1st Aug.

2008
Volume 2, Issue 9

Wealth Incorporation - A CCIM Finance Club Initiative Presents

CHAANAKYA
..Tracking the Economy

Issue Attractions
National Headlines International Headline Corporate Interview Crossword/Quiz
Company Review

1 1 2 3 4

I am no longer an advocate of elaborate techniques of security analysis in order to find superior value opportunities. - Benjamin Graham, American Stock Market Investor

National Headlines

R.Com fails to break MTN jinx, ends talks. The reason given is the legal hurdles of MTN. Kingfisher Airlines runs up to Rs. 4000 Crores debt, it also plans to sell two A340s to other carriers and defer delivery of 29 aircrafts. Hindustan Unilever is one of the companies that have beaten the inflation and slowdown by a margin as its Q2 profits increase by 13% due to higher consumer spending. LIC walks out of the credit card venture with GE. BSNL plans to invest Rs. 5000 Cr. in Wi-Max Technology project. N-deal looms over Indias gas plan, projects worth over $20 billion are being reconsidered. Lafarge French cement maker to pump in $1 billion for pan India presence. GSPC (Gujarat state petroleum corporation) to pump in Rs. 4000 Crs. for KG basin oil & gas.

Investors Check/Quiz/Buzz Words

Faculty Editorial

Inflation11.89 % , IIP 3.8%

15 days Movements
14900 14400
Sensex

Sensex

13900 13400 12900 12400 14 15 16 17 18 22 23 24 25 28 29 31

43.4 43.2 43
Seri

International Headlines

Rs/$

42.8 42.6 42.4 42.2 42 14 15 16 17 18 22 23 24 25 26 27 28 29 30

Teva Pharmaceutical Company to buy rival Barr Inc for $7.46 Billion. Ford reports $8.7 billion loss in Q2. InBev to buy Anheuser for $52 billion. Swiss drug maker Roche holding company has offered to buy the remaining outstanding shares of Genentech for $43.7 billion. Oil prices which had touched $146/barrel have now eased down to near about $123/barrel. IMF Says End to U.S. Housing Slump `Not Visible,' Credit Crisis May Worsen. Record $490 Billion U.S. Budget Gap Facing Next President, Official Says. U.K. House Prices Fell 4.4% in July, the Biggest Drop since at Least 2001.

Series2

1400 1380 1360 1340 1320 1300 1280 1260 1240 1220 1200

Gold

14 15 16 17 18 19 21 22 23 24 25 26 28 29 30

6200 6000 5800

Oil

5600 5400 Series1 5200 5000 14 15 16 17 18 19 21 22 23 24 25 26 28 29 30

I rarely think the market is right. I believe non dividend stocks arent much more than baseball cards. They are worth what you can convince someone to pay for it. - Mark Cuban, American Entrepreneur

Interview with Mr. Ramana

Position Held : Associate Researcher, Deloitte Consulting, Hyderabad Q1. Sir, please tell us about your responsibilities as an Associate Researcher with Deloitte?

Page 2

Ans. My main responsibility includes number crunching and its derivatories, this is almost like Data Mining. My work involves data interpretations and finding out patterns that have been lying undiscovered and hence helping a module of the project in finding new ways of tracking down uses with data that the client supplies to us. Q2. What does a consulting firm do and what it has to offer to an entry level MBA student? Ans. Consulting is all about increasing the client/customer experience through better research and better understanding of the raw data generated through a business activity. Consulting is a vast subject to be dealt with, my work basically deals with analysis and interpretations, entwining them both to create that raw data into a purposeful and meaningful end result that will help the client in understanding his own business and that into which he wants to enter into or diversify. As far as an entry level MBAs job profile is concerned, it could be anything ranging from data analysis to preparing the whole feasibility of a certain project, there is no such thing that does not count in research that goes into Consulting firms job, so one has to know about everything that a project revolves around, it could be setting up a new ship yard, a new airport for a logistics company or even a new detergent and its possible success and failure. Its quite challenging and requires good knowledge of current affairs and Government policies, all in all, its an all rounder job. Q3: What kind of skills are important for students who want to land up into a consulting firm? Ans. Well, analytical skills are the most important, when it comes to looking for a job in a consulting firm, the other regular ones are soft skills, decision making and strategy optimizing, Strategy is something which should be considered seriously, a report or a job can be dependent on a single strategy and the same data can yield a different result under a different strategy implementation.

Q4: Thank You Sir, any final words for the finance group of CCIM? Ans. Firstly Good luck, not only should you keep your eyes open, but also ears and a constant questioning thought process. I strongly advocate the process of purposeful learning if you know what I mean. Thank You.

A cardinal principle of Total Quality escapes too many managers: you cannot continuously improve interdependent systems and processes until you progressively perfect interdependent, interpersonal relationships. - Stephen Covey, American Author and Management Consultant.

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CROSSWORD
1 7

Did you Know? The first Wall Street Journal was published July 8, 1889. It sold for 2 cents, a yearly subscription was $5.00) and it was published 6 days a week at 3:15 pm. The English name letter of credit is derived from the French word accreditif, a power to do something, which in turn is derivative of the Latin word accreditivus, meaning trust. Of 17 Indian Budgets since 1991-92, on 10 occasions the stock markets fell in the one-month following the Budget.
Stock Ratnas Indian Hotels BSE 532174,NSE ICICIBANK CMP- Rs. 663.45 TARGET PRICE: RS.1250 Biocon BSE 532523,NSE BIOCON CMP- Rs. 375.85 TARGET PRICE: RS.450 Tata Chemicals BSE-500770,NSE TATACHEM CMP- Rs. 310.45 TARGET PRICE: 490
(CMP Current Market Price)

8 9

10

Clues Across: 1. This company has the highest market capitalization on Sensex. 2. This method of trading involves selling of securities without owning them. 3. IDEA cellular recently purchased a majority stake in this company. 4. This account is required to receive the delivery of securities. 5. This Mutual Fund company recently withdrew its IPO from the markets. Down: 1. The rate at which RBI lends securities & money to other banks 6. This new index forms second 50 most liquid securities after Nifty 50. 7. This private equity firm recently bought a majority stake in Nilgiris. 8. Capital markets investment product offered by insurance companies. 9. Insurance Business JV partner of Future group. 10. The practice of taking advantage of a price differential between two or more markets.

Quiz:
1. A group of mortgages held in trust as collateral for the issuance of a mortgagebacked security. Some mortgage-backed securities issued by Fannie Mae, Freddie Mac and Ginnie Mae are known as "pools" themselves. 2. A slang term primarily referring to the American Stock Exchange (AMEX). It can also describe any exchange that is not the New York Stock Exchange (NYSE). Contd. On Page No. 5

If you work just for money, you'll never make it, but if you love what you're doing and you always put the customer first, success will be yours. - American, McDonald Entrepreneur

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Company Review : Amba Research

Overview:

By : Sukrutha

Amba Research is a leading provider of investment research support services to the global capital markets industry. They work with clients in all the worlds major financial centers. Clients use Amba Research to leverage their own investment research process, enabling them to generate and screen more investment ideas in a high-quality, customized, cost effective and flexible manner. What They Do: Amba Research specializes exclusively in providing investment research support. This focus allows them to provide a broad and in-depth range of research services. They support clients in major areas of research, including equity, fixed income and credit, and quantitative research. The company is committed to quality, innovation and integrity. Careers at Amba Research: Amba Research provides its global clients with supreme quality off-shore investment research support by hiring only motivated individuals with a strong desire to build a career in investment research. Amba practices and encourages a culture of continuous learning and professional development. On joining, all candidates attend a proprietary investment research training program and other training programs. Besides that, regular in-house continuous education programs encourage learning through knowledge sharing, and higher education policy provides financial assistance and encouragement to pursue professional courses such as the CFA program or similar globally recognized programs. Job Opportunities: Current vacancies are for the positions of Analysts in Investment Research and Quantitative Research. Desired qualifications for these posts include: 1. Minimum Requirement: Bachelors degree or an equivalent professional qualification in Business, Accounting, Finance or Economics. 2. Strong financial statement analysis skills 3. Fluency in written and spoken English, including report writing skills 4. Strong Excel modeling skills Preference will be for candidates with: Strong skills in stock valuation methods. MBA holders, candidates working towards the CFA charter, or holders of other finance-related postgraduate qualifications
The key is not to prioritize what's on your schedule, but to schedule your priorities. - Stephen Covey, American Author and Management Consultant.

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INVESTORS CHECK
Well Managed Investing Risks ... Bring Rewards! Contd. from last issue... Most individuals measure risk as their chance of loss, but instead measure risk by the variability of returns! In other words, because stocks have higher average returns, you can suffer some losses and still end up vastly ahead over the long run. There's only one situation in which adding stocks to your portfolio doesn't make sense -- when you don't have time to let the market work for you. In any given year, you have about a 1 in 4 chance of taking a loss in the stock market. If one year or less is as long as you plan to invest, stocks boil down to a gamble. But if your time horizon is five years or more, there's a very good chance that putting at least a portion of your money in stocks will boost the performance of your investments! One question that has to be resolved is the kind of investment risk youre comfortable taking. The choice ranges from conservative to aggressive, with a broad middle ground between the extremes. Conservative Investing: Means putting money where there's little risk to principal. Moderate Investing: Means taking risks by putting money into growth stocks and bonds. Aggressive or Speculative Investing: Means taking a possible risk of losing part of your investment in exchange for the possibility of making a larger profit. The ideal risk equalizer is that you should work for balance among the various risk categories. One of your concerns should also be that if you invest too conservatively, you won't have enough money down the road to afford your goals even if you've been diligent in following your plan. Another concern is that by taking too many chances you risk losing too much of your capital.

Quiz:

Contd...

3. A slang term for the uncontested market space for an unknown industry or innovation. Coined by professors W. Chan Kim and Renee Mauborgne in their book "Blue Ocean Strategy: How to Create Uncontested Market Space and the Make Competition Irrelevant". 4. A clause in a property insurance contract that, under certain circumstances, permits the property owner to abandon lost or damaged property and still claim a full settlement amount. If the insured party's property cannot be recovered, or the cost to recover or repair it is more than its total value, it can be abandoned and the insured party is entitled to a full settlement amount.

Buzz Word

Book Quotes:

Rolled up coupons - Interest coupons on securities, which are not paid out, but added to the capital value of the security. Shark repellant - An action taken by a company to make itself less attractive to takeover bidders. Flight to quality - A tendency of investors to buy safe bluechip securities when the economic outlook is uncertain. Escalator clause - A clause in a contract allowing for regular price increases because of increased costs or regular wage increases because of increasing cost of living.

"A real decision is measured by the fact that you've taken a new action. If there's no action, you haven't truly decided." - Tony Robbins "The ability to discipline yourself to delay gratification in the short term in order to enjoy greater rewards in the long term is the indispensable prerequisite for success." - Maxwell Maltz

Ask five economists and you'll get five different answers - six if one went to Harvard. -Edgar R. Fiedler, American Business Economist

Page 6

Cost saving strategies available to SMEs

By : Prof. Anirban Ghatak

In a scenario where mega-billion dollars in acquisitions, whether Tata - Corus, or Hindalco - Novelis stole the limelight, it is not easy rising funds for small and medium enterprises to the fore. In the other words we can put it Can we think of some strategies by which SMEs can reduce their cost? Here is a list of some of the cost-cutting measures one can put in place. 1. Performance Review: Introduction of a smart system in the business (specific, measurable, agreed, realistic, and time-bound) and match specific results to identify critical success factors in business planed on spending. 2. Review building: Review the roles and responsibilities and personal goals. Everyone in business operating in their ability? Members are fully accountable for performance? 3. Review of outsourcing: Consideration of outsourcing, and the shift from fixed costs to variable costs to reduce non-core activities or to fill vacancies. 4. Review of space: Premises could prove extremely costly for business. So proper planning is required for the same. 5. Financial review: Discounting of bill provides an immediate counting of the cash injection against the value of the billing and ongoing financial support of business as they grow. Leasing gives an immediate use of the equipment and pay for itself while it was used - without tying up capital in depreciating assets 6. Review suppliers: Review the relationships with suppliers to obtain preferential discounts for volume of trade, or the loyalty of prompt payment. Always try to work together to save money. 7. Review process: Time is money. Analysis of operations, and to eliminate bottle necks - and improve the flow of information to speed up the time in order to entice the customer. 8. Review of clients: Get rid of customers that do not contribute sufficiently to the bottom line. Make it profitable or abandon to them if they crate distraction. 9. Procurement Review: The use of zero-based budgeting to break the spending habits - all is justified in terms of cost and in line with the business plan at the beginning of each year. The acquisition of a central purchasing border. Discretionary spending should be reduced. 10. IT review: Old, inefficient systems costing you money should be replaced as the cost incurred are much more compare to the benefits derived from them. These are some of the cost saving strategies available to SMEs, even these are not the exclusive strategies available. Research should be done in the same areas so that the new strategies can be developed and can be adopted.

Crossword Answers
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E P O R A T E
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C T I
3 8

U
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10

L S P I P
4

R B I M A T R A I N G E M F

Quiz Answers 1. Mortgage Pool 2. Little Board 3. Blue Ocean 4. Abandonment Clause

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Contributions made by :
Faculty Article Editing/Compiling News Did you know, Quotes, Company Review Stock Ratnas, Quiz Graphs Investors Check Corporate Interview Book Quotes, Buzz Word Crossword Coordination Prof. Anirban Ghatak Arihant Patawari Fouzia Taranum B. Anoop Rajan & Ashish Poddar Sukrutha Laavanya Gnana Devi Diwakar Grover Vamsi Kanagovi Nikhil Mehta Vineeth Kothari Manish Sinha

Please mail your valuable feedbacks, reviews at chaanakya.ccim@gmail.com