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Niveshak April 2009

Niveshak April 2009

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Published by sarvshwet
Niveshak is the monthly finance magazine of IIM Shillong, visit http://iims-niveshak.com/
Niveshak is the monthly finance magazine of IIM Shillong, visit http://iims-niveshak.com/

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Published by: sarvshwet on Aug 26, 2009
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02/01/2013

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THE INVESTOR
VOLUME 2 ISSUE 3
APRIL 2009

Niveshak
Volume II
ISSUE 3
April 2009

Editor
Biswadeep Parida

Team Niveshak
Amit Choudhary
Nilesh Bhaiya
Sareet Mishra
Sarvesh Chowdhury
Sujal Kumar
Tripurari Prasad

All Images and artwork
are copyright of IIM
Shillong Finance Club

\u00a9Finance Club
Indian Institute
of Management, Shillong

I
ma y ha ve al wa ys be en bl am ed of be in g pe ss im is ti c fo r sh ar in g al l ba d fi na nc ia l
ne ws an d ou tl oo k wi th yo u th ro ug h Ni ve sh ak si nc e th e co ll ap se of Wa ll St re et .

To ge th er we ha ve tr ie d to fi nd th e bu ll am on g th e ru in s of th e Su b Pr im e. Bu t we we re ch as ed by be ar s in al l th e fi na nc ia l ma rk et s fr om Ko sp i to Na sd aq . We we re al so ov er wh el me d by ne ga ti ve co rp or at e fi na nc ia l re su lt s an d un he al th y Ma cr oe co no mi c re po rt s in al l th e co un tr ie s ac ro ss co nt in en ts .

Bu t th is ti me we ha ve go t so me go od ne ws fo r a ch an ge . Ma rk et s ar e re co ve ri ng . Ye s, the bull is back, picking momentum and means serious business this time. All the major sh ar e ma rk et s ha ve sh ow n gr ee n fi gu re s on mo st oc ca si on s si nc e 9t h of Ma rc h 20 09 . Af te r wr it in g of f bi ll io ns of do ll ar s of to xi c de bt to US Tr ea su ry in th e pa st qu ar te rs , so me of th e ma jo r US fi na nc ia l in st it ut io ns ar e ba ck in pr of it s th is qu ar te r.

India has gone a step further in giving positive data. When Kospi, Dow Jones In du st ri al Av er ag e, S& P 50 0, Na sd aq co mp os it e in de x , Eu ro ne xt et c ha ve gr ow n by 15 to 25 %, ou r ve ry ow n Bo mb ay St oc k Ex ch an ge ha s sh ot up by 35 % si nc e 9t h of Ma rc h 20 09 . Most of India Inc\u2019s financial results are out and all seem to have shown profits whereas so me of th ei r co un te rp ar ts in th e we st ha ve st ru gg le d. Th is ma y be th e fi rs t si gn s of de co u- pl in g of th e In di an Ec on om y fr om th e We st bu t we ma y be fa r aw ay fr om th at .

Th is ma y be th e fi rs t si gn s of re co ve ry bu t it is to o ea rl y to pr ed ic t. Th e de va st a- ti on we ha ve se en ti ll no w ma y be ju st th e ti p of th e Su b Pr im e ic eb er g. We ar e st il l no t cl ea r. We sh al l wa it fo r mo re go od ne ws an d po si ti ve da ta fo r a fe w mo re qu ar te rs to ce l- eb ra te go od pl ac em en t se as on s ne xt Fe br ua ry .

In th e pr es en t is su e we sh al l tr y to fo cu s on an ot he r In st it ut io n wh ic h ha s be en or at le as t se em ed vi rt ua ll y un sca th ed fr om th e fi na nc ia l cr is is \u2013 Mi cr of in an ce . We wi ll tr y to study its growth over the years and evaluate its future prospects in rural India. As we be gi n to as su me th e de pa rt ur e of th e cr is is , we ta ke a lo ok at th e im pa ct th e gl ob al sl ow do wn ha d on In di an Pr iv at e Eq ui ty pl ay er s an d it s im pl ic at io ns on In di a In c. We sh al l tr y to understand the current recession under Minksy\u2019s Hypothesis. This hypothesis states that bu bb le s an d sl ow do wn s ar e ju st a pa rt of th e ec on om ic boo m an d bu st cy cl e.

In th e cu rr en t cr is is , US an d Eu ro pe an cr is is we re th e wo rs t su ff er er s. BR IC ec on o- mi es we re al so de va st at ed to sa me pr op or ti on s. Th is cr is is ma y se e th es e po we rf ul ec on om ie s lo os e th e re ig ns of ec on om ic gr ow th to th e N- 11 co un tr ie s. Ho w tr ue ar e th es e as su mp ti on s? We ma y ha ve an an sw er . We wi ll al so tr y to su bs ta nt ia te th is st ud y wi th an ar ti cl e on th e In ve st me nt op po rt un it ie s in Ni ge ri a, on e of th es e N- 11 co un tr ie s. Th is is th e ac co un t of on e of ou r fr ie nd s wh o un de rt oo k hi s wi nt er in te rn sh ip in La go s, Ni ge ri a.

World Leaders met at the London G-20 conference and took a few steps to see the wo rl d ou t of cr is is wh il e th e In te rn at io na l Mo ne ta ry Fu nd de ci de d to fl oa t it re se rv e cu r- re nc y \u2013 Sp ec ia l Dr aw in g Ri gh ts wo rt h $2 50 bn . Th ou gh th e mo ve is ex pe ct ed to he lp em er g- ing economies with their Liquidity problems, some economists also feel that the allocation wo ul d ad d to th e In fl at io n- re la te d wo es . We sh al l al so tr y to an al ys e th es e ne ws it em s an d their implications.

I al so ha ve so me go od ne ws fr om Te am Ni ve sh ak . In a bi d to co nn ec t wi th ou r st ak e- holders, we have launched a blog for Niveshak. This blog will carry latest news from the wo rl d of fi na nc e al on g wi th al l th e ar ch iv e fi le s of Ni ve sh ak . Yo u ar e co rd ia ll y in vi te d to di scu ss on th e la te st ne ws an d al so pr ov id e yo u su gg es ti on s an d re vi ew s to ma ke yo ur Ni ve - sh ak be tt er .

Happy Blogging.
-biswadeep Parida
(Editor- Niveshak)
Disclaimer: The views presented are the opinion/work of the individual
author and The Finance Club of IIM Shillong bears no responsibility whatsover.
From Editor's Des
K
\u00a9The Finance Club, Indian Institute of Management, Shillong
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Was Suprime Predictable(17)
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Fixed Income Markets in India(23)Opinion
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