1

FI N O M E T RIC S

M e a s u rin gFin a n c e

Presented by –

MFM ( MASTERS OF FINANCIAL MANAGEMENT )

JAN-2010 ISSUE

VOLUME-1

2

CONTENTS

ECONOMIC INDICATORS as on January 3, 2010

NATIONAL & INTERNATIONAL NEWS HIGHLIGHTS 3

BSE/ NSE CHANGING TRADING TIME 5

TELECOM SECTOR - REVIEW 7

COOKING CHICKEN CURRY FROM NOTHING! 10

2009- FLASHBACK 12

MARKET WATCH! 16

THE BIZ QUIZ 21

GOLD Rs 16690.00/10 gram

SILVER Rs 26775.00/kg

Oil $77.93

Dollar Rs 46.65

Euro Rs 66.83

Repo rate 4.75% (Nov 2009)Interest rate 3.25%

WPI 4.78%

Growth rate 7.9%

CRR 5%

SLR 25%

3

NATIONAL NEWS- DEC 2009Sensex ends year on a high, best performance in 18 years

Mumbai: Indian equities markets closed the year in style, with abenchmark index adding over 120 points Thursday in what has been itsbest performance in 18 years

JP Morgan declares dividend under JP Morgan Alpha Fund

JP Morgan has planned to declare dividend under dividend option of JPMorganIndia Alpha Fund on January 4, 2010. The quantum of dividend decided fordistribution under the scheme is one percent that is Rs. 0.1 per unit and the facevalue per unit is Rs.10.

Godrej Properties to be listed on Jan 5

Mumbai: Equity shares of Godrej properties will be listed on Bombay Stock Exchange on

January 5, 2010. The company had fixed the issue price for its initial public offering (IPO)

at Rs.490 a share, at lower end of price band of Rs.490-530 per share.

Most IPOs in 2009 trading below issue price

Though, 2009 can be regarded as a year of major initial public offerings (IPOs), most of the

companies that have gone public this year are seeing their shares trade lower than their

issue price. According to research firm Prime Database, in 2009, there were 21 IPOs that

raised Rs. 19,535 crore. In 2008, 36 IPOs raised Rs. 16,927 crore. In 2007, 105 IPOs

mobilized Rs. 34,179 crore.

Honda Siel, Axis Bank sign deal for vehicle finance

New Delhi: In an attempt to offer competitive interest rates for its customers, car maker

Honda Siel Cars India (HSCI) has signed an agreement with private lender Axis Bank for

providing vehicle finance. According to HSCI, following the deal Axis Bank has become one

of the preferred channel financiers for the car maker.

Focus On Managing Inflation, Growth: RBI

The focus of India's monetary policy is shifting to managing recovery and containinginflation from one concentrated on fostering growth after the global downturn, adeputy governor at the Reserve Bank of India said.

4

INTERNATIONAL NEWS – DEC 2009

Russia-Ukraine dispute 'could lead to EU oil cuts'Russia has warned a price dispute with Ukraine could cause it to cut oildeliveries to three EU countries, Slovakia says.

Unemployment 'will peak at 2.8m'Unemployment will reach 2.8 million in 2010, according to the CharteredInstitute of Personnel and Development.

Oil price rise nears $80 a barrelThe price of oil nears $80 a barrel in post-Christmas trading, reaching thehighest levels for more than a month.

House price increase 'slows down'Growth in house prices in England and Wales slowed in December to just0.1% as demand from new buyers fell, a survey suggests

Dubai $10bn help from Abu Dhabi 'was loan, not handout'Abu Dhabi's last-minute $10bn (£6.13bn) bail-out to United Arab Emiratesneighbour Dubai was a loan, not a handout, it has emerged.

Which way for commodities in 2010?After a year of soaring commodity prices, next year is expected to seefurther increases, financial firms are predicting. But the price rises will notbe universal and the gains made by investors will probably be lower thanthey have been in recent months.

5

BSE/ NSE CHANGING TRADING TIME

The Dalal Street will have to wake up to a new dawn from 4th January, 2010 owing to thechanges in trading timings. NSE & BSE the two leading stock exchanges in India decided toadjourn the change in market timings due to pressure from SEBI to January 4 from 18th

December, 2009, a day that these bourses had decided on earlier.

BSE in a statement said, "Based on the market feedback, it has been jointly decided by BSE andNSE that the revision of market open timing to 9 am shall be effective from January 4, 2010. Inthe interim, the current market open timing of 9:55 am shall continue."

The market closing time would continue to remain unchanged at 3:30 pm.

SEBI, which primarily initiated the move, said it will soon come out with a white paper on theissue, explaining the need for fine-tuning the trading and how the investing community willbenefit from the same. In October, market regulator SEBI allowed stock exchanges to fix tradingtimings between 9 am and 5 pm.

Are we geared up for this change?

According to experts, the adjournment of the change in timings by no means prepares them todeal with the technicalities involved in longer trading hours.

THE REPERCUSSIONS

The banks’ real-time gross settlement (RTGS) system, a funds transfer mechanism wheretransfer of money takes place from one bank to another on a 'real time' and on 'gross' basis isnot in place yet—it starts only at 9.45 am. This will cause disruption in the functioning of theexchanges.

Traders, who, want to make margin payment at 9 am through their banks may face a hitch.However, bankers say this isn’t a major glitch, since brokers can always make the paymentsvia the internet.

However, in all probability, enterprising banks may think of booting their systems earlier. Brokers’ offices may also not be able to handle the extension of trading hours as of now. Brokers alleged that the decision to extend trading hours will surely increase their cost of

running their offices, but there was no guarantee that their income from broking will go up toat least match the rise in expenses.

6

Some brokers even alleged that the decision by the two bourses, in which several privateequity funds and foreign bourses have stakes, were prompted by higher returns for theseshareholders.

THE RATIONALE BEHIND THESE CHANGES ?

Competition!The recent tussle between stock exchanges on trading hours make this amply evident, with themarkets regulator having to step in to make sure the National Stock Exchange (NSE) and theBombay Stock Exchange (BSE) don’t go ahead with their plan to alter trading timings at shortnotice. But competition also leads to many desirable outcomes and increased competitivepressure from BSE is beginning to make a difference in the stock exchange industry.Both BSE and NSE have lowered fees for members, with the former even introducing theconcept of maker-taker pricing, something that has facilitated growth of electronic trading indeveloped markets.

Other reason:

The move is seen as a strategy to increase business volume as the stock exchange, as well ascreate more trading opportunities to the investors.

The BSE is confident that it will benefit both the exchange and the investor community. Itwill have a minimum impact on the mechanisms and BSE is fully prepared to meet anytechnical glitches that may arise

CORPORATE VIEWS

Change in stock timing is totally absurd. People say there is a need so as to matchSingapore Stock Exchange, but then its timing starts from 7.30 am . Even if we start at9.00 am( which was effective from 4th jan,2010) , we still lag behind by one and halfhour to match them.The other view is that investor, broker would avoid their pre-assessment before marketstarts leaving more space for speculators

VISHNU VARDAN, Territory Manager,India Infoline , Bangalore

TELECOM SECTOR - REVIEW

Introduction

It started off as an elitist service offered by a few firms and with call charges that only the rich couldafford. Then, after the license-fee structure moved from upfront fees to a revenue sharing arrangement,many businessmen jumped into the fray. There were controversies galore with each change in policy buteach year, mobile phones and services became cheaper. In the past few years, the cell phone has becomeubiquitous. Drivers carry them and so do maids, plumbers, electricians and sundry tradesmen. It hasimproved business prospects for them. All this has happened because of competition.

The telecom revolution in India has followed a tortuous path

Over the years, dozens of players have entered the field. Their entry has ensured a healthy growth inthe overall market, and also a network that now covers most of India. Periodically, the industry has gonethrough waves of consolidation with bigger players buying out smaller operators. A couple of years ago,the number of major players in the sector stood at seven, which is a large number even for a fast-growingmarket. Last year, the government handed out a number of licenses to new players, ostensibly to improverural coverage. At one stroke, the number of national players almost doubled from seven to about 13, andthe new players started attacking both the urban as well as rural markets. At one level, price wars havebroken out, reducing the calling cost dramatically for consumers. At another level, there is a bitter battletaking place for allocation of additional spectrum at low or no cost. It is in fact a prelude to another battlethat will start once the spectrum policy on 3G is finalized.

Flash Points -causes Result New brands & players

The government givesfresh licenses in 2008

Outsourcing lowers cost Spectrum policy divides

players into haves andhave not

The market gets crowded thoughincumbents still hold largermarket shares.

Tata Docomo, Unitech Wireless,Datacom, Aircel, Etisalat DB,Loop Mobile.

8

TELECOM WAR - The BattlefieldThere are two fronts of the war: lower tariff and more spectrum

PRICE WAR: A new front was introduced when Docomo introduced per second billing instead ofthe earlier per minute billing. Almost all operators followed with lower and lower tariffs.

Company Launch Own Network Other NetworksTata Docomo 29th September 1p/sec on local and

STD,ISD1p/sec

Sistema 8th October .5p/sec on local, STD 0.5p/secAirtel 30th October 1p/sec on local and STD 1.20p/sec

Vodafone 30th October 1p/sec on local and STD 1.20p/secAircel 31st October 1p/sec on local and STD 1p/secIdea 31st October 1p/sec on local and STD 1p/sec

RelianceCommunications

3rd November 1p/sec on local and STD 1p/sec

‘Backs to the wall’

With the stronger incumbents entering the tariff game and bringing their per second cost to one paisa,the new operators will have their backs to the wall. There is very little room to move once you come downto half a paisa a minute, considering the minimum cost for an off-net call is 20 paisa per minute. They willbleed for a while, but will be able to sustain for a couple of years. With operators such as Aircel and TataTeleservices in expansion mode and at least three new operators getting ready to launch, including Etisalatand Unitech Ltd-Telenor SA joint venture Uninor, the incumbent operators seem to have nothing left to dobut match the “lowest common denominator” in the market. The trailing P/Es of many of these companieshave come down sharply. It is not often that you get such good companies at such fair valuations. Given thecurrent valuations, some fund houses have marginally increased their stakes in the sector in November withan eye on long-term investments. The prospects for the near term, however, look grim as the sector isexpected to remain in a state of lower revenue and profitability for at least the next two quarters. Theremaining two quarters are likely to see a greater decline in the revenues and profits since these companieswill fully reflect the fallout of the rapidly shrinking mobile tariffs. However, companies such as BhartiAirtel, which has diversified into related businesses such as DTH, IP TV services, and enterprise dataconnectivity services, are expected to weather the low profitability of the segment.

‘Taking a Toll’

India’s top Fund houses offloaded a substantial chunk of telecom stocks from their portfolio over a monthago, as the bruising tariff war threatens to further lower the profits of these firms. The launch of TataDocomo’s per second billing offer, followed by Reliance Communications,Aircel Ltd, MTS, VodafoneEssar Ltd and also the state-owned Bharat Sanchar Nigam Ltd.’ lucrative 50-paise per minute tariff fromOctober 2009 may have been welcomed by customers. But investors, including mutual funds, have beenincreasingly wary about the profitability of the sector in the near term. The tariff war in the telecom sectorhas intensified, leading to pressure on margins that has seen share prices of most telecom companiesplummet by an average of about 30% in October alone. Telecom stocks are currently trading at their lowestvaluations. The stocks of Bharti Airtel, Reliance Communications and Idea Cellular are available at anenterprise value, which is 6-seven times their EBITDA.

9

STATISTICS

Falling Revenues Stock Decline

Total telecom subscribers 429.72 million (March 2009)

Wireless subscribers 391.76 million

Wire line subscribers 37.94 million

Tele density 36.98 million

India service providersrevenue in Q1 09

$8.2 billion

India’s Rural Mobile Phoneusers

100 million

Company Name Market Cap in Cr.Bharti Airtel 108066.23

Reliance Comm. 32683.44Idea Cellular 14368.92Tata Comm. 13181.25

Tata Teleservices 4393.06Spice Comm. 4136.13

MTNL 4044.6Tulip 2727.89

OnMobile Global 1403.52HFCL Infotel 457.73

10

A few days ago, there was an advertisement for a reality show on TV, where the classic fable of hareand tortoise was being retold. The hare as usual runs fast and then decides to takes a quick nap whiletortoise crawls consistently towards the finish line. The twist here is that just before the finish linetortoise meets with an accident only to get killed, eventually making the lazy hare winner of the race.The advertisement rightly mentions about reality where things do not happen the way they areexpected. This is quite relevant to the financial reporting done by companies where financialstatements are not presented in the expected manner and a twist always exists. Quite smartly theaccounts are manipulated to show profits which were actually never made. It’s exactly like cookingchicken curry out of nothing. Let’s look at some of the ways by which profits are manipulated bycompanies.

STASHING DEBTS INTO THE SUBSIDIARIES:This is one of the most prevailing tactics used by the companies. The liabilities and expenses of acompany are transferred to the subsidiaries’ financial statement. Since the subsidiaries are separatelegal entities, hence the debts of the parent company which are transferred to its subsidiaries gethidden for the investors. The best example for this is the famous Enron scam where the CFOAndy Fastow created a number of subsidiaries (SPEs) to hide Enron’s debts and losses.

THE EARLY RECOGNITION OF REVENUES:This tactic is very commonly used in services industries like the IT, ITES, Software Services etc.The company books lump-sum payments as current sales when services are to be provided over anumber of years. Let’s take the example of a software service provider which receives a 5 yearscontract from its client which makes an upfront payment for 5 years services. Ideally the revenueshould be amortized over the life of the service contract ie 5 years, however the company records thefull payment as sales of only the period in which the payment is received.

MAKING PREPAID EXPENSES PRECEDING AN ACQUISITION:

It might sound a bit confusing, but is a quite effective tactic. Preceding an acquisition, the targetcompany pays rather prepays, for as many expenses possible. Thus technically after the acquisitionthe combined entity’s expenses will be much lesser. It also boosts up the EPS growth rate of thecombined entity compared to the previous quarters. The tactic gives a false impression to theinvestors by making them believe that the acquisition has been very much successful.

CREATING OTHER SOURCES OF INCOME:

It is one of the most legally accepted tactics to manipulate the profits. Here a loss making companysells some of its assets (could be equipments, land anything). What it does is that some part of theloss gets mitigated by the income generated from selling of asset.

COOKING CHICKEN CURRY FROM NOTHING!

- A Report on how companies manipulate profits

11

STATING REVENUE EXPENDITURE AS CAPITAL EXPENDITURE:

Before explaining this tactic let me elaborate the difference between revenue expenditure and capitalexpenditure. A capital expenditure involves funds spent for the acquisition of a long-term asset.From the accounting point of view the company requires to spread such cost of the expenditure overthe useful life of the asset. On the other hand revenue expenditure is the one which a companymakes for its due course of business like purchase of raw material, paying wages etc. Unlike capitalexpenditure, revenue expenditure could not be spread over a period of time and has to be stated fullyin the current income statement. Companies wherever possible try their level best to state theirrevenue expenditure as capital expenditure in order to inflate the profits. In the early 1990s AOLvery smartly declared the cost of making and distributing its CDs as its marketing campaign and along-term investment. Hence the cost was stated as capital expenditure. This transferred the costsfrom the income statement to the balance sheet where it was going to be expensed over a period ofyears.

CHANNEL STUFFING:

In this tactic the company makes a large shipment to its distributor at the end of a quarter andrecords the shipment as sales; even when the distributor has the right to return any unsoldmerchandise. Ideally the company should have kept the products as a type of inventory because thegoods can be returned and are not guaranteed as sales.

CREATION OF FICTITIOUS REVENUE:

To make you understand this tactic let me give an illustration. XYZ ltd enters into transactions withABC ltd (which is a company in the same industry) selling rights to use each other excess capacity.Each party sells its rights to its excess capacity and buys rights to the other party's excess capacity.The two payments are offset, so no money changed hands. The transaction is for Rs 5 crore and therights lasted for 10 years. They booked the Rs 5 crores revenue in the current year even though therights were for 10 years, and capitalize the payment of Rs 50, 00,000 for the purchase, expensing itover the 10 year life of the rights at Rs 50, 00,000 each year. They created a Rs 4.5 crore profit in thecurrent year.

DIGESTING THE CURRY!

The implications drawn till now lead to one conclusion ‘an investor must not get carried away by theextraordinary profits shown by companies’. While many of the aspects are not easily noticeable forthe investor however the following should be a caution signals.

1. Company is showing extraordinary profits while the sector it belongs to is booking losses2. Company is unexpectedly increasing the number of its subsidiaries.3. Subsidiary of the company is showing unexpected drop in profits compared to previous

quarter, while the company’s profits are rising.4. Huge rise in EPS immediately after an acquisition.

Everyday companies discover a number of ways to bypass the accounting and reporting standards.It’s an uphill task for an investor to make out such manipulations. The only advice for an investor isthat “in the real world profits made by a company need not necessarily indicate a sound health of thecompany, so always be watchful about your investments”.

12

2009- FLASHBACKHIGHLIGHT 1:- NEW ERA

HIGHLIGHT 2:- NEWEST FRIENDS

HIGHLIGHT 3:- FAITH RESORTED

HIGHLIGHT 4:- TAXING TIME

The sordid Satyam saga ended whenTech Mahindra bought the scandal-scarred Satyam in April 2009. Earlier,Satyam founder and ChairmanRamalinga Raju (R) had resigned afteradmitting to the country's biggestcorporate fraud

US President Barack Obama and thePrime Minister Manmohan Singh pledgeto fully implement the nuclear accordsigned by the two countries in 2008When George Bush Jr was President

The return of the UPA government forthe second term was welcomed by thestock market. Liberalization stepsinitiated in the first term were expected togather momentum as Congress managedto shed Left shackles

Finance Minister Pranab Mukherjeeunveiled the draft Direct Tax Code.The plan is to do away with the manytax exemptions and deductions, whichhave made existing tax laws bulky andcomplicated Sharma)

13

HIGHLIGHT 5:- FOUL WEATHER

HIGHLIGHT 6:- TROUBLED TIMES

HIGHLIGHT 7:- TILL BIZ DOES US APART

HIGHLIGHT 8:- THAWED TIES

2009 was a bad year for airlines theworld over and India was no exception.Public and private sector airlines sawunprecedented crisis followed by strikesby first Jet Airways and then Air Indiapilots

The birth of a new state seemed almostimminent as the central governmentgave in to emotional blackmail byKCR. It was Chief Minister YSR's (R)death in a helicopter accident thatchanged the equation in AP

The wrangle over an energy dealbetween the billionaire Ambani brothershas highlighted the risks inherent in aneconomy dominated by big familybusinesses and spurred calls for thegovernment to intervene

Prime Minister Manmohan Singh andRussian President Dmitry Medvedev re-energized their ties after sealing sixsignificant accords, including a no-strings-attached civil nuclear deal

14

HIGHLIGHT 9:- THE INDIAN IDENTITY

HIGHLIGHT 10:- SELFISH AIMS

HIGHLIGHT 11:- GOLDEN BOY

HIGHLIGHT 12:- INDIAN ECONOMIC SUMMIT

Nandan Nilekani assumed charge aschairman of the Unique IdentificationDatabase Authority of India, The aim:To provide Indians with fake-proof,easily verified IDs.

The environment summit atCopenhagen, which was supposed toforge the terms to save the world, turnedout to be a damp squib. India’s JairamRamesh said he did not go to save theworld but to save India.

Bollywood's A.R. Rahman won twoOscars for his score in Danny Boyle's"Slumdog Millionaire", becoming thefirst Indian composer to strike gold atthe annual Hollywood awards(Bloomberg)

If discussions at the World EconomicForum are anything to go by, Asia'sthird-largest economy may have turneda corner with its political will to help itreach 9-10% growth rates

15

HIGHLIGHT 13:-DEAD-RUN ENDS

MEGA DEALS

Company Sector Deal Type Deal Size Second Party

Sterlite Industries IndiaLtd. ,Tuticorin(Copper Producer)

Metal American DepositoryShares (ADS)17/07/2009

$1500 millionRs.7305 crore

Rs.7305 crore

JV of DreamWorks andReliance BigEntertainment (U.S.)

Media andEntertainment

Joint Venture16/07/2009

$825 millionRs.3966.6 crore

Reliance BigEntertainment

Adani Power Ltd,Ahmedabad

Power IPO28/07/2009

$560-623millionRs.2700-3000 cr

Public offering

Shantha BiotechnicsLtd., Hyderabad

Biotech M & A28/07/2009

$785 millionRs.3740 crore

Sanofi-Aventis

S Tel Ltd.New Delhi

Telecom M&A20/06/2009

$237.82 millionRs.1150 crore

SterlingInfotechGroup (SIG)

Tata Steel Ltd.Mumbai

Metal GDR Issue21/07/2009

$500 millionRs.2408 crore

Institutionalinvestors

Tata Power CompanyLtd, Mumbai

Power GDR Issue22/07/2009

$335 millionRs.1619 crore

Institutionalinvestors

Dubai's crisis exploded on Nov 25 whenthe emirate said it would delay paymenton debt issued by one of its flagshipfirms. Since then, the situation hasimproved but it has left a lot of countriesshaken in its wake

16

MARKET WATCH!

EQUITY MARKET UPDATES

DOMESTIC INDICIES

17

MONTHLY GAINERS BSE as on Wednesday, December 30, 2009

security name current close (Rs.) last close(Rs.) gain%Sterlite Project 131.90 42.60 225.00AmritBnspati 239.55 84.00 185.17Amrit Banas 161.10 64.50 149.76

TimesGuarnty 80.10 35.45 125.95Manaksia 122.35 56.20 117.70

MONTHLY LOSERS BSE as on Wednesday, December 30, 2009

security name current close (Rs.) last close(Rs.) loss%Channel Guid 28.00 116.50 -75.96Arvind Chem 30.10 57.10 -47.28Infomedia 18 45.85 76.75 -40.26ZanduPhrmWrk 6,055.05 9,880.65 -38.71Seax Leather 53.15 85.15 -37.58

MONTHLY GAINERS NSE as on Wednesday, December 30, 2009

Company Name Week4 Week3 Week2 Week1 Change Change %

Ranbaxy LaboratoriesLtd.

422.65 469.40 502.20 526.20 96.25 18.58

Suzlon Energy Ltd. 73.00 81.15 85.05 80.90 16.70 18.48

Tata Motors Ltd. 641.90 703.00 713.25 727.15 144.20 18.22

Hindalco Industries Ltd. 134.60 142.10 143.00 137.15 25.30 15.73

Bharat Petroleum... 520.80 605.60 634.00 593.70 98.90 15.56

18

MONTHLY GAINERS NSE as on Wednesday, December 30, 2009

Company Name Week4 Week3 Week2 Week1 Change Change %Reliance Industries Ltd. 2123.30 1098.00 1071.80 1016.95 1047.25 96.03

Satyam Computer ServicesLtd.

104.60 92.25 108.10 96.45 4.95 5.04

Housing DevelopmentFinance...

2811.95 2804.45 2721.75 2564.25 134.75 5.04

State Bank of India 2334.95 2291.60 2296.95 2145.75 110.65 4.88

GlaxoSmithkline Consumer... 1679.60 1686.55 1634.10 1606.80 68.80 4.27

GLOBAL MARKETS

Country indices Return (%) PE Ratio1st mth 3rd mth 6th mth ytd Year ago current

Dow jones 0.5 8.8 24.2 19.9 13.9 16.4Nasdaq composite 5 9.3 24.9 44.9 21.8 43.6S&p 500 1.4 7.9 22.4 24.7 14.8 24.5Mexico bolsa 3.8 13.2 34.2 45.4 14.6 19.8Brazil bovespa 0.4 12.6 36.1 80 8.3 20.5Dax 3.3 6.3 23.2 23.9 10.4 60.2Ftse 100 0.7 6.3 27 21.8 24.7 60.3Cac 40 2.7 4.6 23.7 21.6 9 16.6Nikkei 225 11.2 2.2 7.1 18.5 12.5 -----Hang seng -4.8 2.3 17.7 49.6 12.9 22.5Shanghai composite -4.5 10.7 7.4 72.5 17.6 33.4

Sensex 0.9 4 21 80 10.3 23.2Straits times 1.6 6.6 23.2 61.1 10.2 25.6

FOREX MARKET : Currency 1 INR Rupees

US Dollar 0.021 46.66Australian Dollar 0.024 41.8633British Pound 0.013 75.3493Canadian Dollar 0.022 44.5676Euro 0.015 66.8474Japanese Yen 1.994 0.5015Danish Krone 0.111 8.9817Hong Kong Dollar 0.166 6.0167Singapore Dollar 0.030 33.2123

19

FII IN HIGH SPIRITS:-

Foreign institutional investors (FIIs) pumped $7.1 billion into equities during the quarter endedSeptember 2009. May 2009 showed an enormous infusion of $4.14 billion in just one month.Banking and Financial Services, Metals and Realty have been the most attractive sectors. (NETINVESTMENT IN MILLION)

TOP 10 SECTORS - (these sectors account for 87% of the portfolio)

FII FAVOURITESCOMPANIES FII HOLDING (%) NET FII

INV.($MN)

JUN 09 SEP 09

HOUSING DEV. &INFRA.

7.1 26 371

SOBHA DEV. 2.5 18.7 73HINDUSTAN CONST. 10.8 26.8 110INDIABULLS FIN.SERVICES

32.5 47.5 174

ORBITCORPORATION

6.5 21.3 26

UNITECH 22.8 36.4 618GVK POWER &INFRA.

17.1 30.1 189

OPTO CIRCUIT(INDIA)

22.6 32.5 60

VOLTAMPTRANSFORMER

13 21.9 15

3i INFOTECH 7.7 16.6 19

20

DERIVATIVES- ( FUTURE & OPTION) SEGMENT OVERVIEW

GROWTH INNO OF

CONTRACTSMADE

IN F & OSEGMENT

OVER YEARSTURNOVER

IN F & OSEGMENT

OVER YEARS2000-2010

AVERAGEDAILY

TURNOVER(Rs. Cr) IN

F & OSEGMENT

OVER YEARS

ANALYSIS OFYEARLY

SETTLEMENTCYCLE OF

F&OSEGMENT

21

…….Challenge your BIQ

WALK IN THE PARK:

1) Who is the current finance minister of India?2) What does Industrial development bank of India popularly known as?3) Which financial services giant is referred as the "Thundering Herd"?4) Which successful investor is popularly known as "The Oracle of Omaha"? And his famous quote

is "Rule No.1: Never loses money, Rule No.2: Never forget the Rule No.1"5) Who is known as the Father of modern Economics?

SHERLOCK HOLMES’ FAVORITE: (….a diamond in the rough!)

1. The Founder of ______ ______ (Charles ____) played semi-pro baseball prior to coming to WallStreet. The ______ in the name is from Edward ______ who was a soda fountain salesman.

2. In which country's coins you can found the following lines imprinted, 'this is the root of all evils’?3. If Dubai World is an investment company that manages and supervises a portfolio of businesses

and projects for the Dubai government then what is Nakheel?4. What is an elevator pitch?

HARD NUTS TO CRACK:

1. Expand ABN AMRO.2. What is a 'Credit Crunch'?3. If you file the 'Chapter number 11' in USA in the name of your company what would you do?4. What does Single window lending refer to?

PEHCHAN KAUN?

*ANS IN BLOG & FEB ISSUE

22

IBTE –

If you are an academician, a researcher, corporate personnel or a Finance enthusiastthen, we welcome you to send in your inputs by way of your opinion, information,suggestions and share your experiences in the field of finance. For a snapshot on febuaryissue of the newsletter please log on to the blog mentioned below .You can mail us on “finometric@gmail.com” or can leave your comment onwww.finometric.blogspot.com. . We treasure your views and comments.

CHIEF EDITORS SOMYA, SWETHA,KIRAN & CHAMPAK

ASSISTANT COORDINATORS SWATHI.V, SWATHI.D, ANKITA

CONTRIBUTIONSNATIONAL &

INTERNATIONAL NEWSSOUMYA SURAJAN

CHANGE IN TRADINGTIMING

SWETHA & AMAN

TELECOM SECTOR ARTICLE ABHAY , UDAY &SWATI VENKETASH

MANUPULATING PROFIT CHAMPAK

2009 FLASH BACK SOMYA, ANKITAEQUITY MARKET UPDATE ABHAY, UDAY & SWETHA

QUIZ POOJABLOG & DESIGN CHAMPAK & SOMYA

Department of Management StudiesHosur Road, Bangalore-560029, Karnataka, India

Tel: +918040129350/51/55 Fax: +91804012900

TEAM

23

Email- finometric.gmail.com Website- www.finometric.blogspot.com