ISSUE - 119

6th JULY [WEDNESDAY]

EDITORS DESK

- TANIYA BANERJEE

With the much awaited bailout packages being announced for Greece, the world now awaits if it will be enough to bring about the desired results. Only recently did the rating agency Standards & Poors predicted that the bailout package would provide little relief to Greece, moreover putting Greece in the selective default rating. Get the complete story here in our Cover Story section this week. Just when we felt proud of our sportsmen for having brought accolades to the country with their exemplary performance at the Common Wealth Games, alas! We had to be disappointed again! Mired with yet another controversy of a doping scandal, the Indian sports fraternity faces tough times ahead. Get to know more about the episode and our writers view in our Opinion Forum. With a slew of networking sites already making inroads in to our lives, a new name can be added to the ever growing list Google+. Touted as the next big challenger to Facebook, this social networking platform seems to be fully ready to join this competitive market. Get to know about it in our Brand Track section this week. The King Of Good Times, Mr. Vijay Mallya is our Focus Of The Week. Touted as the Richard Branson of India, this mans name has become almost a synonym for flamboyance and luxury. Get to know more about him here 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. Cheers! Taniya Banerjee Editor.

EDITOR COVER FAST-TRACK

1 OPINION 2 BRAND 3 QUICK BITES

5 FOCUS 6 MARKET 7

8 9

COVER STORY GREECE BAILOUT?!

THE IBS TIMES

- SANYA DHAWAN

Greece is to receive as much as $124 billion from private investors and the IMF. The IMF proposes to give 30% of the total amount and the private investors propose to give the remaining 70% funds to end the euro regions debt crisis and prevent from default. The first bailout worth $160 billion was supported by the IMF and the EU. So where did it all start? The global debt- The international implications of this bond-market problem are serious for the world's stock markets, as well as for the global economy as a whole. It goes back to somewhere in 2002, Around 2002, various investment banks offered complex financial products with which governments could push part of their liabilities into the future, One of them being that the one insider recalled, adding that Mediterranean countries had snapped up such products. These complex deals involved the so called cross currency swaps in which the government debt was fiscal deficit cannot go issued for two currencies- the dollar and the yen- only to be later on converted into the original below 3% of the GDP currencies that is the Euro. and the total government Now to be a part of the EU, there are basic compliance rules subdebt must not exceed jected to hefty fines. One of them being that the fiscal deficit cannot 60%. go below 3% of the GDP and the total government debt must not exceed 60%. Now, the Greece government resorted to heavy manipulation of accounts to show their deficit within the 3% range whereas it actually is somewhere around 12%. It has been largely hit by a debt bomb. Goldman Sachs introduced something called as cross currency swaps into the Greece market where the government bought currency in dollar and yen and entered into a future contract. But the government did need euro to pay its current bills. So the US bankers devised fictional interest rates which gave the government a much higher value than what the Yen or the dollar was actually worth. It created an additional credit of $1 billion for Greece. But every fairy tale has an end. And every bond has a maturity date. These bonds matured at the end of 10-15 years. Goldman Sachs charged a heavy commission and sold these swaps to a bank in Greece. Side by side, the Greece government also managed to fudge up their accounts by omitting transactions like payment to military and payment to hospitals etc. this led to maintain the deficit at a safe 3%. Years of unrestrained spending, cheap lending and failure to implement financial reforms led to the crisis. The credit rating has reached an all time low of classifying them as junk bonds. The PM, Andreas Papandreou has resorted to spend cuts as the country struggles to pay its rising interest rates on bills. He has also included various austerity measures. Germany's Chancellor Angela Merkel and all 16 countries which make up the euro zone have agreed a rescue plan for their ailing neighbor. These issues have hurt the Euro and the Euros reputation is leading up to a fall against the leading currencies. Is the Euro going to fall or revive back? My call is that the worlds new super powers- BRICSA- will take over the PIGS (Portugal, Italy, Greece, and Spain).

Years of unrestrained spending, cheap lending and failure to implement financial reforms led to the crisis.

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FAST-TRACK NEWS

THE IBS TIMES

- VASUNDHARA ARORA

First Female IMF Chief: A historic event

French Finance Minister Christine Lagarde made history by becoming the first female managing director of the International Monetary Fund (IMF), and her appointment received wide praise in Chicago, where she once served as Chairman of one of the world's largest law firm Baker & McKenzie. At the same time, international finance experts agree Lagarde's leadership and financial skills will be immediately tested with the current crisis in Greece. "A busy work agenda awaits," declared the IMF in its internal online magazine, while it stressed one of Lagarde's most pressing items includes the difficult policy choices needed to help global recovery (and) address the euro area crisis.

No oil if payment issue not settled by august: Iran

Iran has threatened to stop crude oil supplies to India from August if New Delhi does not resolve a seven month old payment dispute. Iran is the second largest crude supplier to the country after Saudi Arabia and accounts for about 12% of Indias annual oil needs. State-run National Iranian Oil Company has sent letters to Mangalore Refinery & Petrochemicals and Essar Oil saying it would be forced to halt supplies from next month if the two countries fail to evolve a mechanism for future payments, executives at the refining firms said on condition of anonymity. The two refiners are among the principal buyers of Iranian crude.

Reliances K6-D6 Block Capex not inflated: OilMin

The cost of developing Indias largest oilfield in Reliances D-6 block was actually less than the estimates of global experts such as Mustang International, which calculated a figure of $9.03 billion, oil ministry officials responded to objections raised by the national auditor about raising expenditure to $8.08 billion. The government had appointed Mustang International in Oct07 to validate RILs cost estimates for producing natural gas from D1 and D3 fields in the block.

Vedanta to buy another 10% in Cairn energy

Vedanta Resources Plc will buy another 10% in the Indian arm of Cairn Energy Plc as part of restructuring of the muchdelayed deal that will result in a $600 million reduction in the price tag. The restructuring was necessitated because the Anil Agarwal-led company had agreed that a part of the taxes paid by the 30% shareholder, state-run explorer ONGC, could be deducted from revenues. The tax, known as royalty, is currently paid entirely by ONGC and the government had insisted that its burden had to be reduced before it approved the deal.

Vodafone to pay $500 million more for Essar buyout

Vodafone 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 factored into the original agreement. The transaction will result in the steel to BPO group owned by the Ruias, receiving $4.58 billion in cash for its 33% stake, bringing to an end a lucrative and controversial involvement in the telecom sector.

L&T Finance just cannot wait to go ahead with an IPO

L&T Finance has finally decided to go ahead with the INR 1,750 crore initial public offer (IPO) within the next six weeks despite the prevailing bearish sentiment. Besides the value unlocking opportunity for the shareholders of L&T, it will help L&T Finance open alternate channels of fund raising. The company is also in talks with institutional investors for a preIPO placement for up to INR 400 crore. The issue proceeds would be used for repayment of INR 345 crore loans given by the parent L&T, infusing INR 570 crore equity into L&T Finance and investing INR 535 crore in the capital base of L&T Infrastructure Finance Company.

FCCB investors fear row as maturity nears

Global hedge funds and offshore investors are closely tracking the response of Corporate India, judiciary and financial market regulators as INR 16,000 crore of convertible bonds sold by local top-500 companies came up for redemption by March 2012. Lenders are curious to know whether the courts will uphold creditors rights. Shares of many companies are trading at a fraction of the FCCB conversion price. If prices do not recover, firms can redeem bonds by paying off to the investors and that seems tough given issuers stretched balance sheets. But RBI later this week came to rescue the issuers by allowing repayments through fresh ECBs.

Actuarial Risk The risk that the assumptions that actuaries implement into a model to price a specific insurance policy may turn out wrong or somewhat inaccurate.

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THE IBS TIMES

Asia, Africa to dominate world trade: HSBC study
As the US fades as a global superpower and primary consumer for world trade; new trade and capital market connections are witnessing the emergence of a new Silk Route, led by China, that could see trade between Asia, Middle East, Africa and Latin America eclipse trade between developed nations and emerging nations, or even among developed nations. Till date, emerging nations' growth has been unusually dependent on exports to the developed world, but western nations are simply not growing fast enough to sustain this model.

Global M&A deals hit 1.5 trillion in first half

Global M&A deal volume reached $1.5 trillion in the first half of this year, registering a 22% increase from last year levels, says a report by deal tracking firm Dealogic.The deals were mainly targeted at the Americas, followed by the EMEA and the Asia Pacific region, including India and China. China was the most targeted nation in Asia Pacific with $84.3 billion in the first half of 2011 followed by Australia ($ 71.9 billion), Japan ($ 55.8 billion) and India ($ 32 billion). "India has the second highest cross region inbound M&A volume in Asia Pacific with USD 22.3 billion in the period under review, up a whopping 144 % from last year"Dealogic said.

Foreign retail investors get entry into MFs, cap set at $10 billion

The government has allowed foreign retail investors to cumulatively buy up to $10 billion worth of Indian shares through domestic mutual funds, as it looks for ways to make up for the decline in foreign direct investment. The move to allow this new class of investors, known as Qualified Foreign Investors or QFIs, was first proposed by Finance Minister Pranab Mukherjee while presenting the 2010-11 budget. QFIs will include individuals and bodies such as pension funds.

Commodities to rebound from the worst losing streak since 2008

Commodities will rebound from the worst losing streak since the end of 2008 because shortages of everything from copper to palladium to corn will boost prices even if economic growth slows. "The long-term perspective is that many commodities have supply constraints and that's an environment where you want commodities in your portfolio" said Walter Hellwig, who helps manage $17 billion of assets at BB&T Wealth Management in Birmingham. Bloomberg surveys anticipate silver being the biggest winner among 15 major commodities in the second half.

Fed May Buy $300 billion in treasuries after QE2

The Federal Reserve will remain the biggest buyer of Treasuries, even after the second round of quantitative easing ends this week, as the central bank uses its $2.86 trillion balance sheet to keep interest rates low. While the $600 billion purchase program, known as QE2, winds down, the Fed said June 22 that it will continue to buy Treasuries with proceeds from the maturing debt it currently owns. That could mean purchases of as much as $300 billion of government debt over the next 12 months without adding money to the financial system.

Kvitova beats Sharapova at Wimbledon for 1st major

One might reasonably have expected Petra Kvitova, not Maria Sharapova, to be betrayed by nerves in the Wimbledon final. This was Kvitovas first Grand Slam championship match, while Sharapova already owned three major titles, including one from the All England Club. So, Kvitova tried almost everything once the play began, particularly her big, flat left-handed groundstrokes that pushed Sharapova back on her heels. In a surprisingly lopsided final, Kvitova beat the higher-seeded, yet shakier, Sharapova 6-3, 6-4 Saturday to win Wimbledon for her first Grand Slam trophy.

Rafael Nadal loses to Djokovic in Wimbledon final

Spanish Sportsman & Tennis ace Rafael Nadal was defeated in the Final of Wimbledon 2011 by Serbian & new World Tennis Number 1 ranked player Djokovic 6 - 4, 6 - 1, 1- 6 , 6- 3. Djokovic won his first ever Wimbledon Tournament & defeated Nadal for the 5th straight time in a final. The Serb is having a superb season which kicked off with the Australian Open & has basically won everything (except Roland Garros) ever since.

Erasure Guarantee- A guarantee made by accredited institutions assuring the legitimacy and accuracy of changes made to
bonds and securities.

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OPINION FORUM GLORY OF INDIAN SPORTS TARNISHED BY DOPING SCAM!

THE IBS TIMES

- SHILPA MALHOTRA

What more can one think about Indian democracy today other than scams, political tussles, corruption and the never ending fight for representation? Well, in the recent past I see myself as a critic rather than self-defeating supporter of our systems. The situation of our country is like a house divided against itself which will never stand unless everyone in the system unify and function for the common benefit. The recent scam in sports reflects another failure on part of Indian administration. The accolades brought by the Indian athletes in the Common Wealth Games are stigmatized by the biggest dope scandal that was unveiled by the Indian Olympics Association (IOA). Six track and field athletes, including two Commonwealth and Asian Games gold medalists, flunked dope tests for anabolic steroids in just two days. Mandeep Kaur and Sini Jose, both members of the Indian women's 4x400m relay who won gold in the Commonwealth and Asian Games last year, quarter-milers Jauna Murmu and Tiana Mary Thomas, long jumper Hari Krishnan and shot putter Sonia were caught for doping. Mandeep and Jauna flunked tests conducted by International Association of Athletics Federations at NIS Patiala last month while Sini, Mary Thomas, Hari Krishnan and Sonia returned positive tests by National Anti Doping Agency (NADA) during June 11-14. All the six athletes have been provisionally suspended till their disciplinary hearings are completed and quantum of punishments decided while the IOA has demanded a comprehensive inquiry into the alleged nexus between the medicine (drug) suppliers, coaches, doctors, other officials along with involved sportspersons.

Legend Milkha Singh slammed the coaches and the federation for the doping scandal and said the tainted athletes should be stripped off the medals they had won.

The scandal has brought shame to the nation and a myopic view over this will not lead our nation anywhere. A thorough inquiry should be instituted to uncover the layers of doping controversy. Legend Milkha Singh slammed the coaches and the federation for the doping scandal and said the tainted athletes should be stripped off the medals they had won. I would say why the players would be stripped off if they are being influenced by the officials and the administration in a negative way. There are serious loopholes that require immediate attention. Firstly, how can a player flunk the dope test at NADA or even if not flunked but tested positive is not brought to books. The Sports Authority of India in charge of the training I would say why the camps is guilty of all the dope mess created in the country players would be stripped Mandeep Kaur and Jauna Murmu are not criminals; they are victims of a system. They are well off if they are being in- aware of doping menace in sports. They have knowingly and willfully followed the training fluenced by the officials methodology advocated by the coaches and recovery experts as well the authorities, who run and the administration in sports in the country. If these athletes are culpable of doping offences, so are their coaches, support staff and sports administrators. No matter how glorious front we may pose to the world; we a negative way. are still at the helm of system ridden with controversies and scams that are eating away the entire economy. Swap Execution Facility- A trading system or platform that enables many participants to execute or trade swaps. A swap execution facility would allow for greater transparency and would be a significant shift in the way derivative trading is made. The Dodd-Frank Act lays the foundation for this change of derivative execution.

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BRAND TRACK GOOGLE+, SOCIAL MEDIA WAVE HITTING US SOON!

THE IBS TIMES

-SANDEEP ASRANI

Analysts say it is in response to the competition that Google faces from Facebook.

A lazy Sunday afternoon and I happened to come across this yet another new buzz in the social world. Google plans to launch its new social networking platform Google + that promises to take social networking to a whole new level. Analysts say it is in response to the competition that Google faces from Facebook. But my question is, isnt that a little too late? Another question is that how is Facebook which is a platform that is completely focused to social networking a threat or is competition to the worlds largest search engine as we know it i.e. Google. Well apparently it is! Traditional advertising groups jostled for awards at a recent annual industry gathering in Cannes, the year's biggest star was a newcomer to the beaches: the social network Facebook. The company has gone from nowhere a few years ago to become the biggest single seller of online display advertising in the United States with more than $2 billion in revenues this year, according to research firm eMarketer. It has achieved this by bringing in a new sophisticated trend of tracking the likes and dislikes through the data mining process which makes sense to its advertisers.

So now it is clear why the search engine giant feels that Facebook is its competition. To counter this change in trend Google on the 28th of June launched its website Google+ which created quite a buzz, but all of a sudden on July 1st within less than 48 hours from its launch it stops the rollout of its website on hearing the news that Facebook is planning to come out with something awesome. But for the ones who did get a chance to land themselves on the Google + page within the initial 48 hours have mixed feelings about the new platform. Is this done by Google in defense to the Facebook announcement or is it just a strategy to create an artificial buzz among the internet users. Google + focuses on the most basic of human needs which is the need to connect with others. With a smile, a laugh, a whisper or a cheer, we connect with others every single day. Today, the connections between people increasingly happen online. Yet the subtlety and substance of real-world interactions are lost in the rigidness of our online tools. Google wants to make it better by including you, your relationships, and your interests. It plans to achieve this by bringing its new features which are obviously different from what other social sites have to offer and Facebook in particular. With its features such as + Circles It plans to achieve this by which enables the users to make custom circles of the existing network by making sure that only information relevant to them is provided. Whether it is inside a pub or on a front bringing its new features porch, human beings have always enjoyed hanging out, hence Google has + Hangouts which enables virtual on screen hangouts and making the whole experience fact-to-face-towhich are obviously difface. It combines the casual meet-up with live multi-person video, making the on-screen gatherings fun, fluid and serendipitous. + Sparks delivers a feed of highly contagious ferent from what other content from across the internet on any topic you want, in over 40 languages. Simply add social sites have to offer your interests, and you will always have something to watch, read and share with just the and Facebook in particu- right circle of friends. There is much more from Live Video Streaming to + apps for the mobile phone users, Google plans to leverage its web expertise and ensure it comes out lar. with a bang. And may be as it is said, It is better late than never. So for all the social animals out there, be on the watch out and make sure that the whole social wave of Google hits you and you do not miss out on it.

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QUICK BITES- NEWS THAT CANT BE MISSED !

Big Shots

THE IBS TIMES

- RAJAT MONGA

French Finance Minister Christine Lagarde elected the managing director of the IMF Harish Manwani named the new Chief Operating Officer of Unilever Plc, the world's second largest consumer goods company YC Deveshwar re-appointed as chairman of tobacco-to-hotel conglomerate ITC

Company Talks
Tata Motors sales down 0.70% in June Volkswagen sales up 166% in June at 5,397 units ICICI Bank plans to open 1,500 branches in 4 years M&A deals involving Indian companies halve to $ 7.7 billion in Jun qtr CVC bans Corporation Bank from awarding tenders Cafe Coffee Day to expand all formats, launch a loyalty card for customers Gitanjali Group launches a new brand identity and logo Britannia to invest over Rs.200 crore in new plants Apollo to invest Rs 2,250 crore in Welspun Group Carlyle Group invests $25 million in India's Visen Industries Lanco Infratech faces threat of export licence review in Australia Bank of Mah and SBI Cards launch credit card Amul mulls US launch via pact with local units Emami eyes healthcare acquisitions, to invest Rs 400 crores

Economy Speaks
Fitch scales down 2011 GDP growth to 7.7 pc FDI in retail likely to be approved within weeks Infra sectors growth slows down to 5.3 pc in May Government likely to discuss sugar de-control next week Reserve Bank of India allows issue of shares under FDI scheme India's growth to overtake China: Kaushik Basu Foreign retail investors get entry into MFs, capital set at $10 billion Manufacturing set to get tax boost in new policy India's May exports up 56.9 pc to $25.9 billion Sharad Yadav for ban on Futures trading of agri-products Delay in monsoon may spell doom for farmers

The Captains of the Ships

Chairman of Hotel Leela Venture: Capt. C.P.K. Nair Chief Marketing Officer, Verizon Wireless Ms.Marni Walden Global Chairman & CEO, P&G- Mr. Robert McDonald

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FOCUS OF THE WEEK THE KING OF GOOD TIMES!!!

THE IBS TIMES

- ADHIRAJ SOOD

I was standing at Prince Panwala in NFC Market; New Delhi when my friend asked me, could I ever stop being a philanderer? Could I quit smoking? And I said YES. He than asked me if I could quit drinking beer and my immediate reaction was no, never. He is a man who changed the face of the liquor industry in the world including the face of beer industry across fifty nations. It was a privilege for my friend when he received his MBA degree at IMT Ghaziabad from him. He is called the Richard Branson of India. My focus of the week is the chairman of UB Group Ltd, Dr. Vijay Mallya. At a tender age of 27, Mallyas father passed away leaving him with an empire with annual revenues of $100 million. But, that did not hamper his growth plans; he transformed his fathers empire into a multi million dollar business with annual sales more than US$ 4 billion. Presently his group consists of over sixty multi national companies with businesses encompassing life sciences, agriculture, chemicals, information technology, aviation and leisure. Mallya is a man known across the globe for his flamboyant lifestyle for me he is a man with a vision for acquisitions. He acquired the global Berger Paints Group in 1988; in 2005 he took over Millennium Breweries Ltd which owned the two premium beer brands named Sandpiper and Zingaro. In 2007 he became the liquor baron of the world by acquiring Scotch whisky maker Whyte & Mackay for Rs 6000 crore. He is also the owner of Indias best domestic airlines, Kingfisher. At present his airline connects 32 cities and is also the owner of Air Deccan, a low cost airline (the name was later changed to Kingfisher Red). Mallya is a keen sportsman and is an ardent aviator and yachtsman of distinction. He participates in various sporting events and supports various sporting activities worldwide. His passion for sports and his dream to see India reach new height in all form of sports is the reason for his buying of Spyker F1, Formula One team in 2007 to give India its first F1 team and it is only his hard work that India would hold its first Grand Prix in Greater Noida this year. He also owns Queens Park Rangers FC and intends to buy A S Bari, a football club which plays in the Italian Serie A. He is also a proud owner of an IPL team called Royal Challengers, Bangalore. Mallya loves his country. He has made some staggering auction purchases from his own earned wealth for the country. His winning bid of 175,000 for the sword of Tipu Sultan at an auction in London and a successful bid for the belongings of Mahatma Gandhi at US$1.8 million, in a New York auction (that initially caused an uproar in India and its government tried and failed to prevent it from going under the hammer) make him countrys favorite businessman. Mallya is a man who sets example for others. He believes in working hard and partying harder. Known for his crazy parties, Mallya does not think twice before flaunting his wealth. Mallya owns yachts, private jets, a customized Boeing 727, around 250 vintage cars and a stud farm with 200 horses. He also owns Kalizma, a 165 feet yacht; which was once owned by actor Richard Burton. Mallya truly is the KING OF GOOD TIMES.

He participates in various sporting events and supports various sporting activities worldwide.

Mallya is a man who sets example for others. He believes in working hard and partying harder. Known for his crazy parties, Mallya does not think twice before flaunting his wealth.

Fairway Bond- A type of bond that accrues interest if the embedded index or interest-rate option underlying the bond remains within a specified range. The fairway in golf is like the index or interest rate range. The outlook is positive if the ball lands on the fairway; if a ball lands in the rough, the outlook is negative.

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THE IBS TIMES

MARKET WATCH
- SAINYAM KUMAR A one and a half month low inflation was the trigger for the Indian markets to soar 3% during the week ending July 1st, 2011. This coupled with the fact that the FIIs invested more than 3 times during the week than they have invested in the entire 6 months starting January 2011 moved the markets closer to the psychological level of 19k for the first four days but Friday saw a dip of about 85 points. The movement of all the indices brought forward a near perfect picture for the bulls where all of them (except for Oil & Gas) made significant positive movements. FMCG gained on the back of an expected strong monsoon which will lead to a fall in the input prices. What came as a surprise was that inspite of sharp cuts in the production of cars due to low level of demand in the market BSEAuto managed a healthy gain of 2.6%. The Movers & Shakers of the Week

SURGES
PUNJ LLYOD PANTALOON
JUBILIANT LIFESCIENCES

%Change
22.2 20.6 20.4

DOWNFALLS
GTL LTD

%Change
-13.8 -8.9 -4.7

TITAN INDUSTRIES STERLING BIOTECH

One of the major news that hit the market was that the power generating companies are facing an escalated cost due to shortage of coal. Since the industry is regulated and the tariffs can not be changed by the companies, the increased pressure might force them to default on the loans taken. The index heavyweight, RIL, faced major sell-off as another dimension got attached to the on going controversy of KG-D6 block. The recent development says that the company was favored by the oil ministry during the development of the block. This news was countered by a positive for the sector which said that ONGC FPO has got the approval from the companys board because of which the scrip rose 6% on Friday. The combined effect of the news led to a minor change in BSE-Oil & Gas.

Global Cues: The week saw the reversal of the trends as the global markets were led by Europe and US on the back of easing of the Greek debt crisis and an increase in the manufacturing output in US. The Asian markets were led by India followed by Singapore (2.4%). Even Japan registered a positive movement of 2% which has not been seen for a long time now.

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THE IBS TIMES

MARKET WATCH
Sensex Nifty DJIA HangSeng FTSE100 Gold ($/oz.) Crude($/bl) INR v/s USD INR v/s EURO
* FIGURES NOT AVAILABLE

27 JUNE 2011 18,412.41 5,526.60 12,043.56 22,041.77 5,722.34 1,496.90 101.55 46.1250 65.4698

28 JUNE 2011 18,492.45 5,545.30 12,188.69 22,061.78 5,766.88 1,502.10 103.59 46.7675 65.9642

29 JUNE 2011 18,693.86 5,600.45 12,261.42 22,061.18 5,855.95 1,511.80 106.19 45.5826 65.2382

30 JUNE 2011 18,845.87 5,647.40 12,414.34 22,398.10 5,945.71 1,500.30 107.50 45.4172 65.3594

1 JULY 2011 18,762.80 5,627.20 12,582.77 * 5,989.76 1,486.50 45.1724 65.4467

Cat Spread - A type of derivative traded on the Chicago Board of Trade (CBOT) that takes the form of an option on a catastrophe futures
contract. In other words, a cat spread is basically a call option spread bought by insurance companies on catastrophe futures contracts. Purchasing a cat spread involves buying or selling a call option whose underlying asset is a catastrophe contract, while simultaneously selling or buying the same number of call options at a higher strike price. A cat spread is used by insurance companies to hedge risk coverage of catastrophic events.

BUSINESS JARGONS BY NITIKA THAKUR

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SourcesThe 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 TEAMADHIRAJ SOOD, NITIKA THAKUR, RAJAT MONGA, SAINYAM KUMAR, SANDEEP ASRANI, SANYA DHAWAN, SHILPA MALHOTRA, TANIYA BANERJEE, VASUNDHARA ARORA.

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