ISSUE - 135 7th DECEMBER [WEDESDAY]

SYNOPSIS - SWATI VERMA

The shams just don‟t seem to end in India ,it seems! With the country envisioning a cor-

ruption free future, high ranking officials seem to make the dream a distant reality. Under

scanner is the BCCI which has been charged with money laundering to the tune of almost

Rs. 11 billion. Lack of transparency and no official accountability set in place seem to be

the breeding ground of such issues. Talking more on the same is our writer through the

Cover Story this week.

The year 2012– supposedly the year of end is the protagonist of the Opinion Forum this

week. Let me present you with a quick preview– The Euro Zone crisis, currency devalua-

tions ,slumping world trade and a fairly poor performing global economy. Is the end

probable or just nervous jitters? Elucidating on the same is our writer this week.

Lakmé is a word synonymous with high value cosmetic brand ,for the Indian woman es-

pecially. Pt. Jawahar Lal Nehru‟s wish that every Indian woman could afford a branded

range of cosmetics led to the birth of this luxury giant in India. Ranging from cosmetics

to conducting an annual fashion fiesta with top designers presenting their collection to a

global audience, Lakmé has gone far and wide in it‟s reach. Hence presenting the Lakmé

story through Brand Track this week.

The traditional banking practice of providing loans from the reserves that the Central

Banks allocates is gradually diminishing due to the simple reason-the reserve require-

ments have dropped to zero. We try to bring to you a simple model of the current banking

system that includes interest on reserves and no binding reserve requirements. We see

how bank lending quantities and interest rates are invariant to the level of reserves cho-

sen by the central bank through the Focus this week.

Moreover we have our regular sections Fast Track, Quick Bites and Market Watch with

lot of Jargons to add on to your knowledge.

Hope it‟s an enriching read!

Swati Verma

SYNOPSIS 1 OPINION 5 FOCUS 8

COVER 2 BRAND 6 MARKET 9

FAST-TRACK 3 QUICK BITES 7

COVER STORY– BCCI - BACK TO PAVALION!! - SHILPI KALWANI Who thought what Mark Twain said in the past would become BCCI‟s Principle- “Honesty is the best

policy- when there is money in it”!! India‟s largest sports authority is under the scan of Parliament for

reasons relating to lack of transparency. Rolling in crores, the BCCI is a money-minting behemoth. The

Board of Control for Cricket in India (BCCI) is under investigation for violating the country's laws

(Under FEMA- Foreign Exchange Management Act) amounting to some 10.77 billion rupees , Sports

Minister Ajay Maken said on Tuesday. He said the investigation covered the ownership of franchises and

fund transfers without the permission of the Reserve Bank of India (RBI) and income tax department dur-

ing the 2009 Indian Premier League held in South Africa.

Is BCCI – Covering the Uncovered?

When the question was raised by media, former player Arun Lal said- „He welcomes any move that

makes the BCCI more transparent but warned the government should not try to hijack the game's admini-

stration‟. The Indian sports ministry on Tuesday pushed for a bill that seeks to reform sports federations

but is perceived as an attempt to control the country's rich and powerful cricket board. The bill seeks to

limit the tenure of sports administrators and bring trans-

parency in the federations by bringing them under the

country's Right to Information (RTI) Act."What was the

need to bring this bill? Is government trying to take over

the sports federations?" - asked BJP parliamentarian

Anurag Thakur. Maken answered this by saying- "How, is

bringing a Sports Body under RTI tantamount to control-

ling it, I fail to understand." There exists two crossroads

for the same. On one hand sports minister supports the bill

by ensuring it as a step to make BCCI more accountable

whereas on the other hand some consider it as government

trying to take the steering of control in their hands.

“Cricket should not expect special treatment.” - said Mohammad Azharuddin (Former Captain & Con-

gress Parliamentarian). In contrast, some other federations have not witnessed a change in their top ad-

ministration for up to three decades, as is the case with the Archery Association of India. This is a bill

covering all sports & so, cricket cannot be an exception.

BCCI exposed- behind the mask of charity

The sale of Indian Prem­ier League (IPL) telecast rights, franchises and tickets (amounting to approx. Rs.

9000 crores) / a donation made to charity. The Board of Control for Cricket in India (BCCI) insists that

both activities qualify to be called philanthropic; whereas the income-tax authorities think otherwise.

Formed in December 1928, registered as a charitable trust under Section 12(a) of the Income Tax Act

1961, the BCCI hitherto enjoyed exemption stating that it „promotes cricket for general public good‟.

When denied exemption (1990), the board highlighted the Rs 50 lakh donation it intended to make to the

Kargil Relief Fund & demanded tax exemption. However, following the game-changing amendment of

the Finance Act 2008-09, it was stated that the object of BCCI does not fall under public welfare, & the

withdrawal of exemption took place. This step followed the BCCI‟s move to covertly amend its rules and

add new objectives in its memorandum, including setting up coaching academies and conducting the lu-

crative IPL. Moreover, after examining the acc­ounts of cricket associations affiliated to the BCCI, the I-

T department has issued show-cause notic­es to seven such units with headquarte­rs in Delhi, Mumbai,

Chennai, Kolkata, Hyderabad, Bangalore and Ahmedabad.

“BCCI’s profits have been growing at a faster rate than Infosys’’

BCCI is the richest cricket board in the world with revenues of Rs 16.63 crore and reserves of Rs 44

crore. And with a Rs 235-crore, five-year television rights contract signed with Doordarshan, which is

worth Rs 42 crore annually, BCCI‟s already overflowing coffers are going to be groaning further under

the weight. It was alleged by some members of CSA that approximately 68 million Rand had gone miss-

ing from its coffers and that some officials had been paid close to 4.8 million Rand in bonuses for the

successful conduct of the IPL in South Africa in 2009.

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Honesty is the best policy

- when there is money in

it”!! India’s largest

sports authority is under

the scan of Parliament for

reasons relating to lack of

transparency.

Should the Government

t ak e o v e r BCCI?

(Answer of poll conducted

by cricket circle)

FAST-TRACK NEWS - SWATI VERMA FDI: Govt. asks traders to give suggestions within one week Ruling out the possibility of any rollback of the decision to allow 51% foreign direct investment (FDI) in multi-brand re-

tail, the government asked the agitating traders to submit their suggestions for necessary safeguards within one week. It

was also decided to form a joint working group of traders and government officials to address the concerns of the trading

community. This was the result of a meeting between the Union Commerce and Industry Minister, Anand Sharma and the

representatives of the Confederation of All India Traders (CAIT) in Delhi, where no common ground was found between

the two parties.

Economic growth will pick up pace before March: Kaushik Basu Terming the slowdown in the Indian economy as a temporary phenomenon, chief economic adviser Kaushik Basu exuded

confidence that it will start accelerating towards the end of the current fiscal. India‟s economic growth rate slipped to 6.9%

in the second quarter this fiscal, the lowest in nine quarters. Meanwhile, finance minister Pranab Mukherjee said economic

growth will moderate to about 7.5% in the current fiscal. Slackening investments amidst high interest rate regime is seen as

one of the major reasons for slowdown in economic activities in the country.

Despite woes, Kingfisher remains favourite airline: Survey

In spite of the mounting troubles and the recent flight cancellations, Kingfisher continues to remain the favourite airline in

the country, an honour which it shares with Jet Airways this year, according to an annual airline and air travel sur-

vey .While Vijay Mallya-promoted Kingfisher is the best airline for in-flight entertainment, food/beverages, in-flight ser-

vice, in-flight maintenance (cabin lighting, cleanliness, seat comfort, leg room), Naresh Goyal-headed Jet leads in ground

handling and landing/take-off quality. India's largest low-cost carrier IndiGo comes next at No 2, said the survey by travel

advisory portal TripAdvisor.

Apple Questioned by German Data Regulator About Carrier IQ A German data regulator asked Apple Inc. to answer questions about privacy issues regarding the usage-tracking software

Carrier IQ on mobile phones. Carrier IQ faces allegations that the software logs sensitive phone-user information. U.S.

Senator Al Franken urged the software‟s developers to share more information about what the product does, and whether it

transmits data to other parties. The Bavarian State Authority for Data Protection sent a letter to Apple to request informa-

tion about the software. Apple said yesterday that it will stop supporting Carrier IQ software.

Rupee rises more on local shares, corporate dollar sales The rupee held firm in afternoon trade on Friday, helped by corporate dollar sales, positive domestic equities and some

portfolio flows. The government's move last week to liberalise foreign direct investment in multi-brand retail chains along

with the central bank's decision to ease rules on overseas borrowings by firms and raise ceiling on interest rates for depos-

its by non-resident Indians has improved view on dollar supply. The BSE Sensex recovered all early losses and was up

nearly 1.8%.

World AIDS Day 2011- Beginning of a new end With the profile of HIV-AIDS undergoing transformation from a life-threatening emergency to a manageable chronic in-

fection, the World Health Organisation (WHO) on Wednesday urged South-East Asian countries to focus on eliminating

the infection, particularly among children, by 2015."We are coming out of a transformative decade for the HIV-AIDS epi-

demic. With innovative treatment regimens, improved health services as well as political commitment, HIV-positive peo-

ple who are on treatment are living longer and better lives," said Samlee Plianbangchang, WHO regional director for South

-East Asia.

Jewellery shops give stiff competition to gold ATM India welcomed the latest arrival in Mumbai's modern Phoenix Mills mall - a gold ATM machine selling jewellery and

31,000-rupee gold coins - but for more than just window-shopping, it faces stiff competition from traditional stores. India's

first such machine may be grabbing the attention of passers-by in the world's biggest bullion market, but upstairs in an air-

conditioned store, the sparkling gold and silver bangles offered by smiling sales assistants have customers grabbing their

credit cards. How well will it be accepted, only time will tell.

In the Pink– Informal expression used to describe a situation in which an investor or economy is in good financial position.

Generally, being in the best of health (or rosy).

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Myanmar's Suu Kyi praises U.S. engagement Pro-democracy leader Aung San Suu Kyi -Suu Kyi - the Nobel laureate who has come to symbolise the pro-democracy aspirations of Myanmar's people -welcomed renewed U.S. engagement with Myanmar, saying she hoped it would set her long-isolated country on the road to democracy. U.S. Secretary of State Hillary Clinton held a final meeting with Suu Kyi as she wrapped up a landmark visit to Myanmar which saw the new civilian government pledge to forge ahead with political re-forms and re-engage with the world community.

Australia government denies backing India, U.S. security pact Australia denied on Friday it was pushing for a joint security pact with India and the United States, a tie-up that would likely add to China's fears that wary neighbours were trying to encircle it. Foreign Minister Kevin Rudd was quoted in an interview with the Australian Financial Review newspaper this week as backing the idea of a trilateral security pact.

Germany's Merkel fights for euro German Chancellor Angela Merkel called for rapid EU treaty change to remedy the root causes of the euro zone's debt crisis but warned that Europeans faced a long, hard „marathon‟ to restore lost credibility. Outlining a long-term approach to tighter fiscal integration in the single currency area, with tougher budget discipline, she dismissed quick fixes such as massive Fed-style money printing by the European Central Bank or issuing joint euro zone bonds, vowing to defend the euro, which she said was stronger than Germany's former deutschemark.

Telecom Commission defers pricing, M&A decision India's Telecom Commission will meet again next Friday to discuss proposals from the country's telecoms regulator on pricing of second-generation spectrum and mergers and acquisitions in the sector. Last month, the Telecom Regulatory Authority of India TRAI proposed a relaxation of rules for M&A in the telecoms sector in a move to facilitate a long-awaited consolidation in the 15-player market. Earlier this year, the regulator proposed steep increases in spectrum prices and a one-time fee on spectrum beyond 6.2 megahertz, drawing howls of protest from firms. The regulator's propos-als have to be approved by the telecoms ministry to become law.

Advani, Chawla in semi-finals of World Snooker Pankaj Advani and Kamal Chawla chalked up contrasting victories to enter the semi-finals of the IBSF World Snooker Championship here on Friday. Advani, though nowhere near his best, carried enough ammunition to bring down Belgium's Peter Bullen 6-2 (71-07, 00-123, 34-75, 92-21, 67-60, 70-09, 69-16, 80-45) while Chawla, the 32-year-old from Bhopal, overcame another Belgian, Kevin van Hove, 6-5, in a tight match.

Zynga IPO values company as high as $9.04 billion Zynga Inc plans to sell an 11.1% stake in a scaled-back initial public offering that would value the Facebook game maker at as much as $9 billion on a fully diluted basis. The leading social games maker plans to sell 100 million new shares at between $8.50 and $10 each. At the midpoint price, the IPO could raise $925 million, which would make it the largest from a U.S. Internet company since Google Inc raised $1.7 billion in 2004.Five-year-old Zynga made its name on viral games such as "FarmVille," among the most popular on the Facebook social network.

Carpetbagger - Someone who opens a building society account with the minimum investment with the sole aim of getting a

windfall if it floats on the stock exchange or is taken over.

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OPINION FORUM– 2012: EUPHORIA OR AGONY? - AKSHAY AGRAWAL

Since all my articles preceding this one ceased with idioms heeding caution, here‟s one more in

the series veritably highlighting the nuances of what to anticipate in 2012.Written with an abso-

lute unbiased demeanour and the core emphasis being the various issues staring at the economy

& us in the face, I hope my readers find it of much usefulness.

With both, the prophets and India TV (since they have no clue on what news is) envisioning the

world coming to an end in 2012 (and thereby putting seers like Nostradamus to shame) and sub-

jecting its audience to a hearty laugh, one thing common to senior investment bankers, fund

managers, and Economists alike is their gloominess when it comes to expressing anything quin-

tessential about 2012.The only commoner, being the extreme volatility of the markets, hopes be-

ing restricted to the extent of the wrath. Top Wealth Management firm, Merrill Lynch, expects

the Global Economy to grow at just 3.7%, China at 8.6% and Incredible India at a paltry 7.5%.

Instantly striking my mind, is the hit single “Riders on the Storm” (Saluting the Doors). Most of

us already have a glimpse of the currently fragile growth

rates, decreasing numbers of safe havens to invest in (read

the victim as the „Common man‟). Clearly investment man-

agers are expecting 2012 to be a very tough year with politi-

cians and policy initiatives trying their very best to make the

economy even more sluggish. True not only for India,

Europe has also joined the party. Rendered totally helpless

by the current market and economy scenario experts in in-

creasing numbers are pointing and expressing their inability to identify and project risk. They are

already crying foul with the ever-shrinking financial system and the government bond markets

being rigged. Also the emerging as the clear undisputed white elephant in the herd is Europe

now being identified as a total dead-end.

Instead of concluding my article this time with just a few words of wisdom, which may already

be being touted as „Gyaan‟ by my readers, I go one step further this time to enunciate what ex-

actly should be the „Karma‟ of the Investors!

Most big investment and wealth management houses are now recommending that almost all

categories of investors should concentrate wholly and solely on the guru mantra of diversifica-

tion so that if they are faced with the wrath of the volatility in one segment, the other segment

acts as an life-saver. The focus of the investors should also cover the vital issues of yield on in-

vestment, the quality of their investments and the opportunity to diversify only after careful

judgement.

In addition, the preferable sectors could include consumer discretionary, consumer staples and

our most pampered sector (read IT) and a total no-go for European equities hint (with a wink): I

just received a mail from my bank advising me to go in for a SIP (Systematic Investment Plan)

to build up a corpus ranging from lakhs to even a crore!

With time periods from 10 to 25 years.

Wait! Wasn‟t the world ending in 2012?

Ear Stroking - A twist on the phrase 'ear bending' which is used to describe the way that the Bank of England lets the City

know what it would like to happen in any given circumstance. Stroking is meant to denote gentle as opposed to crude persua-

sion.

THE IBS TIMES

Top Wealth Management

firm, Merrill Lynch,

expects the Global Econ-

omy to grow at just

3.7%, China at 8.6%

and Incredible India at a

paltry 7.5%.

Also the emerging as the

clear undisputed white

elephant in the herd is

Europe now being identi-

fied as a total dead-end

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BRAND TRACK– LAKME –COSMETICS INDIANISED!! -POOJA DALAL

India is a diverse state. And even more diverse are its people and their needs. Thus out of

this sublime understanding of the needs of the natives, a personal care brand was born. It

was originally started as a subsidiary of TATA oil mills. Having come into being in India

was one of its prime strengths. People were not yet „consumers‟ and their incomes were

not yet „great‟. So it was necessary to position its products as the essentials of self-care

rather than vanity purchases.

Lakmé has many product lines that include hair care, cosmetics and skin care. Within all

the product categories it has different range of products to suit every pocket. There is a

small pack of moisturiser for Rs.70, and there is the professional cosmetic range for the

ones who care more about their looks than their purses. Apart from the price ranges,

products are classified by the purposes they serve for a niche segment. Like the 9 to 5

range is meant for the everyday use by working women, the bridal sutra range is aimed at

the traditional use of make-up. Different as these products might be, there is one common

thread that runs common to all, that is the exemplary quality and its contemporary nature.

But Lakmé has never been satisfied with what it has already achieved. It always has been

a leader in the true sense. Thus when the service industry boomed in the country, it also

went on to take advantage of its growth by opening

up a chain of Lakmé beauty salons all over the coun-

try. These salons provided a complete beauty solu-

tion to a geographically diverse clientele. They claim

that - „we pride ourselves on being the best. From

the class ambience to the extreme attention to per-

sonal hygiene, you can count on world-class exper-

tise at each of our 88 beauty salons across India.

Lakmé also took a successful step towards bringing

the fashion industry of the country closer to the

Global glamour industry by launching the Lakmé

fashion week. It is one of the platforms that have

nurtured the talented and young artists to display and bring to life, their collections and

creativity while also being adored by veterans like Manish Malhotra. For bringing the

show live, Lakmé partners with many other companies like Aircel, INIFD (International

institute of fashion design), Kingfisher Ultra, Blender‟s Pride and many more. Apart from

being perfectly managed in the „Management‟ sense, these fashion shows go a mile fur-

ther to appeal the public. It does so by making sure that it‟s Red Carpets remain „Star

studded‟ for every occasion. Esha Deol graced the occasion of Lakmé fashion week

2011, but it was Hema Malini who glided as the show stopper and received a thunderous

applause that her ethereal demeanour commands!

Apart from having fabulous services (in the form of nationwide salons) and hosting the

single mega fashion event of the year in India, the brand also has a sturdy celebrity back-

ing. Deepika Padukone and Raima Sen have been some popular Bollywood celebs to

have endorsed the brand. More recently in August 2011, Kareena Kapoor was roped in to

be the ambassador for the brand‟s elite long wear range of cosmetics- „Lakmé Absolute‟.

An absolute necessity that these cosmetics are in our daily lives these days, reminds of a

few good things that could happen to your skin this winter! Yeah guys, you could use that

„green eyed monster‟ to surf Lakmé website and find something that suits you.

THE IBS TIMES

More recently in August

2011, Kareena Kapoor

was roped in to be the

ambassador for the

brand’s elite long wear

range of cosmetics-

„Lakmé Absolute’.

Lakmé also took a suc-

cessful step towards

bringing the fashion in-

dustry of the country

closer to the Global glam-

our industry by launching

the Lakmé fashion week.

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QUICK BITES- NEWS THAT CAN’T BE MISSED ! - ANKIT SHARMA

Big Shots…

Merkel vows to build fiscal union

Indian households hold over $950 billion worth of gold

Company Talks… Bank of India buys 51% in Bharti-AXA joint venture, returns to mutual fund business

Bank of India buys 51% in Bharti Axa MF

Government proposes to merge two RRBs in Bengal

Himachal cancels agreement with winemaker Indage Vintners

Minus Ericsson, Sony to only make smartphones

Carrier India buys out Sauter Race

Italian food chain Ci Gusta to enter India

NTPC warns BSES of supply cut if dues not paid

ONGC Videsh faces Syria shutdown after European Union blacklist

Reliance Industries to submit fresh estimates of cost & reserves for KG-D6 block investment plan

JSW Steel hopes to start work on Rs 20,000 crore Bengal steel plant this month

QuEST acquires GKN Aerospace's engineering division

Escorts Construction Equipment eyes land in Gujarat and MP for manufacturing unit

Ranbaxy launches low-cost version of medicine 'Lipitor'

Economy Speaks… US unemployment drops to 8.6%

Reserve Bank of India vows to check rupee slide

FDI: Traders reject joint panel offer, says halt FDI in retail policy first

Huge investment needed in urban transport: Ministry

Rupee fall not to majorly impact year-end inflation target: RBI

RBI to issue new Rs 10 notes

Before knocking on WTO doors, India seeks talks with US on steel duty

Diplomats woo Punjab industry to invest in Africa

FIEO demands interest subsidy for all export sectors

India's exports rise 10.8% in October: Government

The Captains of the Ships… Head of Essar Group„s assurance & cost control divisions – Arvind Chopra

CEO of Saatchi & Saatchi India – Matt Seddon

CEO and Managing Director Ranbaxy – Arun Sawhney

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FOCUS OF THE WEEK– BANK RESERVES AND ITS IMPACT ON LENDING - AVLEEN KAUR SARNA

Macaroni Defense - A tactic used by a corporation that is the target of a hostile takeover bid involving the issue of

a large number of bonds that must be redeemed at a higher value if the company is taken over.

THE IBS TIMES

Many things from stones to baseball cards have served the monetary functions through the ages. The

current banking system worldwide no longer resembles the traditional textbook model of fractional re-

serve banking. Historically, the quantity of reserves supplied by the central bank determined the

amount of bank loans. Through the „money multiplier‟, banks expanded loans to equal the amount the

amount of reserves divided by the reserve requirement. However now in many countries, the reserve

requirements have either been reduced to zero, or to such small levels that they are no longer binding.

Thus we develop a simple model of the current banking system that includes interest on reserves and no

binding reserve requirements.

We show that with no frictions, bank lending quantities and interest rates are invariant to the level of

reserves chosen by the central bank. Banks lend up to the point where the marginal return on loans

equals the return on holding reserves, which is equal to the interest rate on reserves set by the central

bank. This provides an indifference result for the quantity of reserves. Actually, banks hold reserves for

two main reasons, firstly to meet any reserve requirements and secondly to provide a cushion against

uncertainty related to payment flows. The quantity of reserves demanded then is typically interest-

inelastic, dictated largely by structural characteristics of

the payment system and the monetary operating frame-

work, particularly the reserve requirement. When re-

serves are remunerated at a rate below the market rate,

as is generally the case, achieving the desired interest

rate target entails that the central bank supply reserves

as demanded by the system. In the case where reserves

are remunerated at the market rate, they become a close

substitute for short term liquid assets. Thus in either

case the interest rate can be set quite independently of

the amount of reserves and changes in stance of policy

need not involve any change in this amount. The same

amount of reserves can coexist with different levels of interest rates, conversely the same interest rates

can coexist with different amount of reserves. In particular, while the sizes of banks balance sheets ex-

pand by the increases in reserves, all else equal, the lending decision for a bank is determined by the

same marginal return condition as with the former method of monetary policy implementation.

A loan is made at the margin if its return exceeds the marginal opportunity cost of reserves whether that

is with the prior regime or the rate of interest on reserves as in the current regime. Apart from that, the

balance sheet costs are also examined to determine the effect of level of reserves on the bank lending

under this friction. Banks may have costs that are increasing in the size of their balance sheets because

of agency costs or regulatory requirements for capital or leverage ratios. Thus the analysis shows that

with these increasing costs, large quantities of reserves may surprisingly have a contradictory effect on

bank lending. Perhaps, because of its novelty the large quantity of reserves in the banking system has

generated a great amount of concern and debate. However there is little analysis of how reserves impact

bank lending when interest is paid on reserves. The intuition is that the level of interest on reserves set

by the central banks determines the marginal lending rate the banking sector charges to the real sector.

In turn, the marginal lending rates determine the quantity of loans to the real sector. Since the interest

paid on reserves is independent of the quantity, so too is the marginal bank lending rate. Thus the recent

global financial crisis offers a stark example of the effect that variations in bank balance sheet strength,

both perceived and real can have on the real economy. Going forward shifts in the willingness and the

terms on which banks are prepared to lend, the way these manifest in movements in interest rate

spreads are likely to be used for policy advice.

Perhaps, because of its

novelty the large quantity

of reserves in the banking

system has generated a

great amount of concern

and debate..

Through the ‘money mul-

tiplier’, banks expanded

loans to equal the amount

the amount of reserves

divided by the reserve

requirement. However now

in many countries, the

reserve requirements have

either been reduced to

zero.

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MARKET WATCH - KRITIKA SETHI

After a long tumultuous month, the world indices seemed to recover, though slightly. The Indian Stock markets

displayed and upward movement to the tune of almost 7.3%. FII flows also picked up due to the positive senti-

ment of The European leaders devising policies to get the Euro Zone out of muddy waters. Further the Indian

software outsourcing companies‟ share prices began showing an upward movement owing to the anticipation of

the Euro policies- their major business coming from the European countries. Coming to economic estimates,

the Finance Minister Mr.Pranab Mukherjee lowered the GDP projection for the current fiscal to 7.5% from the

grandiose figure of 8.75%,owing to a persistently high inflation and an overall slow economic growth. India's

food price index rose 8 %, at its slowest pace in nearly 4 months, and the fuel price index climbed 15.53 % in

the year. In the previous week, annual food and fuel inflation stood at 9.01 % and 15.49 %, respectively. Coming to the sectoral performances

this week, metals were up 10.5% during the week followed by banking (up 8.0%). In fact, all the sectoral indices ended the week in green as

broad based buying was witnessed across markets. Short covering was also witnessed in select oversold sectors resulting in sharp appreciation.

Oil & Gas stocks were up 6.5% with the power sector recording a gain of 6.2% during the week. However, consumer durable stocks closed the

week on a flattish note.

The Movers & Shakers of the Week:

The Divestment Department is seeking views of various ministries if buy-back of shares could be a feasible option for mopping up resources

from cash rich public sector entities such as Coal India, National Thermal Power Corporation (NTPC), Oil and Natural Gas Corporation

(ONGC), Oil India and National Mineral Development Corporation (NMDC Ltd).With the last date for payment of advance tax drawing closer,

pressure is mounting on the Reserve Bank to cut Cash Reserve Ratio (CRR) by at least 0.25 percentage points to improve liquidity in the sys-

tem. Such a move to lower CRR will result in release of about Rs 15,000 crore into the system. By 2012 we could witness a new line of SUVs

and MUVs being launched by Maruti Suzuki India. This will help the company regain its 50% market share which has taken a beating with the

recent strikes and loss in production that the company had to deal with at their Manesar plant. The Reserve Bank of India (RBI) approved crea-

tion of a separate category of non-banking financial companies for the MFI sector and specified that such institutions need to have a minimum

net owned fund of Rs 5 crore, while for those operating in the North-Eastern states the slab has been kept at Rs 2 crore. The RBI in its second

quarter policy review in October had approved setting up of this category of specialised financial companies which would cater to low-income

groups.

Global Cues:

Equity markets are on track to record their best week in at least two and a half years as hopes of a deal to resolve the eurozone debt crisis take hold.The

FTSE Eurofirst is 1.5% higher, eurozone bond yields are falling, and the euro is flirting with the USD 1.35 mark. Further, risk comes from US employ-

ment data, which could briefly overshadow the eurozone crisis. Some fear that markets are now primed for disappointment when the US releases its non

-farm payrolls report, the most closely watched data point in global financial markets. The S&P 500's Relative Strength index, a closely watched meas-

SURGES %Change DOWNFALLS %Change HINDALCO 15.4 KOUTONS RETAIL -8.4

SBI 14.5 OPTO CIRCUITS -6.8

EDUCOMP SOLUTIONS 14.3 ALSTOM PROJECTS -5.4

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MARKET WATCH

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Disclaimer- This newsletter is just a compilation of news from various sources. Thus, readers are expected to cross-check the facts before

relying upon them. Though much care has been taken to present the facts without error, still if errors creep in, necessary feed

back will be always welcomed. Editors will not be responsible for any undertakings. The newsletter is not meant for sale and

hence, no part of the newsletter should be used without the prior permission of the editorial team.

Sources- The Economics Times, The Hindu Business Line, Times of India, Business Standard, Financial Ex-press, Financial Times,

Business Week, Business World, The Economist, Wall Street Journal, Bloomberg, Reuters, Moneycontrol.com, Vccircle.com,

yahoofinance.com, Business Today, India Today, Investopedia.com, Wikipedia.com, DNA, The Deccan Chronicle, The Hindu,

The Tele-graph.

EDITORIAL TEAM-

AKSHAY AGARWAL, ANKIT SHARMA, AVLEEN KAUR SARNA, DEVANSHI PODDAR, KRITIKA SETHI, POOJA DALAL, SHILPI KALWANI, SWATI VERMA.

BUSINESS JARGONS BY– ANKIT SHARMA

28 NOVEMBER 2011

29 NOVEMBER 2011

30 NOVEMBER 2011

1 DECEMBER 2011

2 DECEMBER 2011

Sensex 16,167.13 16,008.34 16,123.46 16,483.45 16,846.83

Nifty 4,851.30 4,805.10 4,832.05 4,936.85 5,050.15

DJIA 11,523.01 11,555.63 12,045.68 12,020.03 12,019.42

HangSeng 18,037.81 18,256.20 17,989.35 19,002.26 19,040.39

FTSE100 5,312.76 5,337.00 5,505.42 5,489.34 5,552.29

Gold ($/oz.) 1708.30 1722.30 1746.80 1743.00 1745.30

Crude($/bl) 108.75 109.74 110.38 109.41 -

INR v/s USD 52.40 52.26 52.27 51.85 51.50

INR v/s EURO 69.85 69.70 69.85 69.80 69.32

Macaulay Duration - The weighted-average term to maturity of the cash flows from a bond, where the

weights are the present value of the cash flow divided by the price.

THE IBS TIMES

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