8/6/2019 1_1st April 2008 (010408)

1/5

Anticipate the difficult by managing the easy.

-Lao Tzu, Chinese Philosopher

National Headlines

January imports rise 47%; surge in non oil items over 10 months.

Advance tax from financial firms rise up by 72%.

Major import duty cuts on Edible oil, rice. GAIL may book RS 2200 crore loss, ONGC stands to gain and BPCL may run out of

cash by April.

Half of the companies listed since 2006 are ruling below offer prices.

Tata Motors finally agreed to buy Jaguar and Land Rover for $2.3 Billion in cash.

Inflation at a 13 month high touching 6.68%.

R- Power to place 10k crore equipment order of 12 boilers for its plants.

40% hike for Govt. employees as per Sixth Pay Commission.

UCO Bank shifts Rs.104 Cr to three ARCs (Asset Reconstruction Companies)

Investors lose 24.6 lakh crore since January.

Gold sales wane after price touches record Rs.13495 per gram Interbank call rates hit a 17 month high of 9%.

International Headlines

Morgan Stanleys net falls 42%, on 42-3 Billion in write downs.

Citi group planning to sell Australian retail brokerage unit, close branch in Taiwan

and merge others in Singapore & Hong Kong.

J.P Morgan buys Bear Stearns Cos. for just $2 (later on agreed to pay $10)-Deal

backed by U.S govt. Carlyle Capital on brink of collapse. It was once $21.7 Billion Company.

Taiwans Central bank raises interest rate for the 15th continuous quarter to cool

inflation.

Pepsico buys stake in Russian juice maker JSC Lebedyansky for $1.4 bn.

Nike Q3 earnings up 35%

Visa raises record $17.9bn in IPO

1st APR 2008

Volume 2, Issue 1

..Tracking the Economy

Becoming wealthy is like playing Monopoly, the person who can accumulate the most assetswins the game Noel Whittaker

Inflation 6.68% , IIP5.40 %

Issue AttractionsNationalHeadlines

1

InternationalHeadline

1

CorporateInterview

2

Quiz 2

Student Editorial 3

InvestorsCheck/Taglines/Buzz Word

4

15 days Movements

CHAANAKYA

Wealth Incorporation - A CCIM Finance Club Initiative Presents

1100

1150

1200

1250

1300

1 2 3 4 5 6 7 8 9 1 0 11 12 13 14 15 16

Gold(per gram)

Gold

14700

15200

15700

16200

1 2 3 4 5 6 7 8 9 1 0 11 12 13 14 15 16

Sensex

Sensex

39.5

39.7

39.9

40.1

40.3

40.5

40.7

40.9

1 2 3 4 5 6 7 8 9 1 0 11 12 13 14 15 16 17

Rs/$

Rs/$

3900

3950

4000

4050

4100

4150

4200

4250

4300

1 2 3 4 5 6 7 8 9 1 0 11 12 13 14 15 16

Oil(per bbl)

Oil

8/6/2019 1_1st April 2008 (010408)

2/5

Quiz

Everyone has the brainpower to follow the stock market. If you made it through fifth-grade

math, you can do it. Peter Lynch

1. What is a situation where a homeowner mails his or her house keys to a mortgage lender due to aninability to meet mortgage payment obligations and a lack of equity in the property known as?

2. What is an investment scheme that claims to reduce income tax without changing the value of the userincome or assets?

3. Name a type of bond that offers investors the option to reinvest coupon payments into additional bondwith the same coupon and maturity. (Also known as a "multiplier bond" or a "guaranteed coupon

reinvestment bond)

4. Name a debt security that doesn't pay interest (a coupon) but is traded at a deep discount, renderingprofit at maturity when the bond is redeemed for its full face value.

Bhanoji Rao is a renowned academician. He received his first degree at the age of 18 and started his professioncareer. By 2003, when he relinquished formal positions, he gained 45 years of expertise in the area ofdevelopment economics and policy, with special reference to India and East Asia. Output included 15 books, 30chapters in books and 60 published papers.

We were obliged to get an interview with him. In this and the next issue we will cover the interview. You can

also read about him on his website: www.bhanojirao.com

Q) You have done just about everything! Professor, Researcher, Economist, Statistician,Investigator... which part did you enjoy the most?

Reply: The position of University academic in a challenging environment was the most enjoyable, especiallyafter establishing my self as knowledgeable in a couple of special areas. Sought after by students, youngercolleagues, governments and others, it was like a great joy for the ego and a lesson eventually to be humble

Q) Given your extensive exposure to and study in Singapore, what do you feel are the respectiveadvantages of India and Singapore that have led to their growth and advancement? Please

comment on the basic differences between the economic working models of the two countries.R- In India we seem to have great potential and no commensurate realization. Even the tiny island [Singaporcould teach the following as success parameters: rewarding talent and punishing corruption.

Q) How different is the business environment (in India and globally) now than it was when youbegan your career?

R- Business now has to work in an open and global environment. Gone are the days of protecting the homegrown.

Q) You have studied many sectors of the Indian economy. Where do you see the most potential

when the US will be under recession?R- Our strength must be in diversification of products and markets and not in subsidies and handouts toexporters.

Q) Can you give us an insight into the trade linkages you think can emerge of APEC?

R In my personal view APEC will continue to be a great talk-shop for many; for a few like China andSingapore it is an opportunity to network and expand business interests.

(To be continued in the next issue.

Interview With Prof Bhanoji Rao

8/6/2019 1_1st April 2008 (010408)

3/5

Did you Know?

On May 2, in NichLane, London, UK, JGoddard a courier Sheppard's mobrokers was robbedbriefcase contaialmost 300 bebonds worth a tota292 million ($million).

However, as welbeing one of the bigmuggings i t probably the munprofitable at same time: by midevery major bank been warned not

accept the certificand the thief

unable to trade them

JET AIRWAYS

BSE- 532617, NSEJETAIRWAYS,

CMP- Rs. 557.50

TARGET PRICE: RS

GAMMON INDI

BSE- 509550, NSEGAMMONIND

CMP- Rs. 399.75

TARGET PRICE: R

SATYAM COMPUTBSE- 500376

NSE SATYAMCO

CMP- Rs. 408.45

(CMP-Current Market

Stock Ratnas

A bank is a place where they lend you an umbrella in fair weather and ask for it back when itbegins to rain. Robert Frost

Answers To Quiz

1. Jingle Mail

2. Abusive Tax Shel

3. Bunny Bond

4. Zero-Coupon Bon

5. Created in 1924, Massachusetts

Investors Fundheralded the arriv

7 KEY RATIOS FOR PICKING STOCKS Compiled by:

Nikhil Purohit

The following 7 financial ratios offer terrific insights into the financial health of a company -- and

the prospects for a rise in its share price.

1. Ploughback and reserves

After deduction of all expenses, including taxes, the net profits of a company are split into twoparts -- dividends and ploughback. Dividend is that portion of a company's profits which isdistributed to its shareholders, whereas ploughback is the portion that the company retains andgets added to its reserves. The figures for ploughback and reserves of any company can beobtained by a cursory glance at its balance sheet and profit and loss account.

Ploughback is important because it not only increases the reserves of a company but also

provides the company with funds required for its growth and expansion. All growth companiesmaintain a high level of ploughback. So if you are looking for a growth company to invest in, youshould examine its ploughback figures. Companies that have no intention of expanding are

unlikely to plough back a large portion of their profits.

2. Book value per share

You will come across this term very often in investment discussions. Book value per shareindicates what each share of a company is worth according to the company's books of accounts.

The company's books of account maintain a record of what the company owns (assets), and whatit owes to its creditors (liabilities). If you subtract the total liabilities of a company from its totalassets, then what is left belongs to the shareholders, called the shareholders' funds. If you divideshareholders' funds by the total number of equity shares issued by the company, the figure thatyou get will be the book value per share.

Book Value per share = Shareholders' funds / Total number of equity shares issued

3. Earnings per share (EPS)

EPS is a well-known and widely used investment ratio. It is calculated as:

Earnings Per Share (EPS) = Profit After Tax / Total number of equity shares issued

This ratio gives the earnings of a company on a per share basis.

In order to get a clear idea of what this ratio signifies, let us assume that you possess 100 shareswith a face value of Rs 10 each in XYZ Ltd. Suppose the earnings per share of XYZ Ltd. is Rs 6per share and the dividend declared by it is 20 per cent, or Rs 2 per share. This means that eachshare of XYZ Ltd. earns Rs 6 every year, even though you receive only Rs 2 out of it as dividend.The remaining amount, Rs 4 per share, constitutes the ploughback or retained earnings. If youhad bought these shares at par, it would mean a 60 per cent return on your investment, out ofwhich you would receive 20 per cent as dividend and 40 per cent would be the ploughback. Thisploughback of 40 per cent would benefit you by pushing up the market price of your shares.

Ideally speaking, your shares should appreciate by 40 per cent from Rs 10 to Rs 14 per share.Under ideal conditions, ploughback should push up the price of your shares by 20 per cent, i.e.

from Rs 20 to 24 per share. Therefore, irrespective of what price you buy a particular company'sshares at its EPS will provide you with an invaluable tool for calculating the returns on yourinvestment.

(The other 4 ratios will be covered in the next issue.)

8/6/2019 1_1st April 2008 (010408)

4/5

INVESTORS CHECKTech Mahindra: Buy position

At Rs 723, the stock trades at 12 times its current earnings and 10 times its FY-09 earnings.

Tech Mahindra broadly caters to three sets of clientele telecom service providers, telecom equipment manufacturer

and independent software vendors. The company is also working with clients on latest Internet technologies to cove

newer delivery standards such as WiMAX.

Tech Mahindras focus on the European markets, a critical geography for telecom spending. The client base of Tec

Mahindra comprises, among others, AT&T, Motorola, Alcatel-Lucent, Convergys, Vodafone, and O2. Tech Mahindr

derives 70 per cent of its revenues from European clientele.

Tech Mahindra has recently won a $350-million, five-year deal with British Telecom Group (BT). This being a volumservice deal, BT has indicated that a good part of the work is to be carried out offshore, suggesting scope for highe

margins, high growth, portending more business for Tech Mahindra

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

Buzz Word

Odd lot

A trading order for less than 100 shares of stock.

Greenmail

Situation in which a large block of stock is held by an

unfriendly company, forcing the target company torepurchase the stock at a substantial premium to prevent atakeover.

In the tank

Used in the context of general equities. Slang expressionmeaning market prices are dropping rapidly.

Pac-Man strategy

Takeover defense strategy in which the prospectiveacquiree retaliates against the acquirer's tender offer by

launching its own tender offer for the other firm.

Book Quotes:

"Generally, by the time you are Real, most of

your hair has been loved off, and your eyesdrop out and you get loose in the joints andvery shabby. But these things don't matter atall, because once you are Real you can't beugly, except to people who don't understand

- Margery Williams, The Velveteen Rabbit

Tag Lines:

THE WORLD ON TIME -FEDERAL EXPRESS

GOOD PEOPLE TO BANK WITH - UNION BANK

THINK SMALL AKAI

WHEN YOU'RE SURE - BUSINESS STANDARD

ENTER A BETTER LIFE -CHOLAMANDALAM LIFE

INSURANCE

YOU AND US; UBS. HERE TODAY. HERE TOMORROW -

UNITED BANK OF SWITZERLAND

WHATEVER MAKES YOU HAPPY - CREDIT SUISSE

PRIVATE BANKING

A. Commonwealth Bank B. Africa Merchant Bank

C. Finance Group D. Perspective Inc.

A.

C. D.

8/6/2019 1_1st April 2008 (010408)

5/5

Contributions made by :

Logos, Taglines & Editing Arihant PatawariFouzia Taranum

News Anup Rajan &Ashish Poddar

Did you know, Quotes SukruthaStock Ratnas, Quiz Lavanya

Graphs Gnana DeviInvestors Check Diwakar GroverInterview Sasmit K. SahuBook Quotes, Buzz Word Nikhil Mehta Article Nikhil PurohitCoordination Manish Sinha