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It gives us the immense pleasure to come up with August Issue of 2013 successfully. We are happy to announce the winner of the “Article of the month” award, AMAN VIJ and SAURABH JAIN from
“DECOUPLING OF INDIAN ECONOMY”.
This issue reflects on the continuing of unemployment problems and its effect on our economy. A wide range of articles casing from the depreciation on rupee to hike in gold prices with its probable measures. And an unfathomable thoughtful question on every Indian
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mind “Will Raghu Ram Rajan assistance get India’s charisma back?” whose insights were contributed by Munnangi Siva Krishna Manoj and Sonali Pahwa. We have discussed about the steepest decline in real GDP of US History and its impact on nationwide. A
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Decoupling of Indian Economy of Indian
Will Raghu ram Rajan assistance get India’s charisma
Great depression is it a Black Swan
Unemployment Crisis: THERE ARE MILLIONS IN G20 NATIONS
THE DECLINE OF RUPEE AGAINST DOLLAR
HOW 40-SOMETHINGS SHOULD MANAGE THEIR DEBTS
New banks for the under banked economy
Shale Gas - The Global Energy Game Changer
IS GERMANY CAPABLE OF HANDLING THE STORM?
STABILIZING THE VOLATILITY IN INDIAN RUPEE
Indian stock market & Indian Rupee
The Indian Gold Rush
Decoupling of Indian Economy and economy should have enough strength so that they donâ€™t require support of developed counries like US and European countries for their growth The Problem Indian Economy is the 3rd largest economy by GDP (PPP) and is expected to overtake US as the 2nd largest economy by 2030.It is a mixed economy which is a mixture of socialist and capitalist economy
owned business and public sector business (owned by government) plays a vital role in the running of the
economy both consumers and producers have right to consume and produce the things they want with government taking the role of a moderator to remove harmful goods from the economy.
Looking back in history ,the 1991 globalisation reforms in India had given the Indian economy a tremendous boost in terms of growth due to increase in trade and competition. The Sensex had rallied from below 1000 levels to 20000 just in the space of 16 years. So why the need of decoupling of economies? The main problem was that countries like India via IT exports and China via exports of manufactured goods had synchronized their
cycles with developed economies to such a large extent that even if there was a hiccup in those economies, there was a strong wave of uncertainty in developing
What is Decoupling?
Decoupling is the ability of country to be self-sustaining or selfsufficient.
developing economies like India it can be said that for decoupling to take place its financial markets 4
But there was a depression in the U.S economy. The housing bubble which was being built since the 2000 suddenly blew out and the DJI came crashing down and so
did Sensex (Figure 1) which fell
make up for the losses in-
from 20000 levels to the 8000
curred in America which led
to decline in the value of the
The decline of America was
rupee and crash in our stock
being transmitted to India in these
two ways 1.
The cost of production of
Even if you look the recent trend
goods in America was high
even after our government had
taken a number of steps to revive
were closing its plants in
government spending, allowing
FDI in number of sectors like
production in its plants in
aviation and communication, and
India and China. Due to this
deregulation of the fuel pricing,
but the rupee had a fall of around
income decreased which led
8.5% and reached an all-time low
to less consumption of In-
of 60 compared to Dollar just be-
dian goods and our exports
cause of Ben Bernanke’s (Fed’s
Chairman) comment on tapering
Due to weak U.S. economy, investors were unwilling to take risks of investing in
the need for dian economy.
emerging markets like that of
Quantitative Easing. Thus
decoupling on In-
The Solutions In order to be truly decoupled we
contributes to only 15% of GDP (Figure 2). The gap between
need to focus on three things Increasing domestic consumption Reviving the manufacturing sector
Indiaâ€™s domestic production and needs of its 1.2 billion population
is therefore met by imports. To Reducing our dependence on the reduce the dependence on other economies for energy. imported goods, India needs to have a sustainable, self-sufficient
For tackling the 1 problem we
manufacturing sector. To revive
can take the help of china model
Government of India needs to
overcome the impact of fall in ex-
provide incentives for enhancing
ports because of reduced demand
the private investment in the
from developed economies moved
sector. The incentives could be in
onto increasing the investment on
the form of tax breaks on
infrastructure which ultimately led
investment, lesser restrictions on
to higher domestic demand. We
opening of a new business, lower
should provide better business
interest rate loans.
starting environment by removing policy paralysis. Other than that our priority should also be to clear the 215 odd projects worth Rs 7 L crore stuck in red tape. This will lead to greater job opportunities which in turn lead to greater incomes and thus greater demand and
increase. Thus our Indian business houses
because of better support will stay in India itself and thus we would reduce our dependence on FDI and FII.
AUTHOR: FIGURE 2
For overcoming the 3rd problem entering into long term contracts we
oil with oil rich countries to reduce
companies to invest more on R&D the effect of volatile pricing of and explore more sources like the spot markets. AMAN VIJ IIM, RANCHI
underwater reserves, new basins. In spite of the fact that India has huge coal reserves, we are still importing coal. Also we have a huge
production SAURABH JAIN IIM, RANCHI
(Figure 3) which is adding to our trade and current account deficit. We should also invest more in
decoupling is only a myth but we can
dependence on outside world so that our economic policies are not ruined by outside turbulences .
renewable sources of energy like solar, wind and hydro. Other than that we should also focus on
Will Raghu ram Rajan assistance get India’s charisma back? In his first 3 years term as governor he accomplished all challenges so; Government of India has increased his term for 2 more years. The extension came out when the whole world is still in crisis, Mr. Pranab has told that he has played a key role in steering On September 5
the country form the worldwide
financial meltdown resulting in
Governor of the RBI for a three
the fall of America’s epochal
year term. He joined RBI when
there is a recession all over the
Brothers in September 2008.
world. But India is in a pace of
Subsequently in 2008 CAD
7.4% GDP in 2008 reduced
issue is deteriorating but it
from 9.5% in 2007 where the
became more worse in 2011 as
the Imports in India has started
Subbarao appointed as 22
economies like USA it’s GDP
has shrink to negative and
Demand for Crude oil started
China’s GDP has shorten to
increasing besides Gold im-
6.2% in a quarter from 13%
ports surged from USD 16 Bil-
which is a drastic change.
lion in 2008 to merely USD 49
Exhibit 1: GDP of India from 2008-13 8
in 2012 which has become second Mr. Chidambaram like relaxing the largest contributor to total imports FDI norms in several sectors, after Crude oil.
increasing the Import duty on Gold
Current Account Deficit
(US $ billion) Current Account Balance
Gold Imports (in $ bil-
Gold Exports* (in $ bil-
(Net Value in $ billion :) Gold Imports as % of
GDP Net Gold Imports as % of
GDP Gold Imports as a ratio of
Net Gold Imports as ratio
of CAB Source: RBI *: Imputed Figure consists of 15% of exports of â€˜Gems and Jewelryâ€™
After LPG, in 1991 it is eminent To 10% from 2% in different that
are intervals and etc. He worked as a
elsewhere are also effecting the true Professional by not getting situation
is influenced by any higher authority.
worsening as there is no demand In the span of 2011-13 there are lot for exports because all developed of and
are Chidambaram and Dr. Subbarao
adversely affected by the crisis and which at last ensuing in a fag end of there is no drop in imports, this has his career. worsen the situation which resulted After
in bringing forward the reforms by Government of India has appointed 9
23rd RBI governor on 6th of the major problems that the Indian August 2013 Mr. Raghu ram Go- economy is facing. vinda Rajan, for a term of three years and will take over Dr. Subbarao
2013. He is an economist and earlier served as the president of American Finance Association and was also the chief economist of the International
(IMF). He is the same person who
For Mr. Rajan now the situation is like travelling in a car without lights at night, there are many challenges he has to face to overcome with the financial crisis of India. But he is really an ambitious individual. 1.
in the year 2005 had predicted the
stabilize the condition of
renowned financial crisis that had
Indian rupee which has
hit the developed countries in
been dropped by 11% in
He is the second youngest RBI
He should give stimulus
governor after Manmohan Singh
and his appointment by the
economy; the growth has
government came when the rupee
been declined to 5% low
had hit an all-time low of Rs.
last year that has led to
61.81 on August 6 2013. He will
the stress in corporate and
be having a tough time ahead
because of the slow growth of
economy and the
CPI inflation is 9.64% in
decline of Rupee. The current
July even though it is
financial situation of India is in a
reduced from 9.87% in
wretched state. The Rupee got
June and the difference
between WPI and CPI is
November 2012 to 61.81 in August
huge as WPI in June is
6th 2013 has become a nightmare
just 4.86% , it is a
for the Indian government.
gigantic issue for RBI
they have to keep an eye The CAD of India has touched a
record high of 4.8% of GDP in 2012-13 due to the imports of crude oil and gold, this is one of
New RBI governor has to repair
ministry ties. 10
5. He has to work on the new he is ambitious, passionate and banking licenses, as the stress highly knowledgeable person. If he in the banking industry is being shows same dedication then, we increasing. The recent reforms can expect good result from him. taken by RBI is also a great Itâ€™s time for him to bring stability in blow like minimum daily CRR the economy rather than just forebalance of 90% and limit for casting for future so access to LAF is set to 0.5% THAT HE CAN BRING BACK etc.,
THE LOST CHARISMA OF INDIA.
6. Lastly to bridge the gap of current account deficit which is somewhat critical as from the June
pulled out USD 11 Billion. Munnangi Siva Krishna Manoj
We must not forget that he excelled pretty well at every job;
Exhibit 3: Performance of Indian Rupee SOURCE: RBI
Great depression is it a Black Swan As per the theory of author Nasim the US history which will confirm Taleb Black Swan is an event great which is characterized by three properties. 1.
Occurrence of this event is extremely rare.
They create extreme impact.
Human nature makes us fabricate
for their occurrence after the event has occurred in order to make them seem predictable. In this write up I will try to test great depression over these three properties in order to prove it to be a Black Swan event.
depression as a rare event.
Now the focus shifts toward whether great depression created extreme impact or not. One of the major
depression was overproduction and the impact which it created was huge decline in prices and income by 20-50%. As the unemployment rose to about 25%
become homeless as they couldnâ€™t pay their rent.The people who were hit hardest by this depression were on the bottom of the economic ladder. The homeless built shacks out of tar paper, cardboard, and/or scrap material.
As per the theory one of the most s h a c k s
These towns of
critical properties of a Black Swan Hoovervilles. This was the time is that it is an extremely rare event. when hopes of owning a house was This was the period in the US completely shattered since people history when they saw the steepest donâ€™t have the means to pay the decline in real GDP from 104.6 rent. Starvation and illness was a billion dollars in1929 to 57.2 common sight throughout the billion dollars in 1933. During country because of malnutrition and great depression unemployment unhealthy living conditions. This touched
industrial shows the impact great depression
production fall down to about 46 had on human life, on the basis of %. These evidences show that this which we can deduce that great phenomenon was unprecedented in depression fulfills the second condition of Black Swan. 12
Here comes the third and the final per different theories but none part where we discuss the theories could point out the exact cause that make us believe that this event responsible for the great depression. was predictable. Two of the major Because if the exact cause for great factors responsible for the great depression is known then recession depression overproduction construction
t h e of 2007 could have been avoided,
in this shows that these events are
This extremely difficult to predict which
becomes a vicious cycle when makes it qualify as a black swan. unemployed workers consume less Question which arises now is how due to
which industries are great depression can be useful to us
reluctant to produce goods and as a Black Swan. In order to answer thus industries cut production this question I would like to take which results in more layoffs. This the example of turkey from Taleb’s cycle could be reversed with the “Black Swan”, it tells the story of help of
government spending the turkey who is fed and cared for
which could create more demand. a prolonged period, as a result of Federal bank could have cut taxes which turkey is convinced that this and increased spending but gov- treatment will continue in future ernment does the opposite by also but one day, however, the raising the interest rates which turkey is not fed, and butchered at discouraged business spending and the hands of the same people who borrowing. Problem was further had cared for it. This story aggravated when FED refused to illustrates the drawbacks of looking support banks in 1930 which to the past in order to predict the forced them in bankruptcy. This future. This story tells us if we shows that great depression was a analyze the situation on the basis of result of various factors occurring past events then it is highly simultaneously. It is explain
difficult to probable we are going to draw f a c t o r wrong conclusions, this is where boom
i n we can use the concept
construction sector or inefficient “Antilibrary”from the book “Black policies followed by government Swan” which states that
triggered great depreciation or it books in one’s library are more was a result of combined effects. important than the books which has There are different explanations as been already read, in laymen terms 13
it can be stated as “what we don’t know is more important than what we know” this simply means when any analysis is done on crisis situation that analysis should not be based on some pre conceived notions but it should focus on the issues which are not discussed till now. By doing that we will be able to better prepare ourselves against any future crisis situation because AUTHOR:
future crisis situation will not happen in the same way as the old one.
Sagar Choudhary Institute For Financial Management and Research
Unemployment Crisis: THERE ARE MILLIONS IN G20 NATIONS Unemployment
current isnâ€™t a huge mystery, as to why
parlance only associated with the there is such a huge problem with United States of America; in unemployment. Letâ€™s consider a effect, the other countries of the giant corporation, why will it hire world
or workers that cost the firm more
forgotten. Did we know, the total than 10 times as much as other number of unemployed in the G-20 workers. nations
Over the past decade, have
million and the same increases movements of jobs to continue, every passing day?
Therefore, are we now seeing the corporations are also planning to truth of a systemic unemployment and terminating labor, to replace crisis, which is not only restricted them by use of technology. If a to America but also faced by many particular work can be undertaken other economies of the world?
by machine with precise output,
The question arises, what is really why would companies miss the causing this crisis and secondly, is opportunity to lower their cost and there trust that the same will be gain maximum benefit out of the turned around? To our fate, which same? is unfortunate, several long-term All this considerations, there has trends have been formulating since been an overall weakening in the years and have paved way for western world and as long-term bringing us to the point we are trends intensify, the unemployment today.
worldwide would get worse. The
The fundamental to this was the International Labour Organization dominant
big too is convinced about the growing
corporations in the global econ- unemployment in G-20 countries, omy, and there stance of replacing and has been exclusively put in the worker that live in major words by the Director General to industrialised nation with workers CNBC. that live in countries which have a When individuals in the G-20 low labor wage restriction. This nations lose their jobs, they have 15
to stay out of work for Mainstream media trying to con-
quite a considerable amount of vince residents that everything is time. In fact, CNBC claims that 30 fine, by throwing the standard item, percent
the workers who
their jobs in
Unemplo yNation South Af-
Unemployment CondiAbove 25 percent
ment rate has been down,
G20 nations France have been Italy
Has Hit a 15 Year High 12.2 percent, highest in 35
when we look
out of job
years 13.2 percent 13.6 percent 17.7 percent 26.9 percent 27.2 percent
Poland since a year Ireland or longer. Portugal M a j o r Greece Spain nations,
deep into the the statement does not seem accurate. Recently New
which are industrialized, too are no York Times reported that the longer producing enough jobs for decline in unemployment rate in their people.
recent times could entirely be
Unfortunately, it seems, things ainâ€™t going to get better any time soon. Since last recession, the global confidence is the lowest today.
accounted for by a decline in the participation rate. To get an accurate depiction of employment position in United States, we need to look at the employment-population
The United States of America, what is their part of the story? The official numbers do not look quite bad, as much as that of the rest; the official unemployment rate has been hovering at 7.5 percent, since 54 months now, which is the longest stretch in history. It is atleast not double digit, but things could get worse and which in no way means that it is doing better. 16
which is a measurement of the working age population that is actually working. We observe that the percentage of working age Americans that actually have a job has been declining in recent decade. This clearly shows the honesty of the mainstream media, when it tells us about the employment numbers of June 2013. The truth as such is, the unemployment rate has risen in 28 American States, and there has
been things are not getting better in t he
sm al l
Europe and America are likely going to continue to get worse in the years ahead. This is in a way a bad news for most of us, the only thing that we have to offer is our labour in the market place, and the value of the same AUTHOR:
declining, which increases the very difficult current position. The current situation can be compared with game of twisted musical chairs. We have been drafted to play and each time the music stops, more chairs (jobs) are being taken out of the game. There always exists something,
Prakarsh Jain (Chartered
which you might want to start thinking about and the time is now
Accountant) S P Jain School of Global Management,
THE DECLINE OF RUPEE AGAINST DOLLAR Recently, Mr. Narendra modi at around 3.5% from 1950s to highlighted
o f 1980s, while per capita income
depreciation in the value of money growth averaged extremely low and in an attempt to politicize the 1.3% a year. In 1991 there was issue blamed the current govt. for another economic crisis when India this state of our economy which is borrowed money from IMF which more or less correct. But, keeping stated certain norms for india to everything aside what we need to f o l l o w
focus on is how to rebuild the liberalization of foreign trade and value which our currency has lost. 1 rupee was equal to 1$ at the time of independence but now it has weakened by a great extend standing at a staggering value around
not to forget that the finance minister of that time was our current prime minister a giant in the field of economics .In the period of 2000-2007 rupee stopped declining and
rs.39 per US
$ because of continuous inflow
had a budget
d e f i c i t problem
India faced an in
could not borrow from abroad, there was intense pressure for liberalization which was not enforced in to act for some reasons . The "Nehruvian Socialist rate of growth" is used to refer to the low annual growth rate of the economy of India before 1991. It stagnated 18
The current position of the rupee is more alarming as it has weakened by 7.5% against the dollar since may of this year, companies have started taking their money out of Indian market due to its fragile conditions.
CAUSES : -
RUMAN RAHAMTULLAH NATIONAL INSTITUTE OF TECHNOOGY, ROURKELA
The current condition of rupee is due to a cascade of events, according to me the cynosure of them is lack of industrial power to provide sufficient goods for consumption and export, which could be due to the guidelines set by environment ministry and political pressure and taunt on the illiterate and poor people of rural areas which are haven for different minerals. People are deceived to protest against mining and construction of industries which would have been a boon to them. Increasing lust for gold in our country especially for following certain old dated traditions and heavy demand for fuel puts intense pressure on the government to import gold and other precious metals and fuel from gulf countries which increases the market deficit which in turn weakens money a clear cut implication for foreign investors to pull out their money from the indian market. Change in lifestyle of the educated population further pushes for import of goods from foreign market. The result is that rupee stands at a staggering rs.60 per us $. EFFECTS : Effects are widespread and not just confined to only big businessmen but also hits the common people where it hurts the most the pocket. The government has to pay extra money for import of crude oil which increases the deficit even more. Import costs have increased which means companies have to shed more money for raw materials and technology which 19
increases the cost of production implicating an imminent price rise of products and services, cut in remuneration and companies refraining to recruit more employees in such hazardous environment which in turn leads to unemployment and acute pressure on money earned by an individual at high inflation rate. The depreciation of rupee has impacted the automobile sector in three ways. First, input costs have risen as these companies use imported components. Second, some companies will have to pay higher royalty to foreign parent firms. Third, many have foreign currency loans in the form of external commercial borrowings and foreign currency convertible bonds. MEASURES TAKEN : We have with us the most intellectual bureaucrats handling the most important portfolios of the government. Graduates from harvard and cambridge are known to turn fortunes. Currently, MR. P. Chidambaram has raised import duty on gold to reduce its demand and plans to bring down the amount of import significantly in the next fiscal year, encouraging forei gn investments in India and FDI in retail. RBI has increased the interest rates to reduce the supply of rupee to the market. This will ensure that inflation is kept under check.
HOW 40-SOMETHINGS SHOULD MANAGE THEIR DEBTS Handling debt is a challenge for dle the most important expenses those of all ages, and the troubles you face. Also vital maintaining start early in our adult lives. It's the ability to repay your debts only likely to incur some heavy while simultaneously ramping up debts in our 20s and 30s, as we are savings dealing
between our relatively scarce financial resources and the sizable To deal with all those issues, here expenses of getting started with are four things that 40-somethings careers and families.
should keep in mind in dealing with their debt.
By the time one hit your 40s, they might hope to have moved past
that phase. But even though many
E x p e n s e s
people in their 40s have wellestablished careers that produce considerable incomes, they also often
commitments, both to themselves and to family members. That is a big reason why 40-somethings have the highest levels of debt of any age group, and not like younger groups, they've seen their debt levels increase slightly since 2005, according to statistics from the FICO Banking Analytics Blog.
expenses can break the budgets of young adults. But by the time one hits 40, they have plenty of life experience behind them and can predict what sorts of financial demands
expenses like putting children through college or replacing a vehicle are fairly easy to forecast. The smarter one can be about planning for them beforehand, the better they will be positioned to
Debt management in your 40s isn't just about paying down debt. It is also about making sure you're using the right kind of debt to han20
minimize how much debt they have to take on to pay for those expenses later.
Having an emergency fund with following an accident or poor three to six months' worth of health. Working with an insurance income is out of reach for many company
young adults, but by their 40s, it protection package for you could becomes more realistic. Having mean
that fund available can keep them beating debt and suffering a big from incurring debt and provide a financial setback. cushion them can tap later for college
other Put Your Best Debt-Foot For-
Get The Right Protection For Your Family
levels of their lifetimes, they're most vulnerable to unexpected tragedies like a death or major illness in the family. Between lost earnings and enlarged expenses, such events can crush even a financial
Having the right insurance policies in place to protect against tragic events can ensure your family's financial endurance. A simple term -life insurance policy usually costs relatively little but can provide enough death benefits to pay off a home mortgage and other debt while
advantage of credit wherever they
As 40-somethings hit the peak debt
additional savings available for future needs. Disability insurance can replace lost income and cover qualifying expenses if you're unable to work 21
can get it. But as one gets older, their access to better credit should increase, allowing them to skip expensive forms of debt like credit cards and payday loans and instead get low-rate loans that are much easier to pay off. Even though low-rate specials on car loans and credit cards can make their interest costs
consistently economical financing usually comes from a home equity loan or home mortgage, with government-subsidized
loans also offering reasonable rates for many students. If they have to have debt, look to consolidate it into these favorable areas, then avoid taking out additional highcost debt in the future.
Set the Stage For Your Own Future
As important as debt reduction is, 40-somethings also have to face the inescapability of their own future financial needs. One big reason why it is so important to get rid of bad debt and focus on concentrating outstanding balances in inexpensive forms of credit is to give oneself the flexibility to save more for retirement. As their salary increases, the potential matching contributions from their employer also rise, and they won't want to miss out on the opportunity to collect more free money to put PALLABI DUTTA IBSâ€“ HYD
t oward their retirement savings. The hallmark of one's 40s is that debt stops being a necessary evil and starts becoming more of a potentially
ROOHI JUNEJA IBS-HYD
focusing on the positive aspects of debt in helping one balance competing financial needs while avoiding the downsides with which they are already familiar, they can put debt on their side and manage it effectively.
New banks for the under banked economy After more than a decade now, Un d e r
b an k ed
E con o my -
Reserve Bank of India (RBI) is all Untapped Potential set to issue new bank licenses A look at the banking penetration in which was long awaited ever since India tells that it needs hundreds of the
minister, banks to be at par with other major
Pranab Mukherjee, announced in e c o n o m i e s . his
(April-March) penetration depends on the loan-to-
budget speech that the RBI was GDP (gross domestic product) ramulling over the issuance of tio. It is measured by the amount of additional bank permits. To delve domestic bank loans made as a ratio deeper into the rarity of such of GDP of the economy. issuance, the central bank has According to media reports, India's licensed just 12 banks (10 in 1993 loan-to-GDP ratio was 75% in and 2 in 2001) over the past twenty 2011, while China's was 146%. The years. That issuance witnessed the US has a ratio of 233%, with the emergence of Kotak Mahindra UK close behind at 214%. Bank
Kotak went on to become Indiaâ€™s f i r s t
Overall, India remains relatively underbanked by regional standards,
billionaire banker. On 1st July, 2013,
candidates consisting of
Asia - Banking Sector Total Assets, % of GDP
(NBFCs), corporate house, government entities and broking companies have applied for banking licences. 23
with the banking industry's total assets equivalent to just around 80% of GDP as of end-2012. In contrast, the figure for the regional
average (example-Hong Kong) extension, the increase in private stands at about 140%.
sector participation in the industry
However, on the second thoughts, looking at the positive side of the things, this represents an untapped potential and an attractive long-run trajectory especially in view of low
overall - remains critically low given the still-heavy presence of state institutions, and the resulting economic inefficiencies they pour into the economy.
-growth developed markets and a Disparate Return on Assets and prolonged structural downturn in NPA China.
Letâ€™s compare the performance of
More specifically, this attractive the private sector banks and their opportunity exists more in the state counterparts basis their return consumer banking space owing to on assets. The return on assets the favored long term outlook of (ROA) of private banks has risen to India's demographics. Existing 1.53% as of Financial Year 2011banks and the ones waiting for new 12 from 1.13% in Financial Year licenses are the ones who would be 2007-08, while that of state banks benefitting from this untapped has fallen from 1.00% to 0.88% potential.
through the same period.
The heavy footed state: According to the RBI's latest annual
profile of commercial
banks for Financial Year 2011-12, India's
commercial banks, which include the State Bank of India (SBI) and its associates and nationalised banks, approximately account for a mind-boggling
industry's outstanding loans. However, the 20 private sector and 40 foreign banks roughly account for the remaining 20% and 5% respectively. Essentially, the arrival of new private sector banks - and by 24
Ironically with regards to net nonperforming assets (NPAs), the former has seen their ratio fall to 0.46% according to the latest data, which is way below the latter's 1.53%. This
between these banks and their stateowned counterparts in recent years obviates the need for greater private sector participation to extract the gains for the entire economy.
STATE DOMINANCE India - Breakdown of Outstanding Loans as of end-FY2011/12, INR million (Left Hand Side) & Banks' Return on Assets, % (Right Hand Side)
I n c l u s i o n ? that they will reach out to the rural
Looking at the World Bank's latest and unbanked areas and focus on data on financial inclusion (see inclusion objective and also expand chart), it is quite clear that Indians credit to the small and medium over the age of 15, on average, enterprises. However, the truth is remain considerably underbanked that the private sector and the forcompared to their global peers. For eign banks see this lending compulexample, the global average for the sion
percentage of 15 and over's with profitability. an account at a formal institution Itâ€™s easy to see that they are stands at 50%, 15 percentage focusing on the creamy layers of points above India's 35% figure. the premium banking and high net The same global average metric worth individuals to extract the for the bottom 40% of the income maximum profits. distribution is 41%, while for In- So, one way to look at the dia; only 27% of its bottom 40% enthusiasm with which RBI has has an account at a financial come up with new licenses is just to institution. And we talk about show some action in the financial financial inclusion.
sector in the bleak economic
We know that there exists a growth scenario. priority sector lending obligation of 40 per cent. The justification provided for new bank licenses is 25
to more financial inclusion. Our
From State control to Freer economy should be able to leverage their proven entrepreneurial talent
Essentially, a level playing field and management expertise through cannot be there when state banks, letting them enter into the banking implicitly and essentially backed territory. by the government's coffers, can afford to take more risk as compared to their private domestic and foreign peers. Even though the looming entry of new private banks is a positive step forward for the industry as a whole, we believe that the full AUTHOR:
potential of India's commercial banking
unlocked via a marked reduction, if not complete eradication, of state -run entities in the system. Indian private sector has been innovative in penetrating into the frontier and RITU AGGARWAL
expectations are that the same spirit will be shown and it will lead
Source: BMI, World Bank Global Laggard Financial Inclusion Data, % age 15+ 26
Shale Gas - The Global Energy Game Changer and continents are staring at
This article explores the game renewable energy technologies changing potential of shale gas in which are not progressing at an reshuffling the global energy map economically scalable level, shale and how several nations are finan- gas is gearing up with rapid cially and technically stretching developments to take over a themselves to surface on this dominating share in the pie of restructured global energy map. It future energy mix. briefl y
the T h i s
ga m e
developments in shale gas are progressing to tilt the political, changing
among dependencies among countries, is
different countries and the major currently stretching several nations issues
t h e s e financially and technically to
developments. While stressing on surface on the restructured global the prospects of this energy, it also energy map. As its production is emphasis the need for economies transforming
to re-evaluate their trade-offs unviable to viable, let us examine between increasing energy security the global reserves of technically versus environmental scrutiny.
recoverable global shale gas from and its trend across continents.
Shale Gas - The Global Energy United States, currently a net
Shale gas - the cheap, the clean importer of natural gas, with an and the abundant fuel is beginning identified shale gas reserves of 862 to unleash its potential to reshuffle trillion cubic feet, has started the global energy map. With an unraveling access to its rich shale estimated global energy demand gas
by 2030 being 40% higher than in prospects to turn the country to a 2007 and the expected world net exporter of natural gas.
population to reach 9.2 billion urge to scale up the shale gas people by 2050, when countries production 27
companies and the nation for huge reduce its dependence on external investments and to boost the countries. manpower
t e c h n i c a l Brazil has been showing little
capabilities. Adding to this, the interest
environmental agencies, as was resources. with all
energy sources, are
differing with these development despite of identified shale reserves, plans by demanding more stringent huge production costs and lack of environmental regulations.
technological know-how along with
Contrary to this, Canada, infrastructure lags are questioning the now worldâ€™s largest producer the long term viability of the related and the major exporter of natural investments in Europe which gas to US, cautioned by the future started looking at United States for decline for
future gas import opportunities.
its natural gas demand from US, Russia, a major exporter of natural started exploring markets beyond gas to Europe, identifying the North America to supply its future potential of shale gas is surplus gas and also the options for partnering with technology firms to commercial production of shale gain access to shale gas related gas. Among the South American technology and is also gearing up to countries, Brazil and Argentina s e r v e
have rich deposits of shale gas anticipating United States to export which are very important to con- shale gas to Europe. In all, Russia trol
bills. and Europe has kept their radars
Specifically Argentine government high on United States, to frame is putting priority in developing their future strategies in this these reserves to strategically segment. 28
Australia, one of the worldâ€™s stakeholders to draft its policy of largest producers of conventional shale gas exploration. natural gas is currently a major
exporter of natural gas due to less benefits, the financial prospects of demand from its sparse population. these
Despite of the identified reserves economies to restructure their of shale gas, its development is investments
uncertain in the near future thereby postponing their long term because of its lag in technology renewable energy projects by years. and skilled labor. However, if The clean nature of the shale gas is significant economically viable also compelling governments to reserves are identified, Australia influence more investments into can leverage its relationship with these short term projects, to meet Asian countries to export its the emission norms. However, the surplus production.
high gestation period required to
In Asia, China with an un- reap the financial benefits from official estimate of over 1275 these projects is inviting the trillion cubic feet of shale gas de- investors with financial risks, posits is moving positively in associated with the huge instabilideveloping its reserves to reduce ties in the gas prices. Given the fact its energy dependency on foreign that
nations. Chinese government is technology, actively promoting shale development
forming resources, used in these gas
strategic partnerships with foreign extraction projects is banned in companies to acquire technical France know-how. In contrast
India, environmental concerns in other
currently a net importer of 25% of parts of the world, gaining the natural gas, is still exploring public confidence on environmental various alternative sources of en- sustainability of these projects is ergy to bridge the ever increasing one among the major challenges gap between its supply and being faced by this technology. demand for energy. With estimated shale gas reserves of 290 trillion cubic feet, Indian government is in discussion
With traditional importers turning to self-sufficient or exporters and the current energy surplus nations eyeing at new relationships
developments in shale gas are changing
different countries. For instance, Canada, once a major exporter of natural gas to United States now has to compete with the same for exporting its surplus gas. While Europe is eagerly staring at shale developments in United States for an import opportunity, Russia and Australia are looking towards AUTHOR:
Asia. Shale gas developments in
Vijay Kumar Sarakamu
China are decoupling its energy
letting it to take over the supreme
dependency on rest of the world, throne from United States much earlier than was anticipated. While cel ebrating
developments in their territories excited to generate huge investment and
nities, they should also balance their
environmentally safe renewable energy sources. It is high time for the economies to re-evaluate their trade-offs
energy security versus environmental scrutiny.
IS GERMANY CAPABLE OF HANDLING THE STORM? The 2007-08 subprime crisis saw the downfall of many banks and 2. Industrial Production l a r ge
c o m p a n i es .
E u r o p e The recession of 2008-09 affected
remained relatively unaffected t h e throughout However,
t u r m o i l . production. However, it showed
zone remarkable growth in year 2011
sovereign debt crisis in early and 2010. The outlook for the 2010 put Greece, Portugal, Spain future isnâ€™t bright because of the and Ireland (PIGS) in a state of euro zone crisis and the weakness distress. Amongst
of euro currency. all
the destruction 3. Unemployment rates
around it, Germany rose like a According
phoenix from the ashes.
objective of the article is to find
unemployment rate (5.3%) when
out whether Germany is capable
compared to debt ridden countries
of handling the Euro crisis and
like Spain (26.9%) and Greece
whether it can assume leadership
position based on its current
unemployment rate for Euro area
economic situation. The article
stands at 12.2%. The youth unem-
ployment, according to same
situation of Germany based on
report is 7.6%, compared to Spain
key economic indicators.
(56.5%) and Greece (59.2% in
Key Economic Indicators
March 2013). During the 2008-09
recession, employment growth in
Following the decline in growth
manufacturing sector was the
during 2008-09 recession, it has
recovered well and emerged as
increased strongly in the next few
the centre of attention in Europe.
The effects of Euro zone
ereign debt crisis and related
Foreign Trade(Exports and
European banking-sector risks The decrease in exports in 2012 may affect GDP growth.
can be attributed to Euro zone debt crisis. The exports have increased
from 2009 to 2013 by 25.85% Spain. Though it reached a high of while the imports have increased 1.37 US $ in February, it has since by 26.18%. It indicates there is a subsided to 1.3 US $ levels. The strong
for d e c i s i o n
foreign goods. Since mid-2010, policymakers to sovereign debt there
ongoing crises may affect the stability of
transition from exports to domestic Euro in the long term. demand as the main driver of economic growth. However, the Euro crisis and slow growth in de- 6. Current Account Surplus veloped countries like US has Germany has Current Account slowed down the growth in Surplus, which was 7% of GDP exports. The share of exports last year. This was the eight shows that exports to Asia have consecutive year that the surplus been steadily increasing while was in excess of 5% of GDP. those to European counterparts Recent recovery in developed have been decreasing. However, countries and strong domestic the share of imports tells a demand has increased its Current completely different story. Though Account Surplus to 2007 levels. growth
imports 7. CPI and WPI
outpaced growth in EU imports in The data clearly shows CPI and 2010, the following two years WPI have subsided since 2011 reversed this trend.
levels. According to EBESCO report, it is expected that headline
5. Exchange Rates
inflation will remain less than 2%
The data for past two years(2nd
until the end of 2014. The decline
July 2011- 2nd July 2013) shows
in the inflation can be attributed to
that the highest was 1 Euro =
decrease in energy and food
1.4419 US $, with low of 1.2184
prices, from 3.3% in mid 2008 to
US $. The average for this period
for 1 Euro = 1.3163 US $.The
mid-2007, inflation developments
euro is seen coming under
have been affected by volatility in
increasing pressure towards the
commodity prices and oil and
end of 2013 from a renewed
marked heightening of concerns about the situation in Greece and 32
Based on all these factors,
the onslaught of the crisis. It can
following assessment can be
be the knight in shining armour
made of the country:
that Euro zone desperately seeks
Economic reforms taken by
currently. However, Germanyâ€™s
previous government and the
politicians are under increasing
current government have helped
pressure to use public money to
Germany to show phenomenal
lend to PIGS. Germany must tread
growth in 2006-07 and show
a cautious path and play the role
remarkable resilience in the face
of flag bearer to bring Europe out
of European debt crisis.
of this mess.
2. Germany has gained the most from the creation of Euro zone and it can be expected that German companies will increase their capital investment to meet the increasing consumer demand. 3. Assuming the ECB maintains a very soft monetary policy course in near future, Germany will enjoy lower interest rates 4.
The two main threats to its growth are aging population and
retirement age from 65 to 67 to counter
However, more efforts must be made to attract immigrant workers and increase female full time labour participation to sustain the
indicates that Germany is in a healthy state and can withstand 33
CPI and WPI
Yogendra Sarfare T.A.Pai Management Figure: CPI for Germany (Source: EBESCO)
Institute, Manipal Karnataka
STABILIZING THE VOLATILITY IN INDIAN RUPEE Owing to the volatility in the do- outlook for the US economy mestic currency during the first six thereby rendering the US bonds months of the current year, RBI more attractive and pulling out of adopted certain measures to hold FIIs investments from the emerging back the falling rupee. Though it markets further compounding the did not target a range within which rupee woes. the currency should settle, it aimed at
resulting from the continuous HIT speculations
exchange market. Containing the
1 . R e m o v a l
rupee value is important for the
long term stability of the economy as rising import cost will offset all
With the improvements
experienced by the US
economy through the quan-
m ade to
titative easing program, the
The Indian rupee slumped to the
Federal Reserve in the
all time low levels of Rs. 61
beginning of 2013 decided
against the US dollar in late June,
to withdraw the liquidity
2013 sparked by the news of Fed-
support over the coming
eral Reserve likely tapering of
bond buying program following
The rupee hit an all time
low of 59.94 along with
Financial Institutional Investors
Indian and Asian markets
falling by more than 2%.
The weakening of Balance of Payments fundamentals and the
2. Behavior of the FIIâ€™s
widening gap in Current Account Deficit is building further pressure Owing to the weakness in the Inon the slumping rupee.
dian currency, the investment in the
The improvement in US economy Indian has
an optimistic 35
markets looked as a risky
option to FII’s. US bonds
have a higher marginal
positions in rupee and then
output thereby giving better
selling them off as the
yields as against the Indian
currency continue to fall,
which further deteriorates
adjusting for the rupee depreciation)
the value of the currency.
investing in US looked more attractive to these MEASURES TAKEN BY REinvestors. FII’s pulled out SERVE BANK OF INDIA (RBI) over $4-5 billion from the Along with the fall in the value of m
. rupee on account of strong demand
for American currency and foreign 3. Rise in Current Account funds outflow, RBI seemed to believe that the slumping rupee is
CAD is the macroeconomic also
challenge which has been speculation in the foreign exchange putting a lot of pressure on market resulting in high volatility in the entire economy by the rupee value. This belief leaving it look unattractive compelled RBI to intervene and to the foreign investors. A take the following actions. major chunk of foreign First phase reserves has been depleted Firstly the RBI imposed restrictions with the rising import of by banning the proprietary trading. This was complemented by SEBI
gold and oil. 4.
Speculation in foreign raising the margin requirements for currency by authorized trades and curtailing open positions dealers (including banks)
Considering the lag in the commencing 11 July, 2013. On the credit growth as against the backdrop of the RBI’s ban, the deposit
the Indian rupee gained against the US
banking system, the banks Dollar. However, the positive prefer
their impact on the value of the domestic
surplus resources in the currency subsided when banks e x c h a n g e continued to speculate in the cur-
b y rency market through the route of
h e d g i n g The above measures were taken by
requirements, further pushing the RBI to discourage banks to borrow rupee downwards. Adding
for purposes other than meeting the
banks liquidity mismatch. And if at all
continued accessing funds from the they did, demanding a higher price repo window well above 1 per cent for funds borrowed for speculation. of
Liabilities (NDTL) not to fund the liquidity shortage but to speculate in the currency market. This further probed RBI to make discretionary funding costlier. S e c o n d
p h a s e
RBI capped the borrowing ability of the banks under Liquidity Adjustment facility (LAF) to 1 per cent of NDTL of the banking system. It also increased the cost of funds available to the banks by recalibrating
Standing Facility rate to 300 basis points above the policy rate to 10.25 per cent thereby forcing the banks to pay a higher price for speculation. This was followed by an additional
In the wake of the above measures taken by RBI, it was hypothesized that had there been a sustained liquidity shortage in the system, there will be an upward surge in the borrowings in the call market and access in the MSF window. However, the hypothesis of RBI proved wrong. The Repo and Call market
downward trend in the week following the RBIâ€™s tweaking in the rates. Also, MSF was not accessed by the banks signaling that there was no genuine liquidity shortage in the system. Instead, banks have been borrowing with the intention of holding positions in the foreign exchange markets expecting a further depreciation in the rupee value.
liquidity tightening spree of RBI CONCLUSION Gradual depreciating tendency of a by reducing the LAF for each bank currency arising out of the unfavorto 0.5 per cent and sucking out able global conditions is acceptable liquidity from the system by as it gives room to the economy to requiring the banks to maintain the make gradual adjusthigher average Cash Reserve Ratio ments.However, the sudden jerk as (CRR) of 99 per cent of the experienced by the rupee in the past requirement on daily basis as quarter was a result of deviation against 70 per cent. from the fundamentals, also making 37
the economy further instable. The RBI needs to build up strong fundamentals
banking activities and the flow of money in the economy. It further needs to address the issue of liquidating
reserves and FIIâ€™s pulling out of the economy by attracting more foreign investments.
AUTHOR: Naman Kanotra And Niyati Aggarwal T.A.Pai Management Institute, Manipal Karnataka
Indian stock market & Indian Rupee Depreciation of Indian rupee has import duty but that hasnâ€™t work been the biggest concern in last much in favour of the rupee .As few months. It touched a life time these measures may have worked low of 62 on 16-Aug-13. Last for temporary period. few weeks for investors in India were the worst days they could
One more major concern for
imagine, rupee depreciating &
Indian rupee is the US federal
stock market tanking down more
reserve view on QE tapering.US
than 10 % in last two weeks. The
federal reserve announced QE
reasons for the markets to fall and
tapering is possible in coming
the rupee to depreciate are to be
months and Indian stock market
analysed. The Indian economy is
s t a r t e d
going through a challenging
downwards .Indian rupee will
phase .In such case expecting
definitely have an impact due to
stock market to perform well
the decision taken by US federal
cannot be justified.
i t s
m o v e
institutional investors in India One of the major reasons for rupee depreciation is the increasing current account deficit. India's current account deficit has surged to a record high of 4.8 percent. As per a report ,government would focus more on cutting down on imports, especially of gold, silver, oil and non-essential items to lower the current account deficit (CAD) to 3.7 percent of the gross domestic product (GDP) in the current financial year. Government has already tried cutting down the gold imports by increasing the 39
have made big investments which may be withdrawn if QE tapering actually takes place. Also the companies who have raised low cost floating rate debt from the global markets due to low cost interest rates would see significant rise in their interest cost. Indian companies have raised around USD 11.6 billion worth of overseas fund in FY 12-13. The spread between US treasuries and Indian Government Securities have narrowed, thus, making the debt investments in India not
much an attractive option for
rupee is directly proportional .In
FIIâ€™s.Thus Indian rupee will be
Jan2008 when currency made a
getting weaker against USD in
high of 39.27 against 1USD, stock
the near term.
market where at its peak, similarly currency made a low of 51 after a
As Indian stock market and INR shows direct relations an Indian
stock market is suppose to see a good down fall in the short term .As the logic says if an FII wants to shift his investments from India to US, He has to sell his holdings in India (sell Rupee) and buy in the respective country (buy
demand for rupee to fall, leading
year, stock market found a bottom. Today when currency is trading at 62 ,stock market is also away from
its peak. Definitely there are few more reasons for the markets to crash
interdependence & CAD, but the relationship continues to hold true even in the current scenario as well.
Looking at the current scenario
stock market had a good one side
movement of USD against INR.
fall from its peak levels this
And the other shows movement
month. Also rupee went on to
of Indian stock market over the
make a new low. But looking at
period of time.
the government involvement to
As we can see relation between Indian stock market and Indian 40
curb the imports in order to decrease
further devaluation of Indian
economy and rupee, but with bills
rupee should help Indian rupee to
like Food security bill on the table
stabilize a bit for few days at
makes this situation even far from
least. As these measures are not
reach. This all may sound highly
enough to curb the devaluation of
the currency in longer run, Which
something which we cannot deny.
also indicates rupee to depreciate
Optimism can only help a patient
further from the current levels in
to recover from bad health but
the medium term .Stock market
should see a relief rally at least
for a week as it has fallen around 10% in two weeks time without SANKET NARKHEDE
break. As nifty has a strong support zone around 5450-5350
METâ€™s Institute of
range which has been tested in
last six months couple of times.
And also can be tested in coming days before a small relief rally. If
continues, Even equity markets will
journey again without a break. This can be avoided only by some miraculous events happening in coming days which will reduce our
The Indian Gold Rush
24 t h ,
moss and became an urban legend
witnessed an unusual rush in the
shortly, following the flagging
Americas. A rush by a gargantuan
stature of India’s economy. Ironi-
cally though, the “Indian Gold
‘forty-niners’ pioneered by James
Rush” is a parallel universe of its
W. Marshall who first discovered
American bloodline. Instead of
the yellow metal in Sutter’s mill,
prosperity, the Indians lust for the
yellow lustre has taken a toll on
California as the pot of gold,
the economy to fall to heights of
development flourished on the
India conceits as the world’s
l a r ge s t
economists define the
accounting for a whopping $62
“California Gold Rush” as a
million of the metal and also
linchpin in history as it stimulated
meets all its demands via import.
economies all around the world.
So, where does all this gold go?
Well, it goes to sit elegantly
Australia, and Hawaii, British
around our necks in intricate
manufactured goods and even
designs, goes to fit nicely, bright
Chinese clothing found a huge
and shiny, around our fingers and
new market to cater. The return of
large amounts of California gold
generations as wedding exchanges
to pay for these goods raised
until it has lost its shine. That is
prices and stimulated investment
where it all ever goes. The lust for
and the creation of jobs around
gold runs deep in the Indian blood,
ideally demonstrated by - A Pune
The Indian Scenario:
moneylender who sports a 22 carat
In the Indian subcontinent too,
gold shirt worth 1.27 crore rupees
there is a gold rush. Rather say,
and a Mumbai socialite who has
we have always had a gold rush,
commissioned a gold leafed toilet
only bereft of a date to mark its
i m p o rt e r
go l d
birth. And only that it gathered The prime question at hand is – Why this Gold Rush? 42
Consider the Indian background Altogether, gold has an edge but and the answer is why not! : 1.
this wild goose chase for gold has
Our tendency to save is indeed beyond competition.
coffers of foreign exchange and
Investments in gold are marked a dent in the economy. largely
be Says who? Says the depreciating
immune to inflation. 3.
rupee! Economists fear that the
Goldâ€™s superiority as an situation may even mirror the 1991 avenue for investment in crisis though the FM office says terms of liquidity, safety otherwise. and return.
The Inside Story:
It can easily be exchanged Succeeding oil, gold is the next for cash without significant largest shareholder of the countryâ€™s loss unlike in real estate in current account deficit (CAD). case of distress sale.
CAD is the difference between our
Banks provide lockers for profits earned via exports and the safekeeping a considerable expenditure on imports. So, a rise amount of gold in a com- in the CAD implies a falling rupee pact space at a nominal fee.
against dollar, the international
A unit of gold has yielded currency. Hence investors prefer to returns in the last five years park money in dollars instead. in comparison to that of Faced with such vulnerabilities, shares and bonds, for which foreign investors redirect their inthe stock market vouches.
vestments and funds to greener
Possession of gold, rather pastures,
flaunting of its possession afflicted India. With no capital is regarded as a status inflow to fuel business growth and symbol in the society.
indefinitely. In addition to
prevailing ailments, our exports 43
are not in a position to be
“The increase in import duties on
described as booming or even
go v e r n m e nt ’ s
p a c ka ge
Besides, the stiff competition
measures proclaimed by the FM to
from countries such as China,
restrain CAD to 3.7 % of GDP.
Brazil, Thailand and Vietnam has
The government’s plan is to
put us in a predicament. Under
restrict gold imports at 850 in the
current financial year from 950
dwindling exports barely impinge
tonnes in 2012-2013.
the inflow of the imperative
Last month, the government also
tightened it for dealers to use bank
All these factors are in tandem for
credit to buy the precious metal f r o m suppliers overseas. T
nation's central b a n k restrained India’s stumbling economy.
banks and trading agencies from
importing gold on behalf of
First and foremost step is to curb
customers and accepting payment
the gold imports by raising
import duties on it. This in turn
required dealers to pay cash in
would help curtail the CAD and
advance for imports. The central
bolster rupee’s volatility.
bank on Monday scrapped the ban
on deferred payment but required
immediate measures to resolve
banks and dealers that import the
the crisis. Custom duty on the
metal to ensure that 20% of
yellow metal has been raised
imports are re-exported.
from 8% to 10% - a move that
The government could chart out
helped the rupee erase its losses
policies to direct investments
to end at Rs. 61.19/20 against the
towards other commodities. It
dollar, a gain 8 paise over
could also make investment in
other assets attractive through 44
Traded Funds and Inflation Indexed Bonds via attractive tax saving incentives. There goes a saying that â€œThere is always a pot of gold at the end of the rainbow.â€? But in the Indian context, our pot of gold is to have no more of gold.
QUIZ FIND THE WORD The movement of cash in and out of a business from day-to-day direct trading and other non-trading or indirect effects, such as capital expenditure, tax and dividend payments. The apportionment of cost of a (usually large) capital item over an agreed period, (based on life expectancy or obsolescence) A set of standards and practices developed for global banks to ensure that they maintain adequate capital to withstand periods of economic strain. the practice of taking advantage of a price difference between two or more markets A bond or preferred stock that may be redeemed by the issuer before maturity for a call price specified at the time of issuance. An agreement that pledges securities to guarantee a loan without transferring title to the securities. A written agreement used in connection with a security issue. The document sets the maturity date, interest rate, security, and other terms for the issue holder, the issuer, and (when appropriate) the trustee. The ease at which a security can be bought or sold (converted to cash) in the market. To reinvest in a new issue of the same or a similar security after receiving funds from a matured security. An industry whose success is closely linked to the rise and fall of the general economy
1. 2. 3. 4. 5. 6. 7.
8. 9. 10.
R K G
Answers will be available in September issue. Kindly write us your answers on our email-id.
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