COVER INTERVIEW “Navigating Market Dynamics” Mr. Amit Jeswani CIO, Stallion Asset Management “Role of ESG in Capital Markets in the years ahead” Dr. Jagriti Srivastava Assistant Professor, IIM Amritsar
CONTENTS
1. Foreword Prof. Nagarajan Ramamoorthy (Director, IIM Amritsar)…………………………………………………………………2 2. Cover Interview Mr. Amit Jeswani (Stallion Asset Management)……………………………………………………………………………..3 3. Role of ESG in Capital markets in the years ahead Dr. Jagriti Srivastava (Assistant Professor, IIM Amritsar)…………………………………………………………………9 4. Hosting International Sporting Events: an economic advantage or financial blunder? Ritesh Chandwani, Paritosh Sharma (IIM Amritsar)………………………………………………………………………..11 5. The Moscow Tryst: A newly emerging multipolar economic world order Ashutosh Sharma (M S Ramaiah Institute of Technology, Bangalore)…………………………………………….13 6. Economic Corridors: Key to Sustainable Growth Vishnu Teja Kasi, Deepanwita Chowdhury (IMI, New Delhi)……………………………………………………………16 7. What is up with Green Banks in India? Shambhavi Sharma (Masters’ Union School of Business)………………………………………………………………..20 8. Indian Chemical Sector Report…………………………………………………………………………………………………..24 9. FRM Preparation………………………………………………………………………………………………………………………..27 10. Golden Investment Fund………………………………………………………………………………………………………….29 11. Club Activities…………………………………………………………………………………………………………………………..31 12. Our Recommendations…………………………………………………………………………………………………………….34 13. Team FEC………………………………………………………………………………………………………………………………….39 14. Crossword…………………………………………………………………………………………………………………………………40
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FOREWORD
PROF. NAGARAJAN RAMAMOORTHY Director IIM Amritsar
Dear All, I am delighted to introduce the eleventh edition of Vitta Artha, the bi-annual magazine published by the Finance and Economics Club (FEC) of IIM Amritsar. FEC works interminably at the college and industry levels to further the students' interests by exposing them to various aspects of the world of finance and economics—the club endeavors to harness talent and enhance the learning experience of our student community. Vitta Artha – The Finance and Economics magazine of IIM Amritsar is one such effort in the same direction. Varied views in the form of articles given by students from prominent B-schools across India, finance faculty, and the esteemed insights of industry professionals help the students and readers better understand the real-life implications and nuances in the fields of finance and economics. In the latest issue of Vitta Artha, readers will delve deep into the workings of financial market dynamics. The edition sheds light on the key elements to consider in an investment framework, the integration of macroeconomic factors into portfolios, the resurgence of start-up stocks and their prospective trajectory, and the balance between technical and fundamental stock analysis. It also discusses the recent earnings season, the Nifty-Microcap and Nifty-Smallcap indices, and the impact of India’s VIX on the market. Furthermore, it explores the hurdles and prospects in the Portfolio Management Services (PMS) and Alternative Investment Fund (AIF) sectors, and offers guidance on forging a successful career in asset management. This issue features a comprehensive analysis of the role of Environmental, Social, and Governance (ESG) in Capital Markets in decision-making. The article explores how ESG factors have become integral in finance, reshaping investor evaluations and capital distribution. Compliance and disclosure are now essential for organizations, driving inflows to ESG funds. Investors recognize the comprehensive insights ESG provides into a company's viability. Considering ESG factors pressures companies to adopt sustainable practices, reducing credit risk. Alongside this, this edition also features FRM preparation strategies, Chemical Sector Analysis, and Insightful Articles from students from reputed institutes of the country on topics related to Finance and Economics. Like the previous editions, I hope that this issue of Vitta Artha adds value to its readers and thus augments their interest and inquisitiveness in the enriching domain of finance and economics.
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INDUSTRY INSIGHTS
Mr. Amit Jeswani Chief Investment Officer Stallion Asset Management NAVIGATING MARKET DYNAMICS
COVER INTERVIEW: 1. What comprises your investment framework? Are factors like valuation, growth, governance, or competition more significant, and which holds the highest value in your approach? It is a combination of all of the above. Would I buy a company with bad corporate governance? The answer is no because even if that company gets liquidated, I am not going to get any dividends out of it. Will I buy a company with a zero percent growth rate? The answer is if you give it to me for near free, I will probably buy it. Will I buy a company which has a lot of competition? Depends on valuation again. So, in all, you need a combination of all these. Typically, we don't look for bargains or cigarbutt kind of approaches. What we are looking for is companies that can have a combination of great growth, monopolies, or market leaders, gaining market share. When they are gaining
market share or their margins are improving and their competitors' margins are not improving, it automatically means you are doing well. If you get a combination of all these factors at a price that is fair or reasonable, that is when you increase or decrease your allocation because prices are also not constant. If you are okay to pay a price and then the stock moves up 70-80% then you may not be okay holding the stock because you may find better opportunities elsewhere. Since we are a buy-side firm, we have to have 20-25 names in our portfolio and it is about risk-reward trade and we focus on that all the time. 2. In constructing your portfolio, do you factor in macroeconomic considerations? We do factor in macroeconomic conditions. Our portfolio beta since inception has been 0.85 against BSE 500 and against Nifty 50 it has been 0.77. So, we have taken a 15-20% lower risk than our benchmarks to deliver a net alpha of 10%+ for the last 5 years and a few months. So, if there is just a 25 basis points hike or cut or if inflation has gone up by 100 basis points, then I do not think that impacts our portfolio much. If there are very large macroeconomic indicators like the FED printing 2 trillion dollars then of course we take factors like this into consideration. So, we don't focus much on small changes however we do factor in very large changes if they happen. We don't make changes to our positions if crude goes up or down by a few percentage points. We track everything but we forecast nothing. 3. When faced with a conflict between technical indicators signaling a sell and fundamental indicators indicating a buy, how do you navigate such situations? 4
At 10 crores you can do a lot of technical. So just giving you an example, the way you make zero to one crore is very different and then the journey from one to ten is very different ten to hundred is different, and hundred to thousand is very different. As of today, we manage a thousand crores plus. When you are managing that kind of money there is no such thing as stop loss. A 5% weight for me is a 50 crores position. If I start selling 50 crores worth of position, I am sure multiple stop losses will get triggered. I do use technical just to understand what the price action is and largely for risk management. We don't have stop losses based on percentage point drop in stocks. If the market is down 10% and so is my stock then I am okay. If the market is up 10% but my stock is down 25% that is when I do worry. See I started off as a trader and once you are a trader you understand risk management very well. I'll give you an example. So, our total pre-fee returns would be north of 250% in the last five years, and out of that, the top 11 winners have made 157%. The top 11 losers have lost only 8%. Our largest loss has been Edelweiss where we lost 1.3% of our portfolio. Our second largest loss was in Nykaa where we lost 1.2% of our portfolio. We do ride winners and cut losers. We don't hold our losers for a very long time. We accept our mistakes and move ahead.
4. Are there macroeconomic scenarios where stock prices are less influenced by valuations? If so, what factors take precedence during such situations?
It is only the interest rate that changes. The value of stock is the cash flows it generates multiplied by the growth rate and divided by
the cost of capital minus the growth rate. If your cost of capital goes to zero or negative, these things do affect stock prices and this is how bubbles are created. If you see the last cycle, we had the FED and the global central banks printing trillions of dollars and we had negative interest rates. We have all been taught in college, and school that interest rates cannot be negative, and these kinds of scenarios lasted for a very long time from 2015-16 to 2021 we had this kind of scenarios. We all use risk-free for valuation and if the risk-free is negative then you can price any asset at any price and it becomes longer dates. Duration has no impact then. Markets focus only on growth when interest rates are falling and when interest rates are rising the way they have markets focus on valuation. Growth is a very important part of valuation as we see in Gordon's growth model of valuation. High dividend yield stocks usually outperform when interest rates are rising rapidly but over time, we don't keep changing our strategy, we are always focused on growth stocks. You can't keep changing your investment philosophy. Ed Seykota said, "Bulls make money, bears make money, the pigs get slaughtered." Hopefully, we will not be the pigs here. 5. What is your assessment of the recent earnings season? Which sectors have pleasantly surprised you, and where do you see promising opportunities in the future? In every sector, there are leaders that are doing very well. I will give you an example of the fashion industry. We have Trent which is growing at 16%, Tent is the company that runs Zudio, Westside, and Zara, and in the same quarter we had Shopper's Stop growing at 2% while Campus reported a minus 20% growth, 5
Campus is a shoe company. We had so many aviation players that went bankrupt but then we had Indigo which increased its market share to 62.3% in that same period so it's all about execution. In every sector there are winners and losers, there are companies increasing their competitive advantages or decreasing competitive advantages. In India broadly every industry grows at 10-12% but you need to find the right player that can grow at 20-25% and make a decent alpha. There are winners and losers in every sector. In this quarter, Zomato grew at 72%, thanks to Blinkit whereas in the same quarter growth for Jubilant Foodworks, which runs Dominos in India, was 4%. The overall growth of the insurance sector was 1213% in this quarter whereas Policybazaar grew at 46%. You need to find companies that are gaining market share very aggressively. 6. The Nifty Microcap 250 and Nifty Smallcap 100 indices have experienced a melt-up in prices in recent months. Do you believe these prices are sustainable, or is there a risk of the market being overheated in this space? It is a factor of growth rate. I will be a little boring here. Of course, there is a bubble; that is part of the market. All the newer sectors like renewable energy and power transition are in these small-cap indices. These sectors are growing faster. The markets are wrong by 10-20%, beyond that markets are not wrong. If there is a slowdown in growth rate, money will move to large caps. I would be more stockselective in this market. In 2024, I am not so bearish on the market. There are some stocks that are in the bubble territory as there is no float in these stocks but the pattern today doesn't tell me there is a crash coming. Of course, if you talk to me two months later, I
might have a different view. We are riding the trend. Never try to catch the top in a roaring bull market. It is okay to sell 10% down. Once the top is made there will be better signs. I don't have any data that suggests the market is topping right now, small corrections will happen and we have the 20Th October low. If the 20th October 2023 low is taken out, that is my first point of fear. 7. With India's VIX at historical lows and currently lower than S&P VIX, do you attribute this to higher macro stability in India or to continuous domestic inflows into the markets? A good selling point in the given market scenario would be if the VIX crosses 14 and stays above that for one week, we might start reducing our betas. But yes, India's macroeconomic side is very stable and probably the most stable we have seen in a very, very long time. Our consumer demand is a little weaker than what we are used to but on the government side things are at the peak. I've never seen India doing such the right things ever before. Post-COVID is where India started doing great things. What this government has done for railways, infrastructure, and payments is unbelievable. At size, it is very difficult for entrepreneurs to convert black to white. India has become more compliant. Companies are getting such high market capitalizations for being ethical so everyone is now more focused on valuation rather than doing tax thefts. We see a large change in the way the economy is run and all this adds to lower macroeconomic volatility.
8. In PMS, how do you reduce the beta of the portfolio when the VIX crosses beyond a level? 6
This is part of one of our frameworks. The point where we reduce the beta of the portfolio and it is not a constant number for the VIX and it changes with changing market conditions. If elections are coming the VIX might go to 30 and we may not change a thing because it is normal during that period. We do incorporate VIX into our risk management frameworks. We do not hold cash so much in our portfolio. We have a lot of parameters to make our decisions. We do not predict anything but we react to everything. We already know what parameters what we are going to do. We do not go short on the market as no PMS is allowed to go short on the market. We lower our beta by shifting the portfolio weightage to defensives or large caps or whatever our parameters dictate at that point in time. 9. Some startups, initially listed at high valuations, have shown recent signs of recovery. What factors do you believe contribute to this recovery, and do you consider it to be sustainable? See it is about profitability. The value of stock is the cash flows you generate in the future and at what growth rate those cash flows will happen, not today's cash flows. Hopefully, these companies will be very profitable in 2025 and we have a framework that says loss to profit creates a lot of wealth. Stocks go up multiple times. Zomato is already profitable and we expect very large profits from PB Fintech. PB Fintech's loss in this quarter was 23 crores and in the next quarter ESOP costs are going down from 100 crores to 70 crores and that itself will make them profitable and the growth is 46%. In Q4FY24, Paytm will also be profitable. Once a company moves
from loss to profit, market capitalization changes, and a lot of new investors get in. The profit is mostly free cash flows for these companies and it will be given back to investors in the form of dividends or buybacks. If we go right on our estimates for FY25 then all these companies are reasonably cheap. 10. How do you perceive the evolution of the PMS (Portfolio Management Services) and AIF (Alternative Investment Fund) industry? Do you anticipate it influencing the scale of the mutual fund industry in India? I am bullish on the industry but I am not that bullish on the industry. Today discretionary PMS in India is about 2.38 lakh crores and the number of folios is 1,38,000. The typical rich man has at least 2 accounts in multiple PMS companies. So, I don't think the number of families that have invested in the PMS world of India is more than 50,000-60,000. It is a very small industry. If the SEBI keeps increasing the minimum investment size in a country with a per capita income of 2200 dollars the size of industry doesn't increase by too much. But the industry will be growing at decent rates. The super-rich will keep increasing. Since the PMS industry serves only the super-rich it cannot be as big as the mutual fund industry. We have to have 50 lakhs as minimum investment and that is possible for a very small percentage of Indians. How many people in India earn more than 50 lakhs in India and pay taxes and this is all white money that comes into the system. The PMS industry cannot be nearly as big as the mutual fund industry. 11. What advice would you offer to someone aspiring to build a career in the 7
asset management industry? Be passionate! Keep trading a lot. The more you trade, the more you learn. The more you lose, the more you learn. This is the biggest tuition fee. You cannot learn swimming without getting into the swimming pool. You cannot learn the art of investing without getting into the markets. Trade aggressively! When your own money is at stake you will learn automatically. See there are only three ways to learn. One is learning from your gurus and books. The second is learning from your own experiences. The third way to learn is to learn from your competition. These are the only three frameworks of learning that I have. Of course, since everyone is part of the university, they are very good with the first part. The second part is experiences and no one can teach you experiences. The third part, peers, will probably come later in life. Just as there is a tuition fees for the university there is a tuition fee for the market as well. Keep reading and keep learning. Every day is a new day and there is not one thing that is constant. This is a business where you have to work very hard and you cannot survive working 40-50 hours. It starts at 70 hours a week and how much more you can stretch from there. This is a business where few people make it very large and most people don't. You want to be at the peak of your game all the time, fully focused.
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FACULTY ARTICLE long-term viability. Institutional and individual investors can raise valid concerns for businesses about capital acquisition and the cost of capital through putting pressure on companies to adopt effective sustainability policies and practices. These issues are constantly encouraging companies to assess their environmental impact and operate more sustainably.
Prof Jagriti Srivastava IIM Amritsar Role of ESG in capital markets in the years ahead Environmental, Social, and Governance (ESG) factors have quickly gained significance in the financial sector, transforming how investors evaluate companies and distribute capital. The incorporation of ESG factors into investment decisions has evolved into an essential component of responsible investing. ESG compliance is a strategic benefit for businesses. Along with com- pliance, ESG disclosure has become an essential requirement for organisations. The essence of ESG integration is that these issues influence investors’ investing decisions. Investor preferences for an ESG strategy continue to drive inflows into actively managed ESG funds, while non-ESG actively managed funds continue to see outflows. Investors are increasingly realising that considering a company’s ESG factors can provide a more comprehensive picture of its
Furthermore, investors have significant incentives to invest in companies focused on ESG issues, such as reducing credit risk and enhancing legitimacy. When it comes to credit risk, investors are increasingly weighing the environmental risks associated with companies that fail to meet net zero emission targets. The legal, regulatory, and reputational costs of negatively impacting the environment can be enormous. Moreover, previous studies show that companies with poor environmental performance have lower credit ratings. These companies also have higher costs of obtaining external finance. In view of these benefits, there has been a shift in the ESG perception during the past few years. Capital market participants now recognize that ESG practice is more than just a marketing tool. ESG is viewed as a viable tool for asset owners and managers to boost ”alpha” and control risk across their portfolios. Investors now have better access to ESG-related information because of technological advancements. Furthermore, regulations around the world are encouraging companies to consider sustainability issues. For instance, the mandatory climate disclosure under the new Business Responsibility and Sustainability Report (BRSR) disclosure norms introduced by the Securities and Exchange Board of India 9
(SEBI) in 2022 requires the top one thousand companies to mandatorily make the climate disclosure. Likewise, France’s energy transition law introduced in 2016 has significantly improved the mandatory carbon disclosure for listed companies. Going forward, the challenge lies that there is still no widely agreed definition of ESG and no standardised way for companies to report on their ESG performance. Furthermore, it becomes more complex as there is no
consensus between the major ESG rating agencies. The same companies obtain different rankings from these agencies because of their non-transparent ranking methodologies. As a consequence, there is a growing global momentum to create a harmonized global sustainability reporting framework. One of the most encouraging efforts to deal with this is the creation of the International Sustainability Standards Board (ISSB) under the International Financial Reporting Standards (IFRS) in November 2021. We expect continued interest from investors in ESG practices in the coming years. The increased interest leads to investors focusing on the direct source of data rather than relying on intermediaries and rating agencies for ESG consideration. It would result in direct communication between the investors and companies on sustainability issues. It may lead to increased coordination among the rating agencies and the intermediaries for the development of an industry-wide framework on ESG standards and reporting.
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STUDENTS ARTICLES
Ritesh Chandwani and Paritosh Sharma IIM Amritsar Hosting International Sporting
billion, making them the most expensive Olympics in history. The 2016 Summer Olympics in Rio de Janeiro, Brazil, left the city with a debt of $4.6 billion.
Events: An economic advantage or financial blunder? International athletic events have long been seen as a chance for towns and nations to demonstrate their strength worldwide, draw tourists, and promote economic development. However, more focus has been placed on the financial repercussions of hosting such events in recent years. We will explore the controversy around whether it is more advantageous economically to hold major international athletic events or if it could become more expensive. Examples of international sporting events: Successful: The 2012 London Olympics is estimated to have generated £29 billion for the UK economy. The 2014 FIFA World Cup in Brazil is estimated to have generated $11 billion for the economy. The 2018 FIFA World Cup in Russia is estimated to have generated $14 billion for the Russian economy. Unsuccessful: The 1976 Montreal Olympics left the city with a debt of $1.5 billion. The 2014 Winter Olympics in Sochi, Russia, are estimated to have cost $51
ECONOMIC ADVANTAGES: Raise the country's profile: Hosting events such as the Olympics can considerably boost recognition and tourism. Olympic hosting has resulted in long-term economic benefits for cities such as Barcelona, Sydney, and Beijing. These events can also encourage worldwide acceptance and modify opinions in countries like China and South Africa. Long-term investment: Planning major events necessitates infrastructure, transport, and sporting venue investments. These enhancements create a lasting impact on inhabitants while also attracting tourists. Job creation and investment: The preparation and investment connected with organising events create jobs and revitalise cities. For example, the 2012 London Olympics began thousands of employees and increased economic production. Sporting events generate enthusiasm and encourage sports 11
Environmental damage: The construction and operation of new infrastructure and the influx of visitors can hurt the environment.
participation, which benefits public health. They also promote volunteerism and civic involvement. Short-term economic benefits: Events such as the Olympics draw visitors, athletes, and media, increasing economic activity. FINANCIAL BLUNDERS: Overspending: Host countries often overspend on the construction of new or upgraded infrastructure or the operational costs of the event. This can lead to financial losses and debt. Displacement of local businesses: International sporting events can displace local businesses, particularly in the hospitality and retail sectors. This can hurt the local economy.
Corruption: In some cases, international sporting events have been linked to corruption. This can damage the country's reputation and lead to financial losses. Whether hosting an international sporting event is an economic advantage or a financial blunder depends on several factors, such as the careful planning and execution of the event, the level of investment, and the potential for long-term economic benefits. In conclusion, hosting an international sporting event can be a risky proposition, but it can also be a rewarding one. Countries that carefully plan and execute these events can reap significant economic benefits. However, countries that overspend or fail to properly manage the event can end up with financial losses and other negative consequences. REFERENCE: 1. https://www.oncoloring.com/mascot -fuleco-brazil-2014-coloringpage_12273.html 2. https://etherions.com/get-startedwith-short-bitcoin-today/ 3. https://my.hockeybuzz.com/user.ph p?user_id=211316 4. http://en.doodle123.info/2018/06/ 5. https://www.spokesman.com/galleri es/2016/aug/05/2016-summerolympics-opening-ceremony-in-rio/ https://www.statista.com/chart/2104 6/number-of-tickets-sold-forsummerolympic-games/
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Ashutosh Sharma M S Ramaiah Institute of Technology, Bangalore The Moscow Tryst: A Newly Emerging Multipolar Economic World Order
The contemporary geopolitical landscape is undergoing profound transformations, with recent events, particularly the Russia-Ukraine conflict, acting as catalysts for tectonic shifts that are reshaping the global economic order. These changes are accelerating the transition towards a new paradigm—a multipolar world order that challenges the dominance of the West-centric economic system. In this article, we will explore the multifaceted dynamics at play, emphasizing the role of Russia and developing nations in ushering in this transformative era. Over the past year and a half, the RussiaUkraine conflict has spurred significant changes in the global economic landscape, particularly in terms of bilateral trade relationships. Notably, the economic interaction between Russia and India has seen a remarkable fivefold increase. This surge is indicative of deepening economic ties and a growing interest among Indian companies to engage in mutual cooperation with Russia. The intensified economic collaboration signifies a departure from the traditional reliance on Western economic partners. As geopolitical tensions mount, nations are increasingly seeking alternative economic
alliances, fostering a multipolar economic system that mitigates dependency on any single region. Attempts to reshape the global energy market have introduced complexities, including a sharp increase in resource costs and limited supply. The Nord Stream gas pipeline, a critical energy infrastructure project, has faced sabotage attempts, reflecting the geopolitical struggles that influence economic stability. Furthermore, economic warfare, manifested through sanctions, has become a prevailing tool for advancing political goals. While ostensibly measures for political ends, these sanctions act as instruments of economic pressure, leading to unfair competition and the weaponization of advantages in technology, transportation, and insurance. The negative consequences of such tactics are not limited to the target nations; the initiators of sanctions also experience adverse effects, illustrating the counterproductive nature of this approach. In response to external pressures and the challenges posed by the West-centric economic system, an increasing number of Asian, African, and Latin American states are consolidating their economic positions. These nations are demonstrating a resolve to defend their sovereign national interests and play a more influential role in shaping global processes. This marks the emergence of a more equitable, polycentric world order—one where nations strive for economic autonomy and resist external pressure. The BRICS alliance (Brazil, Russia, India, China, and South Africa) serves as a pivotal player in fostering economic autonomy among its member states. This coalition of major emerging national economies has been 13
instrumental in resisting external pressures and collectively shaping economic policies that align with their national interests. The collaborative efforts within BRICS serve as a model for other nations seeking to navigate the challenges of a rapidly changing global economic landscape. One of the key frontiers in this transformative journey towards a multipolar world order is the economic potential of Russia's Far East. This region is marked by special tax, administrative, and customs preferences designed to promote the development of industrial sites and hightech production facilities while creating new job opportunities. The initiatives in Russia's Far East are emblematic of a broader trend where nations are strategically leveraging specific regions to drive economic growth. By providing incentives for industrial development and innovation, Russia aims to position its Far East as a hub for economic activities, reinforcing the broader shift towards a multipolar economic system. As the geopolitical landscape undergoes shifts, nations that resist external pressures and pursue their own national interests are fostering a new model of economic cooperation. In this emerging paradigm, business relationships are defined by mutual cooperation rather than yielding to external pressures. The result is a more equitable system that prioritizes collaboration based on shared interests and integration rather than domination. Integral to this transformation is the development of strategic infrastructural projects that enhance economic integration among nations. The Northern Sea Route, a key initiative, has seen a significant increase in cargo traffic,
demonstrating the growing importance of this global transport corridor. Infrastructural investments, such as the Pacific Railway and a new port on the Sea of Okhotsk, underscore Russia's commitment to securing direct access to Asia-Pacific markets. Development of the Northern Sea Route has garnered special priority, with 34 million tonnes of cargo shipped through the route in the previous year. This number is poised to grow in the coming years, reinforcing the importance of this global transport corridor in shaping the multipolar economic world order. The G20 Delhi Declaration, a significant milestone in global economic governance, reinforces the theme of advancing economic autonomy for member states. This declaration emphasizes collaborative initiatives aimed at fostering inclusive and resilient economic structures. As nations seek alternatives to the West-centric economic system, the G20 Delhi Declaration serves as a testament to the collective pursuit of a more balanced and multipolar economic order. De-dollarization, a strategic move to reduce dependency on the US dollar, is a crucial aspect of the new economic world order. Russia, in particular, is at the forefront of this movement, advocating for diverse global monetary systems. The country's efforts are aligned with a broader vision of establishing financial sovereignty and reducing vulnerability to external economic pressures. Maintaining financial stability is a key factor in the transition to a multipolar economic world order. In response to recent currency fluctuations, Russia's Central Bank has taken measures to safeguard assets from sanctions. The "safety cushion" of assets not subject to 14
sanctions provide a buffer against economic coercion. Additionally, the launch of the digital Ruble positions Russia as one of the first countries to introduce a national digital currency. Coupled with a national payment card system and an alternative to SWIFT, Russia is diversifying its financial infrastructure. The adoption of these technologies signals a move towards financial autonomy and resilience in the face of evolving global economic dynamics. One avenue for progress is the continued exploration of technological innovations that can enhance economic cooperation. Embracing emerging technologies, including blockchain and digital currencies, can contribute to the creation of a more inclusive and secure financial ecosystem. Additionally, sustainable economic policies that accelerate this new economic world order requires a continued emphasis on dedollarization and the development of alternative financial systems. The implementation of the digital Ruble, national payment card systems, and an alternative to SWIFT positions Russia as a pioneer in shaping the future of money. Accelerating the transition towards this new economic world order necessitates fostering multilateral collaborations, fortifying regional economic integration, strengthen financial sovereignty, and foster financial mechanisms that promote resilience. Collaborative efforts, technological innovations, and resilient financial mechanisms will be pivotal in navigating this transformative landscape.
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Vishnu Teja Kasi, Deepanwita Chowdhury International Management Institute, New Delhi Economic Corridors: Key to Sustainable Growth
Corridor being the first such corridor in India connecting Vizag to Chennai. However, with the recent G20 summit, there has been the launch of the India-Middle East-Europe mega economic corridor or IMEC. The proposed IMEC will comprise of road, rail, and ship-to-rail networks that span two corridors: the Northern Corridor, which connects Europe to the Gulf, and the Eastern Corridor, which connects India to the Arabian Gulf. A high-speed data cable, a hydrogen pipeline, and an electrical cable are also planned for the IMEC corridor.
INTRODUCTION:
WHY IMEC?
“India’s growth needs to be in tandem with sustainable economy” ~ Ashwani Bhatia, Whole Time Member, SEBI
Asia has developed into one of the world's major growth centers since the last 50 years. Even with such prosperity, almost 700 million people in Asia—or 65% of the world's impoverished live on less than $1.25 per day. Along with these issues, the region also has to deal with widening wealth disparities, severe infrastructure deficiencies, poor connectivity, a lack of regional and economic integration, unplanned urbanization, decreased productivity, and undiversified economies (Khan et. al., 2018). A
With the world evolving at a rampant pace, the word sustainability is used at every level starting from primary education to the mission critical summits. Today, the primary focus is to equip the world with items which are both viable as well as sustainable either environmentally, economically or socially. The economy of India has had a positive growth with a GDP of 3.75 trillion USD. In order to enhance the economy, it is essential to have an integrated economy wherein India will be connected to the rest of the world through feasible financial goals, industrial boom as well as economic corridors thereby strengthening ties with other nations (Bezpalov et. al., 2022). Economic corridors have been in existence for a very long time with the East Coast Economic
viable solution to these 16
problems is the development of economic corridors which links economic drivers including markets, transportation hubs, communication centers, and other components in a specific area. The objective is to establish a complete transport system that links Europe, the Middle East, and India by road, rail, and the sea, generate employment, lower greenhouse gas (GHG) emissions, strengthen economic unity, improve transportation efficiency, and cut expenses (Karim et. al., 2018). By promoting trade and connectivity, it is expected to change how Asia, Europe, and the Middle East are integrated which will play a pivotal role in enhancing geopolitical relations as well. IS AN ECONOMIC PROPORTIONAL SUSTAINABILITY?
CORRIDOR TO
The emergence of economic corridors can be glued to sustainable development on various fronts, be it economic or social through the creation of geopolitical relations. Economic corridors foster social, environmental as well as economic development through different forums. In terms of minimal trade and investment barriers, East Asia is among the world's most economically linked areas. It is directly connected to a Southeast Asian supplier network that is located nearby. Contrarily, with relatively significant trade and investment obstacles, South Asia is among the least economically linked areas in the world. In addition to its developing ties to the East, Central Asia has historical, if weakening, ties to the West. Asia will need to focus its resources on developing economic corridors and
networks in developing hubs while simultaneously fortifying the long-distance links. This would require a development of infrastructure for better connectivity (Brunner et. al., 2013). By establishing connections between important economic zones, economic corridors usually seek to improve trade and economic activity. This may result in a rise in both domestic and foreign trade, which would present greater growth prospects for companies. For instance, with the China–Mongolia–Russia Economic Corridor, being centrally located between the two, Mongolia has its trade benefits between Asia and Europe while entering new markets (Li et. al., 2022). Jobs are created when economic corridors attract industries and investments leading to increased employment. Consequently, this can aid in reducing poverty. The construction of IMEC while require millions on the road as well as during the phases of operation leading to job creation and alleviating poverty. The creation of economic corridors also helps boost geopolitical relations with different nations. As for India, with IMEC being formed, there is a scope for India to bypass Turkey and roll out a red carpet to Israel thereby sowing the seeds of a positive relationship. Similarly, with the New Eurasian Land Bridge Economic Corridor, Kazakhstan has provided support in terms of security to both Asia and Europe, being situated in the middle of the two. Moreover, there has been formation of friendly relations with the US and Europe as well resulting in social sustainability. Lastly, economic corridors could act as centers of innovation and technological development. 17
These corridors' ability to move people, products, and services can help spread knowledge and technology, which can result in innovations that help a number of industries. Modern technology integration can support resource efficiency and sustainability practices. CHALLENGES:
Economic corridors, although a boon has its own challenges as well such as inefficient governing mechanisms, a loss of land for the locals, instability over funds and others. CONCLUSION: Sustainability grows best in places which foster collaboration. In order to win the race of the survival of the fittest, it is essential to work together instead of in silos. The creation of economic corridors is a significant step to enhance sustainability in all forms. With every passing day, there will be creation of new forms and sources to boost sustainability under feasible conditions. Some might fail to attain
the primary objective while some, like these economic corridors shall succeed. The onus is on us to accept the changes with open hands and be a part of the change while contributing to a better world as there is no planet B to rely upon. REFERENCES: 1. Bezpalov, V., Gukasyan, G., & Okhrimenko, I. (2022). Economic corridors in the
context of the development of macroregions. Innovative infrastructure solutions, 7(4), 275. 2. Khan, M. K., Sandano, I. A., Pratt, C. B., & Farid, T. (2018). China’s Belt and Road Initiative: A global model for an evolving approach to sustainable regional development. Sustainability, 10(11), 4234. 3. Karim, M. A., & Islam, F. (2018). Bangladesh-China-India-Myanmar (BCIM) Economic Corridor: Challenges and Prospects. 4. Brunner, H. P. (2013). What is economic corridor development and what can it achieve in Asia's subregions? Asian
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5. Development Bank Economics Working Paper Series, (117). Li, X., Zhang, X., & Xu, X. (2022). Precipitation and anthropogenic 6. activities jointly green the China–MongoliaRussia economic corridor. Remote Sensing, 14(1), 187.
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Shambhavi Sharma
The nation anticipates a reduction of carbon emissions by 1 billion tonnes from now till 2030.
The carbon intensity of India's economy will be curtailed by less than 45%.
By 2070, India aims to achieve a net-zero status.
Master’s Union School of Business What is up with Green Banks in India?
Green finance stands at the heart of the dialogue on the sustainable evolution of economic growth. This report delves into the concept of Green Banks, specialized institutions designed to amplify investment in climate change mitigation and adaptation solutions. These institutions emerge as a critical response to climate change—a profound threat that endangers habitats, biodiversity, and the very fabric of human life. Green Banks aim to direct business strategies toward a future that is not only sustainable but also inclusive and driven by growth, by simplifying the process of funding projects in previously underserved markets and sectors. In alignment with the Paris Agreement's COP21 resolutions, India pledged to adopt ambitious Nationally Determined Contributions (NDCs), which were later refined at COP26 in Glasgow. Prime Minister Narendra Modi set forth India's renewed climate strategy, encapsulated in the 'Panchamrit'—five lifegiving ambrosias that outline India's commitment to climate action: By 2030, India endeavours to augment its
non-fossil energy capacity to 500 GW. Renewable resources will constitute 50% of
the country's energy requirements by the same year.
The urgency of these actions is underscored by the latest findings of the UN Intergovernmental Panel on Climate Change (IPCC), which posits that without a substantial reduction in greenhouse gas (GHG) emissions by 2030, India, along with the global community, faces the peril of an irreversible ecological catastrophe. ROLE OF GREEN BANKS IN INDIA’S SUSTAINABLE FINANCING: Green Banks play a pivotal role in India's journey toward sustainable finance, which is essential to meet the extensive financial demands of the country's climate commitments. According to the Nationally Determined Contribution (NDC), India requires approximately US $1 trillion in the short term to finance its sustainability objectives. The banking industry, with its vast resources, is considered a cornerstone in achieving this goal. Despite a traditional banking system reported by the RBI to have deposits totaling US$ 2.12 trillion as of November 2022, there is a gap in financing, particularly when it comes to fintech and individual investors. The digital lending sector in India is on an upswing, expected to hit the $1 trillion mark by FY 2023, and the
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fintech market is projected to reach $83.48 billion.
However, setting up Green Banks in India comes with its set of challenges:
While avenues for green financing exist, the necessity for a dedicated institution to fund green projects is becoming increasingly clear. In India, the concept of a Green Bank is still evolving. The focus for these banks is to offer lending services that are not only profitable but also adhere to Environmental, Social, and Governance (ESG) principles. Currently, among 34 leading Indian commercial banks, the RBI found that only about 6% have or plan to introduce green financial products soon. Furthermore, a mere 35% of these banks prominently feature sustainability, ESG, or climate risks on their websites.
1. Unclear Green Definitions: There's a need for a clear set of guidelines, known as Green Taxonomy, which defines what counts as a 'green' activity. This clarity would help investors know they are funding truly sustainable projects. Currently, without these guidelines, companies and banks could face compliance issues and the risk of penalties.
The answer for India may lie in improving both people's understanding and the processes involved in sustainable financing. Green Banks are positioned to ensure the accomplishment of various Sustainable Development Goals (SDGs), such as SDG 7 which aims for affordable and clean energy, SDG 11 that focuses on sustainable cities and communities, and SDG 13 which is centered on climate action, in addition to fulfilling national climate objectives.
2. High Costs for Green Bonds: Green bonds in India tend to be more expensive than other types of bonds. The interest rates, or coupon rates, for green bonds have been higher than those for corporate or government bonds of similar durations.
This pattern holds true for green bonds priced in Indian Rupees as well.
3. Insufficient Green Finance: To meet the climate goals India has set, known as the 'Panchamrit', a significant increase in green finance is necessary.India's targets require a massive investment — about 2.5 trillion US dollars by 2030 for the Nationally Determined Contributions (NDCs) and 10.1 trillion US dollars for netzero emissions by 2070. Right now, the green finance available is less than a quarter 21
of what's needed just to meet the NDCs. While public funding has contributed to green finance, private sector investment remains limited. 4. Risk of Greenwashing: There's a concern that some projects or investments might be misrepresented as 'green' or environmentally friendly when they are not. This practice, known as greenwashing, could lead to financing activities that actually harm the environment due to the absence of strict oversight. WHAT ARE OUR STRENGTHS? 1. Increased Green Finance Awareness: The Reserve Bank of India's 2021 report highlights a surge in public interest regarding green finance and renewable energy,
noticeable through online search patterns. Comparison with global trends shows that India's online engagement with topics like climate change matches those of developed and other major emerging economies. Despite this, specific searches about green financial tools like green bonds are relatively low, representing just 2 percent of related keyword searches. 2. India's Green Bond Initiative: The country has launched a framework for sovereign green bonds aimed at supporting environmental projects across nine distinct
categories, including climate change mitigation, adaptation efforts, resource conservation, and safeguarding biodiversity. The introduction of these green bonds can benefit the country and investors by: a. Broadening Investor Reach: Green bonds offer a chance to expand the investor base by attracting those with an interest in eco-friendly investments who previously had limited options for involvement. b. Reducing Green Finance Costs: For smaller green bonds, being officially listed could increase market exposure and liquidity. This, in turn, makes these bonds more appealing to a wider array of investors, potentially driving down the costs of raising capital for green projects in India. To foster green banking in India, we must enhance how we share green finance data, ensuring transparency to boost investor confidence and reduce knowledge gaps. Green Banks should not only fund but actively monitor environmental projects, providing an extra layer of security for risk-averse investors. They must also pioneer new financial products to attract private investment, like Climate Impact Bonds aligned with ESG standards. Furthermore, establishing clear policies will help define 'green' projects and prevent greenwashing. For smaller, decentralized projects that are often overlooked, Green Banks could offer combined financing, thus increasing their appeal to lenders. Key areas for initial investment would include clean energy and transportation, later expanding to sustainable agriculture and nature-based initiatives. It's crucial for Green Banks to continually track and enhance their environmental contributions 22
through a systematic approach. While still emerging, sustainable banking is essential for India's shift towards an eco-friendly economy, especially in the post-pandemic world where environmental sustainability is more critical than ever. While sustainable banking is still new in India, but it's vital for a greener economy. Green Banks can find the money needed for projects that reduce carbon emissions. After the pandemic, it's even more important to focus on long-term, environmentally friendly policies and finance. Green Banks can introduce innovative services to minimize investment risks. By actively engaging in the projects, they fund and creating time-bound checks, they provide a safety net for investors who prefer low-risk ventures. Their goal is to quickly expand the market reach of clean energy solutions, replacing traditional energy sources.
Green Banks should prioritize investments in proven areas like clean energy and transportation, with the intention to later support emerging fields such as sustainable agriculture and nature-based solutions as they demonstrate financial viability. Green banks, as a new institutional model, are pivotal in securing investment for projects that contribute to a low-carbon economy, thereby supporting the development of a sustainable, circular economy. In the aftermath of COVID19, it's become essential for India and the global community to refocus on environmentally sustainable policies and financial strategies for the long-term wellbeing of our planet.
To reduce the risk perception of green projects, financial tools like loan loss reserves or guarantees are set aside to cover losses from potential defaults. These are particularly vital for emerging sectors like nature-based solutions that carry more uncertainty. Additionally, gap financing can address the challenges of funding small, scattered projects by pooling them together, making them more attractive to investors through economies of scale. Initially,
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CHEMICAL SECTOR REPORT With the population sailing past 1.42 billion and GDP hovering around $4 trillion, Indian chemical sector stands out as one of the rapidly expanding industries globally. With a market size of $178 billion (as of 2021), it has garnered the status of being the sixth largest chemical producer. Contributing 7% to the GDP, the chemical sector is a key supplier to diverse industries like pharmaceuticals, textiles and agrochemicals. Various Government initiatives and development schemes have come up in recent years to attract more investment into this sector. The establishment of Petroleum, Chemicals and Petrochemicals Investment Regions (PCPIRs) and plastic parks have substantially contributed to the growth boom in the sector. In the 2023-24 Union Budget, the Central govt has allocated US$20.93 million to the Department of Chemicals and Petrochemicals to support and further develop it.
exporting to more than 175 countries worldwide. Notable exports destinations include US, China, Brazil, Saudi Arabia, Indonesia, UAE, Japan, Netherlands, Russia, Turkey, Taiwan etc. The Indian Chemical Industry is expected to reach US$ 304 billion by 2025 registering a CAGR of 9.3%. The demand for chemicals is expected to expand by 9% per annum by 2025. The chemical industry is expected to contribute US$ 383 billion to India’s GDP by 2030. India has traditionally been a world leader in generics and biosimilars and major Indian vaccine manufacturers, contributing more than 50% of the global vaccine supply. Chemicals and petrochemicals demand in India is expected to nearly triple and reach US$ 1 trillion by 2040.
MARKET SIZE: The Indian chemical industry covers around 80,000 commercial products, employing more than 2 million people and making up 3.4% of the global chemical industry. With strong holds in international trading, India ranks 9th in Exports and 6th in imports of these products, accounting for 2.5% of global sales and
GROWTH DRIVERS: The sector has seen rapid scaling across last few years due to various growth drivers that have thrusted the upscaling. Below are mentioned few of the significant drivers: 1. Rising disposable income, median age of 24
population, urbanisation and growing penetration and demand from rural markets: 2. Shift in production and consumption towards Asian and Southeast Asian countries in all sectors leading to increasing demand for Chemicals and Petrochemicals 3. Shift in consumer preferences towards a healthier lifestyle and environment-friendly products 4. Production Linked Incentives scheme for manufacturing of Advance Cell Chemistry Battery under Atmanirbhar Bharat Abhiyaan. FACTS AND FIGURES: 1. Exports of Chemicals and Chemical products (excluding pharmaceutical products and fertilizers) contributed 11.7% of total export in the year 2021-22 compared to 12.9% in the year 2020-21. It contributed 10.8% of total export in the year 2022-23 (up to September 2022). 2. CAGR in Export of total Chemicals and Chemical products (excluding pharmaceutical & fertilizer products) during the period 2017-18 to 2021-22 was 13.86% while CAGR of total national export was 12.62%. 3. The compounded average growth rate (CAGR) during the period 2017-18 to 202122 was 4.4% for manufactured product based on WPI while it was 4.4% for Chemicals and Chemical Products. 4. The Index of Industrial Production of Chemical & Chemical products achieved record to 137.2 in July, 2022 as against the lowest value of 109.1 recorded in May 2021.
5. The quantum of production of Major Chemicals decreased to 21.57 Lakh Tonnes during 2023-24 (up to May 2023) as compared to 21.76 Lakh Tonnes during the corresponding period of the previous year. 6. The quantum of production of certain Petrochemicals such as Performance Plastics was 27.55 Lakh Tonnes in 2023-24 (up to May 2023) 7. Production of Alkali Chemicals has increased (Up to May 2023) as compared to the corresponding period of the previous year, recording an increase of 0.12%. 8. The quantum of production of Major Petrochemicals increased (up to May 2023) compared to corresponding period of previous year recording an increase of 10.74%. 9. The production of pesticides and insecticides has risen by 23.5%. 10. A new non-toxic organic photocatalyst has been designed by scientists that can capture CO2 efficiently and transform it into methane. It is because FDI in Chemical Sector is not allowed for hazardous chemicals. INVESTMENTS SECTOR:
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CHEMICAL
The chemical sector has witnessed a fall in FDI inflows in last few years. 100% FDI inflow is permissible under automatic route into chemical industry as per guidelines, but it has witnessed only 9% FDI investment. Most of such investments come from 25
Singapore, Thailand, Indonesia and Malaysia. There are investment opportunities in a variety of industries, such as the dyestuff industry, the pesticides industry, along with the industry of fine and specialty chemicals. The dyestuff industry is a crucial sub-sector of the chemicals industry and accounts for 16% of the global market. It consists of forward and backward linkages with multiple sectors like paper, textiles, plastics, printing inks, leather, and foodstuffs. The potential in this sub-sector is huge, and it serves as a beneficial opportunity for investors.
leading to a rapid expansion of export opportunities. In such situations, Indian industries should prioritize research and development in specialty chemicals since it is
the most revenue generating sector. Given its diverse usage across other industries, the growth opportunities are immense. REFERENCES: 1.www.investindia.gov.in/sector/chemic als 2.www.ibef.org/industry/chemical industry-india/ 3.https://www.fdi.finance/blog/impact-of fdiinvestments-on-the-chemical-sectorof-india/
WAY FORWARD: India is seen as a ‘China+1’ destination for chemical manufacturing due to its low labour costs, skilled workforce, and proximity to the growing markets of Southeast Asia. The ‘Europe+1’ strategy, is also being opined, as the European Union is a major maker and consumer of chemicals. Europe is also working on stringent policies and regulations (climate policy) and is positioning to relocate some of its chemical manufacturing to India in anticipation of low cost of manufacturing costs. Consequently, there has been a consistent shift in demand toward India,
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FRM PREPARATION
Sanjeet Harish Kamath IIM Amritsar Cleared FRM I belong to a family that has a history of entrepreneurship - micro scale businesses that fed & provided a roof over a joint family. My Father was no different, he continued the family tradition and began a business of his own, made a name for himself and has been doing it ever since. One of the things that fascinated me was the role of Investment Advisors that took care of the entire Family's Investment Portfolio. As I grew up, my interests were peaked by the workings of the Stock Market, The Union Budget and the Articles in the Economic Times. After witnessing the effects of Demonetization, Covid Pandemic, RussiaUkraine War not only on the Economy but also on the Investment & Household Budgetary Decisions, I consulted with my aunt for my future course of action. Her advice was to focus on the Risk aspect of Investments & consider attempting the Financial Risk Manager (FRM) Examination conducted by the Global Association of Risk Professionals (GARP). After reviewing the material, I planned for it before clearing Level 2 of my CFA Examination as there was significant overlap between them.
The FRM Exam is divided into 2 Parts with 4 Subjects each. Part 1 delves into The Foundations of Risk Management, Quantitative Analysis, Financial Markets & Products and Valuations & Risk models. Exams for both Parts are conducted twice a year - May & November - roughly a week apart over a period of 5-6 days as per the slot chosen by the candidate on a first-come-first-served basis. The syllabus aims to acquaint participants with basic understanding of Risk & its measurement tools along with Case Studies that elaborate on those concepts. There’s about a 70-30 split between theoretical concepts and numericals & calculations. The exam consists of 100 Multiple Choice Questions to be answered in a single session of 4 Hours. It aims to test the understanding of the course material rather than the speed & ability of mug up. Difficulty of the questions range from moderate to hard, with a high possibility to make silly mistakes. I had chosen the May Exam Window with less than 4 months to prepare and at least 250 hours to devote to the course to have a shot at clearing it. It is very important to plan your schedules or risk missing out on key topic. Being a morning person, I kept the tougher theory topics for the morning, shorter & easier topics for the post-lunch afternoon session and calculation-heavy topics post dinner. I made it a point to do a thorough revision on the weekend of everything I studied over the week. If this sounds difficult to manage, the GARP Website & Candidate Resource Dashboard has an organized 14-Week Study Plan along with topic-wise questions in addition to Subject-wise and Mock Tests. Word of caution – the website is a tad bit difficult to navigate & one has to spend some 27
time to understand which tab takes you where, but once that’s taken care of, you have your timetable sorted. As the exam date came closer, I was nervous & anxious. Never had I attempted a 4-hour exam and getting used to it was a challenge. With one month to go, I attempted 3 mock exams along with hour long subject-wise tests. They were tough & the scores were lower than expected. In such a situation, one must stay focused and revise thoroughly. This is where Kaplan’s Schweser Notes, Secret Sauce & Cheatsheet are a huge boon. Going through them diligently in the final weeks, help immensely. Finally, it was the day of the exam. The center was far from home and I had planned well in advance of how to reach there, even so far as doing a test run two weeks before the test day. Getting a full night’s sleep, proper meal and enough water are crucial to keep yourself calm. No matter how hard you prepare, if the basics are forgotten, all will be lost. To everyone considering the FRM Certification, there's considerable time & money that will have to be invested and it shall be your hard work, whose fruits you'll enjoy.
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GOLDEN INVESTMENT FUND
The Finance and Economics Club, IIM Amritsar announced the launch of Golden Investment Fund (GIF), the student-run investment fund of IIM Amritsar, in February 2019. It was started with the aim to give hands-on experience to the students about investing and applying their research into the equity markets. Team GIF aims to create a culture of research, analysis, and investment among the members of FEC and Finance Enthusiasts of IIM Amritsar. The equity fund intends to achieve better risk- adjusted returns than its benchmark index through investment in large-cap, mid-cap, and small-cap stocks. GIF team releases weekly company reports and monthly fact sheets of its portfolio under management. The monthly report provides an outlook of the current market scenario as well as the companies in the portfolio of the fund. GIF team analyses the company’s fundamental and competitive. position in the market, investment risk, growth prospects, and investment decisions.
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CLUB ACTIVITIES Since its inception in 2017, FEC has been one of the most enthusiastic student interest groups of IIM Amritsar. The club organises numerous interactive events throughout the year to provide students with an enriching learning experience in finance. It supports students in their journey at IIM Amritsar, helping them harness their potential and enthusiasm and guiding them at every turn. From providing advice about additional certifications and online courses, like Bloomberg Market Certification, to helping them with subject choices and interview experiences, FEC facilitates outsideclassroom training to upskill them, leading to brighter career opportunities. The club has kept up its tradition over the months that have passed, working very hard to provide students with the best possible education and experience. Golden Investment Fund (GIF): It is a student-managed investment fund composed of experts in F&O and intraday trading. GIF team releases monthly fact sheets of its portfolio under management. Along with an overhaul of their reports, the GIF team also contributes to the IIM Amritsar's culture by conducting knowledge sessions and investment lectures to engage peers and motivate students to invest in capital markets and develop financial understanding among students. Pariprekshya: Pariprekshya is IIM Amritsar's Annual Finance and Marketing Conclave, where eminent industry experts
share their views and experience on the big stage before IIM Amritsar faculty and students. Being conducted since 2017, the FEC has been pivotal in conceptualising the event and helping students get relevant industry insights and familiarise themselves with industry trends. The Seventh Edition of Pariprekshya, organised in November 2023, had the theme "Digital Transformation in Finance: Exploring the Intersection of Finance and Technology" for its Finance Panel. Several prominent industry leaders have shared valuable insight into the subject. It has been a great success, helping to broaden the students' horizons of knowledge. Starry Nights: FEC is known for its trademark "Starry Nights" sessions, where members share their knowledge and experience in an informal setting. In Starry Nights, an informal discussion occurs on topics in which every attending student can share their point of view, contributing to a healthy conversation on important issues. Various Starry Nights sessions have been conducted since July 2021 on topics ranging from venture capital to the future of Hedge Funds in India. Fin-League: FEC's Fin-League quizzes put the students' business acumen to the test and help them keep their minds sharp and ready while fostering a competitive environment. Winners of Fin-League quizzes were awarded prizes and certificates. The competition is organised in a league format with three progressively challenging rounds. The examinations encompass various topics from Finance and Economics, providing a unique and enjoyable way to comprehend the 31
relevant concepts and principles. Arthaat: The FEC is pleased to present our monthly newsletter 'Arthaat'. Updates and significant events related to finance and economics will be included in the newsletter. We are also ensuring that all the essential global information is immediately available. The October Edition of our newsletter covers central news from India and around the World - from the Israel - Hamas War to the Rising Female Labor Force Participation in India. Activities on social media: The FEC is committed to ensuring that students are updated with the latest news from the world of finance. It includes important events like budget, company mergers, bankruptcies, famous economics concepts, success stories of companies, and many more. We are also reviving an old practice of sending information about recent IPOs on the Indian market this year. FEC has also published a series of posters called "FinBytes" to inform students about the trends in financial and economic terms that are appearing in the news.
give students more practical exposure. In the past, FEC has hosted CFOs and senior management from prominent companies belonging to the financial sector. Investment Awareness Session: As a part of Investor Awareness Week, FEC organized an Investor Awareness Programme in association with BSE IPF. The speaker for the session enlightened the students about the risks associated with investing in the stock markets and guided them on safe investment habits. AArunya: FEC organises two events as a part of AArunya – IIM Amritsar's Annual Management, Cultural, and Sports Fest. The events for AArunya 7.0 are– InSight Out (1000+ registrations) and Impetus – A Case Competition (700+ registrations).
Samvad: Samvad is an interactive discussion series conducted by FEC. It aims to connect students with our alumni and other industry stalwarts through sessions and discussions on various relevant financial topics. FEC conducted the most recent "Samvad" session in October 2023 on "Financial Planning and Risk Analysis”. Guest Talks: FEC regularly organises industry guest lectures and workshops to 32
CLUB ACTIVITIES
PARIPREKSHYA 2023
SAMVAD
FINBYTES
FINLEAGUE
ARTHAAT
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MOVIE REVIEW
Director by: Alex Gibney Distributed by: Magnolia Pictures Release Date: 22nd Apr 2005 Running Time: 109 mins. Country - USA Language - English
was happening. Alex Gibney dives into the Story interviewing key people at the time - investigative journalists who broke the story, contrarian & critical analysts, the then Governor of California and top executives of Enron. The film is divided into segments focusing on key people at the top - Kenneth Lay, Jeffrey Skilling, Andrew Fastow etc. - and gives the audience a breakdown of their motivations, psychology, history & attitudes and how they devised one of the Biggest Frauds in Corporate America. The movie makes use of archival footage, marketing & PR material, congressional hearing videos along with emails, call records & phone conversations of insiders to drive the point of how cut-throat & ruthless the culture was and the kind of pressure under which the employees. It was shocking even to the former executive about how the company functioned at the time. The movie also presents a nexus of corporations & politicians and how things can get manipulated once the right people are at the right places. Looking at it, in retrospect, one cannot help but get awestruck by the meticulous planning of it all. Greed, power, money & politics, all come together to create a force that imploded into itself. The film is heartening to watch as we watch an entire state pay the price to satisfy the greed of a few.
SUMMARY "It took Enron 16 Years to go from $10 Billion to $65 Billion in Assets and just 26 Days to go Bankrupt" - These lines at the beginning of the Movie set the tone for what to expect and the scale at which the fraud took place. The Movie does an important job of documenting a significant moment in a modern capitalistic world & highlights things that were blatantly wrong, not only in hindsight but also while it
It is unimaginable the trauma & hardships that the people went through at the time just so a corporation could meet its "quarterly numbers". It is equally enraging to watch the people responsible for the atrocity lie through their teeth in public and not even feel a morsel of guilt simply because they had the power to do so with the blessing of the higher ups. Thus, in the end, it is quite relieving to watch the "sinners" crash & burn almost instantaneously 34
for all that they had done. For all the Finance enthusiasts, the movie is filled with all the jargons and concepts that they've come across in their academic curriculum - Mark-to-Market, Corporate Governance, Derivatives, Financial Statements, Shell Companies, Ethics, Conflict of Interest, CEO Duality, Shareholder Wealth Maximization - and numerous more. This film is truly a treat for them and a history lesson for General Audiences. Viewed from the lens of the present, the film has multiple parallels with the frauds of the recent years. In one way or another, they involved a lot of window dressing, hiding information and presenting a shining image when in reality they were simply falling off a cliff. In our opinion, the film is an engaging watch with multiple lessons to be learnt and champions the cause of journalists who do an important public service. It also teaches us not to engage in 'Hero Worship' and maintain a critical eye for detail especially when things get hazy at the dawn of euphoria. The film's widespread critical appeal is cemented by the fact that it was nominated for The Academy Award for Best Documentary Feature and Alex Gibney went on to direct multiple such movies becoming an important documentarian of our times.
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BOOK REVIEW
through democratization.
Crafted around some 400 odd pages, “Colossus” pictures the birth of America as the World’s first democracy and its subsequent efforts to modernize the globe. It dwells around the early beginnings of the rise of US Capitalism, followed by Imperialism. It is not merely a historical analysis, but also showcases potential emerging challenges due to overreaching of Imperial Power. It raises concerns regarding America’s abilities to manage its global responsibilities effectively.
Author: Niall Ferguson Publisher: Penguin Books Pages: 466
SUMMARY Penned down in 2004 by one of the finest and prominent historians Niall Ferguson, the book “Colossus: The Rise and Fall of American Empire” explores American Imperialism and its role as a global superpower. The author argues American Imperialism, unlike its preceding superpowers, has not only banked his strengths on military superpower but also on cultural dominance, economic might and its commitment to global peace and harmony
This book also addresses the role of the United States in Cold War period and beyond it. It highlights the challenges posed by global terrorism and the implications of globalisation. The author heavily criticises America’s Foreign Policy and stands for a more rigid and proactive global leadership. He writes that the Americans shy away from identifying their long-term commitments, and being an empire holds an attention deficit disorder, imposing unrealistic timelines on its dependencies. Ferguson dives into US expeditions into Cuba, Haiti, other Central American states and even Iraq and applauds US’ objectives of democratization, but critically claims that such actions do not help in “nation-building” since it invites more hatred and fear mongering. In conclusion, “Colossus” set around early 2000s brings forth a critical examination of America and its possible threats to the
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globe. Whether one may agree or not, it stimulates important discussion points which brings out both sides of the tale and help in effective examination of US’ role as global superpower and its legacy.
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COMIC CORNER
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TEAM FEC
SENIOR COORDINATORS
Atharva Pande
Anuradha Sahu
Jagana Bharadwaj
Somnil Dutta
Utkarsh Jhawar
JUNIOR COORDINATORS
Satwik Satapathy
Sanjeet Kamath
Parth Patel
Parth Singhal
Aniket Chatterjee
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CROSSWORD
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INSTRUCTIONS: Use the clues to fill in the words above. Words can go across or down. NOTE: There are no space between words. ACROSS: 2. An expenditure that has been made and cannot be recovered. 7. The value of one currency in terms of another currency. 8. Policies designed to prevent trade between countries. 10. A share which entitles the holder to a fixed dividend 11. Tax put on imports 12. When long-run average cost declines as firm expands output. 15. A non-profit organization to help people borrow money at low-interest rates 18. Economies where all resources are owned by private individuals and groups. DOWN: 1. Time path of a country's trade balance following the devaluation of its currency. 3. A phenomenon when expansionary fiscal policy causes interest rates to rise. 4. A type of business having only one owner. 5. One country is better at producing a particular good than another country. 6. When Govt reduces its role and gives greater freedom for industry to operate. 9. When a firm has high ratio of capital to labour. 13. When planned expenditure of govt is more than planned revenue in budget. 14. An asset or item acquired with the goal of generating income or appreciation 16. A system of exchange of goods 17. Partial or complete prohibition of trade with a particular country .
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