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Interview with Mr. Vijayan

I have a million dollars in the stock market, because if I lose a million dollars, I dont personall

care. Suze Orman, American Personal Finance author.

Position Held : Divisional Manager, Motilal Oswal, Bangalore.Q1. Sir, as a Divisional Manager, what are your responsibilites?

Ans. Hello, I handle all the divisions of Operations in Karnataka, I look into clie

retention, building up the customer base, moreover I assist in training sessions conduct f

the staff and help develop customer suited products.

Q2. With the present market conditions, what kind of strategies have you employed to he

your client to earn good returns?

Ans.The volatility in the market is at a level where, every second can spell a doom, so w

have to be very careful when we discuss about the investments of the client, mostly, the i

house research we have re-align the decisions that the central office has made to suit th

customers and takes a stand on profit booking, this is when it comes to clients who hav

signed up or signed up for trading. Otherwise, we have products that help customers inveaccordingly to the levels of money committed, the last 2 quarters have been a roller coast

ride, it's been extremely interesting to watch the market trends and make effecti

judgments, nevertheless, with the global oil prices cooling down, the markets look brig

again and it's just an other day.

Q3: Sir, if I may ask, what is your opinion on Technical Analysis and Fundamental Analys

and which out of the two is better ?

Ans. Motilal Oswal, has in-house tools that help the firm invest, we rely on the populmarket tools but also put in our research to ensure we deliver the best of business an

satisfaction to the customer, I understand that, these are part of your curriculum, in m

personal opinion, it depends on the stand that you want to take on the market, obviously

you want to book profits and exit the market as soon as possible, technical analysis can he

you immensely, but fundamental analysis is for investors who have a long term plan wi

them. So, both the analysis have a significant role to play.

Q4: Sir, what essential knowledge do you think an MBA must have and your message to thstudents of Finance Club of Christ University through Chaanakya.

Ans. It is important to understand what you want and then plan accordingly, this is the fir

thing we tell our customers when they trust us with their money, the same thing applies

all, It's very necessary that one has to follow the market and most importantly th

macroeconomic scenario to fully understand their implications and the possible futu

movements of the markets. All the very best.

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Did you Know?

The Dow

Industrial Avera

an average of

stocks. Whe

started there

only 12 stoGeneral Electric

only company o

original 12 still i

index.

In 2007, Ger

managed to ba

its budget for the

time in nearly

years, mainly du

an increase in saleand a s t ro

economy.

In 2004 Bank of

was ordered t

compensat ion

$82m (45m)

case relating to

collapsed Bank

Credit and Comm

International

HCL

INFOSYSTEMS,B

500179 ,

NSE HCL- INS

CMP- Rs. 119.

TARGET PRIC

Rs.155

VISHAL RETA

BSE 532867

NSEVISHALR

CMP- Rs 416.

TARGET PRIC

Rs.485

(CMP Current Market

Stock Ratnas

It's easy to make a buck. It's a lot tougher to make a difference.American Television Journalistand Author

SMART METRIC - P/BV or P/EBy : Manish Sinha

P/BV is also another parameter like P/E that is commonly used to value stocks and isarrived at by dividing the market price of a share with the respective company's book valueper share. Now, book value is equal to the shareholder's equity (share capital plusreserves and surplus). For the banking and finance companies, book value is calculatedas 'share capital plus reserves minus miscellaneous assets not written off. This formulathen takes care of the bank's NPAs and gives a correct picture.

FY08 Balance Sheet of Infosys

If we look at Infosys' consolidated balance sheet above for FY08, book value can bearrived at by adding Rs 2,860 m (equity capital) and Rs 135,090 m (reserves and surplus),which equals to Rs 137,950.Now, by dividing this book value (Rs 137,950 m) by theissued equity shares of the company (approx 572 m), we would arrive at the book valueper share figure, which is Rs 241.2. This will be our denominator for calculating the P/BVfor the Infosys stock, which currently stands at 7.01x.

Because companies from the sectors like software and FMCG have low amount oftangible assets, their P/BV figures are high as compared to those of companies in thesectors like auto, engineering, steel and banking. Thus the P/BV may not be a correctindicator of valuation in companies like software and FMCG. On the other hand, oldeconomy sectors like auto and engineering have large balance sheets, i.e., they have alarge amount of fixed assets and investments. As such, P/BV is a good indicator ofmeasuring value of stocks from these sectors.

What does P/BV indicates?

P/BV is a good metric to value stocks of companies in the capital-intensive industries likeengineering, automobiles and banks. If a company is trading at a P/BV of less than 1, thisindicates any or both of the two -

1. Investors believe that the company's assets are overvalued, or

2. The company is earning a poor return on its assets.

A high P/BV indicates vice versa, i.e., markets believe the company's assets to beundervalued or that the company is earning and is expected to earn in the future a highreturn on its assets.

What does P/BV fail to indicate?

P/BV indicates the inherent value of a company and is a measure of the price thatinvestors are ready to pay for a 'nil' growth of the company. As such, since companiesin the services sectors like software and FMCG have a high growth componentattached to them, P/E and not P/BV is a right measure of their valuations.

P/BV should not be used for valuing companies with high amount of debts. This isbecause high debt marginalizes the value of a company's assets and, as such, P/BVcan be misleading.

Liabilities Rs mAssets Rs m

Equity capital 2,860Cash 69,500Reserves &surplus 135,090

Other currentassets 60,680

Currentliabilities 41,910Fixed assets 47,770

Investments 720Deferred taxassets 1,190

179,860 179,860

8/6/2019 10_16th August 2008 (160808)

4/7Ask five economists and you'll get five different answers - six if one went to Harvard. Edgar

R. Fiedler, American Business Economist

CROSSWORD1

2

3

4

5

6

7

8

9

10

11

12

HINTS:

Across: 1. Owner of part of thecapital

Across: 4. Plan or policy for aparticular purpose

Across: 5. Result or profit produceAcross: 6. Fault or imperfectionAcross: 7. Company's plan of actioAcross: 9. Examination orinvestigation

Across: 10. Refusal of employees tworkAcross: 12. Promise to fulfillconditions

Down: 2. Contract or arrangemenDown: 3. Money paid to owner of copyright or patentDown: 8. Make to suit the buyer's

wishesDown: 11. Break a promise orcontract

Quiz:

1.An instrument used by companies to hedge against the risk of weather-

related losses?

2.A market driven by forces that could be in place for many years, causing

the price of a particular investment or asset class to rise or fall over a

long period of time?

3. The expenses, over and above the price of the property that buyers and

sellers normally incur to complete a real estate transaction?

4. The early rounds of funding for a start-up company, which get their

name because the first is known as Series A financing, followed by

Series B financing, and so on?

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Buzz Word Qualifying ratio

A calculation of how much mortgage a borrower can afford, by

comparing his monthly incoming against his monthly outgoing. Landing order

A permit which allows goods to be unloaded into a bonded

warehouse without paying the customs duty.

Escalator clause

A clause in a contract allowing for a regular price increases

because of increased costs, or regular wage increases because of

increased cost of living.

Book Quotes:

Kindness is the language which the deaf can

hear and the blind can see.Mark Twain

Stop the mindless wishing that things would b

different. Rather than wasting time and

emotional and spiritual energy in explaining wh

we dont have what we want, we can start to

pursue other ways to get it.

Greg Anderson

A cardinal principle of Total Quality escapes too many managers: you cannot continuously improv

interdependent systems and processes until you progressively perfect interdependent, interpersonrelationships. Stephen Covey

Company ReviewBy : Sukrutha

Company Profile: KPMG

KPMG is a global network of professional services firms providing Audit, Tax and Advisory services.They have over 123,000 professionals working together to deliver value in over 140 countries worldwide.KPMG is a global network of professional services firms whose aim is to turn understanding ofinformation, industries, and business trends into value..

KPMG in IndiaKPMG was established in India in September 1993, and has rapidly built a significant competitive presencein the country. The firm operates from its offices in Mumbai, Pune, Delhi, Kolkata, Chennai, Bangaloreand Hyderabad, and offers its clients a full range of services, including financial and business advisory, taxand regulatory, and risk advisory services.

In India, KPMG has a client base of over 2000 companies. The firm's global approach to service deliveryhelp provide value-added services to clients. The firm serves leading information technology companiesand has a strong presence in the financial services sector in India while serving a number of market leadersin other industry segments.

KPMG in India is one of the leading providers of risk, financial and business advisory, internal audit,

corporate governance, and tax and regulatory services. With a global approach to service delivery, KPMGresponds to clients' complex business challenges with seamless service across industry sectors and nationalboundaries.

Careers at KPMG

KPMG has a work environment that recognizes and rewards exceptional performance. To help itsemployees capitalize on the unlimited opportunities in a competitive, dynamic marketplace, KPMG hasimplemented several programs to attract the best and the brightest people and is striving to make KPMG aplace where people will want to stay and build their professional career.

Specific Career Opportunities at KPMG include:

Research Analysts / Associates

Consultants - Technology Advisory Services

With a domain specific expertise in taxation, one could be a Tax Professional at KPMG.

People with an Information Technology background can look forward to being KnowledgeManagement professionals or IT Advisory Professionals at KPMG.

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INVESTORS CHECK

FIIs UPDATE : FII activity in 2008

FIIs are not unabashedly bullish about the Indian stock market any more, as is evident from

the $6.4 billion of net redemptions by them so far in 2008. That accounts for about 11 per cent

of the cumulative investments put in by them since they first started investing in India in

1990s.

In the first seven months of 2008, registrations by FIIs seeking an entry into Indian marketshave continued to climb. Gross purchases by FIIs, the actual indicator of foreign investor

activity in India, are greater than last year. And shareholding pattern disclosures for June show

that the FIIs have increased their stakes in quite a few stocks in the mid- and small-cap spaces

Total FII registrations with SEBI, which were 1,219 in December 2007, were 1,457 at end-July.New registrations by FIIs, which slowed between February and April, went up significantlybetween May and July. January, when the stock market touched its pinnacle at 21k, saw 60new FIIs and 151 sub-accounts being registered. The new entrants may not rush to make theirfirst investments in Indian stocks; but the pick-up in registrations is surely indicative ofsustained FII interest in the Indian markets.

The moves by FIIs were company-specific and provided no signals as to their overall stance on

sectors. With sufficient proof that FIIs havent deserted India, domestic investors may look for

some suitable stocks to add to their portfolios at present.

FII activity in F&O

FIIs will now be able to take bigger leveraged bets in the Indian derivatives market, as SEBI

allows them to use AAA-rated foreign Government securities as collateral to fund margin

requirements. Clearing members can now accept foreign sovereign securities with triple-A

ratings as collateral towards margin requirements for FII derivative transactions routedthrough the exchanges. This approval follows a recent enabling move by the Reserve Bank of

India allowing clearing corporations and clearing members to open and maintain demat

accounts with foreign depositories to pledge or transfer such securities as collateral.

FII activity in the domestic derivatives market is typically a fifth of the overall trading turnover,

both in the cash and derivatives market. It also offers foreign institutions an opportunity to put

to use their idle holdings of any foreign Government bonds to back up their transactions in

Indian stocks.

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

Crossword Answ

1. Sharehold

2. Agreemen

3. Royalty

4. Strategy

5. Yield6. Defect

7. Policy

8. Customize

9. Survey

10. Strike

11. Breach

12. Guarantee

Quiz Answers

1. WeatherDerivative

2. Secular Marke

3. Closing Costs

4. Alphabet Rou

Did you Know?

The NASDAQstarted on Febr8, 1971. 199 yafter the New YStock ExchaO r i g i n a l l y omedian quotes listed.

In 1792 the Ban

the United Statesfirst formed A l e x a n dHamilton. It wasof the first Hot isin the U.S market. Trabegan before stock was even is(when issued).

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Contributions made by :

Editing/Compiling, Crossword Arihant PatawariFouzia Taranum B.

News Anoop Rajan &Ashish Poddar

Company Review, Did you know, Quotes Sukrutha

Stock Ratnas, Quiz LaavanyaGraphs Gnana DeviInvestors Check Diwakar GroverInterview Vamsi KanagoviBook Quotes, Buzz Word Nikhil MehtaStudents Article/ Coordination Manish Sinha