Thursday, 26 December 2013
Wednesday, 25 December 2013
FOUL WEATHER FUND
Today's word: FOUL WEATHER FUND
Theme for this fortnight: MUTUAL FUNDS
Theme for this fortnight: MUTUAL FUNDS
A type of mutual fund that
performs well or even better than the market as a whole in weak market
conditions. The goal of these types of funds is to limit or benefit from
downward market effects. Often these funds invest in stocks with lower
volatility.
Tuesday, 24 December 2013
DISTRIBUTION WATERFALL
Today's word: DISTRIBUTION WATERFALL
Theme for this fortnight: MUTUAL FUNDS
Theme for this fortnight: MUTUAL FUNDS
Hierarchy of distribution of an
equity fund. This specifies the order of distribution to investors when their
investments are sold. For instance, general investors can only receive their
share of the fund after preferred investors are given their corresponding
shares.
Friday, 20 December 2013
COUNTRY BASKET
Today's word: COUNTRY BASKET
Theme for this fortnight: MUTUAL FUNDS
Theme for this fortnight: MUTUAL FUNDS
Exchange traded fund composed of
stocks in foreign countries combined into one security. A country basket allows
an investor to own multiple stocks in his or her portfolio without being
subject to multiple transaction costs and/or multiple securities.
Sunday, 15 December 2013
ELEPHANT
Today's word: ELEPHANT
Theme for this fortnight: MUTUAL FUNDS
Theme for this fortnight: MUTUAL FUNDS
Slang for a large institutional
investor such as a mutual fund or pension fund. The term comes from the idea
that these investors move huge amounts of money into and out of assets and sectors
in a herd-like fashion, having a large impact on security prices when they
move.
Friday, 13 December 2013
CLONE FUND
Today's word: CLONE FUND
Theme for this fortnight: MUTUAL FUNDS
Theme for this fortnight: MUTUAL FUNDS
A mutual fund started by another
mutual fund as a result of the parent fund's large growth and management's
assessment that the parent is limited as to the investments it can make. For
example, a very large fund would generally be unable to establish investment
positions in small or new corporations. Thus, a new, smaller fund with the same
goals as the older, bigger fund is started. Although the parent fund and clone
fund have the same investment objectives, they purchase different securities
and generally operate under different managements.
Sunday, 8 December 2013
DELTA ONE
Today's word: DELTA ONE
Theme for this fortnight: MUTUAL FUNDS
Theme for this fortnight: MUTUAL FUNDS
A category of derivatives for
which a change in the value of the underlying asset results in a change of the same,
or nearly the same, proportion in the value of the derivative. Some examples of
delta one derivatives include equity swaps, forwards, futures, and
exchange-traded funds (ETF's).
Saturday, 7 December 2013
BEAR FUNDS
Today's word: BEAR FUNDS
Theme for this fortnight: MUTUAL FUNDS
Theme for this fortnight: MUTUAL FUNDS
Funds that utilize short-selling
methods to quickly make profits during a bear or declining market. These funds
are usually made up of hedge funds and mutual funds. They are actively managed,
and short individual stocks or inverse-index funds that short entire indexes.
Bear funds revolve around the idea of playing with both sides of the market so
that gains in the bear fund offset losses elsewhere in an investor's portfolio.
Bear funds are considered tactical investments, but usually end up being lousy long-term
investments for investors.
Saturday, 30 November 2013
DIVIDEND CLAWBACK
Today's word: DIVIDEND CLAWBACK
Theme for this fortnight: DIVIDENDS
Theme for this fortnight: DIVIDENDS
An arrangement under which those
financing a project agree to contribute, as equity, any prior dividends
received from the project to cover any cash shortages.
When there is no cash shortfall,
those investors who provided funding are able to keep their dividends. A
dividend clawback arrangement provides incentive for a project to remain on
budget so that investors do not have to return dividends received prior to a
cost overrun.
Monday, 25 November 2013
DIVIDEND DRAG
Today's word: DIVIDEND DRAG
Theme for this fortnight: DIVIDENDS
Theme for this fortnight: DIVIDENDS
A disadvantage of the dividend
structure of unit trust exchange-traded funds (ETFs) that results from SEC
rules that stipulate that passively managed ETFs cannot reinvest dividends back
into the portfolio. ETFs must instead accumulate the dividends in cash and pay
them to holders at periodic intervals. During periods of rising markets, the
dividends would be better served being reinvested in securities rather than
held in cash. This leads the ETF to lag a portfolio that would be able to
reinvest.
Sunday, 24 November 2013
SYNTHETIC DIVIDEND
Today's word: SYNTHETIC DIVIDEND
Theme for this fortnight: DIVIDENDS
Theme for this fortnight: DIVIDENDS
A type of incoming cash flow that
an investor creates with certain financial securities to produce a
dividend-like payment stream that resembles the periodic cash receipts from a
dividend-paying stock.
For example, suppose an investor
owns shares in a company that does not pay a quarterly dividend. In order to
create a cash-flow stream from the shares, the investor could write covered
call options on the underlying stock. By doing so, he or she would receive the
option premiums as an incoming cash flow, but would be obligated to sell the
shares to the option-buyer should that person choose to exercise the options.
This situation, while limiting
the potential price appreciation the investor can realize from his or her own
shares, creates a dividend-like cash flow stream.
Thursday, 21 November 2013
SPILLOVER DIVIDEND
Today's word: SPILLOVER DIVIDEND
Theme for this fortnight: DIVIDENDS
Theme for this fortnight: DIVIDENDS
A type of dividend in which the
payment year and the taxable year occur at different times. Most often, this
occurs when the dividend has been declared near the end of the calender year
(during the fourth quarter), but the actual distribution date of the dividend
payment does not occur until the first quarter of the following year.
Tuesday, 19 November 2013
LOOK THRU
Today's word: LOOK THRU
Theme for this fortnight: DIVIDENDS
Theme for this fortnight: DIVIDENDS
A complex provision defined in
section 954(c)(6) of the U.S. Internal Revenue Code that lowered taxes for many
U.S. multinational companies. The look thru rule gave qualifying U.S.
multinationals a lower global effective tax rate by providing a special
accounting method for calculating taxes owed on income from controlled foreign
corporations. The rule was originally effective from Jan. 1, 2006 through Dec.
31, 2009, but the 2010 Tax Relief Act extended the rule through Dec. 31, 2011.
Saturday, 16 November 2013
Wednesday, 13 November 2013
HOMEMADE DIVIDEND
Today's word: HOMEMADE DIVIDEND
Theme for this fortnight: DIVIDENDS
Theme for this fortnight: DIVIDENDS
A form of investment income that
comes from the sale of a portion of shares held by a shareholder. This differs
from dividends that shareholders receive from a company according to the number
of shares the shareholder has.
The existence of homemade dividends
is the reason some financial analysts believe that looking at a companies
dividend policy is not important. If investors desires an income stream they
will either sell their shares when they want the income or they will invest in
other income-generating assets.
Tuesday, 12 November 2013
CUTTING A MELON
Today's word: CUTTING A MELON
Theme for this fortnight: DIVIDENDS
Theme for this fortnight: DIVIDENDS
A slang term used to describe
when a board of directors declares an additional dividend in addition to the
regular distribution. The additional dividend can be in the form of cash, stock
or property. The board of directors (BOD) is
responsible for deciding how it will share the company's earnings with
shareholders in the form of dividends. In most cases, dividends are issued in
accordance to a set policy and are paid on preset schedule, such as annually or
quarterly.
The BOD is cutting a melon when the company has earned additional income, this is the melon and distributes a portion of it to shareholders. The bigger the melon, the sweeter it tastes to investors!
The BOD is cutting a melon when the company has earned additional income, this is the melon and distributes a portion of it to shareholders. The bigger the melon, the sweeter it tastes to investors!
Sunday, 10 November 2013
VRITTAM (03 NOV 2013 - 09 NOV 2013)
THE WEEKLY
FINANCIAL NEWS
Twitter stock slipped 7.24 percent to close at $41.64 -- a day after a stunning gain of 72.69 percent on its first day of trading on the New York Stock Exchange after a $1.8 billion initial public offering. Some analysts said the debut was helped in part by a shortage of Twitter stock, and that most of the 70 million shares were reserved by the underwriters.
Twitter's market capitalization, based on its stock price,
fell back to around $22.6 billion after topping $24 billion on Thursday.
How's QE tapering a bad thing for Indian markets? Well, it would dry up liquidity, which means FIIs would be pulling out, leaving investors run for cover. However, analysts are of the view that even if the US tapers $85-billion-a-month bond purchase programme, it'll be to the tune of $10-20 billion, something that does not contribute to drying up of liquidity from the market. Amidst chances of QE tapering next year, big domestic event to unfold would be general election results, which may give big sentimental boost to the markets on a favourable outcome.
It is not clear if Zomato will live happily ever after but, right now, this company, which lists restaurants city- and locality wise and counts on restaurant advertisements for its revenues, is in the midst of a fairy tale. In five years' time, its founders, a couple of young graduates from the Indian Institute of Technology, Delhi, have created a company valued at Rs900 crore. It has produced huge value for the entrepreneurs and the fund that backed them and created 600-odd jobs. It is expanding to other geographies at a breakneck speed. And it has created this value on the basis of a service of rising utility to urbanising, ever more prosperous Indians.
Zomato, which lists restaurants city- and locality wise and
counts on restaurant advertisements for revenues, is currently valued at Rs900
cr.
Standard & Poor's today affirmed 'BBB-' long-term and 'A-3' short-term unsolicitedsovereign credit ratings on India, keeping outlook on long-term rating negative.The news came as a grinch on Dalal Street, with the Sensex losing more than 300 points from its intraday high.The markets may have reacted negatively to the news, and some experts may start to raise red flags on India's long-term story, but then there's another take on it.
In times of unpredictability, though with a positive standpoint, here's a bad news. The rate of interest that you pay for your home and auto loans is now a tad higher. The State Bank of IndiaBSE -3.40 % (SBI) today raised its base rate by 20 basis points to 10% per annum from the earlier figure of 9.8%.HDFC Bank hiked its base rate by 20 basis points to 10 per cent. This automatically translates into a hike in consumer loans, though earlier banks used to come out with a separate release announcing the rate hike for consumers. Other banks are likely to follow suit.
India is likely to become the third largest economy by 2030 behind China and the USA, a Standard Chartered report said while projecting that the world is in the midst of an economic "super-cycle". A super-cycle is a period of historically high global growth, lasting a generation or more, driven by opening up of new markets, increasing trade, high rates of investment, urbanisation and technological innovation. India is likely to be the third largest economy with a GDP size of USD 15 trillion by 2030, says Standard Chartered's Super-Cycle Report. China with a GDP of USD 53.8 trillion is projected as the biggest economy, followed by the US at USD 38.5 trillion.
Benchmark indices have failed to gather momentum at higher levels and have consolidated in a narrow range so far in this week. The 50-share Nifty has slipped below its psychological level of 6,300, whileSensex struggled to hold onto 21,000 levels. According to analysts, markets are consolidating at this point in time and there is a 50-50 chance that the market rally is over.
Most analysts see levels of 6,080 on the Nifty as a make-or-break for the index.
EXPERT VIEW
By Saurabh Tripathi
Unless government musters the will to push through some bold
reforms, they could lose value irredeemably.
A SNEAK PEAK INTO THE WORLD OF FINANCE
To know how
economic indicators can affect your financial life,click on the slide show
below
Twitter stock slipped 7.24 percent to close at $41.64 -- a day after a stunning gain of 72.69 percent on its first day of trading on the New York Stock Exchange after a $1.8 billion initial public offering. Some analysts said the debut was helped in part by a shortage of Twitter stock, and that most of the 70 million shares were reserved by the underwriters.
How's QE tapering a bad thing for Indian markets? Well, it would dry up liquidity, which means FIIs would be pulling out, leaving investors run for cover. However, analysts are of the view that even if the US tapers $85-billion-a-month bond purchase programme, it'll be to the tune of $10-20 billion, something that does not contribute to drying up of liquidity from the market. Amidst chances of QE tapering next year, big domestic event to unfold would be general election results, which may give big sentimental boost to the markets on a favourable outcome.
It is not clear if Zomato will live happily ever after but, right now, this company, which lists restaurants city- and locality wise and counts on restaurant advertisements for its revenues, is in the midst of a fairy tale. In five years' time, its founders, a couple of young graduates from the Indian Institute of Technology, Delhi, have created a company valued at Rs900 crore. It has produced huge value for the entrepreneurs and the fund that backed them and created 600-odd jobs. It is expanding to other geographies at a breakneck speed. And it has created this value on the basis of a service of rising utility to urbanising, ever more prosperous Indians.
Standard & Poor's today affirmed 'BBB-' long-term and 'A-3' short-term unsolicitedsovereign credit ratings on India, keeping outlook on long-term rating negative.The news came as a grinch on Dalal Street, with the Sensex losing more than 300 points from its intraday high.The markets may have reacted negatively to the news, and some experts may start to raise red flags on India's long-term story, but then there's another take on it.
The S&P’s negative outlook is marginally positive, as the
rating agency has almost ruled out a downgrade before the elections
In times of unpredictability, though with a positive standpoint, here's a bad news. The rate of interest that you pay for your home and auto loans is now a tad higher. The State Bank of IndiaBSE -3.40 % (SBI) today raised its base rate by 20 basis points to 10% per annum from the earlier figure of 9.8%.HDFC Bank hiked its base rate by 20 basis points to 10 per cent. This automatically translates into a hike in consumer loans, though earlier banks used to come out with a separate release announcing the rate hike for consumers. Other banks are likely to follow suit.
India is likely to become the third largest economy by 2030 behind China and the USA, a Standard Chartered report said while projecting that the world is in the midst of an economic "super-cycle". A super-cycle is a period of historically high global growth, lasting a generation or more, driven by opening up of new markets, increasing trade, high rates of investment, urbanisation and technological innovation. India is likely to be the third largest economy with a GDP size of USD 15 trillion by 2030, says Standard Chartered's Super-Cycle Report. China with a GDP of USD 53.8 trillion is projected as the biggest economy, followed by the US at USD 38.5 trillion.
Benchmark indices have failed to gather momentum at higher levels and have consolidated in a narrow range so far in this week. The 50-share Nifty has slipped below its psychological level of 6,300, whileSensex struggled to hold onto 21,000 levels. According to analysts, markets are consolidating at this point in time and there is a 50-50 chance that the market rally is over.
Most analysts see levels of 6,080 on the Nifty as a make-or-break for the index.
By Saurabh Tripathi
A SNEAK PEAK INTO THE WORLD OF FINANCE
To know how
economic indicators can affect your financial life,click on the slide show
belowMonday, 4 November 2013
BIRD IN HAND
Today's word: BIRD IN HAND
Theme for this fortnight: DIVIDENDS
Theme for this fortnight: DIVIDENDS
The belief that investors prefer
stocks that are currently paying dividends to stocks whose value may grow
through capital appreciation. The belief is based on the assumption that most
people prefer certainty (dividends) to speculation (capital appreciation).
Thursday, 31 October 2013
Wednesday, 30 October 2013
INCUBATOR
Today's word: INCUBATOR
Theme for this fortnight: VENTURE CAPITAL
Theme for this fortnight: VENTURE CAPITAL
A firm engaged in the business of
fostering early-stage companies through the developmental phases until such
time as the company has sufficient financial, human and physical resources to
function on its own.
The firm can be either a non-profit or a for-profit entity, and it can provide assistance via any or all of the following methods: 1. access to financial capital through relationships with financial partners, 2. access to experienced business consultants and management-level executives, 3. access to physical location space and business hardware or software and 5. access to informational and research resources via relationships with local universities and government entities.
The firm can be either a non-profit or a for-profit entity, and it can provide assistance via any or all of the following methods: 1. access to financial capital through relationships with financial partners, 2. access to experienced business consultants and management-level executives, 3. access to physical location space and business hardware or software and 5. access to informational and research resources via relationships with local universities and government entities.
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