Niveshak October 2012 Issue with Page Flip version

Wednesday, October 31, 2012 , Posted by Team Niveshak at Wednesday, October 31, 2012


Dear Niveshaks,

The month of October has witnessed some major financial events that are likely to shape the future of economic development globally. The Euro-zone appeared last night to be in a stronger position to survive the debt crisis after EU figures revealed member governments cut their annual budget deficits last year.
The EU statistics office, Eurostat, said the aggregate budget deficit in the 17 countries using the currency fell to 4.1% of GDP in 2011 from 6.2% in 2010 – the first year of the sovereign debt crisis. Ireland cut its annual deficit from 31% of GDP to 13.4%, while Germany brought the deficit on its annual budget down to 0.8%, Eurostat said.
Greece, where the crisis started, had the highest debt ratio in Europe last year, reaching 170.6% of GDP, or €355bn (£289bn). It reduced its annual deficit to 9.4% from 10.7% in 2010 and 15.6% in 2009.
The Greek Prime Minister, Antonis Samaras, said his government would receive €31.5bn in loans next month if the Athens parliament pushed through €13.5bn in spending cuts and tax increases, though it remained unclear that MPs would do so.
In the United States, the presidential candidates battled it out during three high intensity Presidential debates and one Vice Presidential debate. While President Obama was terribly out of sorts in the first debate, which in effect highlighted, for the first time the vice presidential debate between Joe Biden and Paul Ryan. However, President Obama was much more focused than his Republican counterpart in Romney in the second and third debates, which has now marginally tilted the scales in his favor. Much was made of the lack of clarity and executional capability of Governor Romney’s five point economic plan and pundits widely believe that his policy would take America back to the days which has caused the mess they presently are in.
Back home in India, the general sentiment is slowly but steadily improving. The stock market is seeing a continued bull run, raising hopes of a sustained economic recovery here. With the inflation numbers stabilizing, all eyes are now on the RBI to bring in effect a rate cut which would significantly increase liquidity in the Indian Markets and fuel growth. The Government has also given its complete backing for all the reforms affected last month and has made a plethora of investor friendly norms in an attempt to attract foreign investment.
Starbucks opened its first outlet in India in Mumbai to a warm reception and encouraging opening weekend collections.
Citigroup CEO Vikram Pandit resigned this month and now the banking giant is headed by Michael Corbat. With global growth slowing, majority of the banks are now aggressive on the retail banking front.
This issue brings to you some more interesting and insightful reads. The cover story this month focuses on the growing concept of campaign finance. The issue also features articles on the future of banks in India, an interesting an insightful read on capital structure arbitrage, Indian foreign exchange reserve and an analysis of whether the MIST would obscure BRIC.
We would also like to thank our readers for their constant support through wonderful articles and appreciation. It is your endless encouragement and enthusiasm that keeps us going.

Kindly send in your suggestions and feedback to niveshak.iims@gmail.com and as always,

Stay invested,
Team Niveshak.
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