Business News/Analysis/Perspective And Investment Gyan 4 Intellectuals

MNP - Mobile Number Portability is becoming a reality in India from 31st December 2009 - The Wait is over

2009-11-08T01:54:00.001+05:30

Mobile Number Portability or MNP is becoming a reality for Indians. The regulations pertaining to MNP, finalized by TRAI have been published in the Official GAZETTE OF INDIA.

MNP is going to be implemented from 31st December 2009, in respect of Metro & Category 'A' Licensed Service Areas.

These circles are as follows:

Delhi
Mumbai
Chennai
Kolkatta
Maharashtra
Gujarat
Andhra Pradesh
Karnataka
Tamil Nadu

In all other Licensed Service Areas it will come in to force from 20th March, 2010.

There will be two Clearing Houses to implement this in two zones.
Zone 1 - West & South India
Zone 2 - North & East India

The Number Porting Charges, Transaction Charge and Dipping Charge - i.e. which are to be paid by the customer to port or migrate their number have not yet been notified. They will be finalized and declared by TRAI before the said date of implementation.

Currently all the operators are creating requisite systems, upgrades, processes and rules for MNP internally. Also they making their ERP systems fully ready and making internal staff aware and trained about it.

This is just a teaser informing you about the implementation date.
We are going to cover this issue in full detail with all its ramifications, processes, guidelines etc.

Our team will give you simplest & detailed understanding about the MNP in the time to come and also update you about how much it will pinch your pocket i.e.the cost element involved in it.

Stay Tuned For More..........

Simply Reliance - Variants Launched by RCOM - Exclusive - we were correct & first to inform you about the tariffs - India's Best Tariff Plan

2009-11-05T16:53:00.010+05:30

Now Officially RCOM has launched this tariff - Simply Reliance Plan with all its variants. Simply Tariff War at its Best -

This Plan is India's Most Disruptive and truly a simple, no conditions plan. Touted as India's Best Plan - it truly deserves the mention.

Here is the official cost and benefit chart for your reference. This follows the Volume Discounting Principle. This chart is an extension to our earlier post yesterday. They have matched the other incumbents in launching the 1 paise per second plan with a one year validity unlike the other two variants with life time validity.

Certainly these plans are the best offers available in India at this point of time.

Now if you have heavy outgoing usage then can certainly think of switching over to Reliance for outgoing. Certainly these offers are without any strings attached means no conditions at all and plans for a lifetime.

Or else wait till the Mobile number portability to start and then can switch to their GSM service.

Reliance Communications Simply Reliance Plan Variants

Applicability (Both GSM and CDMA Networks)	Both Prepaid and Postpaid segments - Pan India
Prepaid Plan Implications	New Plan	Existing Plan	New Plan
Sim Card Cost Currently	Free	Free	Free
First Recharge for lifetime plan benefit	Rs. 61	Rs.51	Rs. 41
Existing customer migration cost - one time cost for lifetime	Rs. 58	Rs.48	Rs. 38
Validity of the plan	1 Year	Lifetime	Lifetime
Validity of the number	Lifetime	Lifetime	Lifetime
Minimum Recharge Commitment every 6 months for connection continuity	Rs. 200/6months	Rs. 200/6months	Rs. 200/6months
	SIMPLY RELIANCE PLAN (Rs.)
Category / Pulse Rate	Per second	Per minute	Per 180 seconds (3mins)
Local on-net	0.01	0.5	1
Local off-net	0.01	0.5	1
STD (NLD) on-net	0.01	0.5	1
STD (NLD) off-net	0.01	0.5	1
SMS - local	0.5	0.5	0.5
SMS - national	0.5	0.5	0.5
Roaming incoming	0.01	0.5	1
Roaming outgoing (local)	0.01	0.5	1
Roaming outgoing (STD)	0.01	0.5	1

Per Minute Cost Workout for Consumers - Effective Cost	Rs. 0.60/min	Rs. 0.50/min	Rs. 0.33/min

Postpaid Plan Implications
Monthly Plan Type 1 - Cost (with Rs. 99 worth of free sms's)		Rs. 99/month
Monthly Plan Type 2 - Cost (with Rs. 399 worth of free sms's & free local calls both)		Rs. 399/month

Source - Company and Kotak Report

Simply Reliance - Exclusive News -Plan Variants to be Launched "Customer Chooses the Pulse"- This is truly India's Most Disruptive & Best Tariff Plan

2009-11-04T15:49:00.022+05:30

Exclusive Updates to "Simply Reliance" Plan - India's Best and Most disruptive Telecom Tariff Plan.

I don't like to explain tariff plans to people - i believe they should understand them on their own.

But this step by Reliance Communications is an another first by them - a pioneering step which made them launch country's Most Disruptive Tariff plan on October 5th 2009 in Simply Reliance

and now in November 2009 - they are going to launch its extensions (source based news).

So here is my explanation to make people choose the best.

RCOM’s new plan extensions (to be launched) to the Simply Reliance Plan are — customer chooses the pulse plans.

(Extension Plans to Simply Reliance are not officially launched on the website still - but will be launched shortly as per the source)

After almost 3.75 years of BSNL Launching its One India Plan - this step by a Pan India operator like Reliance Communications is an another milestone in the Indian telecom industry.

They have altered the Industry landscape towards them (in their favor). Although the short term profitability impacts on the company and the entire industry are negative but the game plan currently for all the companies is to garner maximum Revenue Market Share.

Additionally RCom wants to Increase Network Utilization & be properly placed for service upgrades post 3G Launch as their current networks are already 3G ready.

This Reliance Offer is available to All its GSM + CDMA subscribers - New & Existing.

Unlike its competitors RCOM offer is applicable to All Prepaid and Postpaid subscribers - New & Existing. Also Plan Validity is for lifetime.

The Exclusive News with our Team is that they are about to Launch Variants of Simply Reliance Plan.

They will launch a 1 paisa per second plan with Rs. 0.60 per minute cost

and a per 180 second plan with Rs. 1 per 3 minute cost (effective cost .33 paise per minute).

Rcom's Plans are without any conditions or monthly recharge commitment.

RCOM has taken the pricing war to the pulse level. The offer to customers is simple – customer chooses the pulse duration (second, minute, or 3 minutes) and the higher the pulse duration, the lower the per-pulse charge.

RCOM's another Pricing action is similar to Volume Discounting in segments or slabs. This has and will put pressure on Incumbents like Airtel and Vodafone who are responding to the price war with a passive approach - which is ridden with lots of conditions or riders along with the tariff plans which they offer. Airtel Advantage Plan and Airtel Freedom Plan are both expensive as compared to Simply Reliance Plan by as much as 20% to 60% in various tariffs they offer and again their offers are timed - 30 day validity or 1 year validity. Unlike reliance whose offers are for lifetime.

Please find below the image showing the details of the plan: Data Marked in Gold Color is The officially launched correct data.

Thus next time you choose your operator then kindly see who offers what without any conditions attached to it. And don't go by the face value please. (We acknowledge the company website and kotak report for this information)

SEBI Takeover Code amendments in the year 2009, post SatyamGate (Satyam Scam) regarding Promoter Pledging of Shares

2009-03-05T20:51:00.013+05:30

Friends

These updates in The SEBI Substantial Acquisition of Shares and Takeovers Regulations 1997 as amendments for 2009 have become more and more important after the Satyam Expose.

The Satyam episode has been an eyewashing event in Indian Corporate Industry. One more proof of the fact that The Scamsters are way ahead of Regulators and Regulations are always behind the time and Markets.

Also generally in the Bear Markets the companies fall prey to a larger amount of scrutiny and oversight than in Bull Markets. Bear market in general is the time for the regulations to come ahead at par with the Markets.

The first change has been on 28th January regarding Disclosure of Pledged shares.

Why this is important is that - the promotors of the company generally manage a company because of substantial number of voting rights which give them control or they manage the day to day affairs of the company by virtue of their sharehoding in the company.
If it's quantum changes because of pledge to (in favour of) lenders or other third parties - as it happened in satyam then the promotors naturally loose control of the company.
Again the shareholders have every right to know all these important matters well in advance. These are events which are of material importance to all the parties associated with company.
These events help us assess the management quality, try and tell us whether the affairs of the company are free and fair, whether or not they are misusing the funds of the company, what are the long term prospects of the company, whether promotors have sufficient faith in the business model of the company, whether they are funding their other business by way of these pledged shares, are they trying to increase their shareholding in the company because of low current market prices by way of pledging current shares in the market(eg. orchid pharma & chemical) etc.

Thus these events become important for the shareholders, analysts, regulators, government, even potential suitors i.e. acquirers, press, financial institutions, private equity players etc. all alike.

So now don't forget to see the quarterly pledge related filings by the companies to the stock markets to determine whether the company is an investment choice. Also one part where these regulations lack is that they dont mandate the promotors to disclose the purpose of the pledging of shares. In future i strongly feel this should be made compulsory.

Now within 7 days of pledge the promotors via the company have to disclose the shares pledged.

the necessary condition is if they pledge either

- greater than 25000 shares or 1% of voting rights or share capital whichever is lower.

The changes introduced by SEBI are mentioned below for your reference:

In the Securities and Exchange Board of India (Substantial Acquisition of

Shares and Takeovers) Regulations, 1997 -

(i) after regulation 8, the following regulation shall be inserted, namely:-

“ Disclosure of pledged shares.

8A. (1) A promoter or every person forming part of the promoter group of

any company shall, within seven working days of commencement of

Securities and Exchange Board of India (Substantial Acquisition of Shares

and Takeovers) (Amendment) Regulations, 2009, disclose details of

shares of that company pledged by him, if any, to that company.

(2) A promoter or every person forming part of the promoter group of any

company shall, within 7 working days from the date of creation of pledge

on shares of that company held by him, inform the details of such pledge

of shares to that company.

(3) A promoter or every person forming part of the promoter group of any

company shall, within 7 working days from the date of invocation of

pledge on shares of that company pledged by him, inform the details of

invocation of such pledge to that company.

Explanation: For the purposes of sub-regulations (1), (2) and (3) the term

“promoter” and “promoter group” shall have the same meaning as is

assigned to them under Clause 40A of the Listing Agreement.

(4) The company shall disclose the information received under subregulations

(1), (2) and (3) to all the stock exchanges, on which the shares

of company are listed, within 7 working days of the receipt thereof, if,

during any quarter ending March, June, September and December of any

year,:-

(a) aggregate number of pledged shares of a promoter or every person

forming part of promoter group taken together with shares already

pledged during that quarter by such promoter or persons exceeds

twenty five thousand; or

(b) aggregate of total pledged shares of the promoter or every person

forming part of promoter group alongwith the shares already

pledged during that quarter by such promoter or persons exceeds

one per cent. of total shareholding or voting rights of the company,

whichever is lower.”

Carbon Credit Trading

2008-06-24T18:32:00.002+05:30

Is India a good market for Carbon Credits?

MUMBAI: With growing concerns among nations to curb pollution levels while maintaining the growth in their economic activities, the emission trading (ET) industry has come to life. And, with the increasing ratification of Kyoto Protocol (KP) by countries and rising social accountability of polluting industries in the developed nations, the carbon emissions trading is likely to emerge as a multibillion-dollar market in global emissions trading.

The recent surge in carbon credits trading activities in Europe is an indication of how the emissions trading industry is going to pan out in the years to come.

What is a carbon credit?

Simply put, one carbon credit is equivalent to one tonne of carbon dioxide or its equivalent greenhouse gas (GHG). Carbon credits are “Entitlement Certificates” issued by the United Nations Framework Convention on Climate Change (UNFCCC) to the implementers of the approved Clean Development Mechanism (CDM) projects. The potential buyers of carbon credits shall be corporates in various Annexure I countries that need to meet the compliance prevailing in their countries as per the Kyoto Protocol or those investors who would like buy the credits and with the expectation of selling them at a higher price during the KP phase (2008-12). The extension of KP shall be ratified by the current signatories of KP in their future meetings essentially to curb GHG emissions into the environment.

Sources of demand & supply

Emerging carbon credit markets offer enormous opportunities for the upcoming manufacturing/public utility projects to employ a range of energy saving devices or any other mechanisms or technology to reduce GHG emissions and earn carbon credits to be sold at a price. The carbon credits can be either generated by project participants who acquire carbon credits through implementation of CDM in Non Annexure I countries or through Joint Implementation (JI) in Annexure I countries or supplied into the market by those who got surplus allowances with them. The buyers of carbon credits are principally from Annexure I countries.

They are:

Especially European nations, as currently European Union Emission Trading Scheme (EU ETS) is the most active market; Other markets include Japan, Canada, New Zealand, etc.

The major sources of supply are Non-Annexure I countries such as India, China, and Brazil.

Trading In Carbon Credits

Emissions trading (ET) is a mechanism that enables countries with legally binding emissions targets to buy and sell emissions allowances among themselves. Currently, futures contracts in carbon credits are actively traded in the European exchanges. In fact, many companies actively participate in the futures market to manage the price risks associated with trading in carbon credits and other related risks such as project risk, policy risk, etc. Keeping in view the various risks associated with carbon credits, trading in futures contracts in carbon allowances has now become a reality in Europe with burgeoning volumes.

Currently, project participants, public utilities, manufacturing entities, brokers, banks, and others actively participate in futures trading in environment-related instruments. The European Climate Exchange (ECX), a subsidiary of Chicago Climate Exchange (CCX), remains the leading exchange trading in European environmental instruments that are listed on the Intercontinental Exchange (ICE), previously known as International Petroleum Exchange (IPE).

Price influencing factors

In Non-Annexure B countries (the developing countries) across the world, CER prices are influenced by various factors including EUA prices, crude oil prices, electricity, coal, natural gas, the level of economic activities across Annexure I countries, among others.

Some of the major price influencing factors
Supply-demand mismatch
Policy issues
Crude oil prices
Coal prices
CO2 emissions
Weather/Fuel prices
European Union Allowances (EUAs) prices
Foreign exchange fluctuations
Global economic growth

Risks associated with carbon credits

The coming into being and operation of the EU-ETS, the ECX futures exchange platform, revealed that there are market- and policy-related risks for CER producers, including the supply-side risks starting from the DNA approval risk to the CER issuance risk in a complete CDM approval cycle. Apart from these risks there are a host of other risks from both the supply and demand sides that the real market players confront with.

Most CDM projects by their very nature take a long time to generate the CERs and hence, face the aforesaid risks in large proportion, which if not hedged would lead to reduced realization. Under such a situation, the realization of CER generators at times may not even cover the investment put in to generate the CERs and thus, has the potential of even making a CDM project unviable in the long term. Given the long gestation period of CDM projects and the risks involved, it is rather inevitable that they pre-sell their potential credits in the futures market (preferably a domestic futures market, to avoid forex risk attached to participation in a foreign exchange) and thereby, cover their probable downside in the physical market.

Potential participants in carbon credits trading
Hedgers
Producers
Intermediaries in spot markets
Ultimate buyers

India as a potential supplier

India, being one of the leading generators of CERs through CDM, has a large scope in emissions trading. Analysts forecast that its trading in carbon credits would touch US$ 100 billion by 2010.

Currently, the total registered CDM projects are more than 300, almost 1/3rd of the total CDM projects registered with the UNFCCC. The total issued CERs with India as a host country till now stand at 34,101,315 (around 34 million), again around 1/3rd of the total CERs issued by the UNFCCC. In value terms (INR), it could be running into thousands of crores.

Further, there has been a surge in number of registered projects in India. In 2007, a total of 160 new projects were registered with the UNFCCC indicating that more than half of all registered projects in India happened last year. It is expected that with increasing awareness this would go further up in the future. The number of expected annual CERs in India is hovering around 28 million and considering that each of these CERs is sold for around 15 euros, on an average, the expected value is going to be around Rs 2,500 crore.

Courtesy: Multi Commodity Exchange of India

Analytics News Round Up

2007-12-19T20:49:00.000+05:30

IFCI stake sale called off, alongside this IFCI to issue 123.7 m shares on Debt conversion. Thus what we feel is that the stock's prices will be under pressure going forward. Also the investor and speculator frenzy for the stock will subside going forward.

Suven Life Sciences to launch CNS drug Suven-502 in 2008, the company is also going for raising money through the QIP route upto Rs. 50 million USD. The stock has had a run up during last fortnight. It is trading at around Rs. 50 per share and i see the stock going above Rs. 60 in the short term. It is a value stock with a good future, a clear long term story. Its debt/equity is .25 which is quite low compared to a 2.1 of Glenmark. Just to site one example. Its BV is Rs. 38.34 compared to Rs. 35.99 of a larger player Glenmark Pharma. (I am tracking the stock since a year but missed the buying opportunity during the consolidation phase at around Rs. 38 this year)

GBN -Global Broadcast News board approves stock split from FV Of Rs 10 To Rs 2. This is a CNBC TV 18 group company.

Government Panel is going to meet on fuel price revision next week (a news channel)

Morgan Stanley, the second-largest U.S. securities firm - run by CEO John Mack reported a steeper- than-forecast loss of $3.56 billion in the fourth-quarter after $9.4 billion of writedowns on mortgage- related holdings and received a $5 billion cash infusion from state-controlled China Investment Corp. (China's Sovereign Wealth Fund which acquired 9.9% of Morgan Stanley)

Gujarat Fluorochemicals Ltd (GFL) on Wednesday said it will enter into a joint venture with China-based Ying Peng Chemical Company for manufacturing a strategic raw material.

Thanks for reading, read disclaimer on the website for sources.

A MAJOR AIRLINE INVESTMENT

2007-12-14T10:06:00.000+05:30

Jet Blue the struggling discount carier sold 19% stake in its business to Lufthansa of Germany for $300 million.it is the major investment by a foreign airline.

This transaction is also the latest example of the weak dollar to invest in a prominent American company.

The stake sale may help shore up the lagging finances of JetBlue which has $433 million in current debt obligations and has already substantially curtailed its growth plans and sold some assets like older planes. While Lufthansa's investment is strictly financial and doesn't include any strategic partnership for now.

Industry watchers speculated that the deal could lead to further cooperation and give Lufthansa an important foothold in the United States.

source: bbc news

Why Real Exchange Rate?

2007-10-29T17:34:00.001+05:30

How does one determine whether a currency is fundamentally undervalued or overvalued? This question lies at core of international economics, many trade disputes, and the new IMF surveillance efforts.

NOMINAL EXCHANGE RATE V/S REAL EXCHANGE RATE

Nominal Exchange rate usually expressed as domestic price of foreign currency. for e.g.

1 euro = 1.36 dollar

And from euro holder perception

1 US dollar = 0.735 euro

But,the nominal exchange rate is not the whole story. The person or firm, who buys another currency is interested in what can be bought with it. Are they better off with dollars or euros? That's where Real Exchange rate(RER) comes in.

If the real exchange rate is 1, A product in USA cost 1.36 and 1 euro in Germany

In this one product world ( in which price equal the exchange rate), the purchasing power parity(PPP) of the dollar and euro is the same and RER is 1 (see underexplained example)

What is Real Exchange Rate?

The RER between two currencies is the product of the nominal exchange rate(the dollar cost of euro, for example) and the ratio of prices between the two countries.The core equation is

RER = e*p^/p, where e is the nominal dollar euro exchange rate , p^ is the average price of a good in the euro area, and p is the average price of the good in the USA

In our example, e=1.36.If the german price is 2.5 euros and the US price is $3.40, then 1.36*2.5/3.40 yields an RER of 1. But if the german price were 3 euros and the US price $3.40, then RER would be 1.36*3/3.40=1.2

Suppose a product sells for 1.2 euros in Germany, suggesting that the euro is 20 per cent overvalued relative to the dollar

Therefore, there will be pressure on nominal exchange rate to adjust, because the same good can be purchased more cheaply in one country than the other

It would make economic sense to buy dollars,use them to buy a product in USA at the equivalent of 1 euro and sell them in Germany for 1.2 euros. Taking advantage of such price differentials is called arbitrage.

As arbitrageurs buy dollars to purchase a product to sell in Germany, demand for dollars will rise, as will its nominal exchange rate, until the price in Germany and US is the same-the RER returns to 1.

Source:'Finance & Development'

Difference between Global Fund and International Fund:

2007-10-20T07:57:00.000+05:30

In the English language, “Global” and “International” tend to be used interchangeably – hence the confusion takes place. In investing world global and international funds are having completely different goals and providing different kind of investment opportunities to the investors.

Global Funds:

Global funds consist of securities in all parts of the world, including the country in which you reside.

Global funds are for those investors who wish to diversify against country-specific risk without excluding their own country.

Benefits of Global Funds:

An investor may already have a lower than desired concentration of domestic investments may get the perfect portfolio.

An investor may not want to take on the high level of risk involved in making foreign investments.

International Funds:

International funds consist of securities from all countries except the investor’s home country.

International funds are for those investors who want diversification outside of the investor’s domestic investments.

Benefits of International Fund:

If an investor currently holds a portfolio consisting mainly of domestic investments, he or she may choose to diversify against country – specific risk and purchase an international fund.

A speculator may invest in an international fund because he anticipates a rise in a particular foreign market.

Business of cricket

2007-10-19T15:35:00.000+05:30

Liquor king and airline baron Vijay Mallya,auto Major Hero Honda and leading telecom company Reliance communication have started negotiation with BCCI to buy rights over the teams who wil play in 20-20 format which was announced to counter subhash chandra's Indian cricketleauge.T whole idea is...

* Under Twenty20 Format the company is not a sponsor but the owner of the team

* BCCI is asking corporates to pay between $50 million and $60 million (Rs.200 crore to 240 crore) to own on IPL team for life time

* In turn, the BCCI will offer companies revenueshare from stadium advertising and gate money

* The team can be listed on the stock exchanges and buyer have right to re-sell the team at premium

* However,the team owner will not have any share in the revenue the BCCI earns through selling television rights

SOURCE: Business standard

FDI & Stock Market Boom:

2007-10-11T07:04:00.000+05:30

For the week ended September 28, india’s forex reserves increased by almost $12 billion. This is more than the $10 billion that came into the country between April 2005 and March 2006.

Why FDI is coming in to our economy?

Many reasons. But primarily, it is because booming stock market, a robust economy and expectations of Indian corporates doing well. For all these reasons, foreign investors are thinking about India.

Because of this flow of FDI stock exchange is getting more money. And Sensex is going up. If the same trend is continued we will see Sensex at the sky !

Listing Myth

2007-09-22T15:27:00.003+05:30

Lots of investors who may have subscribed to the IPO are under the impression that they strike goldmine when IPO lists at premium.But this may not be entirely correct because return on investment in an IPO is not only dependent on the debut premium but also on oversubscription.This can be better understand by following example.

Suppose a person invest Rs. 1 lakh (the cap for small investors) in two IPOs,EVERONN Systems and DLF

Everonn Systems' share closed with highest premium on day 1,while otherwise was the case in DLF (issue price for both companies was RS 100 per share)

By investing Rs 1 lakh in Everonn systems' IPO the investor would have effectively applied for 714 shares

But due to 123.80 times oversubscription, he would have been allotted only six shares.The profit on day 1 would be Rs.338 per share (difference between close price & issue price ) The investor would have made profit of Rs. 2041(Rs338*6 shares). The ROI in this case is just 2.03%

On the other hand,when investor puts Rs. 1 lakh in DLF IPO,he would have applied for 190 shares and got full allotment of 190 shares because retail portion was subscribed just 0.97 times The profit on day 1 would be Rs 45 per share Means,investor earned total profit 8550(Rs 45*190 shares).The ROI in this case is 8.55%

This means,besides listing premium oversubscription has an impact on investors' return on investment

Source : "Capital Market" Aug-Sep 2007

New FII norms will lead to reduced volatility

2007-09-20T01:38:00.000+05:30

SEBI has proposed to allow FIIs to use AAA-rated foreign government securities in lieu of cash for payment of margins against positions in derivatives.

Margin payment is a headache in this business.. for all sorts of investors in futures and options.. They being FII s whose volume of transactions is huge its going to be a problem..

Currently its a time for musings by various experts about the repurcussions of this policy move. In one such view - According to Professor Amit K. Barua, IIM Ahmedabad, in a debate in ET - this is what i can understand and present to you as per my existing knowledge base..

its An appropriate beginning.

This measure would allow FIIs to use their holdings in, sovereign Debts of foreign countries, eg. US government securities for investing in the Indian equity derivatives market.

The 1st benefit will acrue from the outcome that FIIs will be able to change F and O positions without changing or shifting their cash market investment. So if a margin call comes from the exchange they can use their AAA grade US govt. securities as a margin without selling their cash market exposure to pay out the margins.

Thus the volatility in the cash market of BSE and NSE that is caused by sudden withdrawal and infusion of funds by FIIs will decrease considerably.

Result: This will make the entire process to happen in a phased manner. The reduced volatility in turn will make F and O prices cheap and make investment in to Equity options attractive plus hedging through options will also be attractive.

The 2nd benefit will be seen in FOREX market. The exchange rate fluctuations due to the frequent entry and exit of FIIs' from the Indian equity markets will reduce.

Result: The additional volatility in the market determination of exchange rates will die down as changes in FII exposure will not be drastic. The Forex Options will be cheaper AND will make hedging for "Exporters, IT Companies et all " cheaper against their risk of rupee apreciation against dollar etc.. and will be beneficial to whole indian economy.

Currently there is a cap on the total value of the margin accounted for by foreign securities.

This cap should be raised in a phased manner and can be removed also to reap the benefits in its entirety out of the current changes.

If suddenly rupee apreciates then it will be difficult to realize the full margin value as foreign soveriegn assets are denominated in US dollar now so this adjustment should be accounted for in the margin requirement in advance.

So, let us wait and watch how these new norms behave and how we digest their effects and hope for the best results for the Indian economy.

our sincere thanks to ET and the expert to enlighten us on this very important topic...

Surge of Islamic finance

2007-09-17T19:57:00.000+05:30

The Middle East has so far been regarded as a fabled trade entrepat between Europe and Asia. However, of late things, things have changed. A modern form of Islamic trade finance blossom. And as world trade is accelerating in the region, where oil exporting countries are enjoying strong economic growth and importing more goods and services, the region is gradually transforming into a financial hotspot. And sukuk the shari'ah-compliant Islamic bond emerged.

What makes Islamic finance different?
· Islamic finance differs from conventional finance in its strict adherence to shari'ah or Islamic law, which calls for ethical and equitable finance, and strictly prohibits speculation and receiving and paying interest.
· Two of the basic tenets of Islamic finance inferred from the holy book of QURAN are: First No interest can be earned on loans and, second socially responsible investing.

Surge of sukuk (Islamic Bond)
· Islamic finance today is led predominantly by sukuk bonds. 'Sukuk' means certificates.
· The criteria for issuance of sukuk are the existence of the underlying assets on the balance sheet of the issuing entity, which distinguishes sukuk from conventional bond.
· Unlike the conventional bond sukuk holder enjoys proportionate share in revenue generated by the sukuk assets as well as in the proceeds of the realization of underlying assets.
· Another distinguishing feature of a sukuk is that it is not tradable in secondary market instead it held till the maturity period

Advantages:
· The primary advantage of sukuk is the enhanced quality it brings with the presence of underlying tangible assets.
· Appropriate underlying asset have capacity to not only produce the revenue streams desired by investors but allow even struggling entities to pledge their most profitable assets for sukuk financing.
· The fact that sukuk are backed by hard assets limiting the possibility of issuer default.

Problems of sukuk market:
· Liability has always been a concern for a sukuk as non existence of secondary market
· The absence of consensus Islamic benchmark rate (like LIBOR) and consequently an established benchmark yield curve is an added constraint.
· Since sukuk are invariably backed by an underlying tangible assets there is risk of lose, damage, as non-maintenance of the asset which will undoubtedly have an adverse effect on the sukuk returns.

Indian context:
As India being second largest Muslims populated country, there is good potential to have Islamic finance model. It is helpful for mobilizing and allocating capital to the best opportunities available.

Also read our previous coverage to this topic about S and P islamic index at

http://analyticsnewswire99.blogspot.com/2007/08/strategic-news-updates-03-08-07.html

Rise of Nu-Power

2007-09-16T11:14:00.000+05:30

Nuclear power's revival is most visible in America where power companies are preparing to flood the Nuclear Regulatory Commission with applications to build new plants. Finland is building a reactor, which is having the worlds largest capacity and british government is preparing the way for new planning regulations.

In india also there is the following breeze of activity other than the forthcoming INDO-US Nuclear Cooperation: These power plants are under construction in India.

Rajasthan Atomic Power Project 5 & 6 - 2 X 220 MWe Capacity
Kudankulam Atomic Power Project - 2 X 1000 MWe Capacity
Kaiga Atomic Power Project 4 - 1 X 220 MWe Capacity

Also there is going to be an influx of new capacity and new construction as and when government allows private sector in to the arena....

Companies like L&T, GE, NTPC, Tata Power, Seimens, Areva T&D, ABB and many others are in the pipeline to enter this sector once it is libralized....

Current status of the nuclear industry globally:

439 nuclear power plants in operation with a total net installed capacity of 371.671 GW(e)
5 nuclear power plants in long term shutdown
30 nuclear power plants under construction

Advantages of Nuclear Energy:

1. Nuclear energy is cleaner than oil.
2. Nuclear energy is more secure than gas.
3. Nuclear energy is more reliable than wind.
4. Nuclear power stations are very cheap to run.

Challenges of Nuclear Energy:

1. Nuclear energy involves political risk.
2. There is a risk of terrorist attack for stealing the nuclear fuel for preparing weapons.
3. Chances of weapons proliferation.
4. Nuclear reactors are hugely expensive to build.

What is needed to be done ?

1. Nuclear energysources do indeed deserve a hand from governments.
2. Governments and nuclear industry are doing their best to limit the risks mentioned before and such risks are small enough to be worth taking in the interests of cheap clean energy...

INDIA The New Hub for Wealth Management

2007-09-16T01:24:00.000+05:30

India is the world’s second fastest growing market for wealth management firms.... But i can assure you one thing that even posh or robust wealth management in india cannot buy you trust.......

Why i am saying this ? ... Well traditionally Indian HNI's have been putting money under safe's built stealthily in their homes, or under the matresses or over the ceilings in pop... etc. etc.. also dont forget swiss bank, mauritian banks or schchheles like tax heavens... Again the Indian HNI's dont try to keep all their money under one basket of a firm.. so they dont even retain a firm consistently..

Compare the analogy of Indian HNIs with global scenario.. In Europe, e.g. Wealth Managers even open a client's mails! thus you see people there retaining a Wealth manager for generations! can you hope to see that in India? i guess no...

But India is a prime target of global wealth management firms like Merrill Lynch, Lehman Brothers, Citigroup, Morgan Stanley, UBS securities, Credit Suisse etc..

Lets examine the deal in detail....

See these global facts & figures: (2006)

9.5 million people globally hold more than US$1 million in financial assets.

HNWI wealth totals US$37.2 trillion.

Wealth generation was driven by real GDP gains and continued market capitalization growth

Singapore, India, Indonesia and Russia witnessed the highest growth in HNWI populations

India has second highest Real GDP growth rate in the world at 9% for FY06 next only to China at 10.5%.

Market Capitalization Rise & Returns chart:

To read the contents of the image properly click to open it separately in a new web page or copy it on your computer and open it from there.. its a safe file to save & open.. sorry due to technological limitation of not to open it here perfectly

Destination India:

Thus India is clearly a sought after destination for wealth management companies......
As of 2006 the number of HNIs in India is around 100,015 who are true billionaires..
Bloomberg report of year 2005 showed that approximately $10 billion (Rs 40000 crore) in HNI assets were under management in India then.... Now it is estimated to be around $20 billion (Rs. 80000 crore) approximately as AUM of HNIs.

Points to Ponder:

We believe the key to this market is the use of need based positioning and customization of services taking care of client perspective..

Also one more asset in this business is The Relationship Manager. They are the life blood as well as heart of this business.....

A Delloitte report of year 2006 also says that in banking industry this segment is the most profitable one owing to the HNIs capability of huge 1 time investment capability..

Winning the Hurdle Race:

There is a dearth of Regulation in this sector....

RBI has just recently only allowed individuals to invest upto $100000 dollars (Rs. 40 lakhs) per annum abroad...

Also there is a misconception in India between Wealth Management and Private Banking. We must say here that Wealth mangament is private money management aimed as per the client's profile or needs..
While private banking is a sort of retail banking or mass based affluent banking which caters to sell all range of products... Thus people in india mix private wealth management with private or previlege banking...

One more cache here is that .. In India many a times Advisory & Distribution are not segregated...
So you will find a wealth manager charging a client by investing in the mutual fund products sold by their AM company for which he will charge double fees.. 1. annual portfolio management charges and 2. additional charges for investing in their own MFs calling them Management fees....

This is sheer cheating ! As in this case the wealth manager will always be keen to sell products rather than giving advice... Actually these people can't be called wealth managers at all....

Also a lot of taxation related ambiguity prevails in India making the conventional billionaires even more circumspect and orthodox in approach.

Thus a lot needs to be done on the regulatory field...

But clearly this market segment has a potential being rich gettin richer and richer..

So all those who are at the start of their career can surely aim at making their career in Wealth Management....

Once again we congratulate india for becoming world's second fastest growing wealth management market

Source for the news article:– Bloomberg, Merrill Lynch, Capgemini, The Business World, The Economist Intelligence Unit, moneycontrol.com, the hindu etc etc.. we thank them providing us this great information source.

Business News 13-09-2007 ANW 99 Exclusive

2007-09-13T21:28:00.000+05:30

Unitech becomes the first Real Estate company to enter NIFTY 50 replacing IPCL, the company merging with Reliance Industries Ltd.

April - August customs mop-up at Rs 40,571 cr, Up 18.7% Year on Year.

Why metal prices are going down these days? is it the cyclical downtern due to the said impacts of the LME - London Metal Exchange prices due to supply & demand factors. Is there excess capacity then the demand?

Hindalco cuts aluminium prices by Rs 5,000/t

Hindustan Zinc cuts Zinc prices by Rs 8,800/t (7.4% Cut)

In what is seen as Lobbying for permitting holding company for banks like SBI & ICICI, The Indian Banks’ Association (IBA) would suggest to the Reserve Bank of India (RBI) that it permit banks to set up intermediate holding companies as an interim measure with stipulations that would provide comfort to the regulator.

Tata Motors is considering IPO for its ancillary subsidiaries-HV Transmissions and HV Axles. The company may also consider a strategic stake sale in ancillary units before IPO. This will help them unlock value & also help demerging this business from parent Tata Motors.

The US stocks at latest time 12 oclock IST midnight are trading firm & high - DJIA (NYSE) is trading at 13437.32 up 145.67 points and NASDAQ trading at 2605.62 up 13.55 points. Hope they are having the effect of The Indian Markets which closed today in green!

Lukoil the company 20% owned by ConocoPhillips, is refining more crude at home to meet rising demand and is looking for more oil abroad and has posted record profits!!!!! The second largest russian oil producer has second-quarter profit rising 8.4 percent to a record level, propelled by higher refinery sales and rising crude prices.

hey people wait and watch for a new section that is going to be started by none other than me!!!!! from tomorrow...... and yes its going to be global..

do come for it tomorrow...... I have Christened it as ....

ANW99 Business MOVERS & SHAKERS !!!!!!!!!

We are greatly thankful to all the sources available in the business news segment for all the great information.

FUTURE FOR "RUPEE FUTURES" IN INDIA?

2007-09-11T21:57:00.000+05:30

It's no exaggeration that the recent episode of phenomenal rise in the value of Indian rupee has sent positive reverberations across the world about the growing strength of Indian economy as well as its underlying currency, the rupee.
The rupee appreciation has significantly boosted the demand for rupee -denominated assets across the globe. However exporters started to feel the pinch as it began to erode the country's competitiveness and became the threat to its buoyant export growth .If India is to sustain its momentum over long term, the need of hour is to develop an effective mechanism which will take care of currency related risks. This underlines the pressing need to kick-start a domestic currency future market wherein Indian businessmen can effectively hedge forex risks that they encounter.

WHAT IS CURRENCY FURURE?

Currency future is a futures contract, which exchanges one currency with another at specified price and date in future with one of currencies being US dollar. Except for a few contracts that are held back till the expiry date when the payments are made in each currency, most of the contracts are squared off before the expiry date.

CURRENCY FLUCTUATION RISKS

Companies, which export and import through long term contracts will encounter currency risks
Companies, which borrow in foreign currency also, face currency risks.
The currency risk, which comes through import parity pricing, impinges on all firms.
Householders who invest in companies that are exposed to currency risks also have to suffer from this risk.

CURRENT SCENARIO

Indian firms hedge their currency risks using over the counter (OTC), currency options, swaps and forwards.
But turnover is small with the stringent capital account restrictions imposed on rupee convertibility.
Till recently, rupee exposure risks can be typically hedged either through Non-Deliverable Forwards(NDF) in east Asia or rupee forwards in India.
But the forward market in India are small and the access to NDF overseas markets is limited.
The fact that $1 bn turnover a day of derivatives trading has been occurring outside India on Indian rupees, signifies domestic future market in india to cash in on this growing demand fro the currency.

GROWING CLAMOR

Currency future concept was pioneered by international monetary market, a division of Chicago mercantile exchange in year 1972
To leverage on the surging demand for Indian rupee Dubai Gold & Commodities Exchange (DGCX) launched the world's first non deliverable rupee futures contract on June 7,2007
According to terms, at DGCX, each rupee dollar contract would represent two million rupees. Typically ,prices will be quoted in US cents per RS.100 with minimum fluctuation of $2 per contract
Further trading price list for the current and subsequent two months will be made available publicly in addition to next three calendar quarterly months.

THE WAY AHEAD

The more such kind of products exits outside India, the more anomalous it seems that India doesn't have any such kind of product
As, a consequence, the RBI has formed an internal committee headed by its chief General Manager Salim Gangadharan, to explore the feasibility of launching currency futures in Indian scenario
The introduction of rupee futures also put another instruments in the hands of hedgers to better hedge their exposure risks.
It does help in reducing the monopoly of banks in the area of hedging instruments and thus increase transparency.
Indian stock and commodity exchanges have the essential infrastructure & surveillance monitoring & hence are well placed to embark on the commencement of currency futures market in India

Thus rupee futures provide more flexibility, liquidity and are more transparent than forward contracts Therefore, it's high time to effectively tap the untapped potential of currency futures

SECURITY DEPOSITS - Tool for Retention

2007-09-11T00:59:00.000+05:30

A few Corporates stipulate to their new employees to provide Security Deposit to reduce attrition.
The banks propose for the employee to keep the Security Deposit in the form of a Fixed Deposit (FD) with the Bank.
The employee cannot withdraw such FDs without the consent of the company and the company has the right to withdraw the FD in the event of employee leaving the organization before a certain stipulated period
But if he doesnt move from the company then this amount is his gain and incentive and his property....

Features
The Fixed Deposit is available in a single mode of operation.
Maturity period ranges from 6 months to 10 years
Minimum amount of deposit required is Rs.10,000 and beyond that deposits can be in the multiples of Re.1.
Interest is compounded quarterly and reinvested with the principal amount.
Interest will be subject to TDS
The Fixed Deposit cannot be auto-renewed
Rate of interest is congruent to the current rates ion fixed deposits.
Benefits
Earn high returns on the money deposited
Safe and Secure money deposit
Flexible time period

Thus its going to be a good tool going forward to nail attrition in global business world. This gets a great potent weapon due to increasing returns on bank deposits after an all time low rates of interest for a period of last 4 years. This can work as a bonus and an incentive to them.......

Markets On Monday

2007-09-10T02:02:00.001+05:30

The US Job Data is not so good. Expectation was that of + 100000 jobs but results are a -4000 jobs....

So Dow Jones was down..

Broadly our markets should also operate in sync with it....

But it also depends on how asia opens tomorrow.. most probably japan would be down...

its an un even ride ahead till wednesday, it will precisely be direction less.. & extremely volatile and range bound.....

any good new will lift the markets in short run

wait for 18th september, as FED is going to announce a rate cut, nobody knows will it be 25 basis points or 50 basis points..... but it will b +ve for markets

Thus finally my assessment is that India will also be down tomorrow atleast in the opening trading hours....
my expectation is 300 points............................

But all in all seeing the diwali as an immediate target there are all indications of a very good and big Upswing in the Indian markets...... so Enjoy....

Disclaimer: The views, research & analysis shown are solely of the author... And the author has interests in Indian stock markets... Capital Market investments are risky and investors must do research and take caution while investing....

GET YOUR VIRTUAL DRIVE - BUT EXERCISE SOME CAUTION

2007-09-08T19:08:00.000+05:30

GMAIL DRIVE:

Are you suffered from the loss of data from your computer because of any technical problem?

Or are you willing to assess the data saved in your computer form anywhere in the world?

Here is the function for you….

Try out Gmail drive. This is a virtual drive with the space of 2 GB available for you. You can save the data up to this limit in the drive. More than this, the drive is password protected so nobody else you can access the drive. Form anywhere in the world you are able to see the data as well as work on the data.

No matter in your computer is totally affected form virus; they can not hang up in this drive because this drive is not on your computer server or hard disk.

And all this available free of cost…

Steps to go with Gmail Drive:

Step 1: Create an account with Gmail

This is as easy as you are creating your email account with any other site.

Go at http://www.gmail.com/ click on creat an account, fill the formalities and got the account access.

Step 2: Download Gmail Drive

Now you need to download the drive software form site

Go and push on http://www.filehippo.com/download_gmail_drive/ here on this site at the right top corner a link is available ‘Download latest version’. Go and click on this link, shortly you will get a Zip file on your PC. Visit this zip file and go through the information. Among the contains the last is Gmail Drive Set Up. Make the set up for your PC.

Step 3: Get access on your Gmail Drive

Congratulations ………. Go to your ‘My Computer’, here with other drives you will find a new drive called Gmail Drive

As you double on this drive, you will be asked to give the username and password. Here enter your gmail address name and the password you had given for that email….

Now onwards by giving the username and password you can use this Drive any time from anywhere.

Precautions:

Take care about the following things

Whatever you paste in your Gmail Drive, the backup of that item will land at your Gmail’s email ID. So by deleting this mail backup, you will loose the information/software anything you saved on your Gmail Drive.
To access from any other computer, the drive should be already there or you need to download as described in the step 2.
You can not use this drive to install any software on your computer.

Some bigger Precautions or a CAVEAT & a word of Caution !!!!:

Gmail Drive is a Third party 'add on' for Microsoft windows & not provided by google....
Restrictions on the Gmail service are also enforced when using GMail Drive. For example, files larger than 20 MB cannot be uploaded, as the maximum file size of Gmail attachments is 20 MB
Gmail also prevented users from transferring certain file types, such as an executable or ZIP archive. Some users bypassed this restriction by renaming the file extension or by putting it into a RAR or 7zip archive.
Again GMail Drive is an experimental package that depends on but is not provided by Google.
Changes in Google's Gmail system may render GMail Drive temporarily or permanently inoperable.
The Gmail Program Policies do not explicitly ban or permit GMail Drive, shell namespace extensions, or the use of Gmail storage space for files other than e-mail.
Nonetheless, use of GMail Drive may trigger Google to temporarily suspend a Gmail account.

Thus all in all this is a good forward looking technology !!! Hope it use picks up !

Business News 07-09-2007 ANW 99 Exclusive

2007-09-07T02:42:00.000+05:30

some brisk news first

Bank of England keeps interest rates unchanged at 5.75%

China raises Bank's Reserve Ratio requirement by 50 bps to 12.5%

April - August direct tax mop up at Rs 61,030 Cr, Up 42% (YoY). This is the clear result of higher corporate tax realizations and continued or moderately increased individual tax realizations!

What ??? Steve Jobs Apologizing ? yes in case of what is termed as the technologically superior or far superior but featuristically inferior iphone as inferred from expert reviews... He apologised to iPhone customers and offered a $100 store credit, following Apple's decision to cut the gadget's price by $200 just two months after its release. All hype cant be the resource for expected success.... They will learn from the mistakes and we are surely going to see iphone part II very sooooooooon.... Also Apple Inc. introduced a new range of ipods with WiFi & a Touchscreen !!

Intel Unveils Xeon Quad Core Processors, for servers. These are capable of multitasking and are similar to 4 processing brains packed on a single micro chip... They are also compatible with their new 45 nano meter manufacturing technology....

This is why Venture Capitalists & PE firms mean Business!! They are the masters of the game.... Cerebrus Capital Mangament LLP, yes the proud 80.1% owners of Chrysler Corp. have shown their executive luring ability from rivals!!! They hired Long time Toyota Motor Corp. North America chief executive Jim Press as V. chairman & president. This is the 2nd executive they snagged from Toyota. First a marketing head of Lexus Ms. Deborah Wahl Meyer was hired as CMO now Mr. Press. Also this is the PE firm who appointed Mr. Robert Nardelli ex. controversial CEO of Home Depot Inc. as CEO of Chrysler some time back..... They mean business and are on track for revival of chrysler as visible as per their recent deeds !!!!!

Remember the controversy on GSPC gas find about the actual gas reserve size of the well ? NOw GSPC has tasted its success in KG-8 gas well Appraisal drilling which will substantially increase the reserve size from DGH (upstream regulator & more or less most controversial figure in exploration of oil & gas in india) estimated 1.38 trillian cubic feet.... Remember that GSPC was of opinion that the gas find was economically valued at around $50 Bn then !! Even if this increases the valuation by some modest estimates even then it will be a sizeable gas find after reliance KG gas find or even may topple its record!!! who knows !

In a recent move SEBI has pushed for Waiver of Entry Load in all Mutual fund investments... But all the leading Asset Management Companies have opposed this move !!!!! Keep watching what happens ultimately ??

Kai Nargolwala joins Credit Suisse as Chief Executive Officer for APac - Asia Pacific. He is joining CS from Standard Chartered.

LIC - Life Insurance Corporation, India's no. 1 insurer is partnering GE Money, Corporation Bank, LIC Housing Finance & LIC Mutual Fund for starting its Credit Card venture. Good News Now they should start giving credit cards to all the policy holders of LIC and as the number of policies increases with amount of insurance they should give credit limit..... so this will help us keep at BAy the companies like ICICI & SBI etc. who charge exhorbitant interest rates in some cases in excess of 40% and help LIC take over a sizeable market share.... But they must keep revolving credit interest rates moderate!!!!!!

Securitization Market or the market for structured finance has made an estounding come back in India after the slump of the past year. As per Moody's data the total transactions in this year's H1 half year part the deals totalled around $5.5 Billion. Last year the full year deals were just about $6 Billion!!

Stora Enso, A finland based World's Largest paper maker in an write off of its assets removed charges or value worth $2.4 Billion from its books!!! The reason being higher wood costs & the worsening outlook for magazine papers! They did this restructuring and still this work continues!! Magazine paper selling problems -- people this may be the result of growing popularity of online edititons may be ??? who knows?

we really thank all the news sources for the wonderful and knowledge enhancing insights they have provided us.

Thanks for reading!!!

Business News 06-09-2007

2007-09-05T18:34:00.000+05:30

NTPC is in a 50-50 JV with TN Elec for thermal power project - the cost of the whole project is estimated to be Rs. 5400 crores. What we see is that NTPC as a company doest not want to loosen its capacity expansion drive seeing the delay in the policy allowing them to enter in to the Nuclear power sector. They will try to build on the capacity through the conventional sources amidst the increasing shortage of power in the country.

Tata Motors has said that they will announce exact price of Rs 1Lk car closer to Launch! we see a hype being built around the launch! good even they can now market them proactively!

SBI's follow on public offer is thought to have been delayed due to the market volatility & the better valuation expectations & the government dictat. But the bottomline is that the country's number 1 & largest public sector bank is facing a cash crunch ! ! They need capital replenishment so SBI is looking to make rights issue before end of 2007. plus write now immediately State Bank of India will raise about Rs 1,500 crore through a bond issue this week. The core issue to be set at Rs. 1000 crore plus Rs. 500 crore over subscription option. This is a part of Tier II capital. FM sir please take a call on SBI FPO fast or infuse new govt. funds if it wants to maintain its number 1 position.

Hurrray ! SEBI eases de-listing norms for Small companies. The new de-listing norms approved by the SEBI Board state that companies with paid up capital of Rs 1 crore don't need to make public announcement to buyback shares from investor. They could privately contact shareholders and they are also exempted from the reverse book-building process for fixing the price. The promoters could directly negotiate with investors for buying back shares. So now penny stocks, small non existent companies can easily delist and stop clogging our stock exchanges!!! This is not a reprieve for bigger companies like i-flex, Alfa Laval & BESF who want to delist themselves.

Come 2011, if everything goes well in the phase 2 combination trials of a new Anti Malaria Drug - then we may see Ranbaxy yes our own Ranbaxy to become 1st Indian Pharma company to launch a NEW CHEMICAL COMPOUND (NCE) globally !!! over a million people die of malaria worldwide and only 2 new drugs have come in last 30 years if everything goes well this could prove to be a boon to patients worldwide in developing countries.

The Complete Man - Raymonds will now even dress Women. They launched a range of female designer apparels named ColorPlus. They are going to invest in the brand handsomely going forward around Rs. 400 crores! good now we can see even a complete Women!

Boeing expects that the first of its 787 jetliners alias Dreamliners will be delivered on time in May 2008, although the initial test flight of the aircraft has been pushed back another two months.

Global Advisors have shut down two two commodity Hedge Funds Due to the losses in all the Markets globally !

Mergers and acquisitions could set a world record of more than $3.57 trillion this year without a megadeal from the kings of leveraged buyouts. so forget Blackstone or Kohlberg kravis roberts i.e. forget Stephen Schwarzman and Henry Kravis !!!!!! Even amidst subprime crises M&As are booming and the Takeover Fees earned to the advisors are really approaching record amount without the big hitters!!!!!!

Mahindra & Mahindra has said that it has invested $ 6 to 7 million in developing its new army off roader 'Axe' primarily developed for selling it to Indian & Israeli Army

We really thank all the sources for these detailed knowledge enriching news and information

Book Section: 'The Search' by John Battelle

2007-08-31T16:46:00.000+05:30

Hello friends,

This review was posted by me originally at http://bookreviewsanddiscussions.blogspot.com/2007/04/search.html

After long time I have read any book and that too techno + information. I came across this book when I started my MBA. The book was assigned to one of my batch mates for submitting the review on it. But so were many other books. Now, why I was enticed by this book was because of the name ‘The Search’.

When I was doing my engineering three years ago, we used to hear a lot about ‘The Information Age’. I remember lot of courses was launched by computer coaching institutes on e-commerce. Even I and my friends use to quote a lot about ‘The Information Age’, and the associated jargon, but to impress others. In reality, we didn’t have the idea what is this all about. But today, I can feel it. My second job at ‘Philips Lighting’, I got through e-portal ‘http://www.naukri.com/’. I got admission in MBA College, when I came across its site

'http://simsr.somaiya.edu/simsr/Index.asp ’. The latest laptop purchased by my friend was after negotiating with three vendors in three countries, via internet. Also while doing the job, I found that the people with the habit of hiding the knowledge, were left dumbfounded when I just got the required information via net in a single click. Surely, the times are changing and the new age has begun ‘The Information Age’.

Now, the most important activity we do on internet is ‘The Search’, and that is the book all about. The author is the cofounding editor of ‘Wired’ and the founder of ‘The Industry Standard’. With a very close and keen observation of the organic growth of World Wide Web, the author takes us through the journey of its evolution. He could be approached via his search blog at http://www.batellemedia.com/.

The initial part of the book focuses on ‘The Database of Intentions’. That is how we are ourselves creating the database of intentions, every time we type the word into search engine and telling it what our intentions are. Then it tells us about the initial search engine players prior to giants like Yahoo and Google. It talks about the players like Excite and Archie. Then it explains the mechanism of search i.e. what is going on behind the display. The components like web crawler.Then it talks about the recent players like altavista.com, aol.com, askjeeves.com. And finally about Yahoo and Google.The author talks about how both Yahoo and Google started in Stanford. And both were started out of curiosity, without any intention of making it business, and without any idea about the revolution it would bring in the world.Yahoo was started by Jerry Yang and David Filo, both were pursuing doctorates in electronic design automation at Stanford. The real reason as per the founders to create Yahoo was that they were bored with their PhD’s and they did everything they could to avoid writing their thesis.Google was started by Larry Page and Sergey Brin, while pursuing their computer science degree at Stanford.The difference between Yahoo & Google was the timings. Yahoo was pre-dot com burst company and Google was during the burst.The unique thing about Google is its Page Rank Algorithm, which works behind the search to give most relevant results. The algorithm is basically the software version of peer review methodology being used in Research Papers for years.While most of the search engines compromised their results by the amount the sponsor company pays to them, Google was different. Its mission was to give most relevant result. Then the question rises ‘How Google does make money?’ Exactly this was the question bogging the founders. But soon they found the salvation in Adwords. While searching on Google, on the left side of the screen the best relevant results are shown, while on the right side are the sponsored links. Every time anyone clicks on the adwords, Google gets money from the sponsor. The other revenue generation techniques were to act as database for other companies.The commercialization has just begun. Now every time we insert a word in the search engine, we are giving our psyche away to it. The next time you surf net, via Google or gmail, the sponsored links on the right side are not only the sponsored ones, but they are more relevant to you then the previous time. This is how the search is capturing whole our life. If anybody has read the short stories ‘The Last Answer’ & ‘The Last Question’ by Isaac Asimov, then it will be reminiscent of MULTIVAC, giant computer governing the whole planet. The same concept was shown a bit in ‘The Minority Report’. Now the only difference between search engine and artificial intelligence is that the machine till date can’t understand but only process the data. The moment it is able to understand, we have created ‘SKYNET’ (Terminator Series) ourselves.

Now the competition is not between Google and Yahoo anymore, it’s between Google on one side and Yahoo, Microsoft and IBM on other. With the acquisition of sites like Orkut by Google, the Google is adding almost 1 feature, like Gtalk + Orkut, Gmail Mobile, per day in last week.So friends, the chess board for the ‘Information Wars’ has been already set. Let’s see who wins the game. But irrespective of who wins, the search has long way to go towards perfection and will change our lives forever.

If you want to know how GOOGLE function read thishttp://infolab.stanford.edu/~backrub/google.htmlIf you want a complete REPORT on the book, please leave ur email id on the comment.

Rakesh Jhunjhunwala's Approach of Investing

2007-08-24T14:09:00.000+05:30

The future is always uncertain and therefore a prudent investor invest in the "realms of possibilities". He assess what possible outcome is likely in the company's profit performance and what kind of valuation it can produce.
Here, I basically focus on Rakesh Jhunjhunwala's investment approach which has following five elements
-Efficient asset allocation
-correct stock selection
-Exit horizon
-Disciplined leveraging
-consistent review

EFFICIENT ASSET ALLLOCATION
-Analyze what percentage company allocate to which asset class
-It depends on growth prospects, risk profile, valuation of each asset class etc.
-Determine weightage of each class, and deciding on level of leverage

CORRECT STOCK SELECTION
- When we invest in a company we invest in a business model
-All profit arise due to certain prevalent factors which are also dynamic in nature
-In general we can categories these factors into:
EPS related, which include external opportunity, competitive ability, scalability and people
PE related, which includes price value divergence.

EXIT HORIZON
-It is important to exit the investment at a favorable time and price
-For, Rakesh Jhunjhunwala, existing a stock is an independent decision not driven by profit or loss. He would like sell if he judge that he has better competitive opportunities.
-Since price=EPS*PE, he would also sell when the EPS or expectation about the EPS of a company peak, coupled with PE ratios that are unsustainable.

DISCIPLINED LEVERAGING
- Most of the large successful equity investors have never taken debt for investing-never leveraged. But Rakesh Jhunjhunwla were never been averse to leveraging
-He believes in magic of emotionless and disciplined leveraging. Leveraging allowed him to magnify his investment and earn meaningful returns.
-He leveraged only to extent of his ability to service interest cost and principal repayment.
-He structured his leveraging in such a way that dividend from his investment was enough to repay interest and establishment costs. Leverage doesn't exceed more than 10% of his portfolio value.
-Liquidity is the key to leveraging. We should hold liquid shares at least five times greater than the amount of leverage so that we can de-leverage ourselves at great ease whenever so desired.

CONSISTENT REVIEW
-Review your investments for the changing circumstances because it could alter your assessment of future
-Don't make your entire investment in one go but does it in various stages as thing pan out.

We must realize that the future may not be what we assessed it to be. The ingredients of successful investing lie in locating gaps between current expectation and future likely performance.