International Finance

1. Case Study:- What is happening in the world?
Bullish on Indian mkts:
JPMorgan India
UTVi News Desk Published on
Fri, Sep 26, 2008 .
BANGALORE: Sep.27, 2008
Kalpana Morparia, chief
executive officer, JPMorgan Chase India, said
the Indian stock markets have come off 25-30% given the global situation, but the
long-term outlook is bright given the growth trajectory of the economy. quot;I have
bright view of our markets.quot; Commenting on private equity investment, Morparia
said: quot;I had given a range of the total capital we will commit to private equity... it
remains in the region of $800 million to $1 billion.quot;
WASHINGTON: Sep.27, 2008
US President George W Bush on Friday said that while there were disagreements on
parts of the $700 billion financial bailout plan, Congress will end up passing the
legislation.. Republicans and Democrats will come together and pass a substantial
rescue plan. Washington Mutual, with $307 billion in assets , is by far the biggest
bank failure in history.
Mumbai: Sep. 27, 2008.
quot;Deutsche Bank tie to pick up equity in BPL Limited. BPL board approved a
preferential issue ofm24,25,500 equity shares to DB and its affiliates. FII are nervous.
In India FIIs sold shares worth a net Rs.8,061 crore til September 2008. FII outflow
reached Rs. 37,574.90 crore in calandar 2008 as per the latest data. Inflation
remaining steady as per the latest data released last evening based on wholesale price
Index rose 12.14% in 12 months.
Hong Kong: 27. Sep. 2008
HSBC set to axe 1,100 bank jobs in the global banking and market operations. HSBC
was one of the first banks to feel the sting the subprime mortgage crisis in the united
states and booked a loss of $18.7 billion.
In India : Stiff norms for money changers. Avaiva launches India Bond with
guaranteed return. This offer gives a guranteed return of 7% per annum on maturity.
Honda Seil launches third generation Honda city. McDonalds opens restaurants with
BPCL in BPCL retail outlets.
Sydney: 27 th Sep. 2008: ANZ bank moves 238 financial related jobs to India

2. High prices put countries at risk: IMF DH News Service, Bangalore: 27 the Sep.2008:
Some 50 developing countries remain at risk through 2009 as a result of food and fuel price
increases, according to an updated asses sment from the International Monetary Fund
(IMF). IMF Managing Director Dominique Strauss-Kahn said that wh the international
ile
community is currently focused on the ongoing financial crisis in advanced economies,“it
is important not to lose sight of the ‘other crisis’—the continued debilitating impact of food
and fuel hikes on some of the world’s poorest countries.”
“While food and fuel prices have eased somewhat in recent months, they remain well
above their levels at the onset of the recent price surges,” said Strauss-Kahn. “What this
means for a large number of countries-particularly in Africa-is a significant shock.”
The IMF’s updated assessment shows that the impact of food and fuel price increases on
developing countries, far from diminishing, has continued to mount since its previous
report last June. As of mid-September, oil prices were at some 40 per cent below their mid-
July peaks, but still double the levels recorded at end-2006. Similarly, food prices have
eased eight per cent from their June peak but are still above end-2006 levels. As a result,
the IMF projects that net fuel-importing low-income countries are facing an increase in
their fuel bill equivalent to 3.2 per cent of their GDP—or $60 billion. For 43 net food-
importing countries, the rise in their food bill is 0.8 per cent of GDP or $7.2 billion.
Strauss-Kahn said that we needto combine forces on the domestic and international level
to guard against excessive inflationary and budget pressures and helping the poor.” The
study points to two priorities for the affected countries: First, to bring inflation back under
control, which will require tight monetary policy and the avoidance of unsustainable wage
increase. Second, a shift to better-targeted socia safety net programs to protect the poor in
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a more cost-effective manner.
Strauss-Kahn also called upon don to do more. “External support, preferably grants in
ors
the case of low-income countries, is vital to ease the burden of adjustment and to limit the
effects on real income and poverty.” The IMF, working with other international
organisations, has augmented its assistance to 15 affected countries, for a total of $264 mn.