CAPITAL EDGE

Brought to you by FINesse

 CONTENTS
 From the Editorial Desk Pg 2
 India: Boom or Gloom? Pg 3
 Headlines Pg 5
 The Brand New Rupee Pg 6
 When Innovation Hits Finance Pg 7
 Heard on The Street Pg 9
 Win With Fin !!! Pg 10

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From the Editor’s Desk
Greetings to everyone, the fact that you opened this page, makes us at ‘FINesse’,
the finance club of SIIB grateful to you. Your fortnightly newsletter- ‘CAPITAL EDGE’
is in its nascent stages and we would like your support to make this a success.
Capital Edge is your update on the latest financial news and views. We intend to
appeal to those who are well versed in Finance and those who wish to learn more of
Finance.

The second volume of Capital Edge looks into Indian business scenario in ‘India:
boom or gloom?’ We also have the Implications of the new Rupee symbol in The
‘Brand New Rupee’. ‘Innovation hits Finance’ teases our imagination of the future of
finance. ‘Heard on the Street’, acts as a constant from issue to issue, but certainly is
dynamic, giving us the fortnightly analysis on the stock market.

Apart from Capital Edge, we will be posting various items of Finance related topics
on the notice board every fortnight. Do keep your eyes open, but more importantly
keep your minds open.

We are very grateful to Dr. Madhvi Sethi for her guidance, support and timely inputs
for FINesse and Capital Edge.

We have also included Win with Fin (Finance Quiz) .Last week’s answers
are given & The lucky winner is Dinesh Bhat . Kindly send your answer for
this week’s Quiz at siib-finance-club-2010-12@googlegroups.com .
We ourselves are undergoing a trial by fire with Finance, any mistake, error and faux
pas in the newsletter is deeply regretted. We invite articles from those with
knowledge in Finance, and even for those without. Please feel free to contribute for
the next volume i.e. Volume 3 to be released on 14th Aug,2010. We would like you
to provide us with your suggestions and comments by mailing us at siib-finance-
club-2010-12@googlegroups.com .

Edge out your competition with Capital Edge…

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 India : Boom or Gloom ?
A note to the reader: The following article may put you to sleep, bore you to an
early demise...or enlighten you with new knowledge. I have deliberately left out
statistics and kept the language simple as I don’t wish to throw up any
complications in your wonderful day. You may find over 264909323 articles
such as this, but I assure you this is original and was not a result of the tried
and tested copy-paste methodology. Beware of cheaper, easily readable
imitations.

India has not always been the best place for business opportunities. It has
suffered nearly 200 years of colonial rule and a further 50 years of inward
economic orientation. Free trade was a foreign word to us, much like Coca Cola
or Nike. The Indian business sphere started off the way a tortoise would take
its first step-slow but sure. Nehru and Mahalanobis devised a strategy to keep
our country on the path of development. The Tata, The Ambani, The Birlas all
ruled India Inc. during the period of 1960s to 1990s, due to lack of competition.
They grew and so did India...or did it?

The 1960 and 1970s was characterized by Disco, Drugs and Amitabh Bacchan
films, but the Economy did not see much growth. Business opportunities and
encouragement from the government was rare. Narrow mindedness
bureaucratic procedure was a major deterrent for foreign investment.

1990-cometh the year,cometh the man-Manmohan Singh. Yes,for those of

who didn’t realize, the current Prime Minister of our Country was the erstwhile
Finance Minister. He brought a new revolution for the Indian Economy with his
Reforms package. The reforms package proved to be the next best thing to
sliced bread for the financial state of India. Industries grew, the Stock market
rose to people’s expectations as the Indian financial market was flooded with
FIIs and Amitabh Bacchan was replaced with the Khans.

The 1990s was good but the turn of the millennium proved even better.
Government support ensured that India was established as a financial
destination for Indian entrepreneurs as well as foreign corporate houses.
Corporates like Vodafone, Google, Citibank from varied sectors all bought into
India Inc. You must be wondering why everyone use ‘India Incorporated’ these
days, its simply because India has become a hub for global financial wealth.

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The growth opportunities and business boom has now shifted from the west to
the east. As much as we may criticize our government or our PM, we should be
grateful to them that today we can choose whether we want to buy a Dell
Laptop or an HP laptop, whether we want to shop at Lifestyle or Central,
whether we wish to wash our clothes with Surf or Tide, banking with Citi or
HSBC. India is the place to be for Investment and opportunity.

The challenge that the US faced in the 1900s is now thrust upon India. Can we
as stakeholders of India Inc. make our country rise higher ? Can we enable our
company India Inc. to sustain this boom and not let it falter into gloom ? Can
we bring about a Financial revolution which will ensure that India achieves its
rightful place in the Global market ?

I encourage free thought and would like your opinion.Please give me your
feedback and suggestions at rahuldey1@gmail.com

By Rahul Dey

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 Headlines
 Sensex on 24 July closed at 18,130.98, its highest closing level since 6
February 2008.

 RBI raises Repo rate 25 Bps and Reverse Repo rate 50 Bps to fight
inflation
 IPO of Hyderabad-based microfinance firm SKS Microfinance was
subscribed 10.5 times by 30 July, last date of bidding.
 Fortis exits Parkway, makes Rs 350 cr.
 RIL Q1 net jumps 32% aided by sale of gas from KG basin Rs 4,851 crore.
 Central Vigilance Commission (CVC) widens tele probe, dual licences
under lens.

 Reliance Comm set to divest tower biz to GTL Infra in $6-billion cash-
cum-stock deal.

By Ankur Rustagi & Summant Bhatnagar

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 The Brand New Rupee!!!!!!

On 15th of July the Indian Rupee got its long awaited dynamic Symbol joining
the elite club of the dollar, the pound, the euro and the yen making Indian
Rupee only the 5th currency in the world having a uniquely distinguished
symbol, till now the Indian rupee has been denoted by Rs leaving the scope for
misinterpreting it with the Rupees of other country like that of Pakistan rupee,
Indonesian rupiah, Srilanka rupee, Nepalese rupee etc. Till now to
differentiate it with other similar sounding currency in international market
INR was being used that is the abbreviated form of Indian National Rupees.

With the new symbol the Rupee is ready to incept the mind of the
people. Whenever we being asked to tell any foreign currency, the first
currency which pops in our mind is definitely dollar followed by pound, euro
and yen, Do we ever wondered what’s common between them?? It’s their
symbol apart from the fact they are economic biggies, they have been
penetrated deep within our mind with their symbols, they have some brand
value (as we know Brand is a thought that lives in people mind ),so similarly
with the new symbol will definitely enhance the image of the Indian currency
and the perceived value of Indian currency will be magnified. In simple terms it
is a rebranding exercise in action reflecting the India’s large, growing and
confident economy (India is the fourth largest economy of the world in terms
of purchasing power parity and the second fastest growing economy).

Will the rupee become stronger with the new symbol? Opinions are divided
answer may be a yes and no. Yes for the perceived value or the perception of
Indian currency across the world will become stronger and that will in turn may
in the long turn increase the acceptability of Indian Rupee in Foreign Exchange.

The most interesting thing about the new symbol is that it’s a combination of
Devnagri ‘र’ and the Roman ‘R’ without the stem and also the parallel lines at
the top and the gap between them makes an allusion of our national tricolor
flag. By Vinay Prabhakar

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When Innovation hits Finance!
What do you think is driving force that makes different kinds of industries to
sustain in the real world? Is it the motive to make profit? Is the management of
the company? Or is it the innovations that happen in that industry? Well, while
the former could be one the reasons, Innovation is one of the most essential
factors for any industry to survive, and our financial world is full of such great
innovations! Today we will see what the implications of the innovations are
and what the impacts of these innovations on the economy are. We shall first
look into what the central bank does.

Monetary control is necessary to achieve desired level of growth and sustain

price stability in the economy. Central Banks are responsible for conducting
monetary policy to achieve these goals. Therefore, Central Banks use some
instruments; also determine some targets on monetary variables. Achieving
targets and slowing the rate of inflation increase economic agent's confidence
to the Central Banks therefore credibility of Central Banks increase.

Financial innovations defined

Innovation is normally defined as the introduction of a new product to a

market or the production of an existing one in a new manner. Financial
innovations occur because market participants are constantly searching for
new ways to make greater profits.

The spawning of financial innovations!

Financial system is composed of The Central Bank, financial institutions such as
commercial banks, finance companies and nonfinancial institutions such as
cooperatives, thrift institutions, pension funds. Objective of the financial
institutions is to make profits. If the actions of the Central Bank, regulations
restrict operations of these institutions, they immediately search an alternative
way to realize profit maximizations. Therefore, whenever monetary authorities
restrict the economic agent's behaviour, new financial instruments
are brought into view.

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Financial innovations & economy

Financial innovations can have profound effects on the economy of a country

depending upon what type of innovation it is. It can make a country’s growth
rise or recede, of course there is a huge risk factor involved in innovating these
ideas and implementing them into economy of a country!

The innovations like Credit Default Swaps practically were unheard of till
2000,it is because of these innovations that financial institutions were able to
be more dynamic. We shall dig more into this topic by looking at the
advantages, disadvantages, long term consequences in our next issue. If you
love money you ought to love finance !

By Adarsh Kumar

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Heard on street
TOP 5 WEEKLY GAINERS

COMPANY PREV. CLOSE CURRENT PRICE % CHANGE

IRB INFRASTRUCTURE 260.30 292.85 +12.50

ORIENTAL BANK OF COMMERCE 364.10 403.30 +10.77

JET AIRWAYS 614.10 678.85 +10.54

LIC HOUSING FINANCE 1,035.25 1,136.45 + 9.78

BAJAJ AUTO 2,469.10 2,688.05 + 8.87

TOP 3 WEEKLY LOSERS

COMPANY PREV. CLOSE CURRENT PRICE % CHANGE

MMTC. LTD (STOCK SPLIT Rs 10 TO Re 1) 30,012.95 1,741.65 -94.20

EVEREST KANTO CYLIND 134.65 117.15 -13.00

MARUTI SUZUKI 1,358.25 1,198.15 -11.79

INDIAN BANK 251.50 224.35 -10.80

JAIPRAKASH ASSOCIATES 128.60 118.25 -8.05

STOCK RECOMMENDATIONS FOR NEXT WEEK

COMPANY ACTION STOP LOSS TARGET

LANCO INFRATECH BUY 63 69

IFCI LTD. BUY 61 67

FORTIS HEALTHCARE BUY 153 175

By Mohit Jindal & Kunal Ohre

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 Win With Fin !!!!!!
1. Which Asian country did China overtook to become the world’s second
largest economy after United States? As remarked by the country’s chief
currency regulator published last Friday.
2. On Friday Mr V Vaidyanath resigned from the position of chief executive
and managing director, which company did he belong to?
3. Who did Bharati Airtel appointed as the Chief Marketing Officer for its
African operations?
4. Which brand emerged as the world’s most valuable brand int eh Top
valuable brand listed by the Forbes magazine?
5. According to the report in the Wall Street journal, who is the best paid
CEO of the decade?
6. Which Indian company is in talks to acquire the three of Royal Dutch
Shell’s European refineries?
7. To whom did the Walt Disney Co sold its film studio Miramax?
8. Which Indian origin personality, an expert in international finance and
law has been appointed as Senior Advisor for the Outreach in the South
and Central Asia bureau of State Department to help Indo-US
partnership?
9. Which of the firms have been selected for implementation of Aadhaar a
program by Unique Identification Authority of India (UIDAI)?
10.Which cell phone maker said it would provide free phones preloaded
with information on agriculture, education and entertainment, to over
500 households in five villages of Uttar Pradesh.
By Manish Sonowal and Lam Zoulian

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 FINesse
Our team consists of :
1. Priyam Narayan
2. Vinay Prabhakar
3. Adarsh Kumar
4. Rahul Dey
5. Manish Sonowal
6. Mohit Jindal
7. Tushar Agarwal
8. Ankur Rastogi
9. Lam Zoulian
10. Shshank Jain
11. Kunal Ohre
12. Sumant Bhatnagar

Email us at siib-finance-club-2010-12@googlegroups.com

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