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Key economic indicators (changes for the fortnight 1 July to 15
July)
Sensex 18561.92(200.08) IIP 5.6% 1 US $= Rs 44.51 (-)
Nifty 5581.10 (46.2) Inflation 9.44% Crude oil price= $117.76
(4.5)
Pressure rises on Germany in
Eurozone debt drama
It all began in November 2009, when the Greek
government shocked the markets by doubling
its estimates of its budget deficit for the fiscal
year. Since then the crisis has been a snow ball,
gaining momentum and mass with the passage
of time and crushing the economic stability of
Europe in the process.
The recent developments have seendowngrading of Irish sovereign
bonds to junk
status by the ratings agency Fitch. The same
agency had downgraded the Greek debt status
to CCC from an earlier B+.
Italy, supposedly next in line for a downgrade,
responded by racing to approve radical budget
cuts. Fitch has maintained its current rating of
AA-for Italy.
Germany, the biggest economy in the Eurozone,
is now under pressure to concede its stand on
private partnership in the next phase of bailout
for the distressed Greece.
Read the latest news on the issue by clicking the
link embedded in the title.
Also read a brief timeline of the crisis at:
http://www.bbc.co.uk/news/business-
13856580
RBI may hike rates again on July
26, say economists
In the wake of consistent high inflation, which
stood at 9.44% as measured by the WPI,
economists are of the opinion that the central
bank might go for another round of rate hike to
reduce the amount of liquidity in the system.
They believe that the central bank might go
with the policy despite a moderate fall in IIP
figures, which were 5.6% y-o-y compared to5.8% y-o-y in
April.
Indias 10 year bond benchmark yield has been
in the range of 8.32 to 8.38 per cent and is
expected to reach as high as 8.5 per cent on
concerns of tight cash conditions and interest
rate hike.
It is worth noting here that RBI has hiked
interest rates 10 times since March last year
which has in turn led to an increase in lending
by almost all the major lending institutions.
For more details, read the article from Business
Line, embedded in the title.
Also read the RBIs outlook of growth at:
http://www.bloomberg.com/news/2011-07-
05/rba-holds-key-rate-at-4-75-sees-2011-
growth-slower-than-prior-forecast.html
2011-2012 Issue 1(15th July)
Mone Matters
http://www.bworldonline.com/content.php?section=Finance&title=Pressure-rises-on-Germany-in-euro-zone-debt-drama&id=34782http://www.bworldonline.com/content.php?section=Finance&title=Pressure-rises-on-Germany-in-euro-zone-debt-drama&id=34782http://www.bbc.co.uk/news/business-13856580http://www.bbc.co.uk/news/business-13856580http://www.thehindubusinessline.com/industry-and-economy/banking/article2221432.ecehttp://www.thehindubusinessline.com/industry-and-economy/banking/article2221432.ecehttp://www.bloomberg.com/news/2011-07-05/rba-holds-key-rate-at-4-75-sees-2011-growth-slower-than-prior-forecast.htmlhttp://www.bloomberg.com/news/2011-07-05/rba-holds-key-rate-at-4-75-sees-2011-growth-slower-than-prior-forecast.htmlhttp://www.bloomberg.com/news/2011-07-05/rba-holds-key-rate-at-4-75-sees-2011-growth-slower-than-prior-forecast.htmlhttp://www.bloomberg.com/news/2011-07-05/rba-holds-key-rate-at-4-75-sees-2011-growth-slower-than-prior-forecast.htmlhttp://www.bloomberg.com/news/2011-07-05/rba-holds-key-rate-at-4-75-sees-2011-growth-slower-than-prior-forecast.htmlhttp://www.bloomberg.com/news/2011-07-05/rba-holds-key-rate-at-4-75-sees-2011-growth-slower-than-prior-forecast.htmlhttp://www.thehindubusinessline.com/industry-and-economy/banking/article2221432.ecehttp://www.thehindubusinessline.com/industry-and-economy/banking/article2221432.ecehttp://www.bbc.co.uk/news/business-13856580http://www.bbc.co.uk/news/business-13856580http://www.bworldonline.com/content.php?section=Finance&title=Pressure-rises-on-Germany-in-euro-zone-debt-drama&id=34782http://www.bworldonline.com/content.php?section=Finance&title=Pressure-rises-on-Germany-in-euro-zone-debt-drama&id=34782
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Christine Lagarde elected new IMF
chiefFrench Finance minister Christine Lagarde was
elected as the new Managing Director of the
International Monetary Fund, maintaining
Europes strong hold on the top job at the
global lender.
Vodafone to pay $500 mn more for
Essar buyoutVodafone will pay almost $500 million more for
acquiring one-third of its Indian joint venture
after the British company agreed to
compensate its Indian partner, the Essar
group for a tax payment that was not factoredinto the original
agreement.
Despite 'deemed' approval in place,
Cabinet to decide on RIL-BP dealIn an attempt to play safe, the
ministry of
petroleum and natural gas may seek the
approval of the Cabinet Committee on
Economic Affairs (CCEA) for a $7.2-billion deal
between Reliance Industries (RIL) and BP. This
despite the fact that a deemed consent could
be in place already.
Twitters value doubles to $7 billionExperts estimate that the
market value of
microblogging site, Twitter, has doubled since
December to $7 billion.
In December, Twitter was valued at $3.7 billion
by the company Kleiner Perkins Caufield&
Byers, which invested $200 million in Twitter.
Godrej calls off JV with US based
HersheysUS-based chocolate and confectionery major
Hershey's and the Godrej Group have called off
their joint venture in India following
management differences in running the entity.
At a recent board meeting, both sides mutually
agreed to call off the partnership following
which Hershey's will sell its 51% stake toGodrej
Consumer Products Ltd (GCPL) for an
undisclosed amount.
Infosys nosedives over 4 pc on poor
Q1 resultsIT bellwether Infosys today plunged more than
four per cent on bourses as the company's first
quarter results for this fiscal lagged market
estimates.
Infosys' net profit jumped nearly 16 per cent to
Rs 1,722 crore and its revenues rose to Rs 7,485
crore in the first quarter ended June 30, 2011.
A bit of Fin Gyaan
Credit ratings and their significance
Credit rating is an assessment of the credit
worthiness of individuals and corporations. It is
based upon the history of borrowing and
repayment, as well as the availability of assets
and extent of liabilities. Major credit ratingagencies are:
Moodys, Fitch, S&P, CRISIL, ICRA
etc
Other tools used by a central bank to
reduce liquidity
Open market operation: Selling of government
bonds in the open market can be used to
reduce liquidity
Increasing reserve ratio for banks
Fin TriviaWhy is Wall Street so named?
It is named after the Wall protecting the
northern end of the Dutch colony New
Amsterdam where merchants and traders
gathered by the docks.
For queries and suggestion contact: Abhijit Shukla
([email protected]) or Team Finax ([email protected])
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