Weekly News: Economic Times

Presented By:

Nitin Goel

Retail investors cash out of market, sell shares in

companies (16 Oct, 2010)

Funds led by Fidelity , Templeton andGoldman Sachs Group may have createda record investing $23 billion in Indianstocks, but retail investors are turningaway from the market, as they still licktheir wounds of the last market crash in2008.

India’s benchmark indices have been on atear this year on strong economic andearnings growth prospects, but typical ofthe retail psychology many are paringtheir stakes, as stock prices reach theirprevious peaks.

The desire to take capital out due to fearsthat there may be yet another collapse andthe attractiveness of alternativeinvestments such as retail bonds areleading to investors selling stocks

LSE, Reliance Foundation to set up universities in

India (16 Oct, 2010)

The London School of Economics willcollaborate with Reliance Foundation, runby the promoters of India's largestcorporate house, for setting up world-classuniversities in the South-Asian nation.

The Foundation has taken up the challengeto set up a world class university in India toput India on the global education map.

India faced the challenge of equity andexpansion in education and healthcareDhirubhai Ambani International School inMumbai had produced some of the toptalents in the country and some of thestudents are currently studying at the LSE.

Gush of dollars set to hit India as emerging mkts close

gates (15 Oct, 2010 )

India is staring at the possibility of overseas

fund flow trickles turning into a flood, as

more emerging markets shut their doors on

cheap money from developed nations that are

throwing money to get their economies back

on feet.

Policymakers in the government and RBI

may be forced to choose selective measures

to restrain the flow of capital that is beginning

to disturb trade and commerce.

India has resisted the temptation to indulge in

controls and has openly said it will not resort

to such measures as the flows do not threaten

the markets at this point.

RBI buys dollars, likely year's first: Traders

(14 Oct, 2010)

The Reserve Bank of India bought dollars around44.10 rupees on Thursday in a move that helped brakea rise in the rupee and is believed by traders to havebeen its first such intervention this year.

The Reserve Bank of India has been reluctant tointervene in currency markets but may be forced to incoming weeks as foreign investors are expected topour in billions of dollars to buy shares in thecountry's largest ever IPO.

Coal India's $3.5 billion initial public offer, whichopens on Monday, is expected to attract heavy foreignfund flows and may push the rupee up to 43.50 andforce further intervention.

India would intervene in the foreign exchange marketsin order to maintain stability. Other central banks inAsia including the Bank of Thailand and Bank ofKorea have been intervening in their forex markets toprevent sharp appreciation of their currencies due to aninflux of hot money flows in recent weeks.

Coal India premium falls in grey market (16 Oct, 2010)

Grey market premium for Coal India shares in

Ahmedabad fell 11% to Rs 25 a piece from as high

as Rs 28 on Thursday, following a slide in the

secondary market. It was trading at a premium of Rs

32 on Tuesday.

The nation’s biggest initial public offer would be

open between October 18 and 21 and will begin

trading on November 4. The Sensex fell 1.8% on

Friday.

The government plans to raise Rs 15,200 crore,

selling 10% of the company, or 63.16 crore shares,

in the Rs 225-245 price band. Coal India staff and

retail investors will get a 5% discount to final price.

Although many recent offers have performed poorly,

analysts expect Coal India to yield positive returns

since it is priced at a discount to global peers. The

BSE IPO index is down 5.6% in the last month,

compared with the Sensex’s 3.2% gain.