tag:blogger.com,1999:blog-62177101198866636822024-03-05T16:40:19.290+05:30FINANCIONOMICSECONOMICS IS THE MOTHER SCIENCE AND THE DISCIPLINE OF FINANCE WAS SPUN OUT OF IT. FINANCIONOMICS IS MY COINAGE TO SHOW THE SUBTLE INTER-DEPENDENCE BETWEEN THESE TWO DISCIPLINES. IN THIS FORUM I ATTEMPT TO DISCUSS THE DIFFERENT NUANCES OF THIS RELATIONSHIP.Anirban Duttahttp://www.blogger.com/profile/10423633419872222905noreply@blogger.comBlogger77125tag:blogger.com,1999:blog-6217710119886663682.post-78684628332884400182011-07-17T13:36:00.000+05:302011-07-17T13:36:25.437+05:30Inclusive Education<div style="text-align: justify;"></div><div style="text-align: justify;">My colleague <a href="http://absindia.org/html/faculty_raviN.html">Dr. T.N.Ravi</a>, an eminent scholar, and I presented a paper at the <strong><a href="http://iacbe.org/asian-regional-conference.asp">2011 IACBE Asia Regional Conference</a></strong> on July 16, 2011 at Alliance University, Bangalore, India. The title of the paper is <em>"Academia-led Industry Interface: The Pro-active Initiatives for Inclusive Education and Employment Opportunities".</em></div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">In India our micro, small and medium enterprises (MSME) contributes almost 8 - 10% of our GDP. The majority of these enterprises are unlisted firms and sole proprietorship in nature, and mostly family owned businesses. Traditionally these businesses have been running maybe for a very long time but somehow the experience of running these businesses have not been brought under the ambit of business education.</div><div style="text-align: justify;"><br />
</div><div class="separator" style="border-bottom: medium none; border-left: medium none; border-right: medium none; border-top: medium none; clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg-yAdo89KSw8fMCmFUpt3nKpdQvKlNpCEBo9zqiPnDQpOZaHIMWpfdmQ4ueqYPlgrgK1_mv_l8j8ICRKAQJ4EG0fDd-3OnmJxT3D-gNUx_DPJjbFpuVBFoMBfwNIFkzeEjcZSl0-yvmlnI/s1600/Inclusive.JPG" imageanchor="1" style="clear: left; cssfloat: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="244" m$="true" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg-yAdo89KSw8fMCmFUpt3nKpdQvKlNpCEBo9zqiPnDQpOZaHIMWpfdmQ4ueqYPlgrgK1_mv_l8j8ICRKAQJ4EG0fDd-3OnmJxT3D-gNUx_DPJjbFpuVBFoMBfwNIFkzeEjcZSl0-yvmlnI/s320/Inclusive.JPG" width="320" /></a></div><div style="text-align: justify;">A petty trader or grocery shop owner (the mom-n-pop stores) does mainatain the business' cash receipts and payments in a rough format without even realizing the potential benefits of maintaining his books of accounts using a simple double-entry book-keeping system. If he can be taught how to do so, and get guidance to maintain his business transactions he can easily ascertain his profits, cash flows and determine his financial position.</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">This simple step can give him better eligibility to avail business/trade credit from the public banks at a lower rate of interest and bring him under financial inclusion. This cannot be achieved through a formal setup (which is more prevalent) and needs a non-formal channel for delivery. Inclusive education conventionally have covered only school drop-out children, children with disability, are from ethnic minorities, or are underprivileged. It failed to cover the target beneficiaries like petty traders, shopkeepers, farmers, women, daily wage labourers, etc.</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">The pro-active initiatives by the business management schools, partnering with industry, can be at the center for non-formal inclusive education for the otherwise neglected classes and help them to scale up their businesses by imparting simple but practically important things.</div>Anirban Duttahttp://www.blogger.com/profile/10423633419872222905noreply@blogger.com5tag:blogger.com,1999:blog-6217710119886663682.post-27674746305805712332011-05-09T19:43:00.000+05:302011-05-09T19:43:49.645+05:30Viability Gap Funding - An Emerging Model for Social Infrastructure Financing<div dir="ltr" style="text-align: left;" trbidi="on"><div style="text-align: justify;"></div><div class="separator" style="clear: both; text-align: justify;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjUuKJb0dIITTRBrzrCA9IQMegqxI_vHIV2n1FUfdzwIrj8D1VvY24qcL8DX-JMI18BjSq6cCfisU7hVHZAiGfw4jA6-cQAPzYwwkyzGzwfCa7g7Ws6QTX6Bcl2A21QSNOSPCU-EuYu25hC/s1600/PPP.jpg" imageanchor="1" style="clear: left; cssfloat: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="320" j8="true" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjUuKJb0dIITTRBrzrCA9IQMegqxI_vHIV2n1FUfdzwIrj8D1VvY24qcL8DX-JMI18BjSq6cCfisU7hVHZAiGfw4jA6-cQAPzYwwkyzGzwfCa7g7Ws6QTX6Bcl2A21QSNOSPCU-EuYu25hC/s320/PPP.jpg" width="236" /></a>The transition from economic backwardness to economic advancement is generally characterized by special focus on social sectors like healthcare, education, and general infrastructure for achieving the much needed inclusive growth. Since India is going through this period of transition there can never be an overemphasis on the need to create a model for funding projects in this sector to scale up the intellectual capital which is an essential component of a knowledge economy with the assurance of proper healthcare facilities for all segments of the society.</div><div style="text-align: justify;"><br />
In Western countries the young population supports the old population by contribution to social security. However, because of the ‘<a href="http://financionomics.blogspot.com/2009/01/silver-tsunami.html"><strong>Silver Tsunami</strong></a>’ in many of these countries the scheme is running into serious problems, compelling the governments to seriously think about nationalization of healthcare. Also, <a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=955921">international tax competition</a> that results in lowering tax on capital and increasing tax on labour creates problems for the Western countries with large welfare states.</div><div style="text-align: justify;"><br />
But, in a country like India a major cohort of the population is young, and an imaginative and creative model for funding such projects by roping in the private players and effective supervision by the government could alleviate this problem of lack of funding and the consequent lack of initiatives from the private sector. The approach to this problem should aim at shifting the focus away from the state and move towards public-private-partnerships (<strong><a href="http://www.pppindiadatabase.com/">PPP</a></strong>s). At the same time it should also ensure that the interest and initiative from the private players is sustained through the emerging model of ‘viability gap funding’.</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">This can achieve the twin purpose of effective government supervision and proactive initiatives from the private sector to scale up the intellectual capital which is the very essence of a knowledge economy and also supported by proper healthcare for all.</div></div>Anirban Duttahttp://www.blogger.com/profile/10423633419872222905noreply@blogger.com0tag:blogger.com,1999:blog-6217710119886663682.post-69321538601594706882011-05-07T15:23:00.000+05:302011-05-07T15:23:46.543+05:30Financial Inclusion and CSE<div dir="ltr" style="text-align: left;" trbidi="on"><div style="text-align: justify;">James Austin and Ezequiel Reficco in their HBR working paper (March 2009) aimed to address the contemporary challenges in Corporate Social Responsibility (CSR) through an innovative process called Corporate Social Entrepreneurship (<strong><a href="http://www.hbs.edu/research/pdf/09-101.pdf"><span style="color: blue;">CSE</span></a></strong>). According to Austin & Reficco <em>"CSE aims to produce a significant and comprehensive transformation of the way a company operates."</em></div><div style="text-align: justify;"><br />
</div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgD91KP9fWp8E8kuQRtlz5kyR1vaDDuNpytYXa94TbBOkRNUnQRYFfHRzt-b6ZTTFQEc1p9k45Q-2t0kyJZFkVkQVF2ePXA93nvjTYG2MASmnqYwoDsUJo71o44oAcw97W6RrI5MgTiN7aq/s1600/Social-Ecopreneur.jpg" imageanchor="1" style="clear: left; cssfloat: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="200" j8="true" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgD91KP9fWp8E8kuQRtlz5kyR1vaDDuNpytYXa94TbBOkRNUnQRYFfHRzt-b6ZTTFQEc1p9k45Q-2t0kyJZFkVkQVF2ePXA93nvjTYG2MASmnqYwoDsUJo71o44oAcw97W6RrI5MgTiN7aq/s200/Social-Ecopreneur.jpg" width="191" /></a></div><div style="text-align: justify;">Top leadership of an organization should be visionary enough to identify potential talent within the company who demonstrates high levels of energy and enthusiasm, is proactive in taking up responsibilities and has the fire in the belly to break the sloth of conventional ideas - even if it requires to put his/her foot down to disagree with other fellow mates.</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">I was curiously thinking how CSE can have an impact on the human welfare element. Let us take the example of insurance business in India - it has all potential to be used successfully for financial inclusion but, unfortunately have not gained much momentum primarily because operating performance of this industry was not properly aligned with professed commitment to social value creation. The top- and middle-level management in this industry is more interested to drive business volumes rather than ample coverage of people under insurance benefit.</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">The agency based system in the Indian insurance sector has diluted the core objective of insurance as a tool for risk management. Today most of us still consider insurance as a tool for maximizing financial returns. The agents (mis)sell the insurance products by luring customers by how much they can earn, by paying a stipulated premium per annum, at the end of the maturity of the policy.</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">Insurance companies can empower their agents to build their income streams through CSE and social value creation and not just fulfilling hourly/daily/weekly revenue targets. The same agents can become the torchbearers of spreading awareness among the rural people on the true benefits of insurance products. If the innovative insurance products can be supplemented with a league of motivated sales & marketing force it can address the financial inclusion challenges to a great extent.</div></div>Anirban Duttahttp://www.blogger.com/profile/10423633419872222905noreply@blogger.com0tag:blogger.com,1999:blog-6217710119886663682.post-54542426186823662702011-05-05T22:02:00.001+05:302011-05-05T22:09:53.253+05:30Can Economists Build Brands?<div dir="ltr" style="text-align: left;" trbidi="on"><div style="text-align: justify;">Recently in a conversation with my colleague <a href="http://absindia.org/html/faculty_shamim.html">Dr. Shamim Mandal</a> we were discussing about higher education opportunities for Indian students at various U.S. universities. We concurred upon one point in this regard that beyond scholastic aptitude of the student it is the recommendation(s) that plays a major role.</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">Dr. Shamim and I hail from the same academic discipline - Economics, and thus essentially we focused on students majoring in Economics who wanted to go to U.S. for higher studies and research. The outcome of the discussion was that someone from India, essentially a bright scholar, sometime in the past would have impressed his American professor with his intellect and talent quotient so much that he became a hallmark and his recommendations can be relied upon without second thoughts. In the following years that bright scholar would create a legacy by recommending other Indian fellow mates and help them explore their pursuit of knowledge and success in the U.S.</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">Sukhamoy Chakravarty was one such brilliant and most trusted scholar of Paul Samuelson who can be attributed with the credit of creating a legacy of Indian economists at M.I.T. Similarly, <a href="http://nobelprize.org/nobel_prizes/economics/laureates/1998/sen-autobio.html">Amartya Sen</a> caught the attention of his professors and built his own brand at Stanford University.</div></div>Anirban Duttahttp://www.blogger.com/profile/10423633419872222905noreply@blogger.com0tag:blogger.com,1999:blog-6217710119886663682.post-81673085287769898212010-04-22T11:09:00.003+05:302010-04-22T17:10:27.997+05:30Inclination Towards Passively Managed Funds<div align="justify">Index funds and Exchange Traded Funds (ETF) have become attractive in the eyes of the mutual fund investors owing to many mutual funds lagging benchmarks. I expect a spurt in passively managed funds as they are less expensive and less complex to understand.</div><div align="justify"> </div><div align="justify">ETFs have a lot of scope to grow in India as they are a huge asset class globally. This is reiterated by the fact that many large fund houses are aiming to launch ETFs like Motilal Oswal, Reliance MF, Benchmark MF, Deutsche, etc.</div><div align="justify"> </div><div align="justify">Post the market crash I have observed that despite of entrusting investments with professional fund managers a lot of retail investors have lost their money. According to rough estimates, only 17 per cent funds globally outperform the indices. Hence, passively managed funds would gain importance and mileage in the event of the MF platform of BSE and NSE becoming active. Currently, although these platforms exist, the number of trades is quite small.</div>Anirban Duttahttp://www.blogger.com/profile/10423633419872222905noreply@blogger.com1tag:blogger.com,1999:blog-6217710119886663682.post-14301418377207443562010-04-07T16:32:00.004+05:302010-04-07T16:41:44.770+05:30Building the next-generation business leader<div align="justify">Garth Saloner, dean of Stanford University’s Graduate School of Business, discusses the challenge business schools face in educating students for a new world of companies without borders.</div> <br /><br /><object height="338" width="428"><param name="movie" value="http://www.mckinseyquarterly.com/App_Themes/v2.0/swf/external_player.swf"><param name="flashvars" value="assetsPath=http://www.mckinseyquarterly.com/App_Themes/v2.0/swf/&xmlFileName=http://www.mckinseyquarterly.com/xmlresources/videol2XML.aspx?assetid=1007%26localeid=1"><br /><br /> <embed src="http://www.mckinseyquarterly.com/App_Themes/v2.0/swf/external_player.swf" width="428" height="338" flashvars="isProduction=true&assetsPath=http://www.mckinseyquarterly.com/App_Themes/v2.0/swf/&xmlFileName=http://www.mckinseyquarterly.com/xmlresources/videol2XML.aspx?assetid=1007%26localeid=1"></embed><br /><br /><br /></object>Anirban Duttahttp://www.blogger.com/profile/10423633419872222905noreply@blogger.com0tag:blogger.com,1999:blog-6217710119886663682.post-66543824606962882202010-02-26T09:24:00.014+05:302010-02-27T15:24:37.692+05:30Bharti's African Safari<div align="justify"><a href="http://mediame.com/adblogarabia/wp-content/uploads/2007/09/zain-mtc.jpg"><img style="MARGIN: 0px 10px 10px 0px; WIDTH: 199px; FLOAT: left; HEIGHT: 151px; CURSOR: hand" border="0" alt="" src="http://mediame.com/adblogarabia/wp-content/uploads/2007/09/zain-mtc.jpg" /></a><br /></div><div align="justify"><a href="http://specialnewsonline.files.wordpress.com/2009/10/bharti-airtel.jpg"><img style="MARGIN: 0px 10px 10px 0px; WIDTH: 197px; FLOAT: left; HEIGHT: 116px; CURSOR: hand" border="0" alt="" src="http://specialnewsonline.files.wordpress.com/2009/10/bharti-airtel.jpg" /></a>Bharti's entry into Africa, which has a huge untapped market, via <strong><a href="http://www.zain.com/">Zain</a></strong>'s African assets (ZAF) seems positive from a long-term perspective. It also reduces the risk that may have arisen because of the intense competition in the Telecom sector in India.</div><div align="justify"><br /></div><div align="justify"></div><div align="justify"><strong><a href="http://www.bharti.com/">Bharti Airtel</a></strong> (BAL) has bid for ZAF (excluding Sudan and Morocco) at <strong><span style="color:#ff0000;">US$ 10.7 bn</span></strong>. The acquisition will give BAL control over ZAF and while valuations are at a premium, the strategy will pay rich dividends in the long term.</div><div align="justify"><br /></div><div align="justify"></div><div align="justify">ZAF’s assets have been impacted in terms of growth and profitability by the currency devaluation and poor economic conditions. ZAF’s revenues declined 12% through 9MFY09 (annualised), but grew 5% based on constant currency. The ZAF acquisition is likely to lead to mild <strong><a href="http://www.investopedia.com/">EPS</a></strong> dilution in the second year of acquisition and is expected to be EPS-accretive from 2013. The current fall in BAL’s stock price (11% post announcement) is a chance to accumulate since the performance will likely improve post more clarity on the deal structure and business fundamentals.</div><div align="justify"></div><br /><div align="justify">Though the current market situation and scope for profitability growth in Africa may look glum but post the credit crisis in ’08, African currencies significantly devalued 3-39%, with African nations highly dependent on natural resources (crude) and remittances. With current mobile penetration at 36% in ZAF’s markets of presence, Africa presents an opportunity similar to that in India in ’08 and will likely witness the maximum interest by global telcos in this decade.</div>Anirban Duttahttp://www.blogger.com/profile/10423633419872222905noreply@blogger.com3tag:blogger.com,1999:blog-6217710119886663682.post-20270377318207711602010-02-25T20:16:00.009+05:302010-02-26T09:16:07.023+05:30India Rising - Three Stalwarts' Views<div align="justify"><a href="http://risingpowers.foreignpolicyblogs.com/files/2009/07/india-rising.jpg"><img style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 300px; CURSOR: hand; HEIGHT: 224px" alt="" src="http://risingpowers.foreignpolicyblogs.com/files/2009/07/india-rising.jpg" border="0" /></a> The hype about the emerging economies, especially India and China, has picked up momentum in the recent past. But, this is not something new and probably have been happening for the past 25 years. The rise of the Indian middle class, the growth in per-capita income, literacy rates and slowdown of population growth rate are the few indicators of the Indian growth story. At our <strong><a href="http://www.absindia.org/">Alliance</a></strong> campus I had the privilege of interacting closely with three stalwarts in a span of roughly one month on this topic.<br /></div><br /><div align="justify"><strong><a href="http://www.jagsheth.net/">Dr. Jagdish N. Sheth</a></strong>, a renowned scholar and world authority in the field of marketing, was here on January 17. He was sharing his insights on global competition, strategic thinking and customer relationship management. He strongly believes that while the 20th century economics was driven by government policy of advanced economies, the 21st century economics will be driven by competitive markets of emerging nations. To his opinion this would be primarily achieved through 100% education, gender neutrality, and open to change. He says that the factors attributable for India's growth are:</div><div align="justify"> - Change in the economic policies<br /> - More advanced nations are ageing and ageing rapidly<br /> - Economic pragmatism</div><div align="justify">To my opinion the public sector enterprises will play a major role since they already have the scale and just needs reforms and better governance.</div><br /><div align="justify">I had a question for <strong>Zarir J. Cama</strong>, Deputy Chairman & CEO, <strong><a href="http://www.hsbc.com/">HSBC Bank</a></strong>, Malaysia when he recently visited our business school on February 19. I asked him that can U.K or U.S.A continue to consume goods and services that are manufactured in the emerging economies without having the corresponding growth in earning capacity? He said that an economy like U.K. cannot continue with a deficit of 180% of its GDP very long, and the similar logic is applicable for the U.S. On the other hand the emerging nations like India and China cannot solely rely on the advanced economies for the market of their products and services; they will also have to start consuming their own produces. Referring to the recent financial crisis he opined that it is now clear that Asian banks are emerging stronger and more resilient from the crisis than the most. However, as Asia's economies and businesses grow, they will demand deeper and more sophisticated capital markets to ensure the efficient allocation of capital.</div><br /><div align="justify">During my one-to-one interaction with <strong>Mr. V. Ravi Kumar</strong>, Executive Director, <strong><a href="http://www.bgse.co.in/">Bangalore Stock Exchange</a></strong> at our campus, on February 23, I had asked him <em>"will the divergent growth rates in the U.S. and China finally erode the hegemony of the U.S. dollar?"</em>. In reply to my question he made a very candid remark - <em>"all said and done don't forget that the U.S. is still the elephant in the room and will continue to be the same for years to come"</em>.</div><br /><div align="justify">Though we cannot undermine the upward growth of the emerging nations and possibilities and outcomes of a trilateral relationship between the U.S., India, and China still there is a long way to go. We are excited about China's over 10% growth for the past 10 years but, are we sure that this growth rate is sustainable? In India only financial and monetary reforms cannot shape our future, the next reform we need is inevitably reforms in governance.</div>Anirban Duttahttp://www.blogger.com/profile/10423633419872222905noreply@blogger.com1tag:blogger.com,1999:blog-6217710119886663682.post-13818249060160838782010-01-18T09:19:00.004+05:302010-01-18T09:46:53.770+05:30Long Live Revolution<div align="justify"><a href="http://www.topnews.in/files/Jyoti-Basu101.JPG"><img style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 259px; CURSOR: hand; HEIGHT: 308px" alt="" src="http://www.topnews.in/files/Jyoti-Basu101.JPG" border="0" /></a>When <a href="http://en.wikipedia.org/wiki/Jyoti_Basu"><strong>Jyoti Basu</strong></a> acceded to the chief minister's position in West Bengal, after <a href="http://en.wikipedia.org/wiki/Bidhan_Chandra_Roy">Dr. Bidhan Chandra Roy</a>, one could have hardly imagined that this gentleman politician will trigger awe among all politicians and general public for the years to come. The communist regime in West Bengal was greatly led by him, and his doctrines have kept the Left Front well-knit and alive.<br /><br />Irrespective of political colour, Basu was a pragmatic adviser to his contemporaries. It would not be an overstatement to call him <strong><em>“The Last of the Marxists”</em></strong>, and confer him the status at par with <a href="http://en.wikipedia.org/wiki/Mao_Zedong">Mao</a>, <a href="http://en.wikipedia.org/wiki/Che_Guevara">Che Guevara</a>, <a href="http://www.facade.com/celebrity/Simon_Bolivar/">Simon Bolivar</a> or <a href="http://en.wikipedia.org/wiki/Fidel_Castro">Fidel Castro</a>.</div>Anirban Duttahttp://www.blogger.com/profile/10423633419872222905noreply@blogger.com1tag:blogger.com,1999:blog-6217710119886663682.post-17198066596515779402009-10-15T15:51:00.006+05:302009-10-15T16:28:22.078+05:30Something Is Fishy About Bt Brinjal<div align="justify"><a href="http://raviwar.com/news/images/bt-brinjal-raviwar.jpg"><span style="color:#000000;"><img style="MARGIN: 0px 10px 10px 0px; WIDTH: 326px; FLOAT: left; HEIGHT: 233px; CURSOR: hand" border="0" alt="" src="http://raviwar.com/news/images/bt-brinjal-raviwar.jpg" /></span></a><span style="color:#000000;">The </span><a href="http://www.envfor.nic.in/divisions/csurv/geac/geac_home.html"><span style="color:#3333ff;"><strong>GEAC</strong></span></a><span style="color:#000000;"> (Genetic Engineering Approval Committee) has lived up to its name and approved India's first genetically-adulterated food crop. Now the question that arises is that </span><span style="color:#000000;"><em>"was this approval unanimously passed?"<br /></em><br />I sense a <em>"conflict of interest"</em> in this issue. The panel of experts of GEAC who have approved </span><a href="http://www.csa-india.org/downloads/GE/bt_brinjal_briefing_paper.pdf"><span style="color:#3333ff;"><strong>Bt Brinjal</strong></span></a><span style="color:#000000;"> has <em>"at least"</em> three members who were actively involved in developing and testing of Bt Brinjal. And who owns Bt Brinjal? </span><a href="http://www.monsantoindia.com/"><strong><span style="color:#3333ff;">Monsanto-Mahyco</span></strong></a><span style="color:#000000;">.<br /><br /><strong>Monsanto India Limited</strong> is a subsidiary of the well known multinational in agricultural science products, especially chemicals and pesticides. Monsanto’s work in India began over 50 years ago, soon after independence. Monsanto India has been providing plantation growers with good weed control solutions and new generation herbicides, especially for farmers growing wheat, rice, and soya.<br /><br /></span></div><div align="justify"><span style="color:#000000;">In the run for <em>"commercialization"</em> are we heading for a devastation? Isn't there a better way out to stop the contamination of our nation's fragile food supply? Can we truly discount the possibility of a business house influencing the decisions of a government authority to suit their benefits in this case?</span></div><div align="justify"><span style="color:#000000;"></span></div><div align="justify"><span style="color:#000000;"></span></div><p align="justify"><strong><em><span style="color:#000000;">“</span><a href="http://www.youtube.com/watch?hl=hi&v=c_OJcPKEYDE"><span style="color:#3333ff;">The World According to Monsanto</span></a><span style="color:#000000;">”</span></em><span style="color:#000000;">,</span></strong><span style="color:#000000;"> the documentary film has already nailed such lies by pointing out that India’s cotton seed market has been taken over by Monsanto to produce a virtual monopoly. There are also several anecdotes to show that farmers committed suicide in the areas where the company overran traditional agriculture.</span></p>Anirban Duttahttp://www.blogger.com/profile/10423633419872222905noreply@blogger.com1tag:blogger.com,1999:blog-6217710119886663682.post-2388984573433465802009-09-20T12:42:00.004+05:302009-09-20T13:25:31.817+05:30FIIs in Indian Capital Market - How Predictable Are They?<div align="justify"><a href="http://www.galatime.com/images/2006/daily_fii_mf.png"><img style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 444px; CURSOR: hand; HEIGHT: 343px" alt="" src="http://www.galatime.com/images/2006/daily_fii_mf.png" border="0" /></a> I just presented a paper on <em>"Impact of FIIs and DIIs in Dynamism of Indian Capital Market"</em> - co-authored with one of my senior colleague Dr. Rekha - at the <em>5th National Conference on "Indian Capital Markets - Retrospect and Prospects"</em> held at <strong><a href="http://www.gjimt.com/index.htm">GJIMT</a></strong>, Mohali.</div><div align="justify"><br /><strong>Dr. Prem Kumar</strong>, Director, <strong><a href="http://www.lse.co.in/LSESL/AboutUs/Directors.aspx?id=3">Ludhiana Stock Exchange</a></strong> and an eminent industry practitioner had asked me "what is my thinking about FIIs' investment flow in Indian capital market in future". While answering his query one thing that kept coming to my mind is that the FIIs, though being a major source of liquidity in the Indian capital market, are basically speculators. Otherwise why would they repatriate their money from an economy which is fundamentally sound - a <strong><span style="color:#ff0000;">$1 trillion</span></strong> economy with a steady-state growth of <strong><span style="color:#ff0000;">6.5%</span></strong> (when others were striving hard to show a positive figure).</div><div align="justify"> </div><br><div align="justify">It is understood that there was a severe liquidity crunch at their home, the Indian stocks were highly over-valued, and we also cannot eliminate the possibility of a subtle pressure from their governments to bring back the money home. But, the investment behaviour of the FIIs in the Indian capital market - especially the equity segment - is crazy. The bull-run in the market post elections results in <span style="color:#ff0000;"><strong>May 2009</strong></span> seemed to me a handi-work of the foreigners. Out of the <strong><span style="color:#ff0000;">14</span></strong> trading days, during which the Sensex shot from<strong><span style="color:#ff0000;">12000 pt</span></strong> to <strong><span style="color:#ff0000;">15000 pt</span></strong>, they were net buyers on <strong><span style="color:#ff0000;">10</span></strong> occasions. But, they immediately offloaded some investments in the months of June and July. What is the justification for this behaviour? Isn't it queer?</div><div align="justify"><br />Also, the <strong><a href="http://www.blogger.com/www.bseindia.com/about/abindices/bse30.asp">Sensex</a></strong> is too narrow an index to reflect the actual impact. Dr. Prem Kumar suggested broadbasing of the Sensex which is highly solicited. Also, the regulatory framework should ensure that the FIIs stay invested for long-term. The FIIs comprise only about 20% of the total combined turnover of <strong><a href="http://www.nseindia.com/">NSE</a></strong> and <strong><a href="http://www.bseindia.com/">BSE</a></strong>, yet they are powerful enough to influence the retail investors and dance them to their tunes.</div>Anirban Duttahttp://www.blogger.com/profile/10423633419872222905noreply@blogger.com3tag:blogger.com,1999:blog-6217710119886663682.post-79993827591323242102009-09-09T08:56:00.006+05:302009-09-09T09:32:06.521+05:30Another Sign of Recovery<div align="justify"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjbH1qsSNWQIW5Akasbc93sPk0u0xpCQbpt8Yp3CZWmBaFRCo75MheXclnvcYkf3lAT9SP18_Y23bPqOJ8Su_14QD3CH8Bf-NvESbZ0sm93dP8UhuCYom6IFnOnV-K6f8koJR6FtBFBb-DA/s1600-h/Tax.bmp"><img style="MARGIN: 0px 10px 10px 0px; WIDTH: 320px; FLOAT: left; HEIGHT: 278px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5379309007854873890" border="0" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjbH1qsSNWQIW5Akasbc93sPk0u0xpCQbpt8Yp3CZWmBaFRCo75MheXclnvcYkf3lAT9SP18_Y23bPqOJ8Su_14QD3CH8Bf-NvESbZ0sm93dP8UhuCYom6IFnOnV-K6f8koJR6FtBFBb-DA/s320/Tax.bmp" /></a>The <strong><a href="http://www.incometaxindia.gov.in/">direct tax</a></strong> collection figures can indicate whether an economy is doing well or not. If the economy is passing through a slowdown and there is a contraction in industrial production and corporate earnings then the direct tax collected thereof would also be low. Also, in the event of a economic slowdown (if not recession) even if the direct tax collections, at least, matches with that of the figures prevailing in the good times then it is indeed a sign of recovery.<br /></div><div align="justify"></div><div align="justify"><br /></div><div align="justify">There were concerns among the policy makers of a lower mop up of direct taxes due to reduced corporate earnings. But, the all India figures for direct tax collection till <strong>September 5</strong>, totalling <strong><span style="color:#ff0000;">Rs. 90,039.7 crore</span></strong>, is actually higher than what it was for the corresponding period last year.</div><div align="justify"><br /></div><div align="justify"></div><div align="justify">The finance ministry's projection for direct tax collection in the current fiscal year is about <strong><span style="color:#ff0000;">Rs. 400,000 crore</span></strong>. The last year's collection was targeted at <strong><span style="color:#ff0000;">Rs. 345,000 crore</span></strong> while the actual collection was lower by <strong><span style="color:#ff0000;">Rs. 6,000 crore</span></strong>. (Source: <strong><a href="http://economictimes.indiatimes.com/">ET</a></strong>)</div>Anirban Duttahttp://www.blogger.com/profile/10423633419872222905noreply@blogger.com0tag:blogger.com,1999:blog-6217710119886663682.post-33042596721894064002009-09-08T09:12:00.009+05:302009-09-08T11:07:47.390+05:30The Saga of Illiquid Stocks in BSE<div align="justify"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEibDaIzztTq0iQmki4RuK911OnAtDWFALUeP1pS_fLLVrdqoZBLB-cr4qgajp_q4zFsWW7NF8WWoAru0Vg_1HtEB_701qB9im1Pr5T08FIMqNRGdszxhe9uT7jYjCl942BqbvQtMDH7U3Ob/s1600-h/BSE.bmp"><img style="MARGIN: 0px 10px 10px 0px; WIDTH: 241px; FLOAT: left; HEIGHT: 320px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5378942204665989426" border="0" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEibDaIzztTq0iQmki4RuK911OnAtDWFALUeP1pS_fLLVrdqoZBLB-cr4qgajp_q4zFsWW7NF8WWoAru0Vg_1HtEB_701qB9im1Pr5T08FIMqNRGdszxhe9uT7jYjCl942BqbvQtMDH7U3Ob/s320/BSE.bmp" /></a> Ideally a stock is termed as illiquid if its is not actively traded in the market or has been lying dormant for a long time. In the current scenario in Indian stock market, on one hand when we see a marked improvement in investor interest in shares, on the other hand there is a spike in the number of illiquid stocks in the <strong>BSE</strong>.<br /></div><br /><div align="justify">The number of listed stocks on <strong>BSE</strong> is around <strong>7750</strong> while its counterpart <strong>NSE</strong> has close to <strong>1200</strong> listed stocks. The number of illiquid stocks have risen from <strong>1600</strong> in <strong>September 2008</strong> to <strong>1800</strong> in <strong>August 2009</strong>. On <strong>NSE</strong>, this number has gone down to <strong>235</strong> from <strong>327</strong> in the same period.</div><br /><div align="justify"></div><div align="justify">This sudden spurt in the number of illiquid stocks vis-a-vis listed shares does not send a good message about the exchange's business health. It also points out that the difference in listing requirements across exchanges. Is <strong>SEBI</strong> doing something in this direction to improve turnover and volume? After all a stock if not actively traded for a long time is as good as a privately held company.</div>Anirban Duttahttp://www.blogger.com/profile/10423633419872222905noreply@blogger.com0tag:blogger.com,1999:blog-6217710119886663682.post-29890486199325521422009-07-21T12:44:00.005+05:302009-07-21T13:10:47.695+05:30SBI Beats Recession<a href="http://cwanderer.files.wordpress.com/2006/04/sbi_new01.jpg"><img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 561px; DISPLAY: block; HEIGHT: 186px; CURSOR: hand" border="0" alt="" src="http://cwanderer.files.wordpress.com/2006/04/sbi_new01.jpg" /></a> <div><div align="justify">The global financial crisis has done collateral damage to many except few and, <strong>State Bank of India</strong> (<strong><a href="http://www.statebankofindia.com/">SBI</a></strong>) is one among those few exceptional banking institutions. <strong>SBI</strong> is India's largest lender and has recorded a growth of <span style="color:#ff0000;"><strong>1.5%</strong></span> in its share of deposits (in <strong><span style="color:#ff0000;">FY09</span></strong>) from that in the previous fiscal.<br /><br />The total deposits raised by all commercial banks in India by end <strong>March 2009</strong> is worth <strong><span style="color:#ff0000;">US$ 818.57 bn </span></strong>out of which the <strong>SBI</strong> group raised <strong><span style="color:#ff0000;">US$ 197.67 bn</span></strong>. In a year when growth was unimaginable <strong>SBI</strong> group has emerged victorious, despite of the gruelling slowdown.</div><div align="justify"> </div><br><div align="justify">It's another way to exhibit that the Indian banking system is standing tall among the ruins - not just because of inaction!!</div></div>Anirban Duttahttp://www.blogger.com/profile/10423633419872222905noreply@blogger.com0tag:blogger.com,1999:blog-6217710119886663682.post-38345232649234782482009-06-26T17:26:00.008+05:302009-06-26T17:46:41.255+05:30'The Man In The Mirror' Vanished So Unceremoniously<div align="justify"><a href="http://www.michael-jackson-trader.com/movies/moonwalker/images/moonwalker1a_jpg.jpg"><img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 640px; DISPLAY: block; HEIGHT: 426px; CURSOR: hand" border="0" alt="" src="http://www.michael-jackson-trader.com/movies/moonwalker/images/moonwalker1a_jpg.jpg" /></a><br /><div align="justify">In my schooldays (<strong><span style="color:#ff0000;">1983 - 1997</span></strong>) I grew up listening to Western music of a few selected <strong><a href="http://en.wikipedia.org/wiki/Rock_and_roll">rock n' roll</a></strong> bands and pop singers. Without a grain of doubt I can recall that the first name that flash across my mind when I think of one pop-star is none else but <strong><a href="http://en.wikipedia.org/wiki/Michael_Jackson">Michael Jackson</a></strong>.</div><br /><div align="justify"></div><div align="justify">A celebrity's life is not at its pinnacle if it doesn't have enough scandals which give critics their food for thought. <strong>Michael Jackson</strong> as a celebrity had enough of them. But, to me since my childhood, he has been an angel. His <em><strong><a href="http://www.youtube.com/watch?v=W61Q-EZ8R7M">'Heal The World'</a></strong></em> was like a hymn to us in school and the most frequently sung <em>opening chorus</em> on our <strong>Annual Day</strong>. It is the same song which we belted out to win the <strong>2nd prize</strong> in an <strong>Inter University National Youth Festival</strong>.</div><br /><div align="justify"></div><div align="justify">I never had an inkling of an idea that the <strong><em><a href="http://www.youtube.com/watch?v=1zpTQCQEFhg">'Man In The Mirror'</a></em></strong> would vanish away so soon!!</div></div>Anirban Duttahttp://www.blogger.com/profile/10423633419872222905noreply@blogger.com2tag:blogger.com,1999:blog-6217710119886663682.post-87548079528853300792009-06-22T17:43:00.012+05:302009-06-23T12:45:13.242+05:30Two Major Moves By LIC And India Post<div align="justify">I am excited about two major moves going to be taken by two different financial services institutions in India. The first move is by <em>Life Insurance Corporation of India</em> (<strong><a href="http://www.licindia.com/">LIC</a></strong>) and the second one is by the <em>Indian Postal Services Department</em> aka <strong><a href="http://www.indiapost.gov.in/">India Post</a></strong>.<br /><br /><strong><a href="http://www.samanvay.iitm.ac.in/Images/LIC_Logo.jpg"><img style="MARGIN: 0px 10px 10px 0px; WIDTH: 150px; FLOAT: left; HEIGHT: 104px; CURSOR: hand" border="0" alt="" src="http://www.samanvay.iitm.ac.in/Images/LIC_Logo.jpg" /></a>LIC</strong> will be implementing a project called <em>Enterprise Document Management System</em> (<strong><a href="http://www.onlinelic.in/images/yogakshema/june/Enterprise%2019-20.pdf">EDMS</a></strong>), which they plan to complete by <strong><span style="color:#ff0000;">2011</span></strong>. It will enable <strong>LIC</strong> to extend <strong><em>'Anywhere Anytime'</em></strong> service. They have already launched the project in <strong><span style="color:#ff0000;">2007</span></strong> partnered with <em>Hewlett Packard</em> (<a href="http://welcome.hp.com/country/in/en/welcome.html"><strong>HP</strong></a>). It will enable the policy holders or their nominees to pay <strong>LIC</strong> premium or claim their settlement payment from any location in <strong>India</strong>. This would indeed make lives of <strong><span style="color:#ff0000;">230 million </span></strong>policy holders across the country much hassle free. Also, the digitization of record of these policy holders will ensure archival of physical records in electronic form and will eliminate risks of loss or damage to physical records due to natural and other disasters.<br /><br />The second move that I was referring to, by <em>India Post</em> is <a href="http://upload.wikimedia.org/wikipedia/en/thumb/d/d0/India-Post-logo.svg/800px-India-Post-logo.svg.png"><img style="MARGIN: 0px 0px 10px 10px; WIDTH: 150px; FLOAT: right; HEIGHT: 104px; CURSOR: hand" border="0" alt="" src="http://upload.wikimedia.org/wikipedia/en/thumb/d/d0/India-Post-logo.svg/800px-India-Post-logo.svg.png" /></a>that they are going to provide on-site <strong>ATM</strong>s for their customers. To note <em>India Post</em> has <strong><span style="color:#ff0000;">155,000</span></strong> locations across the country. This would be a massive value-added service to the <strong>post-office savings bank account</strong> holders. The hours of waiting in long queues at post-offices for withdrawing or depositing money can be cut down substantially. <em>India Post</em> had <strong><span style="color:#ff0000;">228.9 million </span></strong>savings bank accounts with an aggregate outstanding amount in these accounts of <strong><span style="color:#ff0000;">US$</span> <span style="color:#ff0000;">457.89 million</span></strong> (as on <strong><span style="color:#ff0000;">March-end 2009</span></strong>). </div>Anirban Duttahttp://www.blogger.com/profile/10423633419872222905noreply@blogger.com0tag:blogger.com,1999:blog-6217710119886663682.post-30364637949915414662009-06-20T11:48:00.014+05:302009-06-27T13:07:25.946+05:30Is Indian Economy Resilient To A Poor Monsoon?<div align="justify">Delayed monsoon and rising <strong><a href="http://en.wikipedia.org/wiki/El_Niño">El Niño</a></strong> risks gives me a hint ... <em><span style="color:#3333ff;">“are we going to see once again the market selloff during the drought of <strong>2002</strong>?”</span></em> The water reservoir levels are already low, and this factor coupled with poor monsoon may have adverse effects on farm income, and raise fiscal burdens. We are already halfway through in <strong>July</strong> and there has been no significant sign of onset of monsoon. My apprehension may turn out to be true depending on the progress in this month. </div><div align="justify"><br /><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjeFplY9XZheR7dZx4hZwR-zjKrl7J5ka6jN8sCMRbTc0qBGltZHzh1WhX9HJf1IO7QvWmshtmWoJGOgeHOX_0h832zfg_Mrq3mML3THpn7Rq0ZWN3Cg8pMcoqzYVDoI1TOIhyphenhyphen-dhEIjGJT/s1600-h/Monsoon.jpg"><img style="MARGIN: 0px 10px 10px 0px; WIDTH: 364px; FLOAT: left; HEIGHT: 214px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5351907557426740706" border="0" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjeFplY9XZheR7dZx4hZwR-zjKrl7J5ka6jN8sCMRbTc0qBGltZHzh1WhX9HJf1IO7QvWmshtmWoJGOgeHOX_0h832zfg_Mrq3mML3THpn7Rq0ZWN3Cg8pMcoqzYVDoI1TOIhyphenhyphen-dhEIjGJT/s320/Monsoon.jpg" /></a>The year <strong>2009</strong> season has started on a bad note. The overall rainfall for the season until <strong>Jun 17</strong> has been <strong>45%</strong> below normal, with <strong>28/36</strong> <a href="http://www.imd.ernet.in/section/nhac/dynamic/week.htm"><strong>meteorological divisions </strong></a>receiving rainfall below the long-term average. The water levels in reservoirs are at <strong>10% </strong>of capacity (vs. norm of <strong>14%</strong> for <strong>Jun</strong>). This is indeed an alarming situation. According to <strong><a href="http://www.bom.gov.au/">Australia’s Bureau of Meteorology</a></strong>, the signs of a developing <strong>El Niño</strong>, which usually lead to drought in <strong>Asia</strong>, have strengthened during the past fortnight. And if their predictions materialize in reality then we are definitely heading towards a crisis situation.<br /><br />Indian agriculture is no more heavily dependent on monsoon. There has been much progress in the irrigation facility, and also the share of agriculture in <strong><a href="http://en.wikipedia.org/wiki/Economy_of_India">GDP</a></strong> has declined. The share of the monsoon-dependent <strong><a href="http://en.wikipedia.org/wiki/Kharif_crop">kharif crop</a></strong> has declined. Since <strong>1987</strong>, agri output fell in only <strong>5/8</strong> years when monsoon rainfall was <strong>+5%</strong> below average. Also, the area under irrigation (now <strong>43%</strong>) has been rising steadily, albeit gradually. This is a positive indication.<br /><br />With agriculture now accounting for only <strong>18%</strong> of GDP (versus <strong>33% </strong>even in the early <strong>1990s</strong>), the Indian economy is far more resilient to a poor monsoon season. However, a poor crop will deflate the current buoyancy in farm incomes. At a time of <strong>+10%</strong> fiscal deficits, there is little room for further fiscal support. </div>Anirban Duttahttp://www.blogger.com/profile/10423633419872222905noreply@blogger.com0tag:blogger.com,1999:blog-6217710119886663682.post-26365923626839946712009-06-16T12:47:00.005+05:302009-06-16T13:02:37.514+05:30Investor Hostility and the Communist Governed States in India<div align="justify"><a href="http://www.pppinindia.com/images/kerala_bo_pic4.jpg"><img style="MARGIN: 0px 10px 10px 0px; WIDTH: 330px; FLOAT: left; HEIGHT: 279px; CURSOR: hand" border="0" alt="" src="http://www.pppinindia.com/images/kerala_bo_pic4.jpg" /></a> In one of my earlier posts <strong><a href="http://financionomics.blogspot.com/2008/09/west-bengal-is-one-such-state-of-india.html">“Brand Bengal: It’s High Time to Rethink”</a></strong>, dated <strong>September 06, 2008</strong> I had discussed the current state of investor hostility in the Communist regime in <strong>West Bengal</strong>. After the <strong>Dubai</strong> based <strong><a href="http://www.smartcity.ae/">Smart City</a></strong> decided to quit its ventures to set up self-sustained townships for information technology and knowledge-based industries near <strong>Kochi</strong>, <strong>Kerala</strong> I am compelled to think <strong><em><span style="color:#000099;">‘is investor hostility plaguing communist governed states?’<br /></span></em></strong><br />The proposed Smart City was likely to generate direct employment for <strong><span style="color:#ff0000;">80,000 people</span></strong> and provide indirect employment to another <strong><span style="color:#ff0000;">20,000 people</span></strong>. This is only the employment generation aspect, besides this there are other aspects like revenue generation for the state in the form of taxes, and economic growth of the state which gets adversely affected. Added to this will be a <strong><a href="http://en.wikipedia.org/wiki/Domino_effect">domino effect</a></strong> wherein other investors restrain themselves from investing in projects in Kerala.<br /><br />When the <strong>Tatas</strong> pulled out of its <strong>Nano</strong> project from Singur, West Bengal the immediate loss was over <strong><span style="color:#ff0000;">Rs. 5,000 crore</span></strong> and the potential loss was a whopping <strong><span style="color:#ff0000;">Rs. 80,000 crores</span></strong>. Smart City, Dubai had urged the Kerala state government to commit at least <strong><span style="color:#ff0000;">12%</span></strong> free land out of the total <strong><span style="color:#ff0000;">346 acres</span></strong> of land. The Kerala government still does not have a clear-cut answer to this issue and have dilly-dallied things.<br /><br />Kerala and West Bengal are two states where the communists have ruled for long tenures and had once built a strong political base. In West Bengal the current public choice is against the red-brigade, they have been badly beaten in the <strong><a href="http://panchayat.gov.in/">Panchayat</a></strong> (local self-governments) elections followed by the Parliament elections. The story in Kerala is also similar, and if the investor hostility continues then the communist governments in these two states would have to pack their bags soon. </div>Anirban Duttahttp://www.blogger.com/profile/10423633419872222905noreply@blogger.com0tag:blogger.com,1999:blog-6217710119886663682.post-75388437115548671202009-02-24T14:38:00.012+05:302009-02-24T15:33:21.516+05:30Slumdogs Are No Underdogs<div align="justify"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhJNXF_GbZ7igAg_ZuKEIrpT9SKrG9sTeZjWTMSEZqTwdTCpMLa9mty8Heh4SV2PTU4Au7vlJaBieg0tzNbxwq-nA3f5AnZuPdxU3U6W_8KEtQHW9G0lGJEqWnwKK9uEEfKPln1MjYlDvNV/s1600-h/Slumdogs.PNG"><img id="BLOGGER_PHOTO_ID_5306297972052489154" style="DISPLAY: block; MARGIN: 0px auto 10px; WIDTH: 320px; CURSOR: hand; HEIGHT: 122px; TEXT-ALIGN: center" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhJNXF_GbZ7igAg_ZuKEIrpT9SKrG9sTeZjWTMSEZqTwdTCpMLa9mty8Heh4SV2PTU4Au7vlJaBieg0tzNbxwq-nA3f5AnZuPdxU3U6W_8KEtQHW9G0lGJEqWnwKK9uEEfKPln1MjYlDvNV/s320/Slumdogs.PNG" border="0" /></a>The laurels that <strong><a href="http://www.arrahman.com/">A. R. Rehman</a></strong>, <strong><a href="http://www.gulzar.info/">Gulzar</a></strong> & <strong><a href="http://en.wikipedia.org/wiki/Resul_Pookutty">Resul Pookutty</a></strong> brought to India at the centrestage of the <strong><a href="http://en.wikipedia.org/wiki/Academy_Award">Academy Awards</a></strong> function have enthralled every conscious Indian. We may have had loads of criticism against the portrayal of India's poverty and wretched condition of life of its slum-dwellers in this movie, but we cannot detach ourselves from dousing in the celebration for the victors who are very much Indian.<br /><br /><div align="justify"><div align="justify"></div><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj6tqdYJq4D1LWdNBszNCs_T7dhB_mjp1zshBvzCmMnM4s2jx6I8iMsbv7E44o5oLP0YUNw7vIqnJmq9BJkSW7hYqbYVKZ2879_UVcELi3BkE35nHxQ4tZ_ocIt3nn0mWqklivB-GqTxSgC/s1600-h/SBI-logo.png"><img id="BLOGGER_PHOTO_ID_5306298836288849810" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 189px; CURSOR: hand; HEIGHT: 200px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj6tqdYJq4D1LWdNBszNCs_T7dhB_mjp1zshBvzCmMnM4s2jx6I8iMsbv7E44o5oLP0YUNw7vIqnJmq9BJkSW7hYqbYVKZ2879_UVcELi3BkE35nHxQ4tZ_ocIt3nn0mWqklivB-GqTxSgC/s200/SBI-logo.png" border="0" /></a> <div align="justify">This is not the end of the story; India have once again proven her worth in another field - banking. Our very own <strong><a href="http://www.sbi.co.in/">State Bank of India</a></strong> (fondly known as <strong><em>SBI</em></strong>) have superseded <strong>Citigroup</strong>'s market capitalisation to be among the largest banks in the world. The market capitalisation of <strong>SBI</strong> on Friday closed at <strong><span style="color:#ff0000;">Rs. 66,285 crore</span></strong>. This is around <span style="color:#ff0000;"><strong>25%</strong></span> more than the closing market capitalisation of <strong><a href="http://www.citi.com/">Citigroup</a></strong> on the <strong><a href="http://www.nyse.com/">NYSE</a></strong> on Friday. The market capitalisation of <strong>Citigroup</strong> was <strong><span style="color:#ff0000;">Rs. 52,931 crore</span></strong>.</div><br /><div align="justify"></div><div align="justify">Though <strong>Citigroup</strong>'s revenue in the last four quarters is almost eleven times more than the revenue earned by <strong>SBI</strong>, its profits are nowhere near the figures earned by <strong>SBI</strong>. While <strong>Citigroup</strong> has suffered losses of <strong><span style="color:#ff0000;">Rs. 83,474 crore</span></strong> in the last four quarters, <strong>SBI</strong> has booked profits of <strong><span style="color:#ff0000;">Rs. 8,262 crore</span></strong>. <strong><a href="http://www.theglobalist.com/AuthorBiography.aspx?AuthorId=815">Martin Hutchinson</a></strong>, an economic commentator, recently put out a list on the status of the 12 largest banks in the <strong>US</strong>. He categorised <strong>Citi</strong> as a zombie bank. <em><span style="color:#000099;">“Citi has been a serial flirter with bankruptcy over the past 30 years and remains a basket case,”</span></em> he wrote.</div></div></div>Anirban Duttahttp://www.blogger.com/profile/10423633419872222905noreply@blogger.com6tag:blogger.com,1999:blog-6217710119886663682.post-56489707561437510142009-01-12T11:05:00.010+05:302009-01-13T00:46:14.717+05:30Amazing Facts About The Big 4<div align="justify">The <strong><a href="http://web.bryant.edu/~ais/big5.html">Big 5</a></strong> (Sorry 4) accounting firms have been on the top of every finance professional's mind for some reason or the other. There are a couple of true but amazing facts about them, not known to many. Known as the <strong><a href="http://en.wikipedia.org/wiki/Big_Four_auditors">Big 4</a></strong> accounting firms they are:</div><div align="justify"></div><img id="BLOGGER_PHOTO_ID_5290287479405802498" style="DISPLAY: block; MARGIN: 0px auto 10px; WIDTH: 320px; CURSOR: hand; HEIGHT: 38px; TEXT-ALIGN: center" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi2NsSiPipNvCqtR30Mr46Vv6wvXRVuBl2p4JUQW4TYEIhWCQaxxl4A7b_usB3gim-EIMLexztONNbFkfjCSdnfTOfaXpjcaHpamO-8pTntoP-g4e78ALUC9NIsrfJMvDM1TkV3uGQY_n2b/s320/Big+4.bmp" border="0" /> <div align="justify"></div><div align="justify">(<strong><a href="http://en.wikipedia.org/wiki/Arthur_Andersen">Arthur Anderson</a></strong> which made it the <strong>Big 5</strong> is now in archives).</div><br /><div align="justify"></div><div align="justify">Of course they set the global standards for transparency in business. But who is their owner? Shhhhh ... It is a well-guarded secret. Even though present in over 120 countries, for obvious reasons each one of them is headquartered in a <strong><a href="http://en.wikipedia.org/wiki/Tax_haven">tax haven</a></strong>. If you enquire any details about these firms in a tax haven like <strong><a href="http://en.wikipedia.org/wiki/Panama">Panama</a></strong>, you may end up spending the next 2 years in jail. Understand how secret the ownership is!</div><br /><div align="justify"></div><div align="justify">They have paid billions of dollars as fines in the U.S alone to the <strong><a href="http://www.sec.gov/">SEC</a></strong>. In U.K they are being subject to investigations under the <strong><a href="http://www.britannica.com/EBchecked/topic/200336/Fair-Trade-Act">Fair Trade Practices Act</a></strong>. They are the subject of cartoons in the western press and lampooned by the media. </div><br /><div align="justify"></div><div align="justify">They have been found innovative in:</div><ul><li><div align="justify">Booking bogus sales</div></li><li><div align="justify">Capitalizing revenue expenses</div></li><li><div align="justify">Insider trading & related unethical practices</div></li><li><div align="justify">Not accounting sales returns</div></li><li><div align="justify">Inadequate disclosure of off-balance sheet items</div></li><li><div align="justify">Assisting the management in asset stripping</div></li><li><div align="justify">Failing to record liabilities or suppress liabilities</div></li></ul><p align="justify">Well the list on their accounting "innovation" could go on ... That is if you do not reckon shredding of documents as an expert service. It is these 'credible' professional outfits that are in India, advising the Government of India on:</p><ul><li><div align="justify">Speed and directions of reforms</div></li><li><div align="justify">Advisor to the planning commission</div></li><li><div align="justify">Providing expertise to the disinvestment process</div></li><li><div align="justify">Privatization and Globalization</div></li><li><div align="justify">Policies for inviting <strong><a href="http://en.wikipedia.org/wiki/Foreign_investment">FDI</a></strong></div></li></ul><p align="justify">So if you want to innovate your accounts hire these "experts", they would do a good job for you and of course make a fortune in the bargain. If you are corporate manager, you may have personally felt bombarded, sullied, trampled over, bullied and even decried at your own office by representatives of the <strong>Big 4</strong>. Simply because they are from the <strong>Big 4</strong>. Remember, they charge you and you pay even for the time spent on abusing you!</p><p align="justify">If you are a decision maker you might have noticed subtle hints to influence your decisions. Hiring the kith and kin of the decision makers is one of their tried and trusted methods. They are experts in the art of making friends and influencing people. They are too good at <strong><a href="http://en.wikipedia.org/wiki/Dollar_Diplomacy">Dollar Diplomacy</a></strong>!</p><p align="justify">Their ownership is unknown, their competency is suspect and their advice bogus. Then, why do the financial institutions, banks and the corporates in India keep them as auditors, advisors or consultants? Why are they allowed to operate in India, and hired and respected by the Government of India? <strong>WHY?</strong></p><p align="justify">Simply because we are not aware of these firms and therefore we are silent. The need of the hour is to create public awareness.</p>Anirban Duttahttp://www.blogger.com/profile/10423633419872222905noreply@blogger.com1tag:blogger.com,1999:blog-6217710119886663682.post-60390247812013814172009-01-01T21:55:00.005+05:302009-01-01T22:18:06.003+05:30Silver Tsunami<div align="justify"><span ><img style="FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 175px; CURSOR: hand; HEIGHT: 170px" alt="" src="http://images.publicradio.org/content/2007/10/18/20071018_casey_kirschling_baby_boomer_77333396_18.jpg" border="0" />On <strong><span style="color:#ff0000;">February 12, 2008</span></strong>, America's first baby boomer, <strong><a href="http://http//www.blogger.com/post-create.g?blogID=6217710119886663682">Kathleen Casey-Kirschling</a></strong>, received her first </span><strong><span style="color:#000000;"><a href="http://www.investopedia.com/terms/s/socialsecurity.asp">Social Security</a></span></strong><span ><strong> </strong>payment. That was just the beginning. Over the next <strong><span style="color:#ff0000;">20</span> </strong>years, <strong><span style="color:#ff0000;">80</span> </strong>million boomers (those born between <strong><span style="color:#ff0000;">1946</span> </strong>and <strong><span style="color:#ff0000;">1964</span></strong>) will begin collecting Social Security. That's an average of more than <strong><span style="color:#ff0000;">10,000 per day</span></strong>. The wave of retiring boomers has been dubbed the <strong><span style="color:#ff0000;">"silver tsunami"</span></strong>.<br /></span></div><div align="justify"><br /><span >When <strong><a href="http://en.wikipedia.org/wiki/World_War_II">World War II</a></strong> ended, there were <strong>44 </strong>people paying into Social Security for every retiree. Now only three people pay in, for each person taking out, and it could be </span><strong><span ><a href="http://www.investopedia.com/terms/b/bankruptcy.asp">bankrupt</a></span></strong><span ><strong> </strong>by the year 2043. So, if Social Security doesn't benefit from </span><strong><span ><a href="http://www.investopedia.com/terms/b/baby_boomer.asp">boomers</a></span></strong><span ><strong> </strong>retiring, who does? </span></div><div align="justify"><span ></span> </div><div align="justify"><span ><span style="color:#330099;">Courtesy:</span> <strong><a href="http://www.ashworthinformation.com/">Will Ashworth</a></strong></span></div><div align="justify"><a href="http://www.investopedia.com/"><span >http://www.investopedia.com</span></a><span > </span><a href="http://community.investopedia.com/news/IA/2008/Surf_The_Silver_Tsunami_MAN_MPS.aspx?partner=IAI"></a></div>Anirban Duttahttp://www.blogger.com/profile/10423633419872222905noreply@blogger.com0tag:blogger.com,1999:blog-6217710119886663682.post-80381224963907028982008-12-23T23:22:00.009+05:302008-12-24T00:15:47.680+05:30Ten Surprises for 2009<div align="justify"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhNEzY-Sw0u_wLOH2owhaNuSum8-islo6gEvakLNnciSQpf8e60z5HU9xAxTDwz9yeF4mWkRATund4ExKH3d3KmsPhKPuMzBK-ldakn4_80BoAp5_-9qn52ulYQsru82M3o4O6nt9UhRqU7/s1600-h/UBS.JPG"><img id="BLOGGER_PHOTO_ID_5283055416126469650" style="DISPLAY: block; MARGIN: 0px auto 10px; WIDTH: 320px; CURSOR: hand; HEIGHT: 78px; TEXT-ALIGN: center" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhNEzY-Sw0u_wLOH2owhaNuSum8-islo6gEvakLNnciSQpf8e60z5HU9xAxTDwz9yeF4mWkRATund4ExKH3d3KmsPhKPuMzBK-ldakn4_80BoAp5_-9qn52ulYQsru82M3o4O6nt9UhRqU7/s320/UBS.JPG" border="0" /></a>In a collaborative effort between <strong><a href="http://globalequitystrategies.net/">Global Equity Strategy</a></strong> and <strong><a href="http://pages.stern.nyu.edu/~adamodar/New_Home_Page/invmgmt/ch6/globinv1.htm">Global Asset Allocation</a></strong>, and in keeping with their year-end tradition, <strong><a href="http://www.ubs.com/">UBS</a></strong> presented in their final publication of <strong>2008</strong> a list of ten possible <em><span style="color:#ff0000;">‘surprises’</span></em> for the coming year. Its aim is to identify plausible scenarios, representing risks—up or down—to investor consensus thinking, and in some cases, to its own views.<br /><p align="justify"><strong>UBS' list of <span style="color:#ff0000;"><em>‘surprises’</em></span> include:</strong></p><p align="justify">1) Corporate default rates don’t rise significantly; </p><p align="justify">2) Oil prices fall below <span style="color:#ff0000;"><strong>$20</strong></span> per barrel; </p><p align="justify">3) The dollar falls to new lifetime lows; </p><p align="justify">4) Breakeven inflation rates remain near zero; </p><p align="justify">5) Global growth is negative for <strong>2009</strong>; </p><p align="justify">6) The Fed purchases corporate credit; </p><p align="justify">7) Emerging markets regain parity valuations; </p><p align="justify">8) Equity ‘fallen angels’ soar; </p><p align="justify">9) Obama pushes for a ‘tax holiday’; and, </p><p align="justify">10) Gold goes to <strong><span style="color:#ff0000;">$300</span></strong>.</p><p align="justify">Perhaps next year the surprises will be somewhat more positive? Who knows! Now let us take a look at their last years' surprises (predictions) and compare their conjectures to actual outcomes.</p><p align="justify">1) Global growth surprises on the upside: <strong>Did it happen? No.</strong></p><p align="justify">2) Oil prices: Is <strong><span style="color:#ff0000;">50</span></strong> the new <strong><span style="color:#ff0000;">20</span></strong>? <strong>Did it happen? Yes.</strong></p><p align="justify">3) The dollar appreciates: <strong>Did it happen? Yes.</strong></p><p align="justify">4) World trade clouds: <strong>Did it happen? Sort of.</strong></p><p align="justify">5) Developed deflation, developing inflation: <strong>Did it happen? No.</strong></p><p align="justify">6) Financials outperform: <strong>Did it happen? No.</strong></p><p align="justify">7) Emerging equity markets under-perform: <strong>Did it happen? Yes.</strong></p><p align="justify">8) Japanese equities outperform: <strong>Did it happen? It depends.</strong></p><p align="justify">9) Equity volatility settles at lower levels: <strong>Did it happen? No.</strong></p><p align="justify">10) Chinese inflation falls sharply: <strong>Did it happen? Yes.</strong></p><p align="justify">With a success ratio of <strong><span style="color:#ff0000;">40%</span></strong> in their last year's predictions it attests that this exercise has merit. At least it can provide an avenue for <em><strong>'out of the box'</strong></em> thinking which can aid risk management. Whether their predictions hold good or live upto its own benchmark is a question that only time can answer. Let's wait and watch!!</p><br /></div>Anirban Duttahttp://www.blogger.com/profile/10423633419872222905noreply@blogger.com3tag:blogger.com,1999:blog-6217710119886663682.post-10515788625376867992008-12-21T11:56:00.006+05:302008-12-21T12:32:29.409+05:30Market Failure and the Big Three<div align="justify"><a href="http://www.thetorquereport.com/detroit_3.jpg"><img style="DISPLAY: block; MARGIN: 0px auto 10px; WIDTH: 510px; CURSOR: hand; HEIGHT: 260px; TEXT-ALIGN: center" alt="" src="http://www.thetorquereport.com/detroit_3.jpg" border="0" /></a>It was much debated on whether the <a href="http://financionomics.blogspot.com/2008/09/is-feds-bailout-going-to-be-dramatic.html"><strong>Federal Reserve</strong> should bailout</a> the <strong>U.S </strong>auto industry or not. Many were of the opinion (with a conservative view) that the <strong><a href="http://en.wikipedia.org/wiki/Big_Three_automobile_manufacturers">Big Three</a></strong> could probably survive and be competitive if the <strong>U.S </strong>government would let them go into <strong><a href="http://www.uscourts.gov/bankruptcycourts/bankruptcybasics/chapter11.html">Chapter 11</a> </strong>bankruptcy instead of bailing them out with taxpayers’ money.<br /><br />In a capitalist economy, government intervention is less likely and less welcome unless there is a <a href="http://en.wikipedia.org/wiki/Market_failure"><strong>market failure</strong></a> which has far reaching effects. The fall of the <strong>Big Three </strong>would have been an imminent danger to the <strong>U.S.A</strong>'s national economy. <strong>President Bush</strong>'s order for an emergency bailout of the <strong>U.S</strong> auto industry offering <strong><span style="color:#ff0000;">$17.4 billion</span></strong> have risen mixed feelings. The autoworkers union complained the deal was too harsh on its members, while Bush's fellow <strong><a href="http://en.wikipedia.org/wiki/Republican_Party_(United_States)">Republicans</a></strong> in Congress said it was simply bad business to bail out yet another big industry.<br /><br />To my opinion the <strong>Fed</strong>'s decision is perfect as it could not afford to allow the massive auto industry to collapse when the economy is already in the middle of an economic downturn. The <strong>Big Three</strong>'s fall could send the <strong>U.S</strong> economy into a deeper and longer recession. But, it is also high time for the <strong>U.S</strong> auto companies to reform bad management practices and begin the long-term restructuring to safeguard the millions of jobs it provides.</div>Anirban Duttahttp://www.blogger.com/profile/10423633419872222905noreply@blogger.com4tag:blogger.com,1999:blog-6217710119886663682.post-56796555120110930802008-12-13T22:34:00.014+05:302008-12-14T00:33:21.409+05:30Chiquita, Not Just Bananas!<div align="justify"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj2BqLlJoDkGHEp83OpnaAZaMvGQYYJKJNCUNLdy_Q3XqBMWvDO7qIu-z5LEwPTUWOMCCxadq9IlhWMFg0mksgXNilinRHrlANvQKdT0rfkXGnlgFyM6OgBlcJe-6ZD45J7qSPlhdUvQL4r/s1600-h/Chiquita.JPG"><img id="BLOGGER_PHOTO_ID_5279345663238929618" style="DISPLAY: block; MARGIN: 0px auto 10px; WIDTH: 320px; CURSOR: hand; HEIGHT: 158px; TEXT-ALIGN: center" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj2BqLlJoDkGHEp83OpnaAZaMvGQYYJKJNCUNLdy_Q3XqBMWvDO7qIu-z5LEwPTUWOMCCxadq9IlhWMFg0mksgXNilinRHrlANvQKdT0rfkXGnlgFyM6OgBlcJe-6ZD45J7qSPlhdUvQL4r/s320/Chiquita.JPG" border="0" /></a><span style="color:#000000;">The name <em><strong>Chiquita</strong></em> in the western world is synonymous to a banana. But there's a lot more to <strong><em>Chiquita </em></strong>than just bananas!<br /></span><div align="justify"></div><br /><div align="justify"><span style="color:#000000;">The company's website parade about its ethical business practices without shame or modesty which they hardly practise in reality: </span></div><div align="justify"><span style="color:#000099;"><em>"<a href="http://www.chiquita.com/CorporateCommitment/EthicsAndIntegrity.aspx">Chiquita is committed to conducting business ethically and in compliance with the letter and spirit of the law. This commitment is reflected in our Company’s Core Values – Integrity, Respect, Opportunity and Responsibility. These values embody who we are and what we do.</a>"</em> </span></div><div align="justify"></div><br /><div align="justify"><span style="color:#000000;">In</span> <strong><span style="color:#ff0000;">March 2007</span></strong>, <span style="color:#000000;"><strong><em>Chiquita</em></strong> was convicted of federal criminal charges for making more than <strong>100</strong> payments, totaling more than</span> <strong><span style="color:#ff0000;">$1.7 million</span></strong>, <span style="color:#000000;">to the United Self-Defense Committees of Colombia (Autodefensorias Unidas de Colombia or <strong><a href="http://united%20self-defense%20committees%20of%20colombia/">AUC</a></strong>), which has been designated as a <strong><a href="http://www.state.gov/s/ct/rls/rpt/fto/">Foreign Terrorist Organization</a></strong> by the U.S. government. <strong><em>Chiquita</em></strong> paid a</span> <strong><span style="color:#ff0000;">$25 million</span></strong> <span style="color:#000000;">fine</span>.</div><img id="BLOGGER_PHOTO_ID_5279345980271737346" style="DISPLAY: block; MARGIN: 0px auto 10px; WIDTH: 320px; CURSOR: hand; HEIGHT: 210px; TEXT-ALIGN: center" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh249XM1KB_HqromxHjBJAgNJ2MwqyV2m5hsKwuZHLi6Oy-neumc3NSzbVtoqXxrgtW_PNv7PrM18M01kVxMd2OyaiVf6mFzEwYGTIqvg8Wt0DXkPQQy80BpjVI1Lqak33r1O5avcCVK3cK/s320/AUC.jpg" border="0" /> <div align="justify"></div><div align="justify"><span style="color:#000000;">In</span> <span style="color:#ff0000;"><strong>July, 2007</strong> </span><span style="color:#000000;">Colombian families represented by EarthRights International (<strong><a href="http://www.earthrights.org/">ERI</a></strong>), together with the Colombian Institute of International Law (<strong>CIIL</strong>), <strong><a href="http://www.asha-foundation.org/women/women/judith_chomsky.php">Judith Brown Chomsky</a></strong>, and Schonbrun DeSimone Seplow Harris & Hoffman LLP (<strong><a href="http://www.sdshh.com/">SDSHH</a></strong>), filed a federal class-action lawsuit charging <strong><em><a href="http://www.chiquita.com/">Chiquita Brands International, Inc.</a></em></strong>, the multi-national produce company, with funding and arming known terrorist organizations in <strong>Colombia</strong> in order to maintain its profitable control of <strong>Colombia</strong>’s banana growing regions starting in the <strong><span style="color:#ff0000;">mid-1990s</span></strong>. </span></div><div align="justify"><span style="color:#000000;"></span></div><br /><div align="justify"><span style="color:#000000;"><strong><em>Chiquita</em></strong>’s payments to these paramilitary groups, including the <strong>AUC</strong> and its predecessors, were reviewed and approved by senior executives of the corporation, and resulted in the targeted killings of hundreds or thousands of individuals, including trade unionists, banana workers, and political organizers. </span><span style="color:#000000;">It is also said that the company have been engaging women and child labourer in their plantations in <strong>El-Salvador</strong>, <strong>Colombia</strong> and other <strong>Central American</strong> nations, who were made to work under inhumanic working conditions.</span></div><div align="justify"></div><br /><div align="justify"><span style="color:#000000;">It flaunts its 'Code of Conduct' (CoC) and holds it up as the representative of its ethics and compliance program. Apparently, going by the CoC of the company, it looks like the company is deep-rooted in strong fundamentals. But, the dark-side of the company's economic activities is scary.</span></div></div>Anirban Duttahttp://www.blogger.com/profile/10423633419872222905noreply@blogger.com0tag:blogger.com,1999:blog-6217710119886663682.post-1256126335060659712008-12-09T13:11:00.007+05:302008-12-09T13:49:41.232+05:30DEEPENING WOES FOR JAPAN<a href="https://customers.reuters.com/d/graphics/JP_GDP1208.gif"><img style="DISPLAY: block; MARGIN: 0px auto 10px; WIDTH: 650px; CURSOR: hand; HEIGHT: 424px; TEXT-ALIGN: center" alt="" src="https://customers.reuters.com/d/graphics/JP_GDP1208.gif" border="0" /></a><br /><div align="justify"><a href="https://customers.reuters.com/d/graphics/JP_GDP1208.gif"><span style="color:#000000;"></span></a><span style="color:#000000;">In the face of the global financial meltdown it is now predicted that the recessionary situation in <strong>Japan</strong> may deepen further. The previous record was three quarters in a row, as in the last contraction seven years ago in the wake of the </span><a style="COLOR: rgb(17,65,112)" href="http://en.wikipedia.org/wiki/Dot-com_bubble" target="_blank"><span style="color:#000000;"><strong>dot.com</strong></span></a><span style="color:#000000;"> bust.<br /></span><br /><p align="justify"><span style="color:#000000;">High oil prices were the primary cause for economic slowdown in <strong>Japan</strong> until the third quarter. But, what is currently being observed that <a href="http://www.telegraph.co.uk/finance/newsbysector/transport/3232893/Nissan-and-Honda-cut-back-UK-production.html"><strong>Japanese companies are curtailing production</strong></a> at an unprecedented pace as demand plunges not just in the <strong>United States</strong> and <strong>Europe</strong> but also in emerging nations that had until recently weathered the global financial storm. The situation is aggravated further by the sharp appreciation in yen.</span></p><br /><p align="justify"><span style="color:#000000;">Economists have been expecting a <strong><span style="color:#ff0000;">0.4 percent</span></strong> contraction in fiscal <strong><span style="color:#ff0000;">2008/09</span></strong> but that now needs to be revised down. It's hard to see at this point how the economy will return to a recovery. The sharp fall in oil price and other commodity prices should positively impact Japanese consumption but there is still time when the positive effects are felt.</span></p></div>Anirban Duttahttp://www.blogger.com/profile/10423633419872222905noreply@blogger.com0