragged by weak global demand and tight monetary policy.
ECB trimmed interest rates by a quarter point to 1.25 percent surprising global markets.
China's official PMI registered its lowest reading since February 2009, an unexpected decline that reflected a drop in new export orders. The overall index dipped to 50.4 from September's 51.2, edging closer to the 50 line that separates growth from contraction.
Gold prices fell by Rs 95 to Rs 28,315 per ten gram in the bullion market today on reduced offtake by retailers and jewellers at prevailing higher levels amid a weakening overseas trend.
News of the Week RBI to consider easing of rates in December
on any specific deal. New Hope is considering a break-up and asset sales amid interest from global resource companies, sources had said last month.
International Banks announce close to 110,000 job cuts
With the inflation expected to come down next month, sources from the RBI have said that they may ease the interest rates. RBI has hiked interest rates 13 times since March 2010 in order to control inflation which stood at around 9% for nearly a year. According to Mr.C.Rangarajan, fovernor of the RBI, however, the head inflation may take another two months to come down. Indiaâ€™s growth has been slowing down due to the cumulative rate tightening of 375 basis points. Yet the RBI continues with its fight against inflation being the only central bank implementing tightening monetary policy.
TATA Group looking to buy assets of Australiaâ€™s New Hope Corp Tata group is looking at the assets of Australia's New Hope Corp, a $5 billion coal miner that put itself up for auction last month, and could consider a bid in the future, a source with direct knowledge of the matter said on Saturday. Tata group firms Tata Power and Tata Steel have been on the lookout for coal assets in recent years to feed their growing raw material requirements. A spokesman for Tata Steel said the company is evaluating various options for raw material assets but declined to comment
Banks are shedding jobs worldwide as stricter regulations and a tough six months for trading income take their toll on investment banking units. Switzerland's Credit Suisse said this week it was cutting another 1,500 jobs on top of an earlier round of 2,000 layoffs. Dutch financial services group ING added to the tally with 2,700 jobs, most of those permanent positions. Japan's Nomura is also looking to slash over 1,000 jobs, a source with knowledge of the matter said. The layoff plans brings staff cuts announced this year or reported to be in the works at major banks to 109,000, some of them to be lost over three- or four-year programmes.
BNP Paribas in talks to buy Geojit Financial Services
French lender BNP Paribas is in advanced talks to buy out its Indian partner Geojit Financial Services in an institutional broking joint venture. However, both BNP and Geojit will continue the relationship in the retail broking business. BNP Paribas holds
50.1 percent stake in the three year-old joint venture -- BNP Paribas Securities India - while Geojit, in which billionaire Indian investor Rakesh Jhunjhunwala hold a significant stake, controls the remaining stake. The joint venture, catering to domestic and foreign institutional clients, was set up after the French lender bought a strategic stake in the retail broking business of Geojit Financial Services, which is now Geojit BNP Financial Services.
IRDA strict on Motor Insurance Companies
Insurance regulator IRDA has warned non-life insurers against evading claims on the mandatory personal accident cover that these companies are required to provide with each motor insurance policy. IRDA has written to the insurers, directing them to ensure that nomination papers for personal accident cover are duly filled in at the time the policies are sold. The directive follows complaints that insurers have evaded crores of rupees in claims, because either the consumers were not informed or the nomination papers were not properly filled in. Motor insurance constitutes the largest non-life insurance segment, with a share of about 48%. Non-life insurers collected a total premium of Rs 28,604 crore during April-September 2011, compared with Rs 22,744 crore in the corresponding period last year.
News of the Week continued... UTI Mastershare fund declares 22% tax-free dividend
real estate companies easing prices, demand may pick up. "The price rise, if it comes into effect, will neutralise the ill-effects of lower demand for cement so far," a broker said.
up its searing pace of expansion in the July-September quarter, establishing itself as the clear growth leader for Indiabased rivals to emulate and mounting a serious challenge to multinational competitors such as IBM and Accenture.
Genpact net profit up 19.7 per cent
UTI Mutual Fund today declared a tax-free dividend of 22 percent for the UTI Mastershare Unit Scheme. It is the 25th consecutive dividend declared under the scheme. The record date for the proposed dividend is October 31, and all unitholders registered under the dividend options as on October 31, would be eligible for dividend. As on October 25, the NAV per unit of the scheme was Rs 27.54 under the dividend option. UTI Mastershare Unit S ch e m e is an op e n - en d ed equity-oriented scheme. The investment objective of the scheme is capital appreciation and income distribution through investment in equity and equity-related instruments. As of September 30, UTI MF manages average assets of Rs 62,579.86 crore.
Cement stocks firm up on price hike buzz Shares of cement companies surged on speculation that prices will rise by Rs 10 per 50 kilogram bag in North India. ACC, Ambuja and Shree Cement surged 1-5% to Rs 1,223, Rs 116 and Rs 2,000, respectively, on the BSE. With indications that interest rates may have peaked, some of the construction projects that were on the back-burner may come back to life. Furthermore, with
India's largest BPO Genpact expects to finish the year ahead of its 25% sales guidance, buoyed by its close integration with Headstrong and cash flows from a dozen new deals it won in the last six months. At the current rate, Genpact aims to finish the year with about $1.6 billion in revenues. Genpact's revenues for the quarter ended September 30 grew 34% over the year-ago period to $429.6 million. The company's net profit grew to $48 million, up 19.7% from last year. Due to the Headstrong acquisition, IT business is contributing almost a quarter of the revenues, helping it surpass smaller rivals in growth. Genpact's largest customer GE contributed about 29% to its revenues while revenues from non-GE clients was about 71%. The non-GE business grew about 54% from last year while GE revenues rose by only 0.8% against the third quarter of 2010.
Cognizant emerges new leader Cognizant Technology Solutions kept
For the fifth quarter in a row, Cognizant's revenue growth topped 30% and it bumped up sales and earnings forecasts for the financial year which ends in December. Cognizant also increased its forecast for earnings per share to $2.83 from $2.78. Its shares were trading around 2.5% lower in early morning trade on the Nasdaq stock exchange whose main index was up 1%. Cognizant is in the middle of a share buyback programme with authorisation to purchase up to $600 million of its stock.
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Correct answers of last week
Q1. Which brand began its journey as 'Brahmanara Coffee Club'
7up, Germany, Nike, Sony, Swallow Sidecar/SS Q2. In which country's coins you can found the following lines imprinted, 'This is the root of all evils' ? 1998, London, Dennis M.Nally Q3. Name the first Indian woman CEO of a Foreign Bank? 1987, Amstelveen Netherlands, Michael Andrew Q4. Who started the Wall Street journal? Q5. The government has recently decided to augment the capital 1845, New York, Stephen Almond (Chairman), base of which institution by infusing a capital base of 3000 crore Barry Salsberg (CEO) rupees as government equity? 1989, London, Jim Turley
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