Page 1

JUNE 2018



Article of the Month

RBI in favour of Blockchain technology but not for Cryptocurrency

Finance & Investment Club

Finance & Investment Club

Finance & Investment Club

Editor’s Note We are pleased to publish the seventeenth issue of ‘Arbitrage’ – Finance and Investment Club’s monthly magazine. Arbitrage aims to cover a diverse range of topics under the wide domain of Finance and Economics. Our goal is to ensure that we provide significant value to the readers through informative articles and articles on current affairs. We would like to thank all the authors for contributing their articles for Arbitrage. In the Article of the Month – ‘RBI in favour of Blockchain technology but not for Cryptocurrency’, the author Ms. Komal Bhoria from SJMSOM, IIT Bombay, has done a good analysis on RBI’s stance regarding Blockchain and Cryptocurrency. We hope for the continuous support of our authors and readers to make this magazine a success. -Finance and Investment Club, IIM Rohtak


Siddhesh S Salkar

Vineeth Harikumar

Naveen Kumar

Sankalp Jain

Pavankumar S

Bibekjyoti Roy Nandi

Aditi Patil

Finance & Investment Club


1. RBI in favour of Blockchain but not cryptocurrency


2. Securities Lending and Borrowing in India


3. Reclassification of Mutual Funds


4. Unfolding Capital Cash Flow Valuation


5. Sustainable Finance –Socially Responsible Investing


6. The Tariff Game of USA


7. Protecting our Chickens: Making Watchdog act Watchdog


8. Blockchain Vs Hashgraph in Private Equity


9. Argentina - A Fragile Economy


Finance & Investment Club

1|P ag e

RBI in favour of Blockchain technology but not for Cryptocurrency ARTICLE OF THE MONTH

Komal Bhoria SJMSOM, IIT Bombay

Source- ET India - Reserve Bank of India, on its first bi-monthly monetary policy for the current fiscal year ended recurring speculations on the regulation of cryptocurrency in the country by forbidding regulated entities to provide services to any business or individual dealing or settling with virtual currencies and for any existing relationships to unwind within next three months. Also, Crypto-investors will no longer enjoy the provision of investing money directly from their respective banks to crypto currencies using platforms such as Zebpay, Coinsecure, Koinex, Unocoin, Laxmi Coin, and others. The unprecedented move by the apex bank turned out to be in line with the conjectural risk of crypto-assets as depicted by the government many a times debarring cryptocurrencies as

legal tender. The circular issued by the RBI clearly states that, “technological innovations have the capabilities to improve the efficiency of transactional systems and comprehensiveness of financial system, but virtual currencies certainly raises the risk associated with terror funding, money laundering and consumer protectionism.” Such a decision might complicate the investor’s decision on whether the government is in process of developing the framework for the digital system or making it more complex for 50 Lakh Indians who are currently invested in the virtual currency owning to $2 Billion in Bitcoin itself. Restricting regulated entities and at the same time not allowing private bodies to

Finance & Investment Club

2|P ag e

strengthen the system have made the investors’ situation no-win. Post the announcements, certain developments have been noticed which proved out to be negative for the cryptocurrency model, steep fall in the price of cryptocurrency such as Bitcoin which was traded at a premium post RBI’s stance on cryptocurrency led its trading to thrice the previous rate traded on discount, trade volumes plummeted, and confusion faced by the industry amidst improper and immediate steps being taken by the Central Bank.

As per RBI, they have been facing challenges in maintaining their monopoly over money supply and certain managerial decisions for the country, it certainly impinge upon smoother implementation of monetary policy and adjusting liquidity in the market as well as financial stability. It would take them considerable amount of time to regulate the market by allowing fiat money along with the circulation of virtual-currency and officially implementing the trading to be on cash basis, because when crypto-currency gain traction, government lose control on money markets. One can think of such a decision to be lacking in terms of accessing because instead of seeing virtual currency as a potential threat to the economy, it’s certain that even if it becomes popular but still the conversion would be in our normal currency and that is still under the control of the apex bank. Taking such a step

reflects the lack of understanding of the current payment system emerged recently amongst other powerful nation’s markets. Other possible arguments such as terror funding or money laundering that can be further ruled out since investors can still move cryptocurrencies across borders and convert them to legal paper currency that can be further used for such illegal activities. Indian government’s concern with the burst of Bitcoin-bubble might be correct for other crypto-currencies but for now, it is not possible for Bitcoin since 40% of bitcoin is owned by only one thousand people in the world and with more than 3.5 Million bitcoins getting lost recently due to a hack left only 4 Million of Bitcoin available for trading and with the halving event for Bitcoin miners occurring after every four year which halve the number of bitcoins created with each new block of transaction makes the following crypto-currency relatively safe in comparison to others. Recently, in India cryptocurrency exchange platform Coinsecure had reported losing of bitcoins worth $3 Million to a hack, assuring their investors reimbursements but such happenings lay serious flaws on security and technological capabilities in the sector even though backed by blockchain which allows you to transact leading no provision for reverse transactions and thus making it more secure than ever. Instead of introducing KYC requirements and compliances in order to further strengthen the security for user’s private key for the newly born trading system with risk mitigation and general security measures, government has initiated a near ban which acts as against the interest of consumers since more than 60% of investors have started entering the system through Initial Coin offerings around October and December when Bitcoin was traded at its peak value. Such investors are already recurring losses at present, selling off their

Finance & Investment Club

3|P ag e

crypto-assets after three months would not fetch investors any proceeds in their current linked bank accounts, thus currently investors are bound to take immediate action countering to steps taken by the RBI to limit transactions via regulated entities. Bitcoin in its second greatest fall already lost 70% of its value from Dec 17 to Jan 18, all hopes to revive into the crypto markets are lost because provision to in-cash the returns in your bank accounts have been taken up by the government. Hitherto, unofficially government has claimed cryptocurrency to be illegal tender and mentioned about the speculative nature of the crypto-assets, but last year government collected Rs 50 to 100 Crores on taxes from the crypto segment and have sent repeated notices to investors to pay taxes on their capital gains as per Payments Council of India’s Surya while also enquiring about their source of funds and initial holdings. Such instances lead to discrepancies among the investors’ understanding whether government is in favor of crypto-to-fiat or crypto-to-crypto transactions. Other way of sustaining in the market for cryptocurrency exchange platforms must be crypto-to-crypto trading only if Indian investor is willing to transform itself to the new model or simply going to “over-the-counter markets or overseas” which might lead to fall of many emerging startups enter the business as exchanges. Just like in the case of China after ban on trading of cryptocurrencies on exchanges in the country lead to offshore trading and turned to the darknet and peer-to-peer exchanges on the OTC Market.

To rather safeguard the consumer, it is required from all central banks to work in coordination to set up standard regulations in interest of financial systems across the border against illicit practices such as terror-funding or money laundering pinning down the uncertainty linked with the crypto-currency. Virtual currency market is planning in collaboration with all major exchanges to move to Apex Court against the decision taken by RBI for crypto-currency investors after capturing the loopholes defined by the recent diktat. They feel the sudden decision clamped down the entire concept of digital currency without properly drafting set of guidelines to regulate the system. Meanwhile, Crypto exchanges have linked the decision by RBI on the legal grounds stating scrapping off their rights on using banking services for any legitimate business. Most exchange players have filed a writ petition to their respective high courts under Articles 19 (1) (g) and 14 against respondents including RBI, Indian government and the GST Council. Denying of banking services will lead to cessation of their business model as a facilitator for an exchange from fiat-to-crypto product. Following notification might lead to paradigm shift of the market from India to other foreign countries for the market players in the segment where exchanges are still backed up by banking entities. By March 2019, a committee under Subhash Garg (Secretary of economic affairs in Finance Ministry) will submit the draft to regulate the existing virtual currency system in the country.

Finance & Investment Club

4|P ag e

Securities Lending and Borrowing in India Siddhesh Suhas Salkar Indian Institute of Management, Rohtak Introduction Securities Lending & Borrowing (SLB) is a system in which an investor borrows securities from the stock owner for the purpose of holding short positions. The investor needs to pay Stock Lending Fee (SLF) to the owner of the stock which depends on the market value of the borrowed securities and the period for which the stock is held. The SLB market in developed economies like US and UK are much more mature than the emerging economies like Brazil, India or Taiwan for instance. This article aims at highlighting the importance of developing SLB market and its contribution to the emerging economies like India.

Skewness in the global securities lending market International Securities Lending Association (ISLA) published securities lending market report in March 2018. As per reports, the global markets crossed $2 trillion mark in the year 2017. Most of these transactions are done in developed markets like USA, UK, Canada, Germany, etc. For instance, average daily turnover in USA market is approximately USD 5 to 6 billion. It can be inferred that SLB market in India is highly under-developed which is in contrast to SLB markets in developed economies. SLB

markets started in South Korea and Brazil in the year 1996 and 2000 respectively. Over the years, they experienced a very high growth rate in the securities lending transactions which has led to a development in these countries’ SLB market. The daily turnover in Brazil SLB market is about USD 2 to 3 billion, whereas, in South Korea it is about USD 300 million.

Well-functioning of markets SLB system helps in better functioning of markets, especially in cases where ownership of securities is concentrated. Efficient price discovery of securities Many of the bonds are concentrated with relatively lesser number of owners. Securities lending market increases the supply of units that can be sold. The number of investors in the market increases which drive the prices to their fair value and makes price discovery becomes more efficient. Earning income from portfolio inventory If SLB market is not functioning, then the long positions in the portfolios of investors will not contribute to any activity in the market. SLB provides an opportunity for the portfolio owner to earn income by lending securities from their portfolio.

Finance & Investment Club

5|P ag e

Help short term financing Investors with long positions in their portfolio can post them as collateral and receive short term financing through securities lending. This also helps investors to make efficient use of their portfolio.

anonymous matching of orders. In the next two years, the volume traded in the SLB markets was very low which made the regulators bring about changes in the regulatory framework. Few of the changes are listed below:  The duration of SLB agreements was increased to 12 months.  Early repayment and early recall facilities were introduced.  Liquid ETFs were allowed to trade with limits on their positions.  Netting of positions was allowed.  Margin and collateral obligations were made similar to that of cash markets.  Insurance firms were allowed to participate in the SLB market.

Efficiency in SLB system Efficient SLB system is the one where fees charged by one party are in line with the benefits that the other counterparty. The fee charged by the lender should compensate for the additional risk and reduction in liquidity of the portfolio. Hence, for an efficient pricing, the number of participants in the system needs to be large enough. In some countries, regulatory framework hinders the growth of SLB market by reducing the number of market participants which leads to inefficient system.

Indian context In April 2008, National Securities Clearing Corporation Ltd (NSCCL) introduced SLB market in India. The market involved the use of a clearing house which eliminated the credit risk associated with the process. As the transactions were not OTC, there would be

In spite of changes done to the framework, the increase in traded volume was not significant. There existed many other aspects which needed to be looked into in order to develop the SLB market.  The framework did not permit NRIs to participate in the SLB market.  FIIs were directed to maintain collateral only in the form of cash while domestic participants were allowed to post other liquid instruments.  The limits on positions of ETFs was too small for an institutional investor.  Absence of OTC settlements discourage the participants by limiting the flexibility of the agreements

Recommendations Shorter duration contracts: Introduction of contracts of shorter duration would encourage Mutual Funds to participate in the SLB market as they can liquidate their position within shorter duration. Borrowers trying to short the securities or looking for Finance & Investment Club

6|P ag e

settlement support can get into short duration agreements. Collateral requirement: Restrictions on the type of collateral posted should be liberalised so that it becomes easier for the participants to post the required collateral. Increasing the assets classes in SLB: The spectrum of assets classes allowed to be traded in the SLB market should widened. This will provide more options for transaction in the SLB market. Ensuring settlement guarantee for early recall: The clearing house should ensure that the risk associated with settlement in case of

early recall is eliminated. In the current scenario, the lender is at a risk of nonsettlement in case it wants to get back its shares earlier. Position limits: The position limits on institutional lenders should be increased as the current limits are very small. OTC market: The regulator should allow for the SLB market transaction to be settled overthe-counter. Countries such as USA or Brazil where SLB market is flourishing, the transaction are settled OTC. This allows the counterparties to set terms of agreements as per their requirements.

Finance & Investment Club

7|P ag e

RECLASSIFICATION OF MUTUAL FUNDS – BOON OR BANE Saphalya Rajeevan K.J.Somaiya Institute of Management Studies and Research Introduction The average assets under management(AUM) of the Indian mutual fund industry has grown from Rs.5.05 trillion in March 2008 to Rs.22.6 trillion in May 2018. The industry crossed the Rs.10 trillion mark in May 2014 and it doubled to Rs.20 trillion by August 2017. For an industry that has been on a steady rise and has been gaining consumer confidence, there was a lot of ambiguity when it came to mutual fund categories. Mutual funds were earlier classified as follows:

However, there were no clear guidelines to categorize mutual funds. There was no set rule as to how much large cap stocks a large cap fund must hold or how much mid cap stocks a mid-cap fund must hold. Thus, often a fund under the large cap category would be holding 50-60% mid/small cap stocks giving rise to confusion. Fund houses had more than one scheme classified under the same category which often made it difficult for investors to zero in on a fund. For example, HDFC had 3 schemes under the Large Cap category: HDFC Growth Fund, HDFC Large Cap Fund and HDFC Top 200 making it extremely confusing for investors to select the right fund as per their needs.

Finance & Investment Club

8|P ag e

Recategorization: On October 6th,2017, SEBI released a circular to rationalize open ended mutual fund schemes. The primary aim was to declutter the mutual fund industry and ensure better comparability among funds with similar investment objectives. SEBI’s proposition:


Grouping of mutual funds into 5 major categories: Equity, Debt, Hybrid, Solution oriented and others.

In all, 36 categories were defined and each fund house could have only 1 scheme under each of these categories. One scheme per category is not applicable to the following categories: i.Index Funds/ ETFs replicating/ tracking different indices; ii. Fund of Funds having different underlying schemes; iii. Sectoral/ thematic funds investing in different sectors/ themes

Finance & Investment Club

9|P ag e The newly defined sub categories are as follows:

Minimum investment criteria for Equity mutual funds:

Minimum investment criteria for Hybrid funds:


Rationale for Large, mid and small cap categories of stocks

Earlier, the fund houses would themselves decide what stocks classified as Large cap, mid cap and small cap without any set rationale. There were ambiguities even in the allocation, there were large cap funds that had invested more than 50% in mid and small cap stocks but called themselves as large cap funds.

Finance & Investment Club

10 | P a g e It has been decided to define large cap, mid cap and small cap as follows: a. Large Cap: 1st -100th company in terms of full market capitalization b. Mid Cap: 101st -250th company in terms of full market capitalization c. Small Cap: 251st company onwards in terms of full market capitalization AMFI will prepare a revised list of large, mid and small cap funds every six months based on market cap. If there are any changes, mutual funds will have to rebalance their portfolios within a month.

Impact of Reclassification on Fund Houses 

Eliminate duplication Excess schemes will have to either be wound up, merged or need to undergo a change in their fundamental attributes. Eg, HDFC had multiple funds in the Large Cap category. HDFC Top 200 was retained in the Large Cap category. HDFC Large Cap was repositioned to the Large and Mid-Cap category. HDFC Growth was merged with HDFC Prudence to form a new fund HDFC Balanced Advantage

Old category Large cap

Old Name

New name

New Category

HDFC Top 200

HDFC Top 100

Large cap

HDFC Large Cap

HDFC Growth Opportunities

Large and Mid-Cap

HDFC Growth

HDFC Balanced Advantage

Balanced Advantage

Possibility of a fall in Alpha or outperformance Earlier some large-cap schemes would invest in mid-cap stocks to generate greater alpha and outperform the benchmark. This would become difficult under the latest guidelines and might lead to a fall in alpha.

Portfolio churn Every six months, fund houses may have to reshuffle their portfolios based on the changes in categorization (large cap, small cap and mid cap). This will lead to increased costs indirectly impacting fund turnover.

Finance & Investment Club

11 | P a g e

Impact of Reclassification on Investors •

Simplification, less confusion A fund in each category will have to follow the criteria’s specified as per the category. This will simplify selection of funds for investors and advisors. Earlier, an investor could have been holding 2 large cap funds, HDFC Large Cap and HDFC Top 200. But now, because of repositioning, he will be holding only one fund of a particular category, thereby giving him clarity about the fund’s investment objective and making it easy to track the fund’s performance.

Better comparison Due to standard categorization, comparison of schemes will be easier and one would be able to conduct an apple-to-apple comparison for each category.

Portfolio shuffle Because of changes in fundamental attributes and mergers, investors will have to revisit their portfolios and decide if they wish to stay invested or exit from a fund.

Measuring past performance for merged schemes:

Finance & Investment Club

12 | P a g e

Impact on investor decisions •

If the fund continues with the same name with a similar but more well-defined mandate, it is better for the investor and he should stay put.


If the fund is undergoing a change of name with a marginally different mandate, he should consider it, but there is no compelling reason to exit. If the fund is being repositioned with a change of name and mandate, the investor should give it a closer and detailed thought and exit if he feels that it does not suits his needs.


Conclusion Despite the short-term disruptions in the mutual fund industry, this reclassification is a boon for investors in the long term. Investors will now find it easy to pick up a fund from a category and will have greater clarity since there is only one fund in each category. Past performance will have to be dropped for funds undergoing a change in fundamental attribute or a merger making it difficult to assess a fund at the moment. However, once the exercise is over, the industry will smoothen itself and these slight altercations will be resolved.

Finance & Investment Club

13 | P a g e

Unfolding Capital Cash Flow Valuation Parag Nawani Indian Institute of Management, Rohtak

“Price is what you pay. Value is what you get.” Warren Buffett might mean that it is important to find the true value of a company so that an investor doesn’t end up paying more price than its value. The total value of a firm is equal to the sum of its future cash flows. There are two methods to value the future cash flows- either using the free cash flow method or the capital cash flow method. Both of these approaches will provide the same result, but the process is different. This article provides insights into the capital cash flow method and will compare it with the free cash flow approach. The capital cash flow method differs from the free cash flow method mainly in the way that the discount rate used in the former is the pre-tax WACC (weighted average cost of capital). The latter excludes interest tax shields from the cash flow assumptions and

thus uses after-tax WACC for valuation. This might not come as a big difference, but there are instances where the free cash flow method is comparatively difficult to applylike when the debt policy of a company is assumed as a target amount rather than a target percentage; or when the capital structure of a company changes over time. The cost of capital is to be calculated every year in these instances going by free cash flow method, due to which it is difficult to apply this method in these cases. In the capital cash flow method, interest tax shields are included in the cash flows itself, and there is no need to calculate the cost of capital every year.

Mechanics of Capital Cash Flow Valuation Calculating capital cash flows

Finance & Investment Club

14 | P a g e Capital cash flows include all the cash flows that are to be paid to any security holder. There are further two methods to calculate the capital cash flows- either starting with NI or with EBIT.

calculate the present value of the company. The pre-tax WACC is an appropriate measure of the riskiness of the capital cash flows. Pre-tax WACC = D/V*KD + E/V*KE D/V is the debt to value ratio; E/V is the equity to value ratio; KD and KE are the costs of debt and equity, respectively. KD/E = RF + βD/E * RP Pre-tax WACC = RF + (D/V* βD + E/V* βE)* RP The beta of assets is a weighted average of debt and equity beta. i.e. βA = D/V* βD + E/V* βE

The Net Income path The calculations from this path include any tax benefit from debt financing in the cash flows. Interest is deducted before calculating taxes, and this increases the net income. Cash flow adjustments (depreciation, amortization, capex, changes in working capital) are added to the net income, along with non-cash interest. The available cash flow is obtained, and cash interest is added to arrive at the capital cash flow.

So, pre-tax WACC = RF + βA* RP

It can be observed that the discount rate depends on the risk-free rate, the asset beta, and the risk premium; and not on the equity or debt percentages of the company. So when the capital structure changes, there is no need to recalculate the discount rate.

Capital cash flow valuation

The EBIT path

After the calculations start with EBIT, the initial step is to estimate the corporate tax rate and convert the EBIT into EBIAT. It is then adjusted using the cash flow adjustments as in the above case. The free cash flow is obtained in which the interest tax shield is to be added since it does not include the benefit of debt financing. The final value thus obtained is the capital cash flow.

The future cash flows are discounted using the discount rate calculated above.

The relation between CCF and FCF valuation Riskless debt and a constant capital structure

The expected asset return The expected asset return will be the rate at which the future cash flows will be discounted to

FCF method The discount rate used in this method will be after-tax WACC. It has two components- the after-tax cost of debt and levered cost of equity.

Finance & Investment Club

15 | P a g e The after-tax cost of debt will equal to KD*(1-t), where ‘t’ is the tax rate. The levered cost of equity is calculated by unlevering the βA to arrive at the levered equity beta. ΒE = βA * V/E Using this βE, the cost of equity KE can be calculated as:

WACCs increase as the percentage of debt decreases in the capital structure. This is because, with the fall in percentage debt, the benefit of debt financing reduces. On the other hand, there is no change in the pre-tax WACC, even with a change in capital structure.

Now, the after-tax WACC is calculated as:

The free cash flows are discounted using the after-tax WACC. Since every year’s WACC is different, the discount rate for each period is calculated as a compounded rate that uses the preceding years’ after-tax WACCs.

After-tax WACC = D/V* KD*(1-t) + E/V* KE.

CCF method

KE = RF + βE*RP

CCF method The capital cash flow is calculated by adding the interest tax shield to the free cash flow. The interest tax shield is the product of tax rate, cost of debt and amount of debt. The amount of debt can be an absolute value or a percentage of the enterprise value. In this case, using either FCF or CCF will take an approximately equal amount of effort. But, in the next case, this might not be the case.

Risky debt and a changing capital structure FCF method The assumption that the debt is risky in this case adds some complication to the formula for unlevering the asset beta. ΒE = (βA – D/V * βD) * V/E Since the capital structure changes in each period, it is necessary to calculate the after-tax WACC for each period too. The resulting after-tax

There is no change in the expected asset return which is used to discount the capital cash flows. The interest tax shields, on the other hand, do change, since the amount of debt outstanding changes with the changing capital structure.

Application In the case of a Leveraged Buy-Out (LBO), a company acquires a target company using high levels of debt. These transactions generally involve a changing capital structure with the debt level reducing over the years. So, instead of using the FCF approach, if the analyst uses the CCF approach, he would not have to recalculate the cost of capital for each year separately, and thus makes his valuation much easier. So, we see that there are instances where it is beneficial to use the CCF approach rather than FCF approach, to find out the true worth of a company.

Finance & Investment Club

16 | P a g e

Sustainable Finance – A Guide to Socially Responsible Investing Amal Prabhakaran Wipro Ltd.

What is Sustainable Finance? A stock market investor making an investment decision will usually only consider the potential monetary return before buying the stock. But what if he invests in a company because of positive initiatives taken by the organization for the environment? Sustainable finance is a domain of finance that integrates environmental and social factors in making investing, financial and other business decisions. Some of the goals of sustainable finance include – 

Economical and societal development

 

Good and transparent governance Clean and green environment

Socially Responsible Investing uses ESG (Environmental Social and Governance) criteria in screening the potential investment. According to Figure 1, Assets under Management (AUM) of global investments made using ESG criteria have increased by 474% percent during the period 2012-16. The investments are in the area of energy efficiency, water, transportation, natural resources, lighting etc.

Green Investments

Figure 1 Growth of AUM of investments using ESG criteria, Source: US SIF

Finance & Investment Club

17 | P a g e

Sustainable Funds Sustainable funds restrict their investments only to a few selected and thoroughly screened stocks and usually exclude stock and bonds of companies that indulge in practices that harm the environment or deal with tobacco, gambling and alcohol. The funds have their own individual criteria for selecting the investments. Some examples of these funds are - TIAA-CREF Social Choice Bond Fund, Vanguard FTSE Social Index Fund and iShares MSCI KLD 400 Social ETF. Green Bonds Green bonds raise funds for projects known as “green projects�. These projects focus on initiatives in the field of green transportation, green production, organic foods, renewable energy, waste management, etc. Green bonds were initially introduced by the World Bank. Following this, even corporate companies started raising funds using such bonds. In 2015 Prominent Indian Commercial Bank Yes Bank became the first Indian company to issue green bonds. The bonds were rated AA+ by CARE and funds worth 1000 crores were raised. Green Stocks There is no official definition for green stocks. Individuals can have their own criteria for selecting and screening stocks. Someone may choose to invest in companies reducing carbon footprint or they may choose to invest in companies working towards ending poverty. Investors can go through the latest company prospectus and annual report for screening. Some companies even release their own sustainability report and investors can go through the same.

In 2004, research carried out by Lorraine et al, (2004) concluded that a favorable environmental disclosure by the company had a positive result on the share price of the company. Mean returns of several companies in the United Kingdom from 1995 to 2000 were analyzed. It was found that stocks gave negative returns for those companies that have unfavorable environmental reporting. In April 2017, Professor Anthony Heyes of University of Ottawa conducted a study on how environment affects the stock market. The research was published in Harvard Business Review. Professor Heyes and his colleagues, placed an Air sensor issued by the US Environment Protection Agency (EPA), close to Wall Street, the trading capital of the word. This sensor measured daily air quality. Heyes simultaneously recorded and analyzed daily data from the S and P 500 index. It was found that markets responded negatively on days when air quality was poor.

Figure 2: Comparing performance of SRI and Non-SRI Funds 1995-2005, Source: Wall Street Journal

Returns on Green Investing

Finance & Investment Club

18 | P a g e

Figure 3: Comparing performance of sustainable equities and green bonds against benchmark Index, UBS Sustainability Report. June 2018

Few studies in the past found that sustainable investing provides higher returns compared to the benchmark index. In contrast, there have been studies concluding that sustainable investments give inferior returns on benchmarks. These studies varied in the type of investments, regions and the time period. But according to the latest report on sustainable investing published by UBS, both sustainable global equities and green bond performance has matched the broader equity market performance and fixed income market respectively during 2014 to 2017.

Sustainable Finance Initiatives Morningstar Carbon Risk Score Investment research and management firm Morningstar launched a carbon risk score to help investors in measuring carbon risk in funds. The funds are assessed on a global scope and scores ranging from Low to High is assigned. “Low carbon designation” is given

to funds with investments in companies that have low carbon emission and low exposure to fossil fuels. The Government Pension Fund of Norway It is mandatory for the fund to avoid "investments which constitute an unacceptable risk that the Fund may contribute to unethical acts or omissions, such as violations of fundamental humanitarian principles, serious violations of human rights, gross corruption or severe environmental damages” according to the ethical council norms. United Nations Environment Programme – Finance Initiative UN Environment launched UNEP FI after the 1992 Earth Summit. More than 200 financial institutions have collaborated with UN Environment towards the sustainable finance mission. UNEP FI works with both corporates and countries in policy making and regulation.

Finance & Investment Club

19 | P a g e

Every year, a global roundtable is help to discuss on the need of the hour. NASDAQ OMX Green Economy Global American Multinational Organization NASDAQ was the first to set up a family of indexes tracking the green economy. The index focuses on sectors like renewable energy, waste management, pollution mitigation, bio fuels etc. NASDAQ OMX Green Economy Global Benchmark Index (QGREEN) is the primary index in the family and the index has consistently outperformed both NASDAQ U.S. Market and NASDAQ U.S. Large Cap indexes. The FTSE Green Revenues Index Series FTSE Russell, owned by the London Stock Exchange has launched green revenues index series to track companies involved in transition to a greener economy. Following are the indexes in the family –        

FTSE All-World Green Revenues Index FTSE Developed Green Revenues Index FTSE Emerging Green Revenues Index FTSE Asia Pacific Green Revenues Index FTSE Europe Green Revenues Index FTSE All Share Green Revenues Index FTSE China Green Revenues Index Russell US Green Revenues Indexes

The Biodiversity (BIOFIN) by UNDP



UNDP Launched BIOFIN initiative to reduce the gap in finance for bio-diversity management. BIOFIN, supported by EU, helps countries to mobilize finance for

biodiversity and uses the fund to achieve UN’s sustainable development goals. Presently, 30 countries have implemented BIOFIN including India. Sustainable Finance Collective (SFC) – ING ING Bank launched this initiative in Asia along with funding partners Credit Suisse, FMO and the UNDP-UN Social Impact Fund who collaborate to finance sustainability projects. The projects are bifurcated into three sustainability themes, namely –   

Circular economy Sustainable energy Social Impact

The funding partners will provide capital for these projects along with advisory services with the help of environmental and technical consultants.

Conclusion We have been taught that primary objectives of financial management are profit maximization and wealth maximization. However, that might not he fully correct in today’s time. Maximizing profit and wealth has increased the wealth gap and had a minimal impact in solving social and environmental challenges which are increasing day by day. An organization really looking to make an impact in the world shouldn’t maximize its profit or wealth but its sustainability.

Finance & Investment Club

20 | P a g e

The Tariff Game of USA Pritesh Saha & Abhimanyu Godara Indian Institute of Management, Lucknow

In history of United States, tariff had been an important political issue during 19th century. The first such act, Tariff Act of 1789, was passed to meet federal debt commitments. Historically, the Republicans favoured protectionism. The tariff rates were considerably high during their government till 1930s, even reaching 95% at times. Although the party now supports free trade, Mr. Trump has reminded us of those old Republican days. According to Mr. Trump, globalization has done more harm than good to America. His election agenda revolved around American jobs lost due to unfair trade deals America had entered into during earlier presidents. So, he started his election campaign with promise of implementing protectionist policies and restoring American economy to good old days when it was leader in manufacturing.

Tariff war between the world's two biggest economies If you look at the trade with China, it hasn’t been fair for many-many years. In the last four decades China has grown faster than any major economy in history and gone from a poor developing country to an economic powerhouse that is challenging America’s spot at the top of the international food chain. Its emergence as the global power was so sharp and extreme, faster than the world can handle. US and other Western nations kickstarted much of China’s rise by opening up the trade. After China joined 2001, we see an enormous surge of Chinese exports to everywhere in the world and to the United States in particular. US and other countries still complain that China is not opening its market enough and is keeping the value of its currency artificially low to make Chinese exports more attractive. The Chinese Finance & Investment Club

21 | P a g e

government owns, influences and subsidizes major industries giving them artificial competitive edge. There are heavy restrictions on foreign investments and foreign companies are pressured to share their technologies. Removing the suspicion of whether China wants to be a market oriented economy or not, it entered into Trans-Pacific Partnership. This is the one that President Trump ripped up on the third day in his office. As per Trump, China is winning and the US is losing. According to him the past approaches to deal with China have not worked out well and it’s not profitable to negotiate with them. Thus he wants to hit them with some aggressive forceful action. First he imposed tariff on $50 billion worth of imports from China and then on imports worth $100 billion. But dynamics have changed and today China sees its economy strong enough to withstand almost anything that the U.S. can throw at it. The tariff war started with US imposing tariff on solar panels and washing machines. China is major exporter of these items. China retaliated when US imposed tariff on steel and aluminum by smashing tariff ranging up to 25% on a range of US products mainly including agricultural items. As the Chinese saying goes, pressure generates motivation, they believe the current situation would inspire the wisdom and enthusiasm of the Chinese people.

NAFTA agreement or disagreement? US has the largest trade deficit in the world ($566 billion). This is the main reason behind the recent protectionist mood of US. 25 percent tariff on steel imports and 10 percent tariff on aluminum has been declared.

Recently US has threatened Canada and Mexico to scrap NAFTA. United States, Canada and Mexico together constitute the largest free trade zone in the world. NAFTA has resulted in US importing more from Mexico. Thus it is facing trade deficit. According to some people, this agreement has done more harm than good to America. But these are just speculations. It cannot be said for sure if NAFTA should be held responsible for loss of manufacturing jobs. We cannot say what would have been if NAFTA were not implemented. The US auto industry is still struggling to compete with Asian manufacturers. The production has shifted to other countries because of low manufacturing costs. Not all countries are good at manufacturing all goods. A large portion of imports is comprised of US goods only which are manufactured outside and then imported. If US imposes tariff, it will make the goods expensive for the consumers. That way it would hurt more. The middle and lower income consumers will be affected the most. They would have to spend more on daily used items from their already low income.

Collateral damage on US allies Taiwan 10% of Taiwan’s steel exports (1.2 million metric tons) goes to the US market. Also, a significant portion of Taiwan’s solar cell exports goes to US. Recognizing the fact that Chinese state-support was artificially reducing the cost of steel, the US imposed tariffs on steel and aluminum imports. Then the US imposed tariffs on steel and aluminum imports. But, countries like Japan and Taiwan were not exempted. So, though the main motive of tariff imposition was China, Finance & Investment Club

22 | P a g e

countries like Taiwan were more likely to be affected as it contributes to about 3% of US steel imports as against China’s 2%.

manufacturing. So tariffs on final products put pressures on the components manufactured here.

The US also published a list of 1,333 Chinese imports which they proposed hitting with a 25 percent tariff. This list of goods amounted to roughly about $50 billion. If the tariff is implemented, it will make its way to Taiwanese manufacturers since many goods exported from China are merely assembled there while much of the manufacturing is done in Taiwan.

Share prices of South Korean chipmakers like Samsung and SK Hynix have already slumped since the announcement of the tariffs by Trump.

South Korea Like Taiwan a lot of electronic components that goes into final assembly of the products made and exported from China, are manufactured in South Korea. Countries such as South Korea thrive on value driven

Finding a dollar value of the impact on various countries is difficult. Analysts at Citi bank tried to predict the relative impact of the tariffs on different economies based on their percentage of GDP contributed by exports to the US, as well as, stock market exposure to the US (explained in figure). Impact on India China could find alternative sources to US crude oil like West Africa but the US would

Finance & Investment Club

23 | P a g e

hard to find a market as big as China. So, as a result the international crude oil prices might fall and India may benefit from it. However, if the lowering of oil prices happens due to a full blown trade war the positive effects on the Indian economy could be negated by other developments such as disruptions in the global trade. India could substitute for Chinese exports in some segments like textile, garments, gems and jewelry where India already has an edge. But it would be difficult for India to fill the gap as Chinese exports are much more diverse. India is the fourteenth largest steel exporter in the world and the total steel exports by India to the US at the end of financial year 2017 totaled 9,00,000 tons constituting 2 percent of US steel imports. If India is not exempt from the tariff, India will surely be affected by the hikes. In the words of Sanjay Notani, a partner at Economic Laws Practice, a law firm based in Mumbai “It is the ease with which the United States is increasing tariffs citing national security that should concern India,” says. In the future, it is not improbable that the United States could increase tariffs on products that may hit Indian exports hard.”

Who stands to lose more? In a full blown trade war scenario, the biggest losers would be the U.S. consumers. More is the tariff on goods like electronics and fabric, more likely the American companies will pass down those costs to the consumer. And, it’s not only for the imported goods. Companies who don’t import their products and manufacture them locally are also likely to increase their prices. This is because as prices on imported goods rise, domestics firms also jack up their prices. So, though the local manufacturers are likely to benefit from this scenario, it is the consumers who would feel the pinch. The consumers would pay more not just for imported goods but for local goods too. But, projecting the losses of different economies caught in this trade war, US would have the least impact. Following the imposition of tariffs many countries including Mexico, Canada, China have vowed to retaliate. But the US has trade deficits with most of these countries. So, since the US buys far more goods from these countries than what they buy from the US, they stand to lose in the case of a full blown trade war scenario. The retaliatory tariffs by these countries will hardly have any impact because their purchases from the US are insignificant in comparison to what it buys from them.

Finance & Investment Club

24 | P a g e

Protecting our Chickens: Making the Watchdog act as a Watchdog! Anand Pisharody Indian Institute of Management, Sambhalpur When the mandatory audit rotations kicked off in April, 2017, many economists quoted the former Chairman of MFS Investment Management, Mr Robert Pozen: “Mandatory auditor rotation is designed to address a potential conflict of interest between a public company and its auditor. Because an auditor is hired and paid by the public company it audits, the auditor's desire to maintain a good relationship with its client could conflict with its duty to rigorously question the client's financial statements.” In other words, if your dog becomes too friendly to strangers, who would guard your chickens against thieves?

affiliates BSR & Associates serve just less than 20% of these firms. PwC and its affiliates sit at a distant fourth in the rankings. The fifth-placed group, the Chandioks, which is an Indian group, has less than 6% of the market.

The Satyam scam had unearthed a number of possible lapses in the rules governing audits and auditors, and it led to a number of changes in such rules and eventually to a two-year audit ban on one the Big 4 audit firms in India, PwC. But, wait a second… hasn’t India barred Foreign Direct Investment (FDI) in accounting, bookkeeping, auditing, taxations and legal services? Yes, it has. But, the Big 4, which are foreignbased audit firms, enter India as consultancy firms and provide audit services through affiliate firms, thus easily circumventing the FDI rules. Actually, they almost dominate the Indian audit space through these affiliates. For example, if we take a look at the top 500 listed entities for the fiscal ending March 2017, Deloitte and its affiliates Chokshi & Chokshi, AF Ferguson, SB Bilimoria, Fraser and Ross, etc. serve around 30% of the firms. EY, through affiliates SR Batliboi & Company, serve another 25%. KPMG and its

The dominance of the Big 4 was not altered by the compulsory audit rotations as the firms chose to switch from one of the Big 4 to another of the Big 4 when the rotations became applicable. So, when Vodafone, Tata Motors and Tata Consultancy Services switched away from Deloitte, Deloitte won major accounts of Infosys, Bharti Airtel, Maruti Suzuki, Wipro, L&T, Asian Paints, etc. KPMG won big as they got the audit responsibilities of big shots such as TCS, HDFC, Ultratech, Nestle, Godrej Consumer, Hero MotoCorp, Mahindra & Mahindra, etc. Ending the dominance of the big 4 audit firms, which was one of the unquoted reasons for the mandatory audit rotations was thus defeated. But, the Government wished to fix this. As expressed by our Honorable Prime Minister, Shri Narendra Modi, the Government wished to have Indian Big 4.

Finance & Investment Club

25 | P a g e So, a new legislation which stated that ‘wherever the foreign investor wishes to specify a particular auditor/audit firm having international network, then the audit of such investee companies should be carried out as joint audit wherein one of the auditors should not be part of the same network’ was brought into effect in January 2018. The rationale was that firms do not take the services of more than one Big 4 firms, and instead uses a less expensive Indian audit firm as a second auditor. However, the meaning of ‘foreign investor specifying auditors’ is not clear per se. When the SAS99 was adopted in 2003, auditors were required to ‘brainstorm’ the potential for financial misstatements and frauds. They had to approach auditing with skepticism. In 2018, we are discussing the gap between what is expected of audit firms and what they could actually deliver. One of the keys to this discussion is how to end the dominance of the Big 4 in the audit business in India. A key to this can be limiting the remuneration of audit firms, which under section 142 of the Companies Act, 2013 is supposed to be determined in the General Meeting of a

company. An upper limit can be imposed on the remuneration thus decided.

Four continuous quarters of violation of regulation 18 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations should be met with compulsory delisting. A violation of the audit committee composition should be seen as a major flag. In the Nirav Modi-scam, it was time and again mentioned that PNB’s audit committee composition was violating section 18(1)(b) of LODR. It brings down the accountability of the audit committee. Finally, an audit of audit report can be pursued, but the costs involved should be understood before any such move.

Finance & Investment Club

26 | P a g e

Blockchain Vs Hashgraph in Private Equity Shohom Pal St. Xavier’s College Private equity is emerging as one of the major ways of funding nowadays. Debt financing is the key feature of private equity. The number of companies that are existing in the recent time have increased by a considerable number. Most of the new companies which can be provided by the investors investing in their companies through private equity. Here we come with the use of private equity administration. The business environment is highly volatile and subject to change and risk. LITERATURE REVIEW Blockchain is the world’s leading software to manage digital assets. It is decentralised public ledger which keeps the records of the transaction in the world of cryptocurrency. It was originally created to take into accounts the Bitcoin transactions in 2009. Blockchain is a series of blocks which connect together to form a chain. The Blockchain uses the technology DLT or distributed ledger technology. The data in a blockchain cannot be deleted, it just can be distributed. Blockchain require miners to add a new ‘block’ to the chain of series of other blocks. Simple Structure for a blockchain

Blockchain is made up of blocks which is connected to the previous block and this leads to chain of blocks. The blockchain is distributed and is updated on a real time basis. The data on the blockchain can be distributed but not duplicated. The blockchain has got a hash function which helps to solve a complex mathematical puzzle to get access to the blockchain. HOW A BLOCKCHAIN WORKS?

Hash: 0001 Previous Hash: 0000

Hash: 0002 Previous Hash:0001

Hash: 0003 Previous Hash:0002

Finance & Investment Club

27 | P a g e

Hashgraph is a data structure and consensus algorithm. It is also a DLT or Distributed Ledger Technology having a robust system. Its algorithm initiates a new platform for consensus distributed ledger. Hashgraph has all the features of a Blockchain like distributed consensus, publicly distributed ledger and transparency but is faster and secure than it. It is often regarded as the future of Distributed Ledger Technology. The Hashgraph works on the basis of two special techniques:  

Gossip about Gossip Virtual voting

Gossip about Gossip means that a very small amount of information is added to this Gossip, which are two hashes containing the last two people talked to. The network can be expanded as there is a gradual increase in the number of gossips or each node. The Hashgraph depends on the Gossip protocol for its use. This propagates the information throughout the ledger. It resolves the problem of duplicity and makes the network more transparent to use. This brings in more confidence among the general public to rely on the technology.





Finance & Investment Club

28 | P a g e

GOSSIP PROTOCOL When the network is ready, the Hashgraph can use its voting algorithm as the entire information is distributed among the public. It is also easy to judge that what would a node vote for. The data can be used as an input of the voting algorithm and easier to look for which transactions have reached the consensus quickly. A






Private Equity are investment funds which are not publicly traded and whose investors invest in typically in large firms. Private equity is generally known for their extensive use of debt financing which they resale for a higher value to generate a good investment returns for these customers. It can also be used to prevent a company from winding up under distressed situations. Investment is generally made in growth companies which later on would give benefits to the investor. It can be also used to restructure a business so that it does not have to wind up. In a private equity structure, it can both invest in private and public firms. The private equity which is invested in public firms is called Private equity in Public Entities or PIPE. While the risk in start-ups is very high, they give higher returns. In this situation venture capital is used.

Finance & Investment Club

29 | P a g e

The advantage of using private equity is we get a leveraged gain with a good exit price. The disadvantages are that it carries fees and, in some cases, double layer of fees. The money can be locked for a longer period of time making it illiquid and increasing the liquidity risk. They also have a huge amount of hidden cost irrespective to the amount invested in the company. It carries a lot of paper work which reduces the transparency and efficiency.

BLOCKCHAIN VS HASHGRAPH IN PRIVATE EQUITY ADMINISTRATION Blockchain would increase transparency in private equity. Automating the private equity process, paper work reduces. As the blockchain is a public ledger, the information can be accessed by all the parties in the investing firm. The government as well as the regulators can be informed about the investing activities. The investors could easily contact different parties. Blockchains also have a feature called the proof-of-stake. This makes the blockchain a trustable source of information and about the investments because only few personnel can change the data on the blockchain network. The additional fees which is given to the managers could be reduced by the use of blockchain. This reduces the cost of investing leading to greater return from it. The investors would have a greater traceability of the funds and it would reduce the frauds that happen in such scenarios. This technology gives the opportunity to democratize the alternative investment and operationalize the time-consuming activities. The blockchain technology would help in business platform development. The scalability can also be improved by the use of blockchain technology. As Hashgraph uses the feature of gossips, the work done is faster and more efficient. The blockchain uses a feature called proof-of-work which makes the network slow. In a test performed in the previous year, results have shown that the hashgraph can make about thousands of transactions per second whereas blockchain can only make thirteen transactions per second. Hashgraph also makes it scalable than blockchain. It removes the different difficulties one has to face even after using blockchain. It is more secured than a blockchain technology and used for payments.

Finance & Investment Club

30 | P a g e

Argentina - A Fragile Economy Rudra Banerji KJ SIMSR

Introduction Argentina, previously one of the world’s wealthiest nation, is the 2nd largest SouthAmerican country with GDP(PPP) of USD 959.528 billion. It has rich sources of agricultural and mineral resources and highly educated population along with the protracted history of political turmoil and economic instability. After, the prolonged economic crisis the Argentinian Economy saw modest rebound of growth to 1.7% in 2015. But, in May 2018 the Argentine Peso plunged to 5%, all time low at 23.5 against US dollar and also 12-month inflation rate hit 25.4% which is above its target of 15%. In order to stem the rapid depreciation of the country’s currency, the central bank of the country, the Banco Central de la Republica Argentina raised policy interest rate to a gargantuan 40%. President Mauricio Macri’s government approached IMF for financial aid and Macri and Christine Lagarde, Managing Director of IMF reached a preliminary agreement on June 7, 2018, for a 3-year USD 50 billion stand-by agreement to keep the economy afloat alongside side the government pushes through various economic reforms.

Cause of recent collapse The recent bout of volatility in Argentine Peso was triggered by a sudden increase in the US dollar along with market expectations that the Federal Reserve might increase interest rate

more aggressively than previous expectation which is due to rise in US bond yields and also decrease in inflation. Also, the downward pressure on the country’s currency may be due to the imposition of 5% capital gain tax on LEBACs (peso dominated central bank notes) held by foreigners. The stiffening of global financial conditions in addition to a reassessment of global financial threat by foreign investors made Argentina’s economy extremely vulnerable. This is mainly due to its massive reliability on external borrowings in foreign currency, a large current account deficit that has been financed mostly by debt inflows and also currently high inflation rate which increased to nearly 25.4%. According to IMF’s data, the external debt of Argentina in 2015 was 178.9 billion USD which is 28% of country’s nominal GDP and in 2018 it is projected to rise to 252.9 billion USD which is nearly 38.8% of nominal GDP. The combination of these different factors made foreign investors jittery about the country’s ability to pay back its external debt along with weak Argentine Peso. The current economic downturn of the Argentine market came as a shock to president Macri’s investor-friendly government. After coming to power in late 2015, Macri’s government dismantled foreign

Finance & Investment Club

31 | P a g e

exchange controls and trade restrictions. It adopted various strategies like inflation targeting with a freely floating exchange rate, resolved disputes with private foreign creditors, minimized subsidies on public services and also undertook other marketfriendly reforms to re-join the global capital markets.

was a propitious resolution to stem rapid capital outflows but President Macri contemplated such a policy move because one of his key election promises is dismantling capital controls.

The pro-market reform introduced by Macri was praised by IMF in its 2017 Article IV Consultation and various other global business leaders. Market-friendly reforms launched by government created a lot of excitement in the financial world which makes foreign investors to poured billion dollars to both equity and debt markets. Following the sovereign debt default in 2001, after a 15 years hiatus, Argentina returned to the global market. In 2016, Argentina sold dollar-denominated sovereign bonds of worth 16 billion USD in the international market which is succeeded by sold of 100-year dollar-denominated bond in 2017 of worth 2.75 billion USD with coupon-rate 7.25%. Though enforcement of foreign exchange control

Argentina is not the only emerging market economy (EME) which is facing excessive exchange rate volatility and sudden change in investor sentiment but the countries like Turkey, Brazil, Indonesia, Egypt, India having the considerable amount of CAD are also prone to the financial shocks which may emanate from abrupt changes in dollar funding conditions. The major global geopolitical risk by which all the EMEs are affecting currently is the rise in US interest rates, increase in global crude-oil price, the trade war between US and China, Joint Comprehensive Plan of Action also commonly known as the Iran-Nuclear deal, etc. The sudden changes in the global riskappetite prove disruptive to EMEs which lead to “sudden stops� or reversals in foreign

Issues with Economy



Finance & Investment Club

32 | P a g e

capital inflows which results in the decline of country’s currency against US dollar.

Measures need for stabilization of the Economy First and foremost, measure that Argentine government need is to reduce external debt which is achieved by trade surpluses and optimal way of doing this is to increase the production of exportable goods like beef, citrus fruits, grapes, honey, maize, soy products, yerba, pollock, squid, centolla crab, etc. rather than through a recession that depress imports. Since 2011, Argentina’s exports have stagnated and to improve these new policy reforms are needed to increase productivity and strengthen competitiveness in the global market. Secondly, Argentina’s history of borrowing habits and stop-and-go dynamic approach also need special attention by Macri’s government. The government should target the interest-rate based inflation and also on the reduction of the primary budget deficit but to achieve targets through overly ambitious targets will only exacerbate external imbalances.

The government can implement a policy which can ensure inter-generational equity in fiscal management, provide transparency in fiscal operation and also can coordinate between fiscal and monetary policy likewise FRBM ACT, 2003 as implemented by the then NDA government of India. Introduction of crypto-currency can also be one of the probable solutions to deal with rising debt of the country as recently done by Venezuela. This can be used as an alternate way of payments for crude oil products and other imported products like organic chemicals, machinery, motor vehicles, etc.

Conclusion Along with other emerging market economy, Argentina is undergoing an economic crisis. Only the interest-rate hike by the central bank of the country cannot deal with the present economic turmoil instead Macri’s government should take immediate and prompt action to introduce new policies which should focus on the improvement of various macroeconomic parameters starting from high external debt to reduction of current account deficit.

Finance & Investment Club

33 | P a g e

CALL FOR ARTICLES Finance and Investment Club of IIM Rohtak invites articles from all Business Schools across India. The article should be original and should be related to finance and economics. All the reference should be cited and sources of images should be mentioned clearly. The winner of the article of the month will get Rs.500/- with an ecertificate. All the other selected articles will be published in our magazine ARBITRAGE Instructions: 1. 2. 3. 4. 5. 6. 7. 8.

Please send your articles before 28th July, 2018 on Do mention your NAME, INSTITUTE and BATCH with your article Font: - Times New Roman, Size: - 12 in word .doc/.docx Please DO NOT send PDF files and kindly stick to the format Number of authors 2 at max Maximum Word Limit: 1200 words, Minimum Word Limit: 700 words Naming Convention: Name1_Name2_CollegeName.doc Any Image without the source or label will not be accepted

IMPORTANT: The article should be original and should not have been/should not be published elsewhere. You will be disqualified if you violate the same.

Finance & Investment Club

34 | P a g e

Finance and Investment Club Indian Institute of Management Rohtak Disclaimer: The views and opinions expressed in this magazine are those of the authors and do not necessarily reflect the opinion of the stakeholders of IIM Rohtak. Finance & Investment Club

35 | P a g e

All Rights Reserved Finance and Investment Club Indian Institute of Management Rohtak MDU Campus, Rohtak, Haryana For any queries/feedback/comments mail to Website: Follow us on Facebbok

Finance & Investment Club

Arbitrage Magazine - JUNE 2018 ISSUE- Finance & Investment Club | IIM Rohtak  

We are pleased to publish the seventeenth issue of ‘Arbitrage’ – Finance and Investment Club’s monthly magazine. Arbitrage aims to cover a d...

Arbitrage Magazine - JUNE 2018 ISSUE- Finance & Investment Club | IIM Rohtak  

We are pleased to publish the seventeenth issue of ‘Arbitrage’ – Finance and Investment Club’s monthly magazine. Arbitrage aims to cover a d...