Sunday, 13 October 2013

VRITTAM (07 OCT 2013 - 12 OCT 2013)


Promoters of many mid- & small-cap companies and a few high-profile owners are quietly acquiring shares of their companies through open market purchases for the past few months as they feel that these stocks have bottomed out, and are priced attractively.

In a bid to improve liquidity in the banking system, Reserve Bank of India (RBI) cut the Marginal Standing Facility (MSF) rate by 50 basis points to 9%. Starting with the Mid-Quarter Review of September 2013, RBI began a calibrated withdrawal of exceptional measures undertaken since. July 2013. This was done with a view to normalising liquidity conditions. Accordingly, the MSF rate was reduced by 75 basis points from 10.25 per cent to 9.5 per cent.

RBI Governor Raghuram Rajan vows to free markets for $1-trillion core sector investments

Reserve Bank of India Governor Raghuram Rajan aims to build sophisticated financial infrastructure in three years that will facilitate trillion-dollar core sector investments, leading to sustained economic growth. Further, now that the currency has stabilised, the dependence on external sources offunding needs to be curbed and domestic savings have to be encouraged, the governor, who took charge on September 4, said.

Ending speculations over future of their partnership, Bharti Enterprisesand Wal-Mart Stores, Inc. said they are going separate ways for operations in the Indian retail sector. Subsequently, the US retail major will buy out the Indian partner from their 50:50 wholesale cash and carry joint venture -- Bharti Walmart, for an undisclosed sum. In a joint statement, the companies said they have reached an agreement to independently own and operate separate business formats in India and discontinue their franchise agreement in the retail business. 

Rising exports and declining imports in September narrowed the trade deficit to a 30-month low of $6.76 billion, which may help the rupee to stabilise after excessive volatility in the past few months. While exports of textiles, pharmaceuticals and agriculture recorded decent growth, imports came down mainly on account of a decline in inward shipments of gold and oil. 

The bitter fiscal stalemate in Washington is producing nervous ripples from London to Bali, with increasing anxiety that the United States might actually default on a portion of its government debt, set off global financial troubles and undercut fragile economic recoveries in many countries. Five years after the financial crisis in the United States helped spread a deep global recession, policymakers around the world again fear collateral damage, this time with their nations becoming victims not of Wall Street's excesses but of a political system in Washington that to many foreign eyes no longer seems to be able to function efficiently. 

The government on Monday cleared the elevation of Arundhati Bhattacharya as the chairperson of the State Bank of India - the first woman chief of the country's largest lender - succeeding Pratip Chaudhuri who retired on September 30.

Arundhati Bhattacharya, 57, is the bank's 24th chairperson and has a two and a two-and-a-half-year term at the top.

The Big News

The Future Group recently launched Big Bazaar Direct, a cross between e-commerce and door-to-door sales. 

How will the idea work:
1.      Your local shopkeeper becomes a Big Bazaar Direct franchise by paying Rs. 3 Lakh.
2.      At your calling, he comes home and takes your order on his tablet and takes cash.
3.      He transfers your order, via internet, to Big Bazzar.
4.      Big Bazaar delivers home in 3-7 days.

How they Gain:
1.      Franchisee – Big Bazaar brand gets him sales ;earns 7-9% commission on sales; zero inventory ; zero working capital.
2.      Consumer – Big Bazaar products and discounts; Home delivered; Credit cards or internet access not needed.
3.      Big Bazaar- New Sales channel ;Reach customers it can’t physically service; Leverage local connect of franchisees to acquire customers.

The Risk
1.      Delay and errors in delivering goods to consumers.
2.      Uneven consumer experience can hurt the Big Bazaar brand.
3.      Revenue generation for franchisees not in line with their investment. 


Food inflation: How to decode the onion price puzzle
By Usha Tuteja


To know six financial mistakes that young investors should avoid, click on the slide show below


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