Post on 07-Apr-2018
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VOLUME 5.10
ISSUE 96
AUGUST 16, 2011
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about us
Re 01
Grph 02
New 03
National & International events in the world of nance
Dee
Indin Ecnmy 04
Cnemprry aricle
Declining consumption of oil in US 05
Ination & Interest Rate to keep Markets Volatile 07
Did Y Knw? 08
What Constitute US Debt?
Inver Fc 10
Rallis
Inver Check 11
Tree House IPO
sden spek 12
A peek into the corporate world through our Students SIP expe-
rience
bzz Wrd 15
Qiz 16
Check your Financial Quotient
CHaaNaKYa
is the ofcial
Finnce Newleer,
releed frnighly.
I jecive i
keep ech & everyne
re wih he c-
iviie & even in he
world of nance.
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Rates
01
Rep
Revere RepCll re
Ination ( n 28h Jly)
Frex Reerve( n 5h ag 2011)
91 dy t-bill
IIP (Fr Jne 2011)
6.90 Gs 2019
8.00%
7.00%
5.00%-8.10%
+9.44%
$ 317.226 illin
8.3110%
+8.8%
8.0907-8.0907%
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43.5
44
44.5
45
45.5
46
1-Aug 4-Aug 7-Aug 10-Aug 13-Aug
Rs/$
GRaPHs
02
22900
23600
24300
25000
25700
26400
1-Aug 4-Aug 7-Aug 10-Aug 13-Aug
Gold(per 10 gram)
15000000
19000000
23000000
27000000
31000000
5000
5150
5300
5450
5600
1-Aug 4-Aug 7-Aug 10-Aug 13-Aug
future rates open interest
5000
5200
5400
5600
5800
6000
16,500.00
16,900.00
17,300.00
17,700.00
18,100.00
18,500.00
01-Aug 04-Aug 07-Aug 10-Aug 13-Aug
sensex nifty
100
105
110
115
120
1-Aug 4-Aug 7-Aug 10-Aug 13-Aug
Oil(per bbl)
By- Sumit Kumar Gupta II MBA G
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inteRnational news
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 condence in the battered euro credit markets.
national news
By- Rajat Sikri II MBA L
03
StanChart H1 India operating prot 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 ination accelerated signicantly 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 EconomicAdvisory Council (EAC) has called for boosting the condence of investors in the
country.
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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 aremade on the devaluation of dollar and appreciation of Indian rupees. Within a span of 12 months,
the value of dollar has signicantly 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 MotionThe depreciation in the value of dollar, though has benets, 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 difcult for companies to predict their cash
ows, 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
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products. This is not only benecial 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 justied 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 downleading 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 nd 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
xed income securities. Lesser investment inow in these currencies means lesser pressure on
their currency and hence lesser chance of their currency appreciating against dollar. Hence the
technicalities make it difcult to predict the benets in the future.
05
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 edgling 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-efciency 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 condence, 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 fuelby 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-fth 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 inJuly 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 rst 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 rener, has been particularly blunt about the long-
term outlook for its main business.
The silver lining for consumers is that retail U.S. gasoline prices are expected to fall further fromlevels 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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inflation & inteRest Rate to keeP maRkets Volatile
By- Pawan S Rao, II MBA L
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
Apart from concerns over a slowdown of the US economy and the euro zone debt crisis, high
domestic ination 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 rm 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 ination numbers for July will be released. Headline
ination stood at 9.44% in June, while weekly food ination 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 ination 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 Re-
search Head Alex Mathews. Analysts said that given the tricky situation in overseas markets andlocal macro-economic headwinds, it would be wise to remain cautious and stay stock-specic.
The global environment will play a pivotal role in directing the investor sentiment, they added.
Domestically, it will be ination and macro-economic concerns that will guide the investor mood.
Fund ows 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 decit. But ination continues
to be a big headache, with food ination aring in end-July, IIFL Head of Research Amar Am-
bani 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
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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 scal year (FY) 2003,
with increases of $1 trillion in FY2008, $1.9 trillion in FY2009, and $1.7 trillion in FY2010.As ofAugust 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 signicantly
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 nal third is debt held by US own govern-
ment, as in, one part of government owes another part of government. Theoretically, that intra-
governmental 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 29.2Turkey 39.3 27.6
Ireland 33.5 48
Korea, South 32.5 37.8
DiD you know: wHat constitute us Debt?
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Belgium 31.4 17.6
Poland 27.9 23.4Mexico 27.7 34.2
Italy 25.4 20.8
Netherlands 23.7 17.6
France 23.6 37.9
Philippines 23.6 14.4
Norway 21.1 15.2
Sweden 20.9 13.4
Colombia 19.9 15.7
Israel 19.1 20.1
Chile 18.9 12
Egypt 12.9 28
Malaysia 12.7 10.5
Australia 12.3 14.1
All Other 202.5 174.6
Grand Total 4514 3958.1
Of which:
For. Ofcial 3239.6 2690.8
Treasury Bills 422.8 466.9T-Bonds & Notes 2816.8 2223.8
*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, Qa-
tar, Saudi Arabia, the United Arab Emirates, Algeria, Gabon, Libya, and Nigeria.
4. Caribbean Banking Centers include Bahamas, Bermuda, Cayman Islands, Netherlands Antil-
les 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 concernslike inflation also adding to the market misery. The Reserve Bank of India, in a boutwith troublesome inflation yet again increased lending rates by 50 basis points in itsJuly 26 review. The Sensex shed close to 2000 points (about 10%) in past 30 days and
the situation still looks grim.
Fundamenally speaking
Rallis India incorporated in the year 1948 is a company engaged in production andtrading of chemicals, fertilizers and pesticides. It is a member of Tata group of compa-nies, Indias largest and most respected business house. It is the second largest pesti-cides company in the country with a market share of over 13%. The company has im-pressive global presence especially in south east Asia and Europe. The Company hasset up new pesticide plant in Dahej, Gujarat (SEZ) with the capex of `180 crores. Thefacility 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 po-tential to generate turnover of Rs 5000 million over three years. Company`s standalonesales 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 withthe EBITDA margin of 13.1%. Standalone PAT has shown growth of 11.7% YoY toRs 166 million. Lower growth in PAT was on account of higher finance cost and de-preciation. The international business contributes a large portion of the companyssales 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% againstindustry average of 7.9%. Impressive return on capital employed at 49.7% against aver-age of 17.1%. P/E ratio is higher than average indicating it is the preferred stock within
the industry segment.
The price line has given acontinuation wedge
breakout pattern signaling ashort term upmove.
Momentum line has crossedover in the positive regioncoinciding with the
breakout.
The MACD line has
crossed over the signal line.
RSI line has remainedbuoyant never nearing theoversold region in the 3month period in considera-
tion.
The commodity channel in-dex is showing sharp move-ments. Therefor the current
signal may be achieved in avery short period. Howeverthis movement is not purelyreflected by the trade vol-umes. The volume remains
lower than the average.
special poin of in-
ere:
Due to adverse mar-ket conditions therewere no calls made
for the previous issue.
We are looking at atrading horizon of 15-
30 days and shall givemore weightage totechnical analysis andprice trend of thestock. We shall alsostudy the fundamentalaspects of a companyto avoid getting intoloss making tradepositions in case ofmovement of marketin direction oppositeto that of my predic-
tion.
technically speaking
Recommendation :
BUY
CMP : `166
Target Price :`180
Stop loss : `159
BUY :
VIP Industries
CMP`765
Target`825
Stop Loss`735
Exide IndustriesCMP`157.80
Target`168
Stop Loss`153
Sell :
Precision Wires
CMP`110
Target`96
Stop Loss`117
Other Picks
Source: Company Website
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Inrdcin:
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 In-
dia. 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
a he Ie: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 nal 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 Capi-
tal, 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 prot 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 com-
plexes in Rajasthan and Gujarat and for repayment of Loans.
Cnclin:
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 portionwas 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 promot-
ers 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 highgrowth potential in future so investors with long term horizon can consider investing in price
range between ` 80-100 per share.
By- Saurabh Khator, II MBA L
inVestoR cHeck
11
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stuDent sPeak
12
In this issue of Chaanakya, We have with us Mr. Zafar Iqbal, who completed his internship with
MCX Ltd..
Chnky: What is the organization all about?Mr. Zfr: MCX refers to Multi Commodity Exchange. It is an electronic commodity future
exchange. It offers more than 40 commodities.
Chnky: How did you get selected for your Internship?
Mr. Zfr: 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 nally found the contact and kept on persuading that person till he agreed to
help me get an internship in MCX.
Chnky: What was your topic and role as an intern within the organization?Mr. Zfr: I did my internship was regarding the Benets, 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.
Chnky: How you approached towards your assigned goals?
Mr. Zfr: 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 condence 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 vitalin giving a proper direction to my project.
Chnky: How was your experience within the organization?
Mr. Zfr: 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.
Chnky: How your internship would be an add-on to your prole at the time of your
placement?
Mr. Zfr: I am looking for a career in the commodities sector. The experience and contacts
which I gained during my internship would certainly help me.
By- T. B, Deekshit Ravichandra, II MBA L
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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.
Chnky: What is organization all about?
Mr. Chwl: 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 nancial 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 rst Indian International Bank
by being a member of the reputed nancial global Giant ING.
Chnky: How did you get selected for your Internship?
Mr. Chwl: 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.
Chnky: What were the bases for your selection as an intern?Mr. Chwl: 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.
Chnky: What was your topic and role as an intern within the organization?
Mr. Chwl: 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 borrower2. 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.
Chnky: How you approached towards your assigned goals?
Mr. Chwl: 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
Chnky: How was your experience within the organization?
Mr. Chwl: 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.
Chnky: How your internship would be an add on to your prole at the time of your
placement?Mr. Chwl: I had always aspired to work as a manager in the area of credit risk management.
I nd myself lucky to go through an internship in the area of my interest. It will give me enough
condence to face the interviewing panel during my placements. I have done my home work.
Rest is destiny!
Chnky: What would you like to suggest to candidates seeking the internship in the same
organization?
Mr. Chwl: 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 VysyaBank 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
Cmfr leer
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 thatthe 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, insteadof selling before, to see if the level will hold - because the trader will benet 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 some-
times 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 bet-
ting that the support level will not hold and they will benet if this materializes
Cver n apprch
Cover on approach is the closing out of a protable 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.
By- Pragathi P. II MBA K
Apurva Gupta II MBA J
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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 rm 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 eet.
a. $ 112
b. $ 120
c. $ 100
d. $ 90
6. Microsofts acquired Skype in ______.
a. $10.5 billion
b. $8.5 billionc. $9.5 billion
d. $11 billion
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cRosswoRDs
acr
2. Which oldest micronance rm headed by Vijay Mahajan is getting `. 800cr
funds from investors
6. India will route Euro payments through Union Bank of India and which other bank
to settle payments for National Iranian Oil Company
7. With which company did Jet Airways formed an agreemen to develop mumbais
prime land located in Bandra-Kurla Complex
8. Who headed the TRAC committee which proposed the new Makeover and Take
over rules
Dwn
1. The committee that submitted its report on customer service in banks
3. State Bank of Patiala and State Bank of Hyderabad are proposed to merge with
which bank
4. The airline that was rejected recently by Star Alliance to be a part of it
5. The Indian Infrastructure company that has bid for Barcelona and Madrid Airports
17
By- Naveen Kulkarni I MBA N
8/4/2019 Chaanakya 5_10
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answeRs to PReVious issue
8/4/2019 Chaanakya 5_10
21/22
team
Apoorv Jhudeley
& Rajat Sikri
Edir
Zafar Iqbal
Crn
Vaibhav Nagar
Gurjit Singh
New
Naveen Kulkarni
Crwrd & Qe
Sumit Kumar Gupta
Grph & Re
Amit Prakash
bk nd Mgzine Review
T. Deekshith Ravi Chandra &
Rao Pavan Sridhar
sden aricle
Rohit Dhannawat &Saurabh Khator
Inver check
Amit Prakash &
Chinmay Uchhrang
Jethwa
scm
Mandeep Kaur
Saumya Sar
Cmmdiie Mrke
Richa Jain &
Ritu Jadhwani
Dee
Akshat Malik,
Geetika Gupta &
Manan Datt
almni spek
Abhijeet Singh
Qiz
Anubhav Jain
Did Y Knw
Gaurav Jain
sck Wch
Madhukar Das
Inver Fc
Apurva Gupta &
Pragathi P.
bzz Wrd
Kumar Gaurav &Meenakshi Ramnath
Review Cmmiee
Apoorv Jhudeley &
T. Deekshith Ravi Chandra
Creive Hed & Deign
Rhl sinh
Cver Pge nd Ly
Deign
8/4/2019 Chaanakya 5_10
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Inie ofMngemen
Hosur Road, Bangalore - 560029, Karnataka, India
Tel: +91-80-4012 9350/9351/9355
Fax: +91-80-4012 9000