CHAPTER-1

INTRODUCTION TO FINANCIAL MARKET

A financial market is a market in which people trade financial securities, commodities, and
other fungible items of value at low transaction costs and at prices that reflect supply and
demand. Securities include stocks and bonds, and commodities include precious metals or
agricultural products.

In economics, typically, the term market means the aggregate of possible buyers and sellers
of a certain good or service and the transactions between them.

The term "market" is sometimes used for what are more strictly exchanges, organizations that
facilitate the trade in financial securities, e.g., a stock exchange or commodity exchange. This
may be a physical location (like the NYSE, BSE, LSE, JSE) or an electronic system
(like NASDAQ). Much trading of stocks takes place on an exchange; still, corporate
actions (merger, spinoff) are outside an exchange, while any two companies or people, for
whatever reason, may agree to sell stock from the one to the other without using an exchange.

Trading of currencies and bonds is largely on a bilateral basis, although some bonds trade on
a stock exchange, and people are building electronic systems for these as well, similar to
stock exchanges.

Types of financial markets

Within the financial sector, the term "financial markets" is often used to refer just to the
markets that are used to raise finance: for long term finance, the Capital markets; for short
term finance, the Money markets. Another common use of the term is as a catchall for all the
markets in the financial sector, as per examples in the breakdown below.

Capital markets which to consist of:

Stock markets, which provide financing through the issuance of shares or common
stock, and enable the subsequent trading thereof.
Bond markets, which provide financing through the issuance of bonds, and enable the
subsequent trading thereof.
Commodity markets, which facilitate the trading of commodities.
Money markets, which provide short term debt financing and investment.

1
 Derivatives markets, which provide instruments for the management of financial risk.[1]
Futures markets, which provide standardized forward contracts for trading products at
some future date; see also forward market.
Foreign exchange markets, which facilitate the trading of foreign exchange.
Spot market
Interbanks market

The capital markets may also be divided into primary markets and secondary markets. Newly
formed (issued) securities are bought or sold in primary markets, such as during initial public
offerings. Secondary markets allow investors to buy and sell existing securities. The
transactions in primary markets exist between issuers and investors, while secondary market
transactions exist among investors.

Liquidity is a crucial aspect of securities that are traded in secondary markets. Liquidity
refers to the ease with which a security can be sold without a loss of value. Securities with an
active secondary market mean that there are many buyers and sellers at a given point in time.
Investors benefit from liquid securities because they can sell their assets whenever they want;
an illiquid security may force the seller to get rid of their asset at a large discount.

Raising capital

Financial markets attract funds from investors and channel them to corporationsthey thus
allow corporations to finance their operations and achieve growth. Money markets allow
firms to borrow funds on a short term basis, while capital markets allow corporations to gain
long-term funding to support expansion (known as maturity transformation).

Without financial markets, borrowers would have difficulty finding lenders themselves.
Intermediaries such as banks, Investment Banks, and Boutique Investment Banks can help in
this process. Banks take deposits from those who have money to save. They can then lend
money from this pool of deposited money to those who seek to borrow. Banks popularly lend
money in the form of loans and mortgages.

More complex transactions than a simple bank deposit require markets where lenders and
their agents can meet borrowers and their agents, and where existing borrowing or lending
commitments can be sold on to other parties. A good example of a financial market is a stock
exchange. A company can raise money by selling shares to investors and its existing shares
can be bought or sold.

2
The following table illustrates where financial markets fit in the relationship between lenders
and borrowers:

Relationship between lenders and borrowers

Lenders Financial Intermediaries Financial Markets Borrowers

Interbank Individuals
Banks
Stock Exchange Companies
Individuals Insurance Companies
Money Market Central Government
Companies Pension Funds
Bond Market Municipalities
Mutual Funds
Foreign Exchange Public Corporations

Lenders

The lender temporarily gives money to somebody else, on the condition of getting back the
principal amount together with some interest/profit or charge.

Individuals & Doubles

Many individuals are not aware that they are lenders, but almost everybody does lend money
in many ways. A person lends money when he or she:

Puts money in a savings account at a bank

Contributes to a pension plan
Pays premiums to an insurance company
Invests in government bonds

Companies

Companies tend to be lenders of capital. When companies have surplus cash that is not
needed for a short period of time, they may seek to make money from their cash surplus by
lending it via short term markets called money markets. Alternatively, such companies may
decide to return the cash surplus to their shareholders (e.g. via a share
repurchase or dividend payment).

3
Borrowers

Individuals borrow money via bankers' loans for short term needs or longer term
mortgages to help finance a house purchase.
Companies borrow money to aid short term or long term cash flows. They also borrow to
fund modernization or future business expansion.
Governments often find their spending requirements exceed their tax revenues. To make
up this difference, they need to borrow. Governments also borrow on behalf of
nationalized industries, municipalities, local authorities and other public sector bodies. In
the UK, the total borrowing requirement is often referred to as the Public sector net cash
requirement (PSNCR).

Governments borrow by issuing bonds. In the UK, the government also borrows from
individuals by offering bank accounts and Premium Bonds. Government debt seems to be
permanent. Indeed, the debt seemingly expands rather than being paid off. One strategy used
by governments to reduce the value of the debt is to influence inflation.

Municipalities and local authorities may borrow in their own name as well as receiving
funding from national governments. In the UK, this would cover an authority like Hampshire
County Council.

Public Corporations typically include nationalized industries. These may include the postal
services, railway companies and utility companies.

Many borrowers have difficulty raising money locally. They need to borrow internationally
with the aid of Foreign exchange markets.

Borrowers having similar needs can form into a group of borrowers. They can also take an
organizational form like Mutual Funds. They can provide mortgage on weight basis. The
main advantage is that this lowers the cost of their borrowings.

4
Derivative products

During the 1980s and 1990s, a major growth sector in financial markets was the trade in so
called derivative products, or derivatives for short.

In the financial markets, stock prices, bond prices, currency rates, interest rates and dividends
go up and down, creating risk. Derivative products are financial products which are used
to control risk or paradoxically exploit risk.[2] It is also called financial economics.

Derivative products or instruments help the issuers to gain an unusual profit from issuing the
instruments. For using the help of these products a contract has to be made. Derivative
contracts are mainly 4 types:[3]

1. Future
2. Forward
3. Option
4. Swap

Seemingly, the most obvious buyers and sellers of currency are importers and exporters of
goods. While this may have been true in the distant past, when international trade created the
demand for currency markets, importers and exporters now represent only 1/32 of foreign
exchange dealing, according to the Bank for International Settlements.[4]

The picture of foreign currency transactions today shows:

Banks/Institutions
Speculators
Government spending (for example, military bases abroad)
Importers/Exporters
Tourists

5
Analysis of financial markets

See Statistical analysis of financial markets, statistical finance

Much effort has gone into the study of financial markets and how prices vary with
time. Charles Dow, one of the founders of Dow Jones & Company and The Wall Street
Journal, enunciated a set of ideas on the subject which are now called Dow theory. This is
the basis of the so-called technical analysis method of attempting to predict future
changes. One of the tenets of "technical analysis" is that market trends give an indication
of the future, at least in the short term. The claims of the technical analysts are disputed
by many academics, who claim that the evidence points rather to the random walk
hypothesis, which states that the next change is not correlated to the last change. The role
of human psychology in price variations also plays a significant factor. Large amounts of
volatility often indicate the presence of strong emotional factors playing into the price.
Fear can cause excessive drops in price and greed can create bubbles. In recent years the
rise of algorithmic and high-frequency program trading has seen the adoption of
momentum, ultra-short term moving average and other similar strategies which are based
on technical as opposed to fundamental or theoretical concepts of market Behaviour.

The scale of changes in price over some unit of time is called the volatility. It was
discovered by Benot Mandelbrot that changes in prices do not follow a Gaussian
distribution, but are rather modeled better by Lvy stable distributions. The scale of
change, or volatility, depends on the length of the time unit to a power a bit more than
1/2. Large changes up or down are more likely than what one would calculate using a
Gaussian distribution with an estimated standard deviation.

Financial market slang

Poison pill, when a company issues more shares to prevent being bought out by
another company, thereby increasing the number of outstanding shares to be bought
by the hostile company making the bid to establish majority.
Bips, meaning "bps" or basis points. A basis point is a financial unit of measurement
used to describe the magnitude of percent change in a variable. One basis point is the

6
 equivalent of one hundredth of a percent. For example, if a stock price were to rise
100bit/s, it means it would increase 1%.
Quant, a quantitative analyst with advanced training
in mathematics and statistical methods.
Rocket scientist, a financial consultant at the zenith of mathematical and computer
programming skill. They are able to invent derivatives of high complexity and
construct sophisticated pricing models. They generally handle the most advanced
computing techniques adopted by the financial markets since the early 1980s.
Typically, they are physicists and engineers by training.
IPO, stands for initial public offering, which is the process a new private company
goes through to "go public" or become a publicly traded company on some index.
White Knight, a friendly party in a takeover bid. Used to describe a party that buys
the shares of one organization to help prevent against a hostile takeover of that
organization by another party.
Round-tripping
Smurfing, a deliberate structuring of payments or transactions to conceal it
from regulators or other parties, a type of money laundering that is often illegal.
Spread, the difference between the highest bid and the lowest offer.
Pip, smallest price move that a given exchange rate makes based on market
convention.
Pegging, when a country wants to obtain price stability, it can use pegging to
fix their exchange rate relative to another currency.

Role in the economy

One of the important sustainability requisite for the accelerated development of an

economy is the existence of a dynamic financial market. A financial market helps the
economy in the following manner.

Saving mobilization: Obtaining funds from the savers or surplus units such as
household individuals, business firms, public sector units, central government, state
governments etc. is an important role played by financial markets.

7
 Investment: Financial markets play a crucial role in arranging to invest funds thus
collected in those units which are in need of the same.
National Growth: An important role played by financial market is that, they
contribute to a nation's growth by ensuring unfettered flow of surplus funds to deficit
units. Flow of funds for productive purposes is also made possible.
Entrepreneurship growth: Financial market contribute to the development of the
entrepreneurial claw by making available the necessary financial resources.
Industrial development: The different components of financial markets help an
accelerated growth of industrial and economic development of a country, thus
contributing to raising the standard of living and the society of well-being.

Functions of financial markets

Intermediary functions: The intermediary functions of financial markets include the

following:
Transfer of resources: Financial markets facilitate the transfer of real economic
resources from lenders to ultimate borrowers.
Enhancing income: Financial markets allow lenders to earn interest or dividend
on their surplus invisible funds, thus contributing to the enhancement of the
individual and the national income.
Productive usage: Financial markets allow for the productive use of the funds
borrowed. The enhancing the income and the gross national production.
Capital formation: Financial markets provide a channel through which new
savings flow to aid capital formation of a country.
Price determination: Financial markets allow for the determination of price of
the traded financial assets through the interaction of buyers and sellers. They
provide a sign for the allocation of funds in the economy based on the demand
and to the supply through the mechanism called price discovery process.
Sale mechanism: Financial markets provide a mechanism for selling of a
financial asset by an investor so as to offer the benefit of marketability and
liquidity of such assets.
Information: The activities of the participants in the financial market result in
the generation and the consequent dissemination of information to the various
segments of the market. So as to reduce the cost of transaction of financial assets.

8
 Financial Functions
Providing the borrower with funds so as to enable them to carry out their
investment plans.
Providing the lenders with earning assets so as to enable them to earn wealth by
deploying the assets in production debentures.
Providing liquidity in the market so as to facilitate trading of funds.
Providing liquidity to commercial bank
Facilitating credit creation
Promoting savings
Promoting investment
Facilitating balanced economic growth
Improving trading floors

Components of financial market

Based on market levels

Primary market: Primary market is a market for new issues or new financial claims.
Hence its also called new issue market. The primary market deals with those
securities which are issued to the public for the first time.
Secondary market: Its a market for secondary sale of securities. In other words,
securities which have already passed through the new issue market are traded in this
market. Generally, such securities are quoted in the stock exchange and it provides a
continuous and regular market for buying and selling of securities.

Simply put, primary market is the market where the newly started company issued shares
to the public for the first time through IPO (initial public offering). Secondary market is
the market where the second hand securities are sold (securitCommodity Marketies).

Based on security types

Money market: Money market is a market for dealing with financial assets and
securities which have a maturity period of up to one year. In other words, its a
market for purely short term funds.
Capital market: A capital market is a market for financial assets which have a long
or indefinite maturity. Generally it deals with long term securities which have a

9
 maturity period of above one year. Capital market may be further divided into: (a)
industrial securities market (b) Govt. securities market and (c) long term loans
market.
Equity markets: A market where ownership of securities are issued and
subscribed is known as equity market. An example of a secondary equity market
for shares is the Bombay stock exchange.
Debt market: The market where funds are borrowed and lent is known as debt
market. Arrangements are made in such a way that the borrowers agree to pay the
lender the original amount of the loan plus some specified amount of interest.
Derivative markets: A market where financial instruments are derived and traded
based on an underlying asset such as commodities or stocks.
Financial service market: A market that comprises participants such as commercial
banks that provide various financial services like ATM. Credit cards. Credit rating,
stock broking etc. is known as financial service market. Individuals and firms use
financial services markets, to purchase services that enhance the working of debt and
equity markets.
Depository markets: A depository market consists of depository institutions that
accept deposit from individuals and firms and uses these funds to participate in the
debt market, by giving loans or purchasing other debt instruments such as treasure
bills.
Non-depository market: Non-depository market carry out various functions in
financial markets ranging from financial intermediary to selling, insurance etc. The
various constituency in non-depositary markets are mutual funds, insurance
companies, pension funds, brokerage firms etc.

10
 CHAPTER-2

CURRENT SCENARIO OF FINANCIAL MARKETS

After the nationalization of commercial banks, there has been a steady growth in both
agriculture and industrial finance. Certain new financial institutions have been created in the
country such as NABARD, EXIM Bank, SIDBI, etc., which were responsible for providing
funds to the capital market. In the existing development banks, certain operational changes
were made, which enabled them to finance more industrial activity in the country. Mutual
funds, started in both public and private sector banks have also improved the working of
capital market in India.

We can pinpoint the following changes in Indian capital market that had helped India to
compete with developed countries around the world.

1. Economic Liberalization due to Indian Capital Market:

The economic liberalization has led to more deregulation, liberalization and privatization of
some of the public sector undertakings in India. This has resulted in the shares of some of the
public sector undertakings being made available to the public. The Industrial policy adopted
by the government earlier did not allow investment in core sector by either individuals or
private sector. But, with the privatization of some of the public sector undertakings, the
shares are now available to the public for contribution. Example: Steel Authority of India
(SAIL). The Navarathna companies, consisting of major public sector undertakings such as
ONGC, BHEL, Oil India Ltd, Gas Authority etc., are some of the companies which are yet to
be privatized. Recently, the shares of VSNL were bought by TATAs

2. Promoting more private sector banks:

Opening of more private sector banks has resulted in the public contributing to the shares of
these banks in Indian capital Market. Recently, the government has announced 74% equity
participation by foreigners in private sector banks in India. This has not only promoted new
banks but also paved the way for the merger of existing banks with other banks. Example:
The merger of Bank of Madura with ICICI Bank.

2. Promoting more private sector banks:

Opening of more private sector banks has resulted in the public contributing to the shares of
these banks in Indian capital Market. Recently, the government has announced 74% equity

11
participation by foreigners in private sector banks in India. This has not only promoted new
banks but also paved the way for the merger of existing banks with other banks. Example:
The merger of Bank of Madura with ICICI Bank.

3. Promotion of Mutual Funds:

The promotion of mutual funds by nationalized as well as non-nationalized banks has also
improved the Indian capital market. They were helpful to the public by way of tax saving
schemes. Example: UTIs monthly income scheme. Mutual Funds promoted by nationalized
banks have increased investments. SEBI has regulated the working of mutual funds and the
banks have to publish their net asset value every week by furnishing the details in leading
newspapers. At present, the condition of some of the mutual funds is very alarming, with the
value of their investment going below the face value of the securities. Hence, there is every
possibility of the public losing their confidence in the mutual funds. example: Unit Trust of
India.

4. Regulation of NRI Investments:

The Amendment of Foreign Exchange Regulation Act (FERA) into Foreign Exchange
Management Act (FEMA) has given more encouragement to non resident investors. The
percentage of NRI investment in Indian companies has been increased from 5% to 24%. In
the year 1991, India faced an acute shortage of foreign exchange and the then finance
minister adopted certain methods to improve the foreign exchange reserves. He allowed
investment by any individual NRI in any Indian company from the then existing 5% of paid
up capital to 24%. This had resulted in more inflow of foreign funds into India. Foreign
financial institutions have been made to invest directly in the Indian capital market. The lock-
in period of NRIs in equity shares in Indian companies has been reduced from 3 years to 1
year. Any profit earned while diluting the shares will attract 20% tax on profit.
5. Direct Foreign Investment:
The Foreign Investment Promotion Board, consisting of the Secretaries of industries, finance
and foreign affairs, have allowed more direct foreign investment in core sector, especially in
power sector.

6. FERA Companies:
Under the Foreign Exchange Regulation Act, a FERA company is one which has 40% equity
participation by foreigners. This limit has been removed and now even foreign companies are
allowed to have 51% equity participation. For example, Colgate Polmolive has increased its

12
foreign equity participation from 40 to 51%. As a result, we are able to attract more foreign
capital into Indian capital market. The FERA Act has since been amended and is now known
as Foreign Exchange Management Act (FEMA).

7. Online Trading in Indian Capital Market:

Some of the leading stock markets in India have introduced computer system for their trading
activities. The brokers can get hooked-up and do their trading on Online basis. The computer
terminals will enable the public and the brokers to know the price prevailing in the market at
any time. This will prevent speculation activities.

8. Transparency through Online trading:

The online trading through computer has brought in transparency to the transactions in the
market. People are able to know prices prevailing in the market at any time and as such the
brokers cannot deprive their clients of their profits. The manipulation in the opening and
closing prices of shares by the brokers in the market is no longer possible.

9. National Stock Exchange:

A new stock market called National Stock Exchange has been created which has a large
number of companies listed. It is a big competitor to the Bombay Stock Exchange and it is
able to even influence the Bombay Stock Exchange. The National Stock Exchange deals in
shares of companies throughout India and the prices prevailing in the market is a benchmark
for stock prices. The creation of National Stock Exchange has not only widened the market,
but has also subdued the Bombay Stock Exchange. It has paved the way for all the leading
companies equities being traded through a single market. Thus, it enables the public to know
the true picture of the companies and their real strengt
10. Sensitivity Index in Indian Capital Market:
The calculation of index number has also undergone a change. Sensitivity index has been
introduced which represents important 30 companies whose volume and value of shares
determines the market condition. The sensitivity index is an indication of the conditions
prevailing in the market and the conditions that are likely to be encountered by the market.

12. Demating of shares in Indian Capital Market:

The introduction of demating has resulted in improving transactions further. Demating is a
system under which physical delivery of shares is no more adopted. It is called scripless
trade. The shares of individual investors are held by stock holding company and a pass book

13
is given to individual investors. Any sale or purchase of shares will result in entries made in
the pass book. The companies concerned are also informed for making due alterations in the
share register. This has prevented blank transfer and speculation. Every transaction in the
market is not only recorded but it brings revenue to the Government in the form of
registration and stamp charges. Blank transfers will not be possible and short term
speculation in shares cannot be done. Every share purchased or sold will have to go for
registration and hence bogus or benami share transfer is not possible.
13. Market Makers in Indian Capital Market:
The share price of companies will be decided by the market forces of supply and demand.
There are market makers who will ensure the supply and reasonable price for the stocks of
companies. By the introduction of these market makers, manipulation of share price by the
brokers is prevented.

14. Securities and Exchange Board of India:

The creation of Securities and Exchange Board of India (SEBI) is an important development
in Indian capital market of India. SEBI has not only replaced the Controller of Capital issues,
but has brought in uniformity in the transactions in all stock exchanges.

15. Renewal of Registration:

All the brokers and sub brokers have to register afresh with SEBI and any complaints against
them will be inquired and if found guilty, punishment is given.

16. Over The Counter Exchange of India (OTCEI):

For the purpose of newly promoted companies, another stock exchange with lesser degree of
conditions has been promoted and it is called Over The Counter Exchange of India (OTCEI).
It may not be possible for all the newly companies to list their shares with the existing stock
exchanges. The share capital of these companies will be low and hence there should be an
arrangement for listing such companies shares. The creation of Over The Counter Exchange
of India (OTCEI) is helpful to these newly promoted companies.
17. Merchant banker:
Merchant bankers have been permitted to take part in the stock market. operations and their
functions are also regulated by SEBI. They not only help companies in capital budgeting but
also guide the foreign investors in the purchase of securities. The merchant bankers, through
the financial markets, help some of the Indian companies to obtain fresh capital. They also go
in for syndication of loans and help the newly started companies in the issue of shares.

14
18. Non Banking Financial Companies:
The role of non-financial companies has also been controlled. RBI has introduced new
conditions, restricting their activities. New norms with regard to capital of non banking
financial companies have been introduced. For chit funds, a separate Act has been passed and
it restricts the maximum bidding to 40%.

19. Forward trading in Indian Capital market:

Forward trading has been introduced since 9th June 2000 in Bombay Stock Exchange on a
trial basis and if found successful, it will be extended. It will be helpful to the investors in
ascertaining the true colors of existing companies.

20. Badla transactions in Indian Capital Market:

Badla is a transfer of a contract from one period to another, where, either the buyer or the
seller is unable to execute the contract for which purpose, the defaulting parties will pay
Badla charges (which are decided by the Stock exchange). At present, SEBI has banned
Badla transactions.

21. Restrictions on Mutual Funds Investment:

There have been restrictions on the role of mutual funds in the market. They cannot invest
more than 10% of their investable funds in any single company and not more than 10% of
single companys issue of shares can be purchased by mutual funds.

22. Educating Public:

Press and media have contributed a lot in popularizing the Indian capital market and they are
highlighting the prices of securities everyday. The mutual funds and merchant banks have
been asked to set apart a portion of their funds towards educating the public on the
developments in the Indian capital market.

23. Government Securities Market:

After the stock scam, the Central Government has de-linked Government securities from
trading along with company securities. In other words, there will be separate market for
Government securities and they will not be dealt along with company securities in the stock
market. The measure was taken by Dr. Manmohan Singh when he was the Finance Minister.

24. Future trading in Indian Capital Market:

15
Future trading is a contract to buy or sell a particular financial instrument on a future date at a
specific price. The contract enables the parties to transfer according to the changes in the
price from one person to another. By this, the risk is minimized. In every future contract, we
have a buyer and a seller. And if one makes a profit in a particular contract, the other person
may try to minimize his loss through some other contract. Thus, the future market provides
scope for the traders to minimize their loss or the risks in trading of financial instruments. We
have different types of financial futures.

25. Penalty for insider trading in Indian Capital Market:

In 2002, SEBI Act was amended to make insider trading punishable as a serious offense. The
penalty rate has been enhanced to Rs. 1 lakh per day and the maximum penalty can go up to
Rs. 25 crores.

26. Period of settlement in Indian Capital Market:

After removing the Badla, SEBI has introduced T+2 system for settling transactions in
Indian capital market. Accordingly, all transactions entered in the capital market, should be
completed within 2 days excluding the date of trading.

All the above measures have improved the working of stock markets in India. If the present
situation continues, we can expect in future the uplinking of our stock market with that of the
developed countries.

16
 CHAPTER-3

IMPACT OF GLOBALISATION OF FINANCIAL MARKETS

Even the most cursory review of major international economic trends over the past several
decades shows there have been revolutionary changes in world financial markets. During the
1950s and 1960s, financial institutions and their regulatory structures in major industrial
countries evolved in relative isolation from external developments. During those years, most
countries, including the United States, imposed restrictions on international capital
movements. Major international institutional agreements after World War II, such as the
Bretton Woods agreement and the General Agreement on Tariffs and Trade, liberalized world
trade but did little to free the movement of international capital. After the financial
disruptions of the 1930s, many had questioned whether free capital flows and liberalized
capital markets were even desirable. In the International Monetary Fund, the basic obligation
of member nationstheir code of good behaviorwas framed exclusively in terms of
avoiding restrictions on current account payments: that is, payments for merchandise trade,
international services, investment incomes and payments, remittances, and official
government transfers. Meanwhile, the rules and the philosophy with respect to capital
transactions were far different: many countries restricted outward capital transfers either
because they preferred their capital to be invested within their domestic economies or
because they wished to prevent downward pressure on their exchange rates.

In this age of globalization, the key to survival and success for many financial institutions is
to cultivate strategic partnerships that allow them to be competitive and offer diverse services
to consumers. In examining the barriers to - and impact of - mergers, acquisitions
and diversification in the financial services industry, it's important to consider the keys to
survival in this industry:

1. Understanding the individual client's needs and expectations

2. Providing customer service tailored to meet customers' needs and expectations

In 2008, there were very high rates of mergers and acquisition (M&A) in the financial
services sector. Let's take a look at some of the regulatory history that contributed to changes
in the financial services landscape and what this means for the new landscape investors now
need to traverse.

17
Recent innovations in communications and information technology have resulted in a
reduction in diseconomies of scale associated with business costs faced by financial
institutions contemplating geographic expansion. ATM networks and banking websites has
enabled efficient long-distance interactions between institutions and their customers, and
consumers have become so dependent on their newfound ability to conduct boundary-less
financial transactions on a continuous basis that businesses lose all competitiveness if they
are not technologically connected.

An additional driving force for financial service firms' geographic diversification has been
the proliferation of corporate combination strategies such as mergers, acquisitions, strategic
alliances and outsourcing. Such consolidation strategies may improve efficiency within the
industry, resulting in M&As, voluntary exit, or forced withdrawal of poorly performing firms.

Consolidation strategies further empower firms to capitalize on economies of scale and focus
on lowering their unit production costs. Firms often publicly declare that their mergers are
motivated by a desire for revenue growth, an increase in product bases, and for
increased shareholder value via staff consolidation, overhead reduction and by offering a
wider array of products. However, the main reason and value of such strategy combinations is
often related to internal cost reduction and increased productivity. (For further reading, check
out What Are Economies of Scale?)

Unfavorable facts about the advantages and disadvantages of the major strategies used as a
tool for geographic expansions within the financial services sectors were obscured in 2008 by
the very high rates of M&As, such as those between Nations Bank and Bank of America
(NYSE:BAC), Travelers Group and Citicorp (NYSE:C), JP Morgan Chase (NYSE:JPM) and
Bank One. Their dilemma was to create a balance that maximized overall profit.

18
 CHAPTER-4

CORPORATE GOVERNANCE

Ever since India's biggest-ever corporate fraud and governance failure unearthed at Satyam
Computer Services Limited, the concerns about good Corporate Governance have increased
phenomenally.

Internationally, there has been a great deal of debate going on for quite some time. The
famous Cadbury Committee defined "Corporate Governance" in its Report (Financial
Aspects of Corporate Governance, published in 1992) as "the system by which companies are
directed and controlled".

The Organisation for Economic Cooperation and Development (OECD), which, in 1999,
published its Principles of Corporate Governance gives a very comprehensive definition of
corporate governance, as under:

"a set of relationships between a company's management, its board, its shareholders and
other stakeholders. Corporate governance also provides the structure through which the
objectives of the company are set, and the means of attaining those objectives and monitoring
performance are determined. Good corporate governance should provide proper incentives
for the board and management to pursue objectives that are in the interests of the company
and shareholders, and should facilitate effective monitoring, thereby encouraging firms to
use recourses more efficiently."

Generally, Corporate Governance refers to practices by which organisations are controlled,

directed and governed. The fundamental concern of Corporate Governance is to ensure the
conditions whereby organisation's directors and managers act in the interest of the
organisation and its stakeholders and to ensure the means by which managers are held
accountable to capital providers for the use of assets. To achieve the objectives of ensuring
fair corporate governance, the Government of India has put in place a statutory framework.

19
Regulatory framework on corporate governance

The Indian statutory framework with the international best practices of corporate
governance. Broadly speaking, the corporate governance mechanism for companies in India
is enumerated in the following enactments/ regulations/ guidelines/ listing agreement:

1. The Companies Act, 2013 inter alia contains provisions relating to board constitution,
board meetings, board processes, independent directors, general meetings, audit committees,
related party transactions, disclosure requirements in financial statements, etc.

2. Securities and Exchange Board of India (SEBI) Guidelines: SEBI is a regulatory

authority having jurisdiction over listed companies and which issues regulations, rules and
guidelines to companies to ensure protection of investors.

3. Standard Listing Agreement of Stock Exchanges: For companies whose shares are
listed on the stock exchanges.

4. Accounting Standards issued by the Institute of Chartered Accountants of India

(ICAI): ICAI is an autonomous body, which issues accounting standards providing
guidelines for disclosures of financial information. Section 129 of the New Companies
Act inter alia provides that the financial statements shall give a true and fair view of the state
of affairs of the company or companies, comply with the accounting standards notified under
s 133 of the New Companies Act. It is further provided that items contained in such financial
statements shall be in accordance with the accounting standards.

5. Secretarial Standards issued by the Institute of Company Secretaries of India

(ICSI): ICSI is an autonomous body, which issues secretarial standards in terms of the
provisions of the New Companies Act. So far, the ICSI has issued Secretarial Standard on
"Meetings of the Board of Directors" (SS-1) and Secretarial Standards on "General Meetings"
(SS-2). These Secretarial Standards have come into force w.e.f. July 1, 2015. Section 118(10)
of the New Companies Act provide that every company (other than one person company)
shall observe Secretarial Standards specified as such by the ICSI with respect to general and
board meetings.

20
Key legal framework for corporate governance in India

The Companies Act, 2013

The Government of India has recently notified Companies Act, 2013 ("New Companies
Act"), which replaces the erstwhile Companies Act, 1956. The New Act has greater emphasis
on corporate governance through the board and board processes. The New Act covers
corporate governance through its following provisions:

New Companies Act introduces significant changes to the composition of the boards
of directors.
Every company is required to appoint 1 (one) resident director on its board.
Nominee directors shall no longer be treated as independent directors.
Listed companies and specified classes of public companies are required to appoint
independent directors and women directors on their boards.
New Companies Act for the first time codifies the duties of directors.
Listed companies and certain other public companies shall be required to appoint at
least 1 (one) woman director on its board.
New Companies Act mandates following committees to be constituted by the board
for prescribed class of companies:

o Audit committee
o Nomination and remuneration committee
o Stakeholders relationship committee
o Corporate social responsibility committee

Listing agreement Applicable to the listed companies

SEBI has amended the Listing Agreement with effect from October 1, 2014 to align it with
New Companies Act.

Clause 49 of the Listing Agreement can be said to be a bold initiative towards strengthening
corporate governance amongst the listed companies. This Clause intends to put a check over
the activities of companies in order to save the interest of the shareholders. Broadly, cl 49
provides for the following:

21
1. Board of Directors

The Board of Directors shall comprise of such number of minimum independent directors, as
prescribed. In case where the Chairman of the Board is a non-executive director, at least one-
third of the Board shall comprise of independent directors and where the Chairman of the
Board is an executive director, at least half of the Board shall comprise of independent
directors. A relative of a promoter or an executive director shall not be regarded as an
independent director.

2. Audit Committee

The Audit Committee to be set up shall comprise of minimum three directors as members,
two-thirds of which shall be independent.

3. Disclosure Requirements

Periodical disclosures relating to the financial and commercial transactions, remuneration of

directors, etc, to ensure transparency.

4. CEO/ CFO Certification

To certify to the Board that they have reviewed the financial statements and the same are fair
and in compliance with the laws/ regulations and accept responsibility for internal control
systems.

5. Report and Compliance

A separate section in the annual report on compliance with Corporate Governance, quarterly
compliance report to stock exchange signed by the compliance officer or CEO, company to
disclose compliance with non-mandatory requirements in annual reports.

22
 CHAPTER-5

CAUSES AND EFFECTS OF DEMONITISATION

The term demonetisation has become a household name since the government
pulled the old Rs 500 and Rs 1,000 notes out of circulation. While as per dictionary
demonetisation means "ending something (e.g. gold or silver) that is no longer the
legal tender of a country", one needs to see if there is anything more to the word. ET
shares details of the word that has got all Indians worked up over the past three
weeks.

1 What is Demonitisation?

When a currency note of a particular denomination ceases to be a legal tender it is

termed as demonetisation. But since our government is replacing the old Rs 500
notes with newer ones and doing away with the Rs 1,000 notes, it would be more
appropriate to call the move as `scrapping' or `phasing out' of certain currency
notes.

.2 What has the government done?

Prime Minster Narendra Modi's decision to scrap high value notes of Rs 500 and Rs
1,000 has created a shortage of cash in the system, leading to a lot of discomfort for
the general public and businesses. Also, since there is a shortage of newly printed
Rs 500 and Rs 2,000 notes, the situation has worsened. The move has also led to a
shortage of lower denomination notes such as Rs 100 and Rs 50 that are still legal
tender, as people have taken to conserving whatever cash they have in hand.

23
3. How will it impact the economy?

Since our economy is heavily dependent on cash, as only less than half the
population uses banking system for monetary transactions, demonetisation has hit
trade and consumption hard. With people scrambling for cash to pay for goods and
services, the move is likely to take a big toll on the country's growth and output
during the current fiscal. Consumption makes up for around 56% of India's GDP ,
hence, a drop in spending will pull down growth. The current step could also lead to
behavioural changes in households' savings and their consumption pattern, say
economists.

4 What does lower growth means?

Growth in cash-intensive sectors such as real estate, construction and FMCG is

likely to take a hit in the short term as consumers are deferring purchases. However,
there is a positive side to the story: over the medium term, there would be benefits
through higher government spending and greater financial inclusion. Also, the
movement of household savings from physical to financial will help boost growth,
according to Yes BankBSE 0.85 % report.

24
 CHAPTER-6

EFFECTS OF DEMONITISATION ON INDIAS GDP

Prime Minister Narendra Modi's monetary reform had worthy visions, but the procedure had
faults in it's root.

After November 8th last year, Shops stopped accepting the old notes. Holders have until the
end of the year to deposit them in banks or swap them. Almost 86.4% by value of cash in
circulation had been withdrawn being aware about the fact that cash is used for approx 98%
by volume of all consumer transactions in India & now it is beyond doubt that India's
economic momentum is being slowed down.

We have estimated the effect of the demonetization and the resulting cash crunch on various
sectors, which are included for GVA estimation. The impact period considered is 7 weeks
(from the of demonetization announcement on 8th November16 till end of December16).
Certain projections have been made for the losses or gains in each sector week wise, which
have been accounted for in final expected GVA for FY17 which will get reflected In the GDP
growth number. A point to note is that some of the losses in GDP incurred in these 7 weeks
(under Q3) will be recovered in the next quarter, particularly for consumer goods where there
would be only deferment of purchase. However the same doesnt stand for losses in services
sector. Nonetheless, the expected recoveries in Q4 have been netted off while considering the
overall impact in these 7 weeks.

Central Statistics Office (CSO) clearly reveal the extent of the slowdown. GDP growth is
now pegged at 7.1 per cent, compared with a 7.6 per cent pace in 201516, & this projections
were based solely on data from the first seven months & do not factor in the impact of
demonetization & consequat crash crunch.

A World Bank report Global Economic Prospects released Wednesday says that Indias
GDP growth will scale back from 7.6 per cent to 7 per cent in 2017 as a direct result of the
demonetization policy released in Q4.

The immediate withdrawal of a large volume of currency in circulation and subsequent

replacement with new notes announced by the government in November contributed
to slowing growth in 2016, the World Bank said.

25
However, it classified Indias economy as still robust and forecast that GDP growth would
bounce back in coming years.

India is expected to regain its momentum, with growth rising to 7.6 per cent in Fiscal
Year(FY) 2018 and strengthening to 7.8 per cent in FY 2019-20, the report went on to say.

While the World Bank appeared to acknowledge that the negative impact of demonetization
would likely be short term with the positives resting in liquidity expansion in the banking
system, it did warn that the challenges encountered in phasing out large currency notes and
replacing them with new ones may pose risks to the pace of other economic reforms (e.g.
Goods and Services Tax, labour, and land reforms)

The services sector is expected to be affected the most under both the approaches, mainly on
account of losses in trade, hotel, transport etc. due to the volume of cash transactions
involved in these economic activities. Importantly, these losses, due to their inherent nature,
cant be recovered in the next quarter. - SMEs in industry will have a major problem in
adjusting production schedules as both payments and receipts flow in cash given their
structures. - For rest of manufacturing, demand side issues would exist till such times
conditions stabilize and could get reversed in Q4. Hence, Industry is also expected to be
impacted which will be more significant in the first 2-3 weeks post the announcement. - The
gains would be positive for the banking sector due to the increase in deposits which would be
countered by slowing down of other sectors in the group like real estate. - Agriculture is
expected to least impacted with major shock being absorbed in the first 2-3 weeks itself as
there have been issues in sales at mandis due to the cash crunch presently.

26
 CHAPTER-7

POSITIVE IMPACT OF DEMONITISATION ON INDIAN ECONOMY

Recently the Central Statistic Office (CSO) has released the data of gross domestic product
(GDP) of the country for third quarter of current financial year. According to data released by
CSO GDP growth rate is 7% (though lower than 7.4% in the previous quarter) and the gross
value added (GVA) was 6.6%. The above data shows that the demonetization has not affected
as thought earlier.
ANALYSIS-

When about 86% of the currency in circulation in the form of 500 and 1,000 notes
was abruptly removed out of the system, it was expected that it will affect gross
domestic product due to demand shock.
Even economic survey and the Reserve Bank of India will referring it as aggregate
demand shock and the demand compression associated with adverse wealth effects
said that for short run demonetization has adverse impact on GDP.
GDP Growth in the third quarter, when the impact of demonetisation would have been
the worst, is estimated to have been 7% and the estimate for 2016-17 as a whole is
7.1%.
The above data suggest that the financial shock of removing 86 per cent of the
currency from circulation in an economy where more than 90% of transactions were
in cash has not hurt economic growth.
The data released by CSO categorically suggests that the demonetisation effect on
GDP is less than the apprehension shown by many economist and financial
institutions.

THE FOLLOWING ARE THE POSITIVE IMPACT OF DEMONITISATION ON

INDIAN ECONOMY

1. Black money: At one stroke the Prime Minister has choked the supply of black
money stacked inside the country. Of the Rs 17 lakh crore of total currency in
circulation in the country, black money is estimated at mind-boggling Rs 3 lakh crore.
Black money is nothing but a plunder of the nation. Black money operators run a

27
 parallel economy which shakes the very foundation of the Indian economy. With
Modis demonetisation move, all domestic black money will either be deposited into
the banks with heavy penalty or be simply destroyed.

2. Economy: Demonetisation will have a huge resultant effect on the Indian economy.
The clean-up of illegal cash will help turn around the economy. First, it will bring
more borrowings to the exchequer, improve inflation outlook and increase Indias
gross domestic product (GDP). Second, it will revive investment opportunities and
give a fillip to infrastructure and the manufacturing sector. Third, it will help reduce
interest rates and lower income tax rate.

3. Note bank politics: In the run up to the crucial assembly elections in Uttar
Pradesh, Punjab, Goa and Uttarakhand, Prime Minister Modis demonetisation
announcement has come as a shock and awe for the political parties and politicians for
whom black money is a lifeline. The pulling out of the old Rs 500 and Rs 1,000
currency notes will help make the election process clean and transparent. But it has
brought tough times for the political parties and politicians who believe in the idea of
purchasing votes in exchange for notes. That is precisely the reason a rainbow
coalition of a galaxy of regional parties and the Congress is building up against Modi,
because their political interests are badly hurt.

4. Real estate cleansing: It is said that real estate is an industry built on black money.
The extent of black money floating around in the sector is huge. According to an
estimate at least 40 per cent of real estate transactions in Delhi-NCR are in black.
Modis demonetisation move will curtail the flow of black money into the real estate
sector. This will help in making the much needed correction in the sector. The impact:
An unexpected dip in land and property prices.

5. Hawala transactions: Demonetisation has crippled the hawala rackets. Hawala is a

method of transferring money without any actual money movement. Hawala route is
used as a means to facilitate money laundering and terror financing. Hawala rackets
run again on black money. With black money suddenly being wiped out of the
market, thanks to demonetisation, hawala operations have come to a grinding halt.
According to an India Today report, one of the hawala operators in Mumbai has
destroyed currency notes worth about Rs 500 crores.

28
 CHAPTER-8

EFFECT OF DEMONITISATION ON RUPEE APPRECIATION

After demonetization of Indian currency on 08 nov 2016, rupee has became stronger
than currency of 143 countries or economies. Out of 161 countries's currency, rupee has
became weaker than 17 currencies and is at same exchange rate with 1 currencies.

Rupee has became stronger by 0.95% against US Dollar ($) from 66.40 to 65.78 INR per unit
US Dollar. Rupee has become stronger against some popular currencies like Euro, Australian
Dollar, Swiss Franc, Singapore Dollar, Japanese Yen, British Pound, Canadian Dollar and
Hong Kong Dollar. Became weaker than Russian Ruble and South African Rand.

Indian rupee (INR) became stronger than currencies of other south asian nations Pakistani
Rupee, Sri Lankan Rupee, Bangladeshi Taka.

In Modi government, rupee has became stronger than 107 currencies.

Period Stronger Weaker Same

After demonetization (08-11-16 to 14-03-17) 143 17 1

In Modi government (26-05-14 and 14-03-17) 107 53 1

In Modi govt before demonetization (26-05-14 and 08-11-16) 93 67 1

29
The likelihood of restrictive trade policies in the US, along with higher US yields may
weighon the INR. However, the INR is likely to continue to be one of the most resilient EM
currencies, ledby Indias relatively lower dependence on external trade, improved policy and
macro fundamentals. Besides, a favorable FX carry-to-volatility ratio and the possibility of
rising foreigndemand for INR debt (helped by prospects of a rally in government bonds)
should also limit the rupees downslide.

Having said that, the resurgence in commodity prices and sluggish industrial production are
risks worth monitoring. Moreover, RBIs take on Modi governments surprise decision to
demonetise86 per cent of Indias currency in circulation in November 2016, which is widely
expected to have a sharp negative impact on economic activity in the short term, also remains
to be seen.

Should the Central bank, which has come under severe criticism for being behind the curve
on demonetisation,find it necessary to reduce lending rates to flush out the liquidity and
support output, it could thwart the carry-driven consolidation in USDINR.

Clearly, the FX markets in 2017 look like a confusing maze, where uncertainty is the only
certainty in the FX markets. For all those whose prosperity depends on being on the right side
of currency fluctuations:

The game's afoot: Follow your spirit, and upon this charge Cry 'God for Harry, England, and
Saint George!'

30
 CHAPTER-9
SECTORS AFFECTED DUE TO DEMONITISATION

AGRICULTURE
IMPACT: Interestingly, villages have adapted in some ways better than cities. GoI allowing
tax free deposits of any amounts for farmers have led to many of them getting 20% premium
from traders when transacting. Informal credit for daily purchases and use of old notes for
key inputs and selling produce have kept rural economy going. Crop planting increased 20-
35% every week after demonitisation and remained higher than last year in all weeks after
November 8. But a lot depends on cash supply improving quickly in the new year.

REALESTATE
IMPACT: Insiders say theres a 40%-plus drop in enquiries and sales across key markets of
Mumbai, Delhi, Bengaluru and Pune. Deals in secondary market have come to a standstill. In
Bengaluru, drop in deal closings is as much as 60%. Most homebuyers are waiting for big
price reductions. With fear of black money transactions and cash crunch added to an already
slumping real estate sector, near future is bleak.
SOLUTION: Big rate cut will help, as will tax concessions on home purchases. RBI policy
and budget are key. But sentiment improvement will be a very long process

CONSUMERSPEND
IMPACT: Consumption, a big GDP contributor, will take a hit for at least two quarters, say
companies and analysts. Two main problems: Low circulation of lower denomination notes,
which may be temporary, and wealth erosion, that is impacting big ticket purchases. FMCG
sales dropped 20-30% in November. At store levels, impulse buys like snacks, biscuits were
hard hit, as were personal care items, Nielsen data shows. December can be worse than . than
November, since last month consumer spend in the beginning of the month was unaffected.
Nine million retailers who buy from wholesalers are worst hit, and will feel the pain for a
while. Big, organised retail is doing well. Annual growth rate is around 4.4%. Some big
FMCG companies have cut production. Supply chains are hit as cash fuels many transactions.

31
Full impact will show up in a months time, and can be severe.
SOLUTION: Depends on how many consumers can shift to cashless transactions, which
partly depends on how many retailers do an uncertain process at best. Some consumer
sector experts say GoI should consider giving a boost to shopping, like Western governments
do in tough times. Shopping vouchers to Jan Dhan account holders is one idea. Consumers
need to feel good again, tax cuts would be a huge help.

JOBS
IMPACT: Hiring experts say jobs at senior levels are not and wont be impacted. But overall
hiring is down right now, as managers seek to protect revenue/profit targets. No job cut plans
as of now. Variable pay/increment amounts may be impacted. Job numbers are difficult to
estimate, experts say, but sectors where hiring is most hit are retail, consumer goods, real
estate, infrastructure, logistics (for ecommerce especially), auto consumables, and nd building
products. Hiring by mobile wallet and fintech companies are up, though.
SOLUTION: Everything depends on how temporary the pain in. Experts say fundamentals
are good for jobs, provided normality returns fast. One change may be generation of more
formal sector jobs as informal jobs are hit worst by cash-crunch. Of 60 crore Indians
employed, only 6 crore have formal jobs. That may go up to 10 crore in the next 2-3 years.

32
 CHAPTER-10
EFFECT OF DEMONITISATION ON INDIAN STOCK MARKET

On 8th Nov, 2016, PM Narendra Modi announced the cancellation of Rs 500 and Rs 1000
notes (aka demonetization) which resulted in 86% of the circulated money being removed
from the economy overnight. This was primarily done to curb the black money, make all the
counterfeit currency worthless and attack terrorism at its roots.
To understand the impact on the stock market, lets first understand how significant a move
this is. In the past many countries have attempted demonetization, some successfully and
some unsuccessfully, but all of them were done when their economies were having major
problems like hyper-inflation in Germany in the 1920s. This is the first time that a perfectly
healthy economy has attempted it and that too to target black money. Because this is a first,
there are varied opinions amongst economists on what the impact will be in the future.

The immediate impact of removing so much money from circulation is of course the impact it
can have on several sectors that are driven by the black economy like real estate, construction
etc, but more so also the sectors that are more driven by cash, because they are the first that
are affected when so much money is suddenly removed from circulation.

Real Estate

Since Real Estate is driven by the black economy, this was the sector that was probably the
worst hit of all the sectors. The Nifty Realty index gapped down after the day of the
demonetization move and corrected -25% ( as indicated in the chart below, the
NIFTYREALTY bounced of the Auto-SR very strong support of 152.5 on a weekly chart)
before recovering a bit. It is still down almost -16% from 8th Nov. Since many real estate
properties have a big black money component, they are expected to go through at least a 20-
30% correction, and hence for the foreseeable 2 quarters at least, chances are that this sector
will probably go lower before it starts to improve.

Consumer Durables
This sector is primarily driven by cash and hence has also been hit hard. It is down by almost
11.7% since the demonetization announcement.

33
Banking
The Banking sector took an immediate hit the day after the announcement but recovered on
Nov 10th. But, it has been subsequently correcting as it is still grappling with trying to
replenish the cash in the economy. However, this is one sector which is expected to benefit in
the long term because a lot of the black money will be deposited in bank accounts and the
excess funds in the banking system will also help address the non-performing assets (NPA)
problem that many of the banks are facing due to bad loans. Due to these NPA problems, a
lot of the infrastructure funding etc. has also been affected and hopefully, that should also be
addressed when the current cash crunch is reduced and economy claws back to normalcy.

Information Technology
The IT sector has been largely unaffected by the demonetization as it is export oriented and
hence relatively better positioned to handle shocks in the Indian economy. Moreover it is
probably also largely a cashless sector and hence also not affected due to the cash being taken
out of the economy. The NIFTYIT chart below shows that the IT sector is actually doing
better than from what it was on Nov 8th.
In conclusion, we can probably summarize the effect of demonetization on the overall
economy as follows:

1. In the short term, GDP will be down for at least a 1-2 quarters before recovering.

2. A lot of black money will be converted to white and be deposited into the banks
which will in turn help in the NPA problem that banks are facing.

3. In the longer term, reducing of black money economy in the future should bring
more people in the tax net and hence lower taxes as well as interest rates which
will bode well for the overall economy.

Although this was what is called a surgical strike on black money and will have immediate
impact on the existing black money, most economists agree though, that this move is not
sufficient and several other reforms like tax reforms, real estate reforms etc need to be
undertaken to curb the black money generation in the future

34
 CONCLUSION:

Conclusion in India money market is regulated by reserve bank of India & securities
exchange board of India/SEBI regulates capital market. Capital market consists of primary
market & secondary market. All initial public offerings/IPOS comes under the primary
market, & all secondary market transactions deals in secondary market. Secondary market
refers to a market where securities are traded after being initially offered to the public in the
primary market & are listed on the stock exchange. Secondary market comprises of equity
market & debt markets. in the secondary market transactions BSE & NSE plays a great role
in exchange of capital market instruments. Demonetisation was one of the most
comprehensive economic reforms that India has been undertaken. Many thought that due to
cash crunch it will have short term impact on economy, but the data released by CSO
categorically suggests that the demonetization does not have that impact on GDP as it was
feared earlier

35
 REFERENCES

1. http://www.drishtiias.com/editorial-analysis-Impact-of-demonetization-on-
GDP#sthash.Hi4Y2TeW.dpuf

2. The likelihood of restrictive trade policies in the US, along with higher US
yields"@Arishisays http://www.dailyo.in/content.php?id=14786

3. http://economictimes.indiatimes.com/articleshow/55843771.cms?utm_source=content
ofinterest&utm_medium=text&utm_campaign=cppst

4. www.investarindia.com/blog/effect-demonetization-indian-stock-ma

36