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ISSUE - 129




This week we try to capture the clash of two powerhouses, the US and Pakistan, the bone of contention being the spread of terrorist groups like the Haqqani network and the blame game following this scenario .We try to figure out how long this buck passes before a concrete solution is arrived at through the Cover Story this week.

With the recent upswing in the global economy the value of rupee is depreciating at an exceedingly fast rate. This depreciation is leading to a rise in the debt burden of the companies which have borrowed in US Dollars further leading to a reduction in their profit margins. We try to encapsulate the fall of the Rupee and its impact through the Opinion Forum this week.

Kodak– a part of almost every precious moment is the protagonist of Brand Track this weekend. We will take you through the journey of the formation of Eastman Kodak Company and introduce you to the founder George Eastman and how he became a part of every „Kodak Moment‟.

This week in Focus Of The Week we try to bring the concepts of the Indian Financial System together, encompassing concepts like Mutual Funds, Capital Markets and the likes and how it has led to an upsurge in the financial services sector ,with an exponential growth in the offing.

Moreover we have our regular sections of Fast Track, Quick Bites, Market Watch and a special dose of News @ IBS to give all of you a glimpse of the happenings last week on campus. Happy Reading! Cheers, Swati Verma




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People who live in glass houses shouldn‟t through stones, it is said. But Pakistan and it‟s now ex -best buddy US do not seem to quite understand the idiom. Both countries‟ intelligence agencies seem to be playing the blame game. And not to mention, doing so publically. It seems to be unwise to do so, considering the fact that both have equally disturbing and not to mention, mutually shared, secrets. Diplomatic relations between USA and Pakistan date back to Pakistan‟s independence. Signing several pacts and arriving at several mutual agreements and understandings regarding security, the ties were severed severely after the Bin Laden episode. But bilateral relations that lasted Pakistan’s foreign min- more than six decades cannot just stop existing; nevertheless they can get sour of course. The prevailing rift too is a result of series of actions in past by both the nations. ister Hina Rabbani The chronology of the current rift goes something like this. Drone attacks by US personnel Khar goes on to blame (speculated to be working mostly for CIA) kill dozens in North Waziristan. Anti-US feelings in CIA (Central Intelli- Pakistan.US openly states that Pakistan is not taking the required anti-terrorism measures and gence Agency) for not besides that having links with and supporting the Haqqani network (an afghan insurgent group) to fight against US forces in Afghanistan, and with a good reason after attack on US embassy in only having contacts with Kabul. Pakistan refuses the charges, but does not decline having the Haqqani group, but „contacts‟ with the group. Pakistan‟s army accepts links with the network. Pakistan‟s foreign minister Hina Rabbani Khar goes on to many other terrorist blame CIA (Central Intelligence Agency) for not only having contacts with the Haqqani group, but many other terrorist groups as well. groups as well. The cumulative effect of all these happenings is the feeling of noncompatibility among ISI and CIA (who tried collaborating against terrorism) and a general state of „crises‟ between the two nations. But are these public rebuttals just rift among these nations or are there any ulterior motives behind them? Some opine that it is a power game. As the Afghan conflict is about to end in a short time, it is a question of who retains favour of the forces that will control Afghanistan in future. According to the plan, US will hand over the control of Afghanistan to Afghan forces and start withdrawing its troops in July next year.




avoided by Yousuf Raza Gilani, left half way by Hina



If it were only for power, but it also affects the international scenario, where terrorism is concerned. Pakistan lost creditworthiness when Osama Bin Laden was found to be living there. And even before that it is designated as a safe haven for terrorists. Thus everything places Pakistan in responsible position to control terrorism. It‟s time they realized that there should not be any more „Mumbai blasts‟ in other countries or even their own country for that matter. As a citizen of this world, none ought to live in a constant awe of terrorism just because one country does not have its policies in place.

next round of talks with An understanding may be reached after the talks between ISI chief General Ahmed Shuja Pasha the ISI chief should and Washington. What was previously avoided by Yousuf Raza Gilani, left half way by Hina Rabbani Khar, next round of talks with the ISI chief should accomplish its goal of a mutual accomplish its goal of a agreement. mutual agreement.

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HCL Technologies wins Asian Human Capital Summit 2011 Award

HCL Technologies has been conferred the prestigious Asian Human Capital Summit 2011 Award in Singapore for its outstanding human resource practices, putting employees first and at the heart of its business strategies. HCL won the award for its corporate commitment to human capital. HCL Technologies has an online portal to allow any employee in any country to post any question about the company, a move which has promoted a transparent culture and has helped employees learn from one another. The awards were given by Minister of State for Manpower and National Development, Brigadier-General Tan Chuan-Jin at the Singapore Human Capital Summit.

Sensex tanks over 200 points in opening trade on profit-booking

The Bombay Stock Exchange benchmark sensex declined by over 200 points in opening trade today as funds and retail investors locked in gains recorded in the rally. The 30-share BSE index, which had gained 252.05 points in the previous session, fell by 202.56 points, or 1.21 per cent, to 16,495.51 in the first five minutes of trade on Thursday. In a similar fashion, the wide-based National Stock Exchange Nifty index declined by 55.45 points, or 1.11 per cent, to 4,960.00. All the sectoral indices, barring consumer durables, were trading in the negative zone, with losses of up to 1.44 per cent. Brokers said investors cashing in on gains registered in the . previous session in the absence of any positive factors mainly dampened the trading sentiment.

US agency OPIC to provide $150 mn to India for solar powered telecommunication towers

A US agency hsolar powered telecommunication towers. as announced to provide a financial assistance of USD 150 million to India to expand use of The decision by the Overseas Private Investment Corporation (OPIC) is expected to reduce CO2 emissions and create jobs in both the US and India. This project brings OPIC's financing for renewable energy in India to more than USD 400 million approved in just the past year," said OPIC President and CEO Elizabeth Littlefield.

Google+ online traffic spurts 1269 per cent in a week

Search giant Google's social networking site has reached a new high as the number of visitors to the site has grown by 1,269 percent. According to web traffic tracking firm Experian Hitwise, number of visitors to Google+ has increased rapidly since the site invited users to join without an invite from a friend. "Opening access created a massive spike in market share of visits for the site, with a 1269 per cent growth from the week ending September 17 to the week of September 24," the Courier Mail quoted Director of Research at Hitwise, Heather Dougherty, as saying. "In just one week, Google+ went from ranking as 54th most visited site in our Social Networking and Forums category to eighth place," Dougherty added.

Typhoon lashes Philippines, 1 dead, thousands flee

A powerful typhoon slammed ashore the northern Philippines on Tuesday, unleashing floods, cutting power and halting work in the capital, Manila, where residents waded in waist-deep waters and strong winds toppled trees. Authorities ordered more than 100,000 people to shelter from rains and wind gusts of up to 106 miles (170 kilometers) per hour. At least one person, a baby drowned and four fishermen were reported missing. Typhoon Nesat made landfall before dawn over eastern mountainous Isabela and Aurora provinces which face the Pacific Ocean, packing sustained winds of 87 mph (140 kph), the government weather bureau said.

Farm loan to exceed target, touch Rs 5.20 lakh crore: Nabard

Farm loan disbursal is expected to exceed the target of Rs 4.75 lakh crore and touch Rs 5.20 lakh crore in 201112 on the back of good monsoon as stated by National Bank for Agriculture and Rural Development. Based on the data available for the first four months, it is expected that the farm loans will rise to Rs 5.20 lakh during the current fiscal. The target of credit flow to agriculture sector by banks and financial institutions was pegged at Rs 4, 75,000 crore in 2011-12. Agriculture credit disbursal had increased to Rs 4, 26,531 crore in the last fiscal against the target of Rs 3, 75,000 crore.

Blue Chip Swap- When a domestic investor purchases a foreign asset and then transfers that asset to a domestic bank branch located offshore.

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THE IBS TIMES Government to provide capital to PSU banks

With the government ruling out stake dilution below 51%, the finance ministry is assessing the capital requirement of state-run lenders over the next decade, raising the possibility of using innovative fund raising tools such as differential voting right shares (DVRS) and golden shares, besides dusting out old files on the holding company structure. Bankers and government officials state that the department of financial services has set up a committee under joint secretary Alok Nigam and bank chiefs, who have been asked to look into the issue.

IBM topples Microsoft after 15 years

International Business Machines Corp topped over Microsoft Corp to become the world's second-most valuable technology company, a reflection of industry changes including the shift away from the personal computer. IBM's market value rose to $214 billion, while Microsoft's fell to $213.2 billion, the first time IBM has exceeded its software rival based on closing prices since 1996, according to Bloomberg data. IBM is now the fourth-largest company by market value and, in technology, trails only Apple Inc, the world's most valuable company.

Gold rises 0.55% in futures trade on global cues

Gold prices edged higher by 0.55% to Rs 25,882 per 10 grams in futures trade, tracking a better trend overseas on physical buying at prevailing levels. At the Multi Commodity Exchange, gold for delivery in October moved up by Rs 142, or 0.55%, to Rs 25,882 per 10 grams, with a trading volume of 915 lots. Similarly, the metal for December delivery rose by Rs 123, or 0.47%, to Rs 26,134 per 10 grams, with a turnover of 412 lots. Analysts attributed the rise in gold futures prices to a firming trend overseas, as the recent dip in prices of the precious metal below $1,600 an ounce boosted physical purchases and investors sought to protect their wealth from global uncertainty caused by the European debt crisis.

Euro drops for worst month in nearly a year; hits 8 month low

The euro was on track on Friday for its worst monthly slide in nearly a year, slipping back towards an eightmonth low against the dollar as equities took a hit, while selling by Japanese exporters pushed it closer to a 10year low versus the yen. The euro relinquished modest gains made after Germany approved an expansion of the euro-zone bailout fund, pressured by a wall of orders from Japanese exporters wrapping up deals for the end of their financial first half. It lost 0.8% to 103.66 yen, taking out some light stop losses below the late New York low of 103.90 yen, and shed 0.3% versus the dollar to $1.3549, with some traders detecting macro funds among the sellers.

Injured Sharapova exits Pan Pacific Open

Maria Sharapova's effort to avenge her Wimbledon final loss to Petra Kvitova was brought to an abrupt end on Thursday after she twisted an ankle in the quarterfinals of the Pan Pacific Open. The Russian world number two was serving 40-15 up at 3-4 in a well poised first set when she twisted her left ankle on landing after a serve. Sharapova received court-side treatment but decided to retire soon afterwards, giving the Czech a free ticket to the semifinals. Kvitova, who claimed her first Grand Slam title beating Sharapova in June's Wimbledon final, will play Vera Zvonareva, in the semis after the Russian beat compatriot Maria Kirilenko 6-3, 6-3 earlier in the day.

Harbhajan axed: Star spinner at the crossroads

There are two ways to look at Harbhajan Singh's exclusion from the first two ODIs against England. One is that after more than 13 years of top-flight cricket and a stellar career, he has given his all and the bag of tricks is empty. The opposition has worked him out, wickets are hard to come by, the unhelpful pitches compound the problem and it's time for India to look ahead. The other is that Harbhajan is only 31 and this wake-up call will spur the fighter in him to stage a strong comeback, maybe in time for the Australia tour or later. After all, there is precedent in the form of Anil Kumble, who managed 270 wickets in his last 56 games following a lean patch.

. Boomernomics- An investing strategy that involves buying equities directly related to the spending behavior of baby boomers (people born between 1946 and 1964.

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The effects of global financial crisis have been more severe than initially forecasted and have rapidly been transmitted to many developing countries and one amongst them is „India‟. The crisis emerged in India at the time when the Indian economy was already preoccupied with the adverse effects of inflationary pressures. India‟s rupee plunged the most in more than 15 years giving jitters to many as investors sold emerging market assets in favor of the dollar‟s relative safety as the global economy is weakening. With the rupee shedding over more than 10 percent in value, there is a lot of attention on the volatile nature of the Indian currency yo-yoing with the US dollar.

With the rupee shedding over more than 10 percent in value, there is a lot of attention on the volatile nature of the Indian currency yoyoing with the US dollar.

The uncertainty over Greece‟s debt situation and the Euro zone crisis will continue to keep the pressure on rupee. Greece‟s national debt is bigger than its economy, making its economic condition critical and resulting in the weakening of euro and strengthening of dollar. All these have resulted ultimately in weakening of rupee. When the rupee depreciates, the dollar appreciates and as a result the company‟s who have borrowed in dollars are adversely effected as they will have to pay more rupees to repay their loans in dollars which will increase their debt burden and reduce their profit margins. Heightened risk aversion which is a direct consequence of the global crisis, has caused investors to liquidate their assets in what they perceive to be riskier markets and repatriate their money in safer destinations. Ironically all the troubles the United States is facing which includes a lower than expected economic growth, high rate of unemployment have not yet dimmed the luster for the American currency, as at the global level there is still a strong demand for dollars as it is considered to be the safest haven. Consequently, the demand for dollar from existing foreign institutional investors has risen in India resulting in increase in its prices. Rupee movement also has a very high correlation with stock price movement in India. This is explained by the fact that foreign institutional investors (FIIs) are the largest group of investors in the Indian stock market and their buying and selling has a huge impact on the domestic stock prices. FIIs tend to track rupee movement closely as the returns they make on their Indian holdings can be affected significantly by currency movements. In the early controlled exchange rate regime, the rupee exchange rate hovered around Rs 4 in the 1950‟s, Rs 5 in the 60‟s, Rs 7 in the 70s and Rs 8 in the 80s. The liberalized era of 90‟s was different, the rupee moved in 20s (the rupee was also partly decontrolled in early 90‟s) and Rs 40 in the decade of 2000. Also there were two major devaluations by the government in between. The rupee was devalued first in 1966 by a massive 60% from Rs 4.76 to Rs 7.50 against the US Dollar. Twenty five years later in 90s, the rupee was again devalued by 20% from Rs 20.5 to Rs 24.5 against the dollar. The reasons for both devaluations were the twin deficits (current account and fiscal), soaring inflation, insufficient foreign exchange reserves and the developed world demanding decontrol and liberalization to allow them to do business in India.

In the current scenario of rupee



RBI has not intervened aggressively


because it wants to conserve its power for future contingencies.

But the reason for the current fall in the value of the rupee is the current grim global economic environment. Where does this leave the rupee then? Its steep fall against the dollar has major implications not just for the importers and exporters but for the macro economy. In the current scenario of rupee depreciation the RBI has not intervened aggressively probably because it wants to conserve its power for future contingencies. As a rule it is believed that a depreciating rupee is good for exporters but this time the case is somewhat different as the fall was sudden and sharp and many of them would have hedged their positions, which gives us the reason for inadequate supply of dollar in the domestic market. In reality, the exporters also expect stability in exchange rates as the importers and there are chances that the exchange rate management shall be more challenging in the coming days. Thus like all the earlier phases in rupee‟s journey, the current phase of depreciation shall also pass and the rupee will find its own level.

Capitulation- When investors give up any previous gains in stock price by selling equities in an effort to get out of the market and into less risky investments.

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With the slogan “You press the button, we do the rest,” George Eastman put the first simple camera into the hands of consumers in 1888. In doing so, he made the so called cumbersome and complicated process easy to use and accessible to nearly everyone. Since that time, the Eastman Kodak Company has led the way with an abundance of new products and processes to make photography simpler, more useful and more enjoyable. In fact, today‟s Kodak is known not only for photography, but also for images used in a variety of leisure, commercial, entertainment and scientific applications. Its reach increasingly involves the use of technology to combine images and information creating the potential to profoundly change how people and businesses communicate. The company bears the name of its founder George Eastman, who became interested in photography during the late 1870s while planning a vacation from his job as a bank clerk in Rochester, New York. The letter „K‟ had always been the favourite of Eastman‟s, as he quoted that “it seems a strong, incisive sort of letter.” He said that there were three principal concepts he used in creating the name i.e. it should be short, one cannot mispronounce it, and it should not resemble anything or be associated with anything other than „KODAK‟.

You press the button, we do the rest,” George Eastman put the first simple camera into the hands of consumers in 1888

At its peak, Kodak was an icon of the American technology innovation.

Taking a co-worker‟s suggestion to make a photographic record of his intended trip to Santo Domingo, the 24 year old Eastman soon found that the camera, film, and wet plate developing chemicals and equipment he had purchased were far too bulky. Instead of following his original vacation plans, Eastman spent the time studying how to make photography more convenient. He discovered a description of a dry plate process that was being used by British photographers and tried to replicate this process in his mother‟s kitchen at night after work. After three years Eastman produced a dry glass plate with which he was satisfied. Finally in 1880 he obtained a U.S. patent for the dry plate and a machine for preparing many plates at one time, and he started manufacturing dry plates for sale to photographers. The business almost collapsed several times during its early years because the quality of the dry plates was inconsistent and Eastman insisted that the defective plates would be replaced at no charge to the customer. Despite these setbacks, he was determined to make the camera „As convenient as a pencil.‟ The company hedged its bets and launched an all out blitz in the digital camera market. Its family of digital cameras, called Easy Share, was widely praised by everyone around the globe. At its peak, Kodak was an icon of the American technology innovation. Now it‟s fighting to recover from a technology revolution that is strangling its core business. Kodak was late to recognize the problem, then slow to react, and then also went down the wrong innovation path. It faced many problems and made many of the mistakes that any company can when it is so threatened. Because of these delays and missteps, it is still not clear that how Kodak‟s story will play out. Yet, it provides a vivid case study for business facing similar challenges. But, since the last few years, the company has not been managing its budget very well and has been living paycheck to paycheck for a long time now which has become a tough habit to break. Unfortunately for Kodak, its paycheck and patent trolling days are numbered. The company had announced that it initiated a draw of $160 million from its credit line for “general corporate purposes,” sending shares down by as much as 25%, as investors flee for cover with anxiety over the iconic camera maker‟s prospects. The company which was once a blue chip company suffered with the transition to digital cameras and lost much of its traditional film business to the foreign competitors. Intellectual property licensing and lawsuits have largely funded Kodak‟s cash needs but stalled earlier this year, prompting Kodak to decide for selling 1,100 of its digital patents. At this rate, Kodak will become a scrapbook memory due to its failure to keep up with the times and attempting to rely on an unsustainable business model. Thus there is a saying in personal finance that „if your current job can‟t pay your bills, you should find a new job‟. Will Kodak look out for a new job? Special moments in our lives which we have captured as Kodak moments, is this the end of it…??

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Big Shots… Jesper Ovesen being appointed as the Executive Chairman of the Board of Nokia –Siemens Networks. Sergio .P. Ermotti replaces Oswald Gruebel as the new UBS Chief Executive Officer. Siegbert Nascher gets appointed as the new chairman of Vervaltungs und Private Bank AG Group. Dinesh K Sarraf being appointed as the new MD and CEO of the ONGC Videsh Ltd.

Company Talks… Cognizant acquires Zaffera to enhance its expertise in SAP retail space. Amazon all set to unveil its Kindle Fire being estimated to cost at $209.63. BSE to commence the 1st phase of its Liquidity Enhancement Incentive Program. LG Electronics hikes prices of computer and Laptops parts by 6% and other consumer durable goods by 3% due to weakening of Indian rupee. Dabur to set up export – oriented manufacturing facility at Sri Lanka for an investment of around $15 million. RIM launches Curve 9360 at a range of Rs 19990/-. Britannia to bypass traditional boundaries to face competition in other food segments. Aadhar tender delay gives IT vendors‟ early jitters. IBM pips Microsoft to become the 2nd most valuable tech firm after Apple. Sensex looses 0.5% as European Uncertainty drags.

Economy Speaks… Food Inflation raises to 9.13% from 8.84% recorded last week. Axis to roll out at 11.75% fixed home loan in order to woo customers. BSE gets SEBI approval for SME Exchange. Hero‟s Munjal Auto Board goes ahead with stock Split Proposal. Mahindra and Mahindra launches its first global SUV valued at 10.8 Lakhs.

The Captains of the Ships.. UIDAI Chairperson- Mr. Nandan Nilekani Telengana Rashtra Samithi Chairperson –Mr. K Chandershekhar Rao Nokia‟s India Head – D Shivakumar

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Once I had decided in all sanity to unravel and consequently identify the diverse reasons behind the ever-rapidly growing Financial Services Industry in India, abruptly my mind flickered and urged me to have a look at the companies currently listed on the Stock Exchanges in India and the discoveries unearthed during the process left me both astounded and cheerful. Cheerful because not only it directed me to my next question but also yielded a solution in disguise. So next up, the following is the conclusion that I was able to contemplate; the financial services sector in India has witnessed a fundamental transformation since the country was liberalised. The financial services sector includes broking firms, investment services, national banks, private banks, mutual funds, car and home loans, and equity market. The elaborate array of enterprises that got my attention ranged from stalwarts like India Bulls Financial services, Bajaj Financial Services, Motilal Oswal Financial Services to newcomers such as Edelweiss. The key drivers to the exponential growth of the above mentioned services glaring me in the eye were:

India’s high savings rate offers significant opportunity to put resources into the financial markets

India‟s high savings rate offers significant opportunity to put resources into the financial markets. The country has a favorable demographic profile with a large segment of the population under 30 years. The Census 2011 shows that 56.9 per cent of India‟s total population comes in the age group 15-59 years. As the dividend begins to pay off, with the working age-group population rising disproportionately over the next two decades, the savings rate is likely to rise further, according to Mr Pranab Mukherjee, Union Finance Minister A large, untapped domestic market, with a huge growth potential Presence of financial and capital market mechanisms A large and continuously growing intellectual capital Healthy rate of economic growth Apart from this, the banking sector too has undergone a lot of positive developments in the last decade. The policy makers, which comprise the Reserve Bank of India (RBI), Ministry of Finance and related government and financial sector regulatory entities, have made significant attempts to improve regulation, besides framing policies that are conducive to the growth of the sector, currently attempting to deploy desperate measures to reign in the daemon in the form of double digit “ Inflation “. Now, evaluating the Mutual Fund Industry in India, The Indian mutual fund industry has witnessed significant growth in the last few years. Besides the demographic factors, growth has been driven by the increasing reach of Asset Management Companies (AMCs) and distributors. Further, relatively low penetration levels coupled with rapid growth in the assets under management (AUM) in recent years signifies a high growth potential. Coming to the more popular sectors, and my personal favourite , The Indian equity markets are among the deepest and most active markets across the globe. The country's market capitalization (cap)-to-GDP ratio, an indicator of the total listed wealth of a country as a percentage of its GDP, reached a record level of 132.47 per cent in financial year 2010-11. Financial Services – Path Ahead

The Indian equity markets are among the deepest and most active markets across the globe.

Demand for financial services in India is taking off. Noteworthy is the fact that International financial institutions are playing an increasing role in the expansion of India‟s large corporations. Great opportunity lies in the SME segment, which remains largely untapped. Now as the global economy is once again passing through turbulent weather in terms of the growth trajectory, I would certainly continue to advice treading with caution. Happy Investing!

Flash Trading: A controversial computerized trading practice offered by some stock exchanges.

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XPRESSIONZ-AAPKA KYA HOGA JANABE ALI!!! Xpressions - the theatre society of IBS showcased a play called Aapka kya hoga Janaabe Ali on 30th of September. The play was on the touchy topic of Marriage. It basically revolved around one man, and how his family wanted him to marry different women. It was a complete laugh riot. The use of Bollywood songs made it all the more interesting. Despite the Dysfunctional Air conditioning the turnout for the event was generous. The same play had been performed last year as well and it was a massive success. The Auditorium was jam-packed and there was no space left for people who came late. The show was thoroughly enjoyed by the audience which was evident through constant applause and laughter. All in all it was a great show which was brilliantly performed by the society.

MOTIVATIONAL TALK BY MR.K.S.SARMA Mr.K.S.Sarma the chief Mentor of Sparsh, Neemus software solution had come to deliver a Motivational Speech on how to live a fulfilling life.Mr.K.S.Sarma has authored many books on motivation and self help. He gave examples of various Personalties Like Mahatma Gandhi,swami Vivekanad and demonstrated how successful they were at living a fulfilling life. Finally the session ended with a question and answer round.

KAIZEN- GRAND PRIX Kaizen the operations club of IBS Hyderabad held its event by the name of Grand prix. As the name suggests the event was all about cars .The event began with 25 teams participating, these teams were then reduced to 8 based on a quiz about various kinds of cars and their logos. These 8 teams then competed to build the most efficient cars. In the Final round of the game the contestants were asked to play Need for Speed. The event was won by the trio of Ritesh Marwah, Shashank Singhi and Abhinav Mishra.

SAMAVESH- DANDIYA NIGHT To celebrate Navratras Samavesh the cultural society of IBS Hyderabad organized the Dandiya Night. Clad in tradional attire both guys and girls flocked to the event to dance to the tunes of the DJ.The program began with the worship ceremony of Mata Ambay. After the ceremony Dandiya Raas was performed by each and everyone present and the event ended with Bollywood songs and the crowd dancing their hearts out.

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Market continues to jitter due to fear of Greek default and gloomy outlook of the US economy. The after effects of the “operation twist� are quite evident throughout the week. Chinese economy is also in the doldrums which are also a cause of concern for investors. However, gleam of light was visible in later half of the week on the expectation that European leaders and the policy makers would take steps to tackle the crisis of Greece. Adding to a string of global data that has crushed growth-related assets in the past three months, China's manufacturing sector contracted for a third straight month in September while German retail sales slid at their sharpest pace in more than four years. Repo rate continues to be 8.25% whereas reverse repo rate stands for 6% this week as well. Among the sectoral indices, there was a mixed performance with IT (up by 5.8%) and Oil & Gas (up by 2.8%) stocks leading the gains. However, Metal stocks were down by 4.5% on falling commodity prices globally and raw material shortages. The decision to introduce the new mining bill in the next session of the Parliament was also a cause for concern for the industry. Among the other top sectoral losers were Consumer Durables (down by 4.3%) and Capital Goods (down by 3.8%).

The Movers & Shakers of the Week

















Some of the key economic developments during the week are - government is thinking of revising the targets for power generation. For the current 5 year plan, it had decided to generate power around 1 lakh megawatt. However, the target is far from being achieved. Only 60,000 megawatt has been generated so far. The size of the domestic market in generation equipment is expected to grow from US$ 5.7 bn to US$ 25-30 bn by 2012.The industry at present is dependent on fuel availability and regulatory policies. In news from the world of oil and gas, the prices of compressed natural gas (CNG) are set to rise. Indraprastha Gas is thinking of hiking the prices by 6-7% in the next week. This would effectively mean a rise of Rs 2 per kg. As per the company, the prices have to be risen because of higher share of imported gas Degasified Liquefied Natural Gas (RLNG) as also the depreciating rupee making the import costlier. FMCG company Dabur is soon going to venture into Sri Lanka markets with its beverage manufacturing plant. Dabur makes fruit beverages under the brand "Real" and aims to make the most of the growing opportunities in this industry. In fact, the beverages business has been doing well for Dabur andhence there is a need for more production capacity. In the banking industry, a new development took place in the form of Axis bank launching a lifetime fixed rate home loan scheme named "Nishchint". The interest rates for this would be 11.75% and the loan will have tenure of 20 years. At present, this is the cheapest home loan in the market with other banks charging anywhere between 13-13.5% for such loans.

Global Cues:

Indian stock markets were very volatile through this week on global cues. The Sensex finally closed up by 1.8%. Among the other world markets, there was mixed response. China (down by 3.2% and Brazil (down by 1.7%) were the biggest sufferers. Singapore and Hong Kong were also on the losing side. However, France and Germany were both up by 6% each. On Friday, the Dow Jones industrial average dropped 240.60 points, or 2.16 percent, to 10,913.38. The S&P 500 fell 28.98 points, or 2.50 percent, to 1,131.42. The Nasdaq Composite slid 65.36 points, or 2.63 percent, to 2,415.40.U.S. crude oil prices fell 4.1 percent on Friday, down more than 17 percent in the quarter. Copper, a key industrial metal that is a proxy for growth expectations, was down 25.8 percent over the last three months. Mining stocks were among the worst performers, hit by the news of slowing growth in China, the world's second-largest economy and an engine of global growth.

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Gold ($/oz.)
























Market Overhang- An observational theory stating that in certain stocks at certain times, there is a buildup of selling pressure. his occurs as a combined result of sales and a strong wish to sell among those who still hold the stock but fear that selling it may cause further declines.


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DisclaimerThis newsletter is just a compilation of news from various sources. Thus, readers are expected to cross-check the facts before relying upon them. Though much care has been taken to present the facts without error, still if errors creep in, necessary feed back will be always welcomed. Editors will not be responsible for any undertakings. The newsletter is not meant for sale and hence, no part of the newsletter should be used without the prior permission of the editorial team.

SourcesThe Economics Times, The Hindu Business Line, Times of India, Business Standard, Financial Ex-press, Financial Times, Business Week, Business World, The Economist, Wall Street Journal, Bloomberg, Reuters,,,, Business Today, India Today,,, DNA, The Deccan Chronicle, The Hindu, The Tele-graph.


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The IBS Times, 129th Issue  

The 129th issue of the IBS Times by StockYard, the finance club of IBS, Hyderabad

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