1. THE INVESTOR VOLUME 5 ISSUE 2 February 2012
sustainable economy through innovation>>
Pg. 08
A peek into the union budget
pg. 14
NiveshakNiveshak
World
Economic
Forum
The Great Transformation:
Shaping new models
3. C O N T E N T S
Niveshak Times
04 The Month That Was
Article of the month
08 Achieving The Goal Of
Sustainable EconomyThrough
Innovation
Cover Story
11 The 2012 WEF Annual
Meeting At Davos
Perspective
14 A peek into the Union
Budget
Finsight
17 When Airtel Launches
Airtel Bank...
Fingyaan
20 STRUCTURING THE EQUITY
GAP
CLASSROOM
23 Options Market
Bidding adieu
24 Finance Club 2010-12
4. February 2012
Strong inflows strengthen ` to 3-month
high
Expectations of easing monetary policy by the
central bank to boost growth has led to
a surge in foreign fund flows aiding
the rupee to post its fifth straight
weekly gain in the week ending
3rd February. The rupee ended at
48.6850/6950 to the dollar, close to
the day’s high of 48.67, a level not
seen since October 31. The total in-
flows this year has been nearly $5.8 bil-
lion in both equities and debt combined.
The euphoria stems from the annual headline in-
flation, which slowed to a two-year low of 7.47%
in December. The dollar inflows have resulted
due to measures taken by the central bank to
curb corporate and interbank speculation while
attracting funds from non-resident Indians and
foreign investors to support the rupee.
Services PMI hits six month high in Janu-
ary
Improved market sentiment and strong demand
boosted the HSBC Services Business Activity in-
dex to a six month high of 58 in January from
a distant 54.2 in December. The sentiment is
driven by positive outlook for financial interme-
diation and hotels & restaurant sub-sectors that
have witnessed a phenomenal growth since July
2011. However, as inflation still remains above
the comfort level, the numbers have to be taken
with a pinch of salt. The consensus is that it is
too premature for RBI to cut rates at this mo-
ment and it would ideally wait for sustained de-
cline in inflation before taking any action on the
rate front. That has not prevented the central
bank to cut cash reserve ratio by 50 bps to ease
liquidity to indicate its shifting focus towards
aiding growth. Overall, the HSBC composite PMI,
which includes manufacturing and services, rose
fastest in nine months to 59.6 from 54.7 in De-
cember.
Positive outlook for IT sector in 2012
In spite of uncertain conditions in key glob-
al markets, rating agency Fitch has affirmed a
stable outlook for the Indian information tech-
nology (IT) services sector in 2012. It considers
that the strong liquidity position of the Indian
IT companies would stand them in good
stead in the current year. It also fore-
sees a moderation in revenue growth
in 2012 from 2011 levels as demand
from key clients in US and European
countries is likely to remain muted.
The increased hiring by IT compa-
nies in anticipation of a better year
is likely to put downward pressure on
their EBIDTA margins. But, above all, the
sector experienced some relief in the last quar-
ter of 2011 by the depreciating rupee, though
that rally may not be sustainable for long as
seen by the reversal of the trend in early this
year. The agency also mentioned that the sec-
tor would be monitored closely to update their
stance depending on the margin position of the
companies.
Facebook to go public
After a long period of eight years of existence,
Mark Zuckerberg has finally decided to take his
company public. Investment bankers have sug-
gested that Facebook’s initial fund-raising tar-
get of $5 billion could well stretch to $10 bil-
lion based on investor
demand resulting in the
company valuation of up
to $100 billion. This could
make FB one of the most
valuable internet compa-
nies of modern time. The
step is a clear indication
of the growing competition between Google and
FB with the former launching its own version of
social network called Plus. Also the paperwork
involved in going public provided analysts the
rare opportunity to peep into the financial de-
tails of the web giant that was created in a Har-
vard University dorm room. Zuckerberg agreed
to cut his compensation from $1.5 million last
year to $1 effective January 1, 2013, following
the example of Apple founder Steve Jobs.
The Niveshak Times
www.iims-niveshak.com
IIM,Shillong
Team NIVESHAK
NIVESHAK4
TheMonthThatWas
8. February 2012
8CoverStory NIVESHAK8ArticleoftheMonth8CoverStory
A sustainable economy is one in which the re-
sources are not used up faster than nature re-
news them and benefits are shared equitably.
On one account, sustainability concerns the
specification of a set of actions to be taken by
present generation that will not diminish the
prospects of future generations to enjoy levels
of consumption, wealth, utility or welfare com-
parable to those enjoyed by present persons. At
present, the average per capita consumption of
people in the developing world is sustainable
but population numbers are increasing and indi-
viduals are aspiring to high-consumption west-
ern lifestyles. The developed world population is
only increasing slightly, but consumption levels
are unsustainable. The challenge for sustainabil-
ity is to curb and manage western consumption
while raising the standard of living of the devel-
oping world without increasing its resource use
and environmental impact. This must be done
by using strategies and technology that break
the link between economic growth on the hand
and environmental damage and resource deple-
tion on the other.
However, the concept of sustainability is much
broader than the concepts of sustained yield of
welfare, resources or profit margins. If we see
around us today, a sustainability revolution is
taking place – from an old economy that is high
carbon, high pollution, waste intensive and
ecologically disruptive, to a new economy that
is low or zero carbon, low pollution, energy/
resource efficient and ecologically supportive.
But the question that has been lying beneath
all those subtle layers of evolution is still the
same - How to attain sustainable development
for an economy?
And it is perhaps the most important and the
most daunting long-term challenge that the
world faces today. It has often been forecasted
that businesses, cities, communities and regions
that lead this revolution will prosper because
the new economy will outperform the old one.
Why Sustainable development is so
important for an economy?
Communities, cities, counties, regions, states,
provinces and nations need to undertake sus-
tainable economic development strategies for
defensive reasons, to avoid being left behind
as the momentum toward a sustainable econo-
my rapidly accelerates over the next few years.
However, the positive reasons for launching a
sustainable economic development strategy are
even more important. A sustainable economic
development strategy can guide places in evolv-
ing a culture of stewardship, innovation and
action that will lead to prosperity, satisfaction,
and inspiration. At the same time, a sustain-
able economic development strategy can be a
powerful tool for regenerating low and moder-
ate income communities.
A sustainable economic development strategy
provides guideposts on the way to the full real-
8ArticleoftheMonth NIVESHAK
IIMIndore
Rajiv Singh & Sourabh Sahu
Achieving The Goal Of
SUSTAINABLE ECONOMY
Through
INNOVATION
10. February 2012
10CoverStory NIVESHAK10ArticleoftheMonth10CoverStory10
most effectively and the economy works best
when operations are transparent and guided by
appropriate policies.
Strategy to tackle these primary targets
Sustainable economic development strategies
generate substantial economic & employment
growth, sustainable business and community
development by demonstrating that innovation,
efficiency and conservation in the use and reuse
of all natural and human resources is the best
way to increase jobs, incomes, productivity,
and competitiveness. In addition, sustainable
economic development strategies are the most
cost-effective method of promoting renewable
energy and clean technologies, protecting the
environment and preventing harmful impacts
from climate change. A sustainable economic
development strategy has four key elements,
referred to as the four greens:
1) Green Savings—cutting costs for businesses,
families, communities and governments by effi-
ciently using renewable resources and by reduc-
ing and reusing waste.
2) Green Opportunities—growing jobs and in-
comes through business development and ex-
panding markets for resource efficiency, sus-
tainability and clean technologies.
3) Green Talent—investing in fundamental assets
such as education, research, technological in-
novation and modern entrepreneurial and work-
force skills, because people are now the world’s
most vital green economic resource.
4) Green Places—establishing sustainable trans-
portation and infrastructure and protecting and
enhancing the natural and built environment, to
create more attractive, livable, healthy, vibrant,
prosperous, productive and resource-efficient
areas and communities.
Innovation can both enhance economic growth
and achieve sustainability through the develop-
ment of alternatives to traditional usage of re-
sources. The combination of drivers to reduce
dependence on depleting natural resources; to
reduce negative environmental impacts, notably
climate change; to create significant new mar-
ket opportunities for new technologies; consti-
tute a historically novel impetus to innovation.
Conclusion
The long-term solution to the model of sus-
tainable economy is therefore to move beyond
the “growth at all costs” economic model to a
model that recognizes the real costs and ben-
efits of growth. We can break our addiction to
fossil fuels, over-consumption and the current
economic model and create a more sustainable
and desirable future that focuses on quality of
life rather than merely quantity of consumption.
We should aim to establish a long-term vision
for the future that facilitates a cleaner and fairer
future for generations to come. We envision
that the measures taken will create a platform
for an economy that helps to reduce worldwide
carbon emissions, as well as provides attractive
business opportunities to internal and external
investors. The sustainable economy will be-
come an economy, renowned for its utilization
of renewable energy and innovative practices,
celebrated for its commitment to zero waste
practices and distinguished by a value system
that goes beyond the financial.
It will not be easy; it will require a new vision,
for innovation with new measures and new in-
stitutions. It will require a redesign of our entire
society. But it is not a sacrifice of quality of life
to break this addiction. Quite the contrary, it is
a sacrifice not to!
ArticleoftheMonth NIVESHAK
A Sustainable Economic Development Strategy can guide places in evolving a culture of steward-
ship, innovation, and action that can lead to prosperity, satisfaction, and inspiration
12. February 2012
12CoverStory NIVESHAK12ArticleoftheMonthCoverStory
tem that has improved humanity and the world is
better off due to the presence of capitalism. How-
ever, as per another school of thought, capitalism
in its current form does not fit the world around
us anymore. British Prime Minister David Cameron
said that the link between risk and reward has
been broken due to years of uncontrolled “turbo
capitalism”.
The effect of Inequality and Youth Unem-
ployment
Economic issues dominated this year’s five-day
meeting. Inequality and youth unemployment
were also discussed, pushed due to demonstra-
tions from the Occupy WEF movement in the vicin-
ity. The Occupy movement was brought forward
many a time in the discussions. It emerged as one
of the key issues at the annual gathering of busi-
ness and political leaders. The business leaders at
least claimed that tackling the growth of inequal-
ity in the world is imperative in order to sustain
in today’s environment. According to the senior
economic people at the World Economic Forum,
the priority for the leaders after the economic cri-
sis should be the growing inequality. They insisted
that more needs to be done to tackle excessive
pay, poverty and unemployment. Economist Nou-
riel Roubini warned that inequality threatened so-
cial stability.
Youth unemployment refers to the unemployment
amongst the young, typically aged between 18
and 25 years. The issue was high on the agenda at
the WEF where politicians, economists and bank-
ers said that immediate action was necessary to
rouse demand and prevent a generation from be-
coming alien to work. Youth unemployment is not
just a problem of the West, but is also present in
the emerging economies. It is said that the world
is sitting on a social and economic time bomb. It
is plagued by youth unemployment. Over 200 mil-
lion people are jobless worldwide out of which 75
million are between the age group of 16 and 24
and every year about 40 million young people are
entering the workforce.
The conclusion of the discussions on joblessness
was that the objective of providing young people
with good quality jobs, continued education, an
internship or training within four months of leav-
to curtail the Euro zone crisis. They are certain
that an arrangement to prevent a muddled Greek
default is pending and that the key ingredients to
resolve Europe’s sovereign debt crisis are gradu-
ally falling in line.
One of Europe’s top economic official’s stated in
an interview that a contract between the Greek
administration and its private creditors on volun-
tary losses for bondholders would be complete
within days and that the euro zone was showing
improvement on solidifying its financial firewalls.
However, in spite of the positivity, fears of a debt
contagion remain. As stated by the IMF Managing
Director, Christine Lagarde, “The Euro Zone crisis
is not the region’s problem alone. It’s a crisis that
could have collateral and spill over effects around
the world.” She also said that no country is pro-
tected from the possible contagion and that it’s
in everybody’s interest that the crisis is resolved
effectively.
Growth in developing high-growth mar-
kets
Another topic that was highly discussed was the
quest for growth in developing high-growth mar-
kets. Today, the search for growth prospects in
emerging economies has become a necessity. The
landscape of high growth consumer markets is
changing rapidly. Household incomes in emerging
economies will jump by more than US$8.5 trillion
between 2010 and 2020—about 60 per cent of the
global rise over this period. The growth in these
incomes would lead to an increase in the con-
sumption and demand.
As per the Global Competitiveness Report 2011-12
published by the WEF, Singapore, Switzerland and
Sweden top the rankings. The United States con-
tinues the decline it began three years ago, fall-
ing one more place to fifth position. However, the
emerging economies continue to close the com-
petitiveness gap with OECD economies.
Capitalism – an important issue
This year the WEF began with a debate on Capi-
talism. Bill Gates labelled Capitalism as a “phe-
nomenal system” as it has generated a lot of
innovation, something that no other system has
achieved. According to him, there is no other sys-
Economic issues dominated this year’s five-day meeting. Income disparity was one of the top concerns
this year. This was a striking turnaround as it had never been identified as an issue at the WEF
before
14. ..
February 2012
14 NIVESHAK
CoverStory14
ArticleoftheMonth
14 NIVESHAK
CoverStory14
ArticleoftheMonth
14 NIVESHAK
CoverStory14
ArticleoftheMonth
14 NIVESHAK
CoverStory14
Perspective
India’s first Finance Minister, Mr RK Shanmugham
Chetty presented the first Financial Budget of in-
dependent India on November 26, 1947. Since then
every year, the Finance Minister of the Union has
presented the budget. Initially, the main attention
was paid to the agriculture sector which is the pri-
mary sector of independent India. But as the econ-
omy evolved, the focus shifted from agriculture to
other sectors such as industry, services, etc.
In the early fifties, the Indian budget revolved
around the public sector and public finances. At
that time taxes, inflation, public saving, were much
talk about issues. This trend continued until the
funding budget 1985-1986.
Change in this approach began with Mr. Manmo-
han Singh, who served as Minister of Finance under
the leadership of Mr. P.V. Narsimha Rao. Mr. Singh
was instrumental in head starting the new phase
of economic liberalization and privatization. There
was a reduced government control over public sec-
2012 has started where 2011 left off, with global
growth opportunities under the threat of a dis-
tress in financial markets.
The Asian economies are also vulnerable if the
current financial crisis in Europe ends in a euro
zone split or a series of sovereign defaults - which
would create a global financial shock wave similar
to that observed in 2008-2009.
In this scenario, the coming budget has a ma-
jor impact on India’s preparedness for the future.
Therefore, all managers must be aware of the im-
portance of a budget and its components.
What is a Budget?
The word budget is derived from ‘bougette’ a
French word meaning ‘purse ‘. The budget is a
financial plan listing all planned expenditures and
revenues. This is a plan of savings, loans and ex-
penditures for a specified period of time. A bud-
get is an important concept in both micro and
macroeconomics. Microeconomics uses a budget
line to illustrate the advantages and disadvantag-
es between two or more products. In other words,
a budget is a plan expressed in financial terms of
an organization for a specified time period.
In summary, the purpose of the budget is to:
1) Provide an estimate of revenue and expen-
diture, i.e., build a financial model of how our
company can do if certain events, strategies and
plans are carried out.
2) Aid in the evaluation and analysis of how the
real data deviates from the plan. It therefore acts
as a control tool.
History of the Union Budget in India
There is a constitutional requirement in India (Ar-
ticle 112) to present to Parliament a statement of
estimated income and expenditure of government
for each financial year which runs from 1st April
to the 31st March.
Team Niveshak
Harshali Damle
The liberalization process that
began years ago still continues
and is a part of the announce-
ment of India’s budget each
year
A peek into the Union Budget
16. February 2012
16CoverStory NIVESHAK16ArticleoftheMonth NIVESHAK16ArticleoftheMonth16CoverStory16
promote greater confidence in the business fra-
ternity.
Economists expect most of the headwinds to de-
crease during 2012, which provides for a recov-
ery during the year, but not before GDP growth
has slowed considerably.
One should look out for the following as major
components of the budget that affect the com-
mon people in the coming budget:
1) GDP
2) Fiscal Deficit
3) Income Tax benefits
4) Steps to curb inflation - Duty on Oil
5) Corporate Tax rates - Tax Slabs and deduc-
tions available
6) Excise and service Tax rates
7) Direct Tax Code
Main predictions and viewpoints for the next
budget:
1) Based on the analysis
conducted by CRISIL, the
country is expected to
have a GDP of 7% in the
next year with growth of
5.8% inflation and fiscal
deficit to 5.5%.
2) On the basis of es-
timates of CII, the gov-
ernment’s fiscal deficit
would be in the range of
5.5-6.0% of GDP.
3) Preparatory changes
for laying a foundation
for GST
4) The question of the removal of STT has been
raised by the representatives of the different ex-
changes, including BSE, NSE, MCX-SX and USE.
The main improvements suggested are:
1) Efforts should also be made to increase rev-
enues by broadening the tax net, the control of
subsidies and the release of funds in disputes
and litigation.
2) The government should announce a clear
roadmap for the process of disinvestment in the
next five years.
3) The government could also carry out a census
of land and other assets locked up in central
public sector units that have become economi-
cally unviable.
4) To promote foreign investment in infrastruc-
ture, easing the rules for entry of foreign funds
to this sector is another option for enhancing
investment.
5) A synergy of MSMEs and large companies can
be promoted through tax incentives to supply
inputs for small industry.
6) The Direct Tax Code and Goods and Services
Tax are still being thrashed out. Establishing a
clear deadline for the application can help ac-
celerate the discussions and add comfort to in-
vestors.
Therefore there is a need for the government to
focus on promoting inclusive growth and devel-
opment of infrastructure in the plan, through
better manage-
ment and utiliza-
tion of resources.
There is also a
need to create an
environment for
sustained eco-
nomic growth in
the medium and
long term.
Liberalization in
the banking, in-
surance, retail
and aviation will
excite investors.
As a fast-track di-
vestment, modernizing the rules of land acquisi-
tion and ending harmful government monopolies
such as coal is needed.
The budget is usually presented in the last day
of February each year. However, with assem-
bly elections in five States from 30 January to 3
March, Finance Minister, Pranab Mukherjee, in-
dicated that the presentation of Union Budget
2012-13 would be on March 16, 2012. Thus, next
month, our budget-makers have the opportunity
to provide a sound direction to the country in
the midst of crisis.
Perspective NIVESHAK
The government can use this budget to lighten the mood of consumers and investors and to
promote greater confidence in the business fraternity
18. February 2012
..
18CoverStory NIVESHAK18ArticleoftheMonthFinsight
Inc, one of the telecom giants in Canada has
already filed papers with the federal bank to
start a bank. As per Rog-
ers the next big thing
will be money trans-
fer, whether that’s
paying for
a subway
pass or a
p a r k i n g
meter, or
s e n d i n g
m o n e y .
The bank
w o u l d
p r i m a r -
ily deal
in credit and mobile
payment services, as
opposed to bricks and
mortar bank branches
that take traditional
savings and loan ac-
counts. While many big retailers have similar
sort of finance divisions they are essentially ex-
tensions of their core businesses.
The telecom companies are looking to position
themselves in every part of the supply chain and
earn return from the tons of monetary transac-
tions between customers and companies that
are happening via their network. It also makes
sense for operators to offer banking products
and services as people dispense with plastic
and start using their mobile phones as payment
devices. They want to take the control of the
wallet on the phone. Banks are already getting
detached from the end customer by a layer.
While mobile service from a bank needs to pass
through layers of technology and approval from
Google, RIM , Apple etc. for future carrier bank-
ers, we need just a phone or get online and
send the money. All that is needed to know is
the email address and mobile phone number.
An example of an offering will be combination
of prepaid phone deal with a prepaid debit card
via which these telecom banks can aggressively
target the under banked customer segment and
they will not need the entire expensive infra-
structure like the traditional revenue. It is just
new revenue.
Even banks seem to have opened up to this
threat and have started offering more features
to move up in the value chain. An interesting
trend has
h a p -
p e n e d
in Italy
w h e r e
o n e
of the
b a n k s
s e n s -
ing the
threat has
launched “Poste Mobile”, an ESP(Enhanced
Services Provider)-MVNO subsidiary of the
Italian Postal Bank. Here the carrier just acts
as a transport layer while Poste Mobile offers
the various banking services and has full con-
trol on pricing as well as customer information
which is stored in a separate area of the SIM
card.
Gauging at the benefits, Governments of certain
countries like Nigeria are even vetting propos-
als to license operators in the mobile banking
sector thereby laying the foundation of another
technological revolution. The Indian Planning
Commission however is not in favor of allowing
telecom companies to float banking companies.
The government is more in the favor of allowing
The dwindling returns from the
stagnant and competitive voice
calls and messaging market have
forced the telecom companies to
look out for new business
opportunities
20. February 2012
20CoverStory NIVESHAK20ArticleoftheMonth20 NIVESHAKCoverStory20FinGyaan
Equity gap refers to the
difference in the supply
and demand for equity
between corporations
and investors. It can be
seen that a significant
chunk (79%) of the glob-
al financial assets are
invested in the devel-
oped countries. Few fac-
tors that have affected
the appetite for equity
includes the ageing de-
mographic of the west-
ern world, emergence of
alternative investment
avenues and stringent
financial regulations
among others. These is-
sues can be overcome
only be improving inves-
tor sentiment towards
equities through rel-
evant and apt reforms
in primary markets, use
investor friendly struc-
tured products.
nancial assets, the household invest-
ment in equity is decreasing. Among
the household portfolios in emerging
markets, the proportion is around 15
percent while the household portfo-
lios in developed countries like U.S
has 42 percent contribution towards
equity. The contribution towards eq-
uity is decreasing. Even the devel-
oped countries are showing less ap-
petite for equities. Among developed
nations, Japan stands out for its very
low investment in equities. Despite a
long tradition of equity investing by
individual investors for most of the
20th century, Japanese households
now hold less than 10 percent of
their assets in equities, down from 30
percent before the 1989–90 crash. Be-
cause of low or negative returns over
the past two decades, Japanese allo-
What is equity gap?
If it can be put simply then equity
gap is the difference between the in-
vestors’ appetite and the company’s
requirement of funds. Company usu-
ally use this door of raising funds via
equity but is the investors’ appetite
towards investing in equity enough?
EQUITY GAP = INVETORS APPETITE IN
EQUITY – COMPANY’S NEED OF FUNDS
Based on an analysis by McKinsey
Quarterly, the financial assets in the
world are worth 198 trillion dollars out
of which around 21 percent are part
of emerging markets and the rest is
a part of developed economies. This
tells that around 157 trillion lies with
the developed world. Among these fi-
SIIB,Pune
Ajay Kumar Sethi
STRUCTURING THE EQUITY GAP
Fig. 1: Financial assets owned by residents, 2010 in $ trillion
22. February 2012
22CoverStory NIVESHAK22ArticleoftheMonth NIVESHAK
buyout of PATNI has been largely contributed by
the APAX partners (a PE firm). Also, PE firms find
it suitable to invest in emerging markets be-
cause of the low valuations, thus churning out
huge amount of profits from the investments.
• Low returns in equity:
Another factor weighing on demand for equi-
ties is weak market performance. The past de-
cade has brought increased volatility and some
of the worst ten-year returns on listed equities
in more than a century. In opinion polls, Ameri-
cans say they have less confidence in the stock
market than in any other financial institution
and believe that the market is no longer ‘fair
and open’.
• Regulatory changes for financial institutions:
The final factor is the effect of financial industry
reforms on the uses of equities by banking and
insurance companies. U.S and European banks
today hold $15.9 trillion of bonds and equities
on their balance sheets. But new capital re-
quirements under Basel III will prompt banks to
shed risky assets, including equities and corpo-
rate bonds. Similarly, European insurers have al-
ready reduced equity allocations in anticipation
of new rules, known as Solvency II, and could
lower them further over the next five years.
All these reasons attribute towards an estimat-
ed equity gap of 12.3 trillion. The figure 3 will
provide a better view to this picture.
However there are some ways through which
this equity gap can be reduced:
1. Use of structured financial products
Structured financial products can be a proposed
solution to the emerging equity gap. Investors
are losing their appetite for investing in equity
but the use of structured products under proper
financial regulations can be a good booster in
equity environment.
22CoverStory22FinGyaan
2. Initiation of secondary market
Secondary market has been in operation in de-
veloped countries which supports the innova-
tion led investments. E.g. NASDAQ is a second-
ary market for innovation led ventures. If such
secondary markets can be introduced in emerg-
ing countries such as India, then it will not only
serve as a booster for equity market but can
also prove to be a nurturing ground for young
entrepreneurs to make their projects count.
3. Reforming IPO markets
IPO market has been in a down-trend since the
successful IPO of Coal India. It may be due to
the fragile policy making and implementation
in India which has given rise to many political
scams recently. Or it may be the European crisis
which has proved to be major reason for the
outflow of money invested by the FII’s. Whatev-
er it is, the IPO market has to be well regulated
to ensure generation of positive sentiments in
the Indian market.
The only way this equity gap can be narrowed
down is by increasing the investor’s sentiments
towards equity in emerging countries because
emerging countries have been growing at a
staggering rate of more than 16 percent. And
if this growth continues, it will be very impor-
tant to engross the equity investors in emerging
economies and keep the markets in balance.
Fig. 3: Incremental demand for equities by domestic investors vs. increase in corporate equity needs, 2010-20 F $ trillion
24. February 2012
24CoverStory NIVESHAK24BiddingAdieu
My experience in Finance club for last one year was just great where I got opportu-
nities to work with some of the best minds of our batch. The thing that I loved the
most is the commitment of all of us towards completing all our activities before the
deadlines and the greatest regret lies in the fact that we were unable to organize an
online intra B-school competition. However, I hope that in next few years some of our
talented juniors will definitely achieve this dream of ours. The experience of receiving
numerous articles and selecting the best amongst them was the biggest challenge
that I faced during my stint at Finance Club as all these articles were written by one
of the best minds of our country. I hope that in future also wherever I go I will find
the same pool of talent to work with that I got in our finance club.
Apart from finance, proposing new ideas, arguing over and over again and finally
convincing the team to adopt it was a great learning experience for all of us. Once
in the club, the way you tend to keep yourself updated and knowledgeable just to
flaunt your awareness and impress people around will be a motivator for sure :P You
definitely learn more practical stuff here than through books and lectures!
Working for the Finance Club has been an immense learning experience. It’s an hon-
our to be a part of Niveshak, which today is a brand in itself. One gains a lot of dif-
ferent perspectives while writing, editing and going through such huge number of
articles every month. The response and feedback from the student fraternity of dif-
ferent B-schools has been our biggest motivation. Wish Niveshak many more glorious
years ahead.
Membership of Finance Club is something I have cherished and will continue to
do so for the rest of my life. Working with a highly talented and motivated team
inspired me to make a meaningful contribution towards club activities. Niveshak,
the flagship monthly magazine of club offered me a platform to share my thoughts
on business world with others and understand others’ viewpoint on the same. The
unabated growth of magazine’s popularity with each passing edition has made it a
brand among finance enthusiasts in B-Schools across India. Niveshak motivated me
to become a “Niveshak” in real life and I hope it will continue to inspire many more
in times to come. My best wishes to the new club members to continue to work with
the same vigor and interest that they have displayed till now.
It seems like only yesterday when I was inducted as part of Team Niveshak. It’s funny
how time goes by so quickly. Niveshak as a magazine and a platform has added lot
of value to its readers and has done the same for me. It was a great learning experi-
ence to work alongside such a wonderful team and it surely brought me closer to my
passion in financial markets. Hope to see it become bigger and better in the hands
of the new team.
ALOK AGRAWAL
DEEP MEHTA
JAYANT KEJRIWAL
MRITUNJAY CHOUDHARY
RAJAT SETHIA
Sayo Nara...
They were the 3rd batch of the Finance Club, they helped niveshak reach new heights.
Let us listen what they have to say about their experience...
26. February 2012
2626
F I N - Q
1. X is an indicator used to forecast the trend in the stock market for the coming
year based on win of old National Football League(NFL) team or old American Football
League (AFL) team.
2. “Focus on the process rather than focusing on the final result,” is a popular
saying. An investment manager who invests in companies that provide equipment to
an industry rather than investing on the industry’s end product is set to indulge in?
3. X is the type of acquisition where the raider company makes use of borrowed
funds only to meet the cost of acquisition using either its own assets or the target
company’s assets as collaterals.
4. X is an annual prize given to the authors with the best corporate finance re-
search papers published in Y. Y is published by Wiley-Blackwell on behalf of the Ameri-
can Finance Association. Identify X and Y.
5. X (Bank) shares its name with a famous Indian primetime television show
which is presently in its fifth season. X, a Belgian multinational has a very important
first in the Indian context. Identify X and its claim to fame.
6. The word X is synonymous with “endless wealth”. In modern history, it is be-
lieved that X family has the highest net worth. Identify X?
7. Another growing indicator of the growing uncertainty in the IPO Market, SEBI
banned X (company) from future merchant banking assignments because X handled
the IPO of Y, proceeds of which were diverted to questionable land deals. Identify X
and Y.
8. X is an investment strategy wherein an investor matches the short position he
has in one stock with a long position in another stock of the same sector for the pur-
pose of creating a hedge against the sector that the two stocks are in and the overall
market.
9. Denmark – 48.2%
Sweden - 46.4%
Italy – 43.5%
Belgium – 43.2%
Finland – 43.1%
What is being discussed here??
10. Connect?
All entries should be mailed at niveshak.iims@gmail.com by 27th February, 2012 23:59 hrs
One lucky winner will receive cash prize of Rs. 500/-
28. COMMENTS/FEEDBACK MAIL TO niveshak.iims@gmail.com
http://iims-niveshak.com
ALL RIGHTS RESERVED
Finance Club
Indian Institute of Management, Shillong
Mayurbhanj Complex,Nongthymmai
Shillong- 793014
