THE WEEKLY FINANCIAL NEWS
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.
EXPERT VIEW
Food inflation:
How to decode the onion price puzzle
By Usha Tuteja
A SNEAK PEAK INTO THE WORLD OF FINANCE
To know six
financial mistakes that young investors should avoid, click on the slide show
below
