AUGUST 16, 2011

VOLUME 5.10 ISSUE 96

Rates Graphs News

National & International events in the world of finance

01 02 03

Debate
Indian Economy

04 05 07 08

Contemporary articles
Declining consumption of oil in US Inflation & Interest Rate to keep Markets Volatile

Did You Know?

What Constitute US Debt?

Investor Focus Rallis about us

CHaaNaKYa is the official Finance Newsletter, released fortnightly. Its objective is to keep each & everyone abreast with the activities & events in the world of finance.

10

Investor Check
Tree House IPO

11 12

student speak

A peek into the corporate world through our Students SIP experience

buzz Words Quiz

Check your Financial Quotient

15 16

Rates
Repo Reverse Repo Call rate Inflation (as on 28th July) Forex Reserve (as on 5th august 2011) 91 day t-bill IIP (For June 2011) 6.90 Gs 2019 8.00% 7.00% 5.00%-8.10% +9.44% $ 317.226 billion 8.3110% +8.8% 8.0907-8.0907%

01

GRaPHs
Rs/$
46 45.5 45 44.5 44 43.5 1-Aug 4-Aug 7-Aug

By- Sumit Kumar Gupta II MBA G

10-Aug

13-Aug

26400 25700 25000 24300 23600 22900 1-Aug 4-Aug

Gold(per 10 gram)

7-Aug

10-Aug

13-Aug

Oil(per bbl)
120 115 110 105 100 1-Aug 4-Aug 7-Aug 10-Aug 13-Aug

future rates

open interest

5600

31000000

5450

27000000

5300

23000000

5150

19000000

5000 1-Aug 4-Aug 7-Aug 10-Aug 13-Aug

15000000

sensex 18,500.00 18,100.00 17,700.00 17,300.00 16,900.00 16,500.00 01-Aug 04-Aug 07-Aug

nifty 6000 5800 5600 5400 5200 5000 10-Aug 13-Aug

02

inteRnational news
By- Rajat Sikri II MBA L

Central banks of Emerging nations buy $10 bn in gold as West wobbles Double dip recession: Americans wonder where the misery will end Investors will return to emerging Asia: Asian Development Bank Setting its sights on rival Apple Inc, Google Inc announced its biggest deal ever, a $12.5 billion cash acquisition of mobile phone maker Motorola Mobility Holdings Inc.
FOREX-Swiss franc falls, euro gains as risk appetite rises Gold turned higher in muted volume as Wall Street rose for a third straight session on an encouraging New York State manufacturing report and on hopes that French and German politicians meeting in Paris can restore some confidence in the battered euro credit markets.

national news
StanChart H1 India operating profit slumps 39% City Union Bank (CUB) has said it would require ` 3,000 crores by 2014, to support its target of achieving a three-fold increase in its business. RBI allows pre-paid cards for corporate reimbursements BSE to include Coal India, Sun Pharma in Sensex Indian stock market among worst performers this year India, Japan to synergise socio-economic development-linked energies at Tokyo Food inflation accelerated significantly in the week that ended on July 30 because of simmering price pressures in several commodities, even as the Reserve Bank of India damped down hopes of a pause in rate increases, at an informal interaction with top bankers in Mumbai Concerned over the slowing growth of the economy, the Prime Ministers Economic Advisory Council (EAC) has called for boosting the confidence of investors in the country.
03

Debate: inDian economy

By- Richa M Jain, II MBA L Ritu Jadhwani, II MBA L

Introduction There is a good saying - a million dollar question, probably the usage of the saying might change in near future to - a million rupees question. Certainly, this might happen if more analyses are made on the devaluation of dollar and appreciation of Indian rupees. Within a span of 12 months, the value of dollar has significantly dropped from around 47 to 48 rupees to around 39 rupees. Of late, the value of 1 U.S. dollar is around 39 rupees. Indian economy is among the fastest growing economies of the world. The appreciation of the rupees against the dollar would be another giant sign towards its economic prosperity and augmentation. However, the economic epidemics like poverty, unemployment etc., could not be dealt in the short-run. Against the Motion The depreciation in the value of dollar, though has benefits, it also shows its negative impact on the Indian Economy. The most affected segment due to this fall is the exporters. The exporters will be getting their return in dollar at the cost of 39 rupees per 1 U.S. dollar, whereas they used to get around 47 rupees against one dollar. In the past one year, the dollar has dropped by around 20 per cent against Indian rupees. This reveals that positive or negative impact on volume of export or import would be around 20 per cent, which cannot be over looked as the exporters are suffering losses. However the impact will remain until there is depreciation of dollar against rupees. If it continues, then a great change can be expected in the longer run, in international trade arena. Another impact would be the fantasy of dollar has been losing ground day by day. The rupee increased to almost a three-year high last week and it has already impacted margins in the software business, which is one of Indias biggest exporters. There is a concern that it could get worse. An increase in the rupee value means that software companies get fewer rupees for every contracted dollar. It also means an increase in the cost of IT services out of India, if companies try to maintain their margins. The volatility makes it difficult for companies to predict their cash flows, and hence impacts their planning process. One of the biggest impacts the falling dollar value will have is on oil prices. The entire world purchases oil in dollars. If dollar prices fall, the purchasing power of other countries Japanese yen and Swiss franc increases in terms of the exchange value being lower. This has a tendency to increase the demand for oil which eventually might lead to increase in oil prices. Falling value of Dollar will also impact business in textiles and garments sector, handicrafts, engineering goods, chemicals and marine products. Thus, we now have to wait to check the future impact of such a fall, and how the economy reacts to it. For the Motion There are many advantages to India and many other countries due to the falling dollar value. Firstly, a cheaper dollar will lead to higher purchasing power in the hands of consumers for U.S.
04

products. This is not only beneficial to consumers at large and also to the U.S. in general as its sales will increase. This impact in the long run can be huge as it can increase the revenues of home countries to a greater extent especially during this recessionary stage when the country is struggling to grow. This can be justified from the fact that majority of the companies on the S & P list earn 50% of their revenues from abroad. Secondly, Indian importers will be able to make purchase more for the same price as the value for the goods and services falls with fall in the U.S. dollar. Thirdly, foreign tourism will have higher revenues as due to falling dollar value, the cost of holidaying abroad comes down which makes it cheaper to travel to U.S. leading to higher vacations abroad and hence more revenues. Lastly, many companies importing manufacturing raw materials from the U.S. will be able to purchase the same at a lower price and hence their cost of production will eventually come down leading to lower end price. Finally how long will these situation last needs to be waited upon and seen due to the following reasons: If countries want to boost their exports, they would prefer the dollar price rising. This could lead to change in trend. The countries fear other European countries to default; they might find the U.S. as a safe Investment heaven again. This could again lead to increase in dollar value. Countries like Brazil and South Korea are discouraging foreign investment in their fixed income securities. Lesser investment inflow in these currencies means lesser pressure on their currency and hence lesser chance of their currency appreciating against dollar. Hence the technicalities make it difficult to predict the benefits in the future.

DeclininG consumPtion of oil in us

By- Pawan Rao, II MBA L

As a U.S. economic rebound stalls and threatens to spiral into recession, oil demand in the worlds top consumer may be slipping into an irreversible decline. Last years fledgling recovery in U.S. oil usage -- when demand rose 400,000 barrels per day (bpd) -- made up for only a part of the 1 million bpd demand drop during a year of economic turmoil that began in August 2008. Until recently, most analysts believed a healthier economy would push U.S. oil use higher this year and next, before tighter environmental regulations, increased use of bio fuels, and tougher fuel-efficiency standards kick in later this decade to lower demand permanently. Instead, a sour economy may turn last years demand growth into a one-off. With U.S. manufacturing and service sectors slowing, a recent S&P downgrade on U.S. debt, and a series of stock market falls that have rattled consumer confidence, the odds are tilting toward short-term declines as well.
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Last week, the U.S. Department of Energy lowered its forecast for U.S. oil demand from growth to decline in 2011. It also cut its forecasts for growth in global oil demand, as did the Organization of the Petroleum Exporting Countries and the International Energy Agency. U.S. mandates require 36 billion gallons of renewables like ethanol be blended into motor fuel by 2022, up from 14 billion gallons this year. The Obama administration has also boosted fuel economy standards for passenger vehicles to 54.5 miles per gallon by 2025, more than double current standards. GLobaL aPPEtItE FoR oIL Limp demand in the United States and Western Europe wont fully offset growth in developing countries like China and India, whose appetite for crude nearly guarantees world demand will keep climbing. Last years U.S. growth accounted for less than one-fifth of the rise in global oil demand, which was up 2.3 million barrels per day. But with the U.S. still burning more than 19 million bpd -- twice that of No. 2 oil consumer China -- slower demand here could further hammer U.S. oil futures , which have already fallen by one-quarter since hitting $114 a barrel in April. Until the recent slowdown, consensus forecasts saw U.S. oil demand up around 100,000 bpd this year as GDP grew about 2.5 percent, said Adam Sieminski of Deutsche Bank. The latest government data shows U.S. oil demand, which looked buoyant earlier this year, slipped from year-ago levels in each of the last four months as pump prices climbed. Gasoline use in July was the lowest on record for the month, according to MasterCard data. Less demand may wrongfoot oil market bulls like Goldman Sachs, which continues to call for oil prices to surpass 2011 highs next year, as demand expands faster than output. For a long time the premise has been that demand growth will outpace supply, but it might be the other way around, said Tim Evans of Citi Futures in New York. LEss RaDICaL tHaN 2008 Barring an acute double-dip recession, few analysts expect U.S. demand to repeat the radical declines of 2008 or 2009. Last year, U.S. demand rose for only the first time since 2005 when it peaked at 20.8 million bpd, but had still fallen more than 8 percent since then. Higher unemployment since 2007 has cut U.S. vehicle miles travelled by about 2 percent, said James Coan at Rice Universitys Baker Institute in Houston. Americans without jobs drive about 55 percent less, Coan said. Sunoco Inc, the Northeasts top independent oil refiner, has been particularly blunt about the longterm outlook for its main business. The silver lining for consumers is that retail U.S. gasoline prices are expected to fall further from levels above $4 a gallon earlier this summer. Wholesale gasoline futures have already dropped 19 percent since late April highs, and the reductions should trickle down to consumers soon.
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According to Peter Beutel of energy consultancy Cameron Hanover in Connecticut, if recently lower wholesale prices hold, they could amount to savings of $115 billion over a year for drivers. But recent history shows that even sharply falling pump prices cant resuscitate U.S. demand during a downturn. Between mid-2008 and mid-2009, oil use dropped by a million barrels a day, even as gasoline prices cooled by 30 percent. Source: http://english.alarabiya.net

inflation & inteRest Rate to keeP maRkets Volatile

By- Pawan S Rao, II MBA L

Apart from concerns over a slowdown of the US economy and the euro zone debt crisis, high domestic inflation and fears of an interest rate hike will keep the stock market volatile this week, say experts. The 30-share Bombay Stock Exchange Sensex index lost 2.69% to close at 16,839.63 last week amid persistent selling pressure on worries over the global economic crisis after ratings firm S&P downgraded the US creditworthiness. An unprecedented downgrade of the US credit rating by Standard & Poors on August 5 led to a sharp fall in the market, with investors resorting to panic selling. On Tuesday, when the markets will open for trade this week, the overall inflation numbers for July will be released. Headline inflation stood at 9.44% in June, while weekly food inflation shot up to 9.9% at the end of July, sparking fears of a further round of interest rate hikes to tame prices. The market was surprised by the higher-than-expected rate hike of 50 basis points by the Reserve Bank last month. Now, the sharp spurt in food inflation has raised concerns that the central bank will stick to its monetary tightening policy. People are expecting interest rates to go up. Worries over the US and euro zone crisis are still high and fresh in the minds of investors. There is a possibility of a pullback from current levels, but we should be bracing for some more volatility in the short term, said Geojit BNP Paribas Research Head Alex Mathews. Analysts said that given the tricky situation in overseas markets and local macro-economic headwinds, it would be wise to remain cautious and stay stock-specific. The global environment will play a pivotal role in directing the investor sentiment, they added. Domestically, it will be inflation and macro-economic concerns that will guide the investor mood. Fund flows in the Indian markets have not been that bad, considering the intensity of the sell-off. The government, too, is trying its best to address the governance deficit. But inflation continues to be a big headache, with food inflation flaring in end-July, IIFL Head of Research Amar Ambani said. On the macroeconomic front, exports continue to be robust, but might moderate in the coming months owing to the slowdown in the US and Europe Source:http://www.moneycontrol.com
07

DiD you know: wHat constitute us Debt?

By- Anubhav Jain, II MBA M

The United States public debt is the money borrowed by the federal government of the United States at any one time through the issue of securities by the Treasury and other federal government agencies. Gross debt has increased by over $500 billion each year since fiscal year (FY) 2003, with increases of $1 trillion in FY2008, $1.9 trillion in FY2009, and $1.7 trillion in FY2010.As of August 3, 2011, the gross debt was $14.34 trillion dollars. As of January 2011, foreign countries owned $4.45 trillion of U.S. debt, or approximately 47% of the debt held by the public of $9.49 trillion and 32% of the total debt of $14.1 trillion. The largest holders were the central banks of China, Japan, the United Kingdom and Brazil. The share held by foreign governments has grown over time, rising from 25% of the public debt in 2007 and 13% in 1988. As of May 2011 the largest single holder of U.S. government debt was China, with 26 percent of all foreign-held U.S. Treasury securities. Chinas holdings of government debt, as a percentage of all foreign-held government debt, have decreased a bit over the last year, but are up significantly since 2000 (when China held just 6 percent of all foreign-held U.S. Treasury securities).US owe China $1.159 Trillion divided by $14.3 Trillion = 8%. Another third is owned by the American public, and the final third is debt held by US own government, as in, one part of government owes another part of government. Theoretically, that intragovernmental debt could be cancelled without any consequence. The annual gross domestic product (GDP) to the end of June 2011 was $15.003 trillion (July 29, 2011 estimate), with gross debt at a ratio of 96% of GDP, and debt held by the public at 65% of GDP. MAJOR FOREIGN HOLDERS OF TREASURY SECURITIES (in billions of dollars) HOLDINGS 1/ AT END OF PERIOD May May Country 2011 2010 China, Mainland 1159.8 867.7 Japan 912.4 784.8 United Kingdom 2/ 346.5 350.7 Oil Exporters 3/ 229.8 228.6 Brazil 211.4 161.5 Taiwan 153.4 126.2 Carib Bnkng Ctrs 4/ 148.3 166.3 Hong Kong 121.9 145.7 Russia 115.2 126.8 Switzerland 108.2 84.4 Canada 90.7 84.4 Luxembourg 68 75.6 Germany 61.2 55.8 Thailand 59.8 46.3 Singapore 57.4 40.6 India 41 29.2 Turkey 39.3 27.6 Ireland 33.5 48 Korea, South 32.5 37.8
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Belgium Poland Mexico Italy Netherlands France Philippines Norway Sweden Colombia Israel Chile Egypt Malaysia Australia All Other Grand Total

31.4 27.9 27.7 25.4 23.7 23.6 23.6 21.1 20.9 19.9 19.1 18.9 12.9 12.7 12.3 202.5 4514

17.6 23.4 34.2 20.8 17.6 37.9 14.4 15.2 13.4 15.7 20.1 12 28 10.5 14.1 174.6 3958.1

Of which: For. Official 3239.62690.8 Treasury Bills 422.8 466.9 T-Bonds & Notes 2816.82223.8 *TOTAL US DEBT= 14.3 TRILLION Department of the Treasury/Federal Reserve Board July 18, 2011 1. Estimated foreign holdings of U.S. Treasury marketable and non-marketable bills, bonds, and notes reported under the Treasury International Capital (TIC) reporting system are based on annual Surveys of Foreign Holdings of U.S. Securities and on monthly data. 2. United Kingdom includes Channel Islands and Isle of Man. 3. Oil exporters include Ecuador, Venezuela, Indonesia, Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, the United Arab Emirates, Algeria, Gabon, Libya, and Nigeria. 4. Caribbean Banking Centers include Bahamas, Bermuda, Cayman Islands, Netherlands Antilles and Panama. Beginning with new series for June 2006, also includes British Virgin Islands. Source: http://www.treasury.gov/resource-center/data-chart-center/tic/Documents/mfh.txt http://answers.yahoo.com/question/index?qid=20110717193851AA3fwpn http://en.wikipedia.org/wiki/United_States_public_debt

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inVestoR focus
By- Madhukar Das II MBA G

Rallis India
the market is facing tough times under the global pressure. The economic concerns like inflation also adding to the market misery. The Reserve Bank of India, in a bout with troublesome inflation yet again increased lending rates by 50 basis points in its July 26 review. The Sensex shed close to 2000 points (about 10%) in past 30 days and the situation still looks grim. Fundamentally speaking Rallis India incorporated in the year 1948 is a company engaged in production and trading of chemicals, fertilizers and pesticides. It is a member of Tata group of companies, Indias largest and most respected business house. It is the second largest pesticides company in the country with a market share of over 13%. The company has impressive global presence especially in south east Asia and Europe. The Company has set up new pesticide plant in Dahej, Gujarat (SEZ) with the capex of `180 crores. The facility started commercial production from June 2011. This new plant would support export sales of Rallis. This plant will enjoy tax exemption for five years and have potential to generate turnover of Rs 5000 million over three years. Company`s standalone sales grew by 17% to Rs 2,384 million. The companys sales volume grew by >15% YoY during the previous quarter. EBITDA grew by 29.4% YoY to Rs 314 million with the EBITDA margin of 13.1%. Standalone PAT has shown growth of 11.7% YoY to Rs 166 million. Lower growth in PAT was on account of higher finance cost and depreciation. The international business contributes a large portion of the companys sales and is subjected to foreign exchange risks as current scenario is very uncertain. However the margins are healthy for the company. Net profit margin is 12.1% against industry average of 7.9%. Impressive return on capital employed at 49.7% against average of 17.1%. P/E ratio is higher than average indicating it is the preferred stock within the industry segment.

Other Picks
BUY : VIP Industries CMP`765 Target`825 Stop Loss`735 Exide Industries CMP`157.80 Target`168 Stop Loss`153 Sell : Precision Wires CMP`110 Target`96 Stop Loss`117

technically speaking

The price line has given a continuation wedge breakout pattern signaling a short term upmove.

The MACD line has crossed over the signal line.

The commodity channel index is showing sharp movements. Therefor the current signal may be achieved in a very short period. However this movement is not purely reflected by the trade volumes. The volume remains lower than the average.

RSI line has remained Momentum line has crossed buoyant never nearing the oversold region in the 3 over in the positive region month period in consideracoinciding with the tion. breakout.
Source: Company Website

Recommendation : BUY CMP : `166 Target Price : `180 Stop loss : `159

special points of interest: Due to adverse market conditions there were no calls made for the previous issue. We are looking at a trading horizon of 1530 days and shall give more weightage to technical analysis and price trend of the stock. We shall also study the fundamental aspects of a company to avoid getting into loss making trade positions in case of movement of market in direction opposite to that of my prediction.

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inVestoR cHeck
By- Saurabh Khator, II MBA L

Introduction: Tree House Education is one of the leading educational services providers in India, incorporated in 2006. They have 177 pre-schools under the brand name of Tree House across 23 cities in India. Out of 177 preschools 108 are self-operated by the company while rest are based on franchise model. Tree House provide a wide variety of educational services to K-12 schools which includes designing curriculum and providing teaching aids, supplying methods for imparting education, organizing extra-curricular activities for students and teacher training. They offer playschool and nursery facilities, vacation camps, mother-toddler classes, hobby classes, day care facilities and teacher training course at pre-schools. Tree House Educations pre-schools are mainly located in the states of Maharashtra, Gujarat, Karnataka, Rajasthan and Andhra Pradesh. The promoters of the company are Rajesh Bhatia and Geeta Bhatia about the Issue: The issue opened on Aug 10, 2011 - Aug 12, 2011 and was 100% Book Building process. The price band for the issue was ` 135- ` 153. The company is offering discount of ` 6 per equity share on the final issue price to the retail price. The issue size is 8,432,189 Equity Shares of `. 10 face value each. Company plans to raise around ` 129 crore from market if value at upper price band. CRISIL has assigned an IPO Grade 3 to Tree House Education IPO, which means company has Average Fundamentals. The Book running lead manage` for the issue are J M Financials and Motilal Oswal Investment Advisory Private Limited while the registrar for the issue is Link Intime India Private Limited and it has agreement with NSE and BSE. The company is diluting 25 % stake through issue. In the pre-IPO placement to Matrix India partners and Foundation Capital, company raised around ` 150 crore. It raised ` 17.07 crore from issue of 12.64 lakh shares at ` 135 per share to two anchor Investors Rising India Focus Fund and Axis mutual Fund. The company reported 96.74 per cent CAGR revenue growth between FY08 and FY11, amounting to ` 41.15 crore. It also reported a profit after tax for FY11 at ` 9.2 crore. The company plans to use money raised through the issue for pre-schools expansion, for constructing educational complexes in Rajasthan and Gujarat and for repayment of Loans. Conclusion: The issue received bids for more than 1.32 crore equity shares as against issue size of 71.67 lakh equity shares (excluding Anchor investors). QIB portion was subscribed 1.02 times, NII portion was subscribed 1.68 times and Retail portion was subscribed 2.76 times. Maximum bids were received at lower end of price band i.e. ` 135. Anchor Investors were also allotted shares at the same price so we expect the listing to be at lower end of price band. We see that the issue is highly priced and is available at P/E multiple of 48 times which is quite high as compared to its peers and most of its revenue come from pre-school business which is highly disorganized. But if we see the positive side of the IPO, currently the preschool market in India is ` 3000-4000 crore and is growing at 36 % y-o-y. Around 50 % of the Indian population is below 24 years and the promoters have good experience in Educational sector also Tree School has strong pre-school network which give it scalable business model approach. We see that its quite new business and has high growth potential in future so investors with long term horizon can consider investing in price range between ` 80-100 per share.

11

stuDent sPeak
By- T. B, Deekshit Ravichandra, II MBA L

In this issue of Chaanakya, We have with us Mr. Zafar Iqbal, who completed his internship with MCX Ltd.. Chaanakya: What is the organization all about? Mr. Zafar: MCX refers to Multi Commodity Exchange. It is an electronic commodity future exchange. It offers more than 40 commodities. Chaanakya: How did you get selected for your Internship? Mr. Zafar: I used my network to get the internship in MCX. I always wanted to work in any company relating to commodities. I kept asking and getting information on who is working in such companies. I finally found the contact and kept on persuading that person till he agreed to help me get an internship in MCX. Chaanakya: What was your topic and role as an intern within the organization? Mr. Zafar: I did my internship was regarding the Benefits, need and regulatory framework for introduction of Commodities derivative funds related products in the Indian market and analysing how they are presently working in the countries where they are allowed. In addition to that, Comparing the commodity contracts of various commodities like turmeric, corn, energy, carbon, ethanol, ATF etc. which are present in various commodity exchanges all over the globe like Dubai Gold and Commodities Exchange (UAE), Russian Trading System Stock Exchange (Russia), New York Mercantile Exchange (USA), ICE Futures Europe (UK) etc. Chaanakya: How you approached towards your assigned goals? Mr. Zafar: I did not have any clue about commodities market; neither did I know about the basics of commodity trading. First I had to make my basics strong. I only had a brief idea about what a derivative trade is. I had to know derivative trading well since commodities market involves a lot of derivative transactions. I read a lot of literary material and research papers. The workshops and training provided by MCX through Angel Broking and Bloomberg helped me to understand the practical aspects and basic technicalities of the commodities market. After this, I gained confidence and my interest in the subject increased. Since most of my project was about studying contracts and studying regulatory framework, I did my job by making a detailed study of the relevant contracts and regulations. The guidance of my mentor at MCX proved very vital in giving a proper direction to my project. Chaanakya: How was your experience within the organization? Mr. Zafar: I had a mixed experience at MCX. I got to meet very intelligent, authoritative and knowledgeable persons at MCX. The professional way in which they handle things inspired me and also thought me lessons. On the other hand i also saw certain personnel without any professionalism. They were bad examples. But at the end everything is a part of the package. I am glad I got to experience many experiences. Chaanakya: How your internship would be an add-on to your profile at the time of your placement? Mr. Zafar: I am looking for a career in the commodities sector. The experience and contacts which I gained during my internship would certainly help me.
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In this issue of Chaanakya, We have with us Mr. Rajat Chawla, who completed his internship with ING Vysya Bank Ltd. Chaanakya: What is organization all about? Mr. Chawla: ING Vysya Bank Ltd., is an entity formed with the coming together of erstwhile, Vysya Bank Ltd, a premier bank in the Indian Private Sector and a global financial powerhouse, ING of Dutch origin, during Oct 2002. ING has gained recognition for its integrated approach of banking, insurance and asset management. It stands proudly as the first Indian International Bank by being a member of the reputed financial global Giant ING. Chaanakya: How did you get selected for your Internship? Mr. Chawla: I got selected through a direct interview arranged by an acquaintance, Mr. Sameer Mehta. Mr. Mehta is the Regional-Head and VP (Sales), ING for UP & Uttaranchal. Chaanakya: What were the bases for your selection as an intern? Mr. Chawla: My selection was based on my interview and my past academic performances. Apart from my academic performance, I think my aptitude to learn and interest to work was the key for my selection. Chaanakya: What was your topic and role as an intern within the organization? Mr. Chawla: The Area of my study was Credit Risk Management at ING Bank with reference to SME Finance. My mentor for the project was Mr. Prasad Das, Area Credit Manager, ING Vysya Bank Ltd. My role as an intern was to 1. Study the business performance of the prospective borrower 2. Meeting with clients and visiting their workplace to understand the purpose of their 3. Analyzing the Financial Statements and future estimates 4. Following the whole credit appraisal process and assisting the Area credit Manager in arriving at credit decisions. Chaanakya: How you approached towards your assigned goals? Mr. Chawla: My project was divided into three parts and it helped me completing my project in an organized way. a) Theoretical aspect: Understanding what is SMEs , MMEs and their basic traits in the manner mentioned below: i) Going through the balance sheet of the customer. ii) Customer meetings iii) Presentation of post analysis of the balance sheet of the above mentioned customers. iv) Meeting existing customers and new to bank customers b) Practical aspect: This part consisted of the ongoing process and various other practical aspects of credit risk management and exposure to other interrelated jobs. c) MIS: Basics about MIS , preparation of information, and the control aspects generated with each kind of MIS Chaanakya: How was your experience within the organization? Mr. Chawla: I enjoyed myself throughout my internship. It was a true learning experience as I got an opportunity to work with some excellent personnel in the area of credit risk management.
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I am indebted to Mr. Das for his valuable advice, stimulated suggestions and overwhelming support without which the project would not have been a success. I went in as a blank document but came back with a lot to cherish. Chaanakya: How your internship would be an add on to your profile at the time of your placement? Mr. Chawla: I had always aspired to work as a manager in the area of credit risk management. I find myself lucky to go through an internship in the area of my interest. It will give me enough confidence to face the interviewing panel during my placements. I have done my home work. Rest is destiny! Chaanakya: What would you like to suggest to candidates seeking the internship in the same organization? Mr. Chawla: I feel that one should be clear with his area of interest. Clarity of thought and willingness to learn is the most important thing. If you want to seek an internship in ING Vysya Bank Ltd, then you should start approaching the organization right from the end of December. These guys might not pay you any stipend but the learning is priceless. Getting an internship in CRM department of ING is not very easy, so a strong reference will always put you ahead of others.

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buzzwoRDs
By- Pragathi P. II MBA K Apurva Gupta II MBA J

Comfort letters Comfort letters are documents issued to back up an agreement but which do not have any contractual standing. They are often issued by a parent or associate company stating that the group will back up the position of a small company to improve its trading position. They always state that they are not intended to be legally binding. They are also known as letters of comfort. PIP It refers to the smallest price change that a given exchange rate can make. Since most major currency pairs are priced to four decimal places, the smallest change is that of the last decimal point . For most of the currency pairs, this is the equivalent of 1/100 of one per cent, or one basis point. For example, the smallest move the USD/CAD currency pair can make is $0.0001, or one basis point. The smallest move in a currency does not always need to be equal to one basis point, but this is generally the case with most currency pairs. Cover on a Bounce Cover on a bounce is the covering of a short position after it has reached and bounced off a level of support. This strategy waits for the price to move to a support level, instead of selling before, to see if the level will hold - because the trader will benefit if it doesnt hold. Once the security bounces, it is clear the security will have trouble moving down further, so the trade covers the short position. Levels of support act as a backstop to a further move downward in price, but can sometimes fail to hold. If a security falls below a support level, it will often lead to an even stronger downward move as the level is taken out. The trader waiting for a bounce is betting that the support level will not hold and they will benefit if this materializes Cover on approach Cover on approach is the closing out of a profitable short position as the security moves toward a key level of support. As a security moves closer to a level of support the chances of it falling any further weaken because buying has come into the security at the support level, which keeps the price from a continued downward move and limits the continued success of the short trade. Critical support levels often provide limits for how far a security can fall. By covering before the security gets to the support level, they are being conservative with their gains as support levels limit further moves downward and can often see large moves back up as the security bounces.
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quiz
By- Abhijeet Singh I MBA G

1. Jyothy Lab to buy 20 percent more stake in ________ at ` 41.2/share. a. HUL b. P & G c. Henkel India d. Reckitt Benckiser 2. HDFC bank has recently raised ` ____________ crore from lower Tier-II bonds. a. 3,650 b. 3,000 c.3,200 d.4,000 3. __________ has recently signed a memorandum of understanding (MoU) with the Indian Army for customized defence salary account . a. Axis Bank b. PNB c. IDBI Bank d. SBI 4. IT firm Tata Consultancy Services (TCS) has appointed _______________ as the Managing Director and Vice Chairman of its UK subsidiary, Diligenta. a. Sanjay Tyagi b. Robert Clan c. Vinay Kumar d. Phiroz Vandrevala 5. Global Offshore, formerly known as Garware Offshore Services, plans to spend ___________ millions on adding two more Platform Supply Vessels (PSVs) of 4,500 dead weight tonne (dwt) each to its fleet. a. $ 112 b. $ 120 c. $ 100 d. $ 90 6. Microsofts acquired Skype in ______. a. $10.5 billion b. $8.5 billion c. $9.5 billion d. $11 billion
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cRosswoRDs
By- Naveen Kulkarni I MBA N

across 2. 6. 7. 8. Down 1. 3. 4. 5. The committee that submitted its report on customer service in banks State Bank of Patiala and State Bank of Hyderabad are proposed to merge with which bank The airline that was rejected recently by Star Alliance to be a part of it The Indian Infrastructure company that has bid for Barcelona and Madrid Airports Which oldest microfinance firm headed by Vijay Mahajan is getting `. 800cr funds from investors India will route Euro payments through Union Bank of India and which other bank to settle payments for National Iranian Oil Company With which company did Jet Airways formed an agreemen to develop mumbais prime land located in Bandra-Kurla Complex Who headed the TRAC committee which proposed the new Makeover and Take over rules

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answeRs to PReVious issue

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team

Apoorv Jhudeley & Rajat Sikri Editors Zafar Iqbal Cartoon Mandeep Kaur Vaibhav Nagar Gurjit Singh News Richa Jain & Naveen Kulkarni Crosswords & Quotes Sumit Kumar Gupta Graph & Rates Amit Prakash book and Magazine Review Abhijeet Singh T. Deekshith Ravi Chandra & Rao Pavan Sridhar student article Rohit Dhannawat & Saurabh Khator Investors check Gaurav Jain stock Watch Anubhav Jain Did You Know Quiz Ritu Jadhwani Debate Akshat Malik, Geetika Gupta & Manan Datt alumni speak Saumya Sar Commodities Market Amit Prakash & Chinmay Uchhrang Jethwa scam Madhukar Das Investor Focus Apurva Gupta & Pragathi P. buzz Words Kumar Gaurav & Meenakshi Ramnath Review Committee Apoorv Jhudeley & T. Deekshith Ravi Chandra Creative Head & Design Rahul sinha Cover Page and Layout Design

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