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Think of your faults the first part of the night when you areawake, and the faults of others the latter part of the night whenyou are asleep.

- COGITO ERGO

National Headlines Government to borrow 15,000 crore to fund farm loan waiver over next 24 months.

Govt. to issue 9297 crore oil bonds.

Personal tax collection grown to 40% over the last fiscal year. Industrial growth is just 5.3% as against 11.6% last year same time, consumer durables

have degrown by 3.1%.

Forex derivative losses likely to touch $ 3-5 billion.

Rs 128 Trillion derivatives on banks books.

Investors lost 24% value as 13 out of 18 IPOs flop in market.

On March,10 for the first time in the year 2008 FII became the cash buyer buying RS

513 Cr of shares.

Videocon lines up RS6000 Cr. For GSM services.

2 Tata firms plan to raise $1 Billion each for future plans.

International Headlines

Dollar hits three year low against loan Yen 102.92 Yen.

China tops as global FDI increased 5.1% in 07 attracting $90.4 billion while Indiacame 2nd.

Blackstone a private equity firm posted a fourth quarter loss of $170 million.

Nortel Network plans to outsource 1000 jobs to India, to cut costs and return toprofitability.

Volkswagen AG, European automobile manufacturer is acquiring Swedish truck makerScania AB.

Oil prices stable hovering around a record high - after reaching a record of dollar108.21 a barrel, prices now stable around the 107 mark.

Japan lends 7k crore for core sector to India. This is a 21% increase compare to lastyears.

U.S. stocks drops on credit term oil and accentuated recession fears and the market isvery close to its 2008 record low.

16th MAR 2008

Volume 1, Issue 14

..Tracking the Economy

Becoming wealthy is like playing Monopoly, the person who can accumulate the most assetswins the game- Noel Whittaker, Financial Planner

Inflation 5.02% , IIP 5.3 %

Issue AttractionsNationalHeadlines

1

InternationalHeadline

1

CorporateInterview

2

Quiz 2

Student Editorial 3

InvestorsCheck/Taglines/Buzz Word

4

15 days Movements

CHAANAKYACHAANAKYACHAANAKYACHAANAKYAWealth Incorporation - A CCIM Finance Club Initiative Presents

15400

15900

16400

16900

17400

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

Sensex

Sensex

39.5

39.7

39.9

40.1

40.3

40.5

40.7

40.9

1 2 3 4 5 6 7 8 9 1 0 11 12 13 14 15 16 17

Rs/$

Rs/$

1150

1155

1160

1165

1170

1175

1180

1185

1190

1 2 3 4 5 6 7 8 9 1 0 11 12 13 14 15 16

Gold(per gram)

Gold

3900

3950

4000

4050

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4150

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4250

4300

1 2 3 4 5 6 7 8 9 1 0 11 12 13 14 15 16

Oil(per bbl)

Oil

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Quiz

Lack of money is the root of all evil- George Barnard Shaw, Author.

1. A financial derivative contract that transfers credit risk from one party to another. An initial premium

paid by the buyer in exchange for potential cash flows if a given credit spread changes from its curr

level.

2. This term is often used when referring to management fees or other expenses paid to mutual fun

exchange-traded funds, or other pooled investment vehicles. This term represent the investment cap

that the investor spends on investment fees.

3. An event that allows initial investors in a company to cash out some or all of their ownership shares an

considered an exit strategy for an illiquid investment.

Mr. K. Shantharama Kamath, General Manager Treasury, Vijaya Bank

Q- What is your educational background & How you started your career?

KSK: I have Studied B.Sc., CIB, LLB & PG diploma in Personnel Management. I joined Vijaya Bank in the ye1971 as a clerk. From a Clerk to GM, the journey of 36 years has been exciting, as I have seen the making the Bank brick by brick.

Q- What is your present role & responsibility?KSK: Being the head of Treasury, I take care of the entire investment portfolio of the bank. I supervise tinvestment & exposure in Forex Market, Equity, Govt. Security, Call Money market. We strictly follow tReserves & Investments guidelines given by RBI, like caps in different investments, maintenance of CRR & Setc.

Q- How you take the investment decisions?

KSK: There are many things that has to be taken into consideration while making an investment decision limaturity matching, asset-liability matching, future expected cash in & out flow, the nature of fund, markconditions, regulatory requirement, availability of information etc. As the market is getting complex day by dathe role of a treasury manager has become very critical.

Q- Do you think that the technology of your bank is advanced enough to compete with the priva& foreign banks?

KSK: Yes, we have all the advanced technologies in our treasury department. Real time information terminlike Reuters, Bloomberg, SWIFT & RTGS. One will be out of sync with the market if it does not have these staof the art technologies. We have 17 regional centers across the country, cumulative transactions of more th5 crore is to be reported immediately to the treasury department.

Q- What is your view of the present market?

KSK: The entire global market has become excessively volatile for the past few days. Taking the case of ocountry the severity of volatility is more. The proposal to increase the STCG tax from 10% to 15% will no whelp stabilizing the market, as the percentage increase is insignificant. And I feel the interest rate will mosouthward in coming days.

Q- What is your take on the 60K Crore Farm Loan Waiver & how your bank has been affected?

KSK: Out of the 60k crore, the exposure of RRBs & Co-operative Banks is 48k crore & that of Nationalizbanks is 12k crore. I cant comment on the exposure of our bank, as I dont handle that operation. The rehelp can come by developing the irrigation systems, quality seed distribution, improving the farmitechnologies etc. & not by loan waiver.

Q- What is your advice to MBA Finance students?

KSK: A finance student should keep his eyes & ears open, & should track all the movements in the markBuild your basics strong & develop your own opinions about the market dynamics.

Interview With K.S. Kamath

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Did you Know?

The economy of HoCong is believed tothe most economicfree in the world.

It has often been ciby economist such

Milton Friedman and Cato Institute as example of the beneo f l a i s s e z - f acapitalism.

It has ranked as world's freest econoin the Index Economic Freedom 14 consecutive yeasince the inception the index in 1995 anfirst in the Econo

Freedom of the WoReport.

BANK OF INDI

BSE532149

NSEBANKIND

CMP269, TARGET

SUZLON ENERG

BSE532667

NSESUZLONCMP270, TARGET

ORCHID CHEMIC

BSE 524372

NSE ORCHIDCH

CMP 219, TARGET

Stock Ratnas

Everyone has the brainpower to follow the stock market. If you made it through fifth-grademath, you can do it.- Peter Lynch, Fund Manager

Answers To Quiz

1. Credit Spread Opt

2. Foregone Earnings

3. Liquidity Event

How the Sensex is CalculatedBy: Nikhil Purohit

ensex is not only scientifically designed but also based on globally accepted construction andeview methodology. First compiled in 1986, Sensex is a basket of 30 constituent stocksepresenting a sample of large, liquid and representative companies. The base year of Sensex is978-79 and the base value is 100. The index is widely reported in both domestic andnternational markets through print as well as electronic media.

The Index was initially calculated based on the "Full Market Capitalization" methodology butwas shifted to the free-float methodology with effect from September 1, 2003. The "Free-floatMarket Capitalization" methodology of index construction is regarded as an industry best

ractice globally. All major index providers like MSCI, FTSE, STOXX, S&P and Dow Jones usehe Free-float methodology. (See below: Explanation with an example)

ensex Calculation Methodology

ensex is calculated using the "Free-float Market Capitalization" methodology. As per thismethodology, the level of index at any point of time reflects the Free-float market value of 30omponent stocks relative to a base period. The market capitalization of a company isetermined by multiplying the price of its stock by the number of shares issued by the company.

This market capitalization is further multiplied by the free-float factor to determine the free-floatmarket capitalization

The base period of Sensex is 1978-79 and the base value is 100 index points. This is oftenndicated by the notation 1978-79=100. The calculation of Sensex involves dividing the Free-oat market capitalization of 30 companies in the Index by a number called the Index Divisor.

The Divisor is the only link to the original base period value of the Sensex. It keeps the Indexomparable over time and is the adjustment point for all Index adjustments arising out oforporate actions, replacement of scrips etc. During market hours, prices of the index scrips, at

which latest trades are executed, are used by the trading system to calculate Sensex every 15econds and disseminated in real time.

Example (provided by rediff.com reader Munish Oberoi):

uppose the Index consists of only 2 stocks: Stock A and Stock B. Suppose company A has,000 shares in total, of which 200 are held by the promoters, so that only 800 shares arevailable for trading to the general public. These 800 shares are the so-called 'free-floating'hares. Similarly, company B has 2,000 shares in total, of which 1,000 are held by the promotersnd the rest 1,000 are free-floating. Now suppose the current market price of stock A is Rs 120.hus, the 'total' market capitalization of company A is Rs 120,000 (1,000 x 120), but its free-float

market capitalization is Rs 96,000 (800 x 120).Similarly, suppose the current market price oftock B is Rs 200. The total market capitalization of company B will thus be Rs 400,000 (2,000 x

00), but its free-float market cap is only Rs 200,000 (1,000 x 200).So as of today the marketapitalization of the index (i.e. stocks A and B) is Rs 520,000 (Rs 120,000 + Rs 400,000); whilehe free-float market capitalization of the index is Rs 296,000. (Rs 96,000 + Rs 200,000).The year978-79 is considered the base year of the index with a value set to 100. What this means is thatuppose at that time the market capitalization of the stocks that comprised the index then was,ay, 60,000 (remember at that time there may have been some other stocks in the index, not And B, but that does not matter), then we assume that an index market cap of 60,000 is equal ton index-value of 100.Thus the value of the index today is = 296,000 x 100/60,000 = 493.33Thishow the Sensex is calculated. The factor 100/60000 is called index divisor.

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Foreign Exchange : Impact and ScopeBy: Prof C.S Dikshit

In a globalised world, no one can be immune from the impact of foreign exchange-favorable or unfavorable!

Lets us look, the positive aspects first, though crude oil prices crossed us$100per barrel mark recently, India withstan

the shock because strengthen of Indian rupee vis--vis us$ provided the cushion not only terms of Indian rupee

pleasant surprise! Same was the scenario in respect of us$ denominated debt repayments involving lesser outgoes

Indian rupees.

On the flip side the stronger Indian rupee with reference to us$ meant lower rupee realization the export deadenominated us dollars. Also the stronger Indian rupee resulted in export prices from India becoming higher in term

of us$-leading in competitive disadvantage.

Overall in the national context for a developing country the strengthening of its currency is a good new

because generally its imports are more than its exports.

Interestingly competent management of foreign exchange can significantly improve the profitability of

organization conversely poor understanding of foreign exchange related aspects can spell doom for an organization.

The foreign exchange arena keeps the players on their toes- always! Be it hedging, arbitrage or netting! Split secon

decision, fluctuations in exchange rates, regulatory parameters in different countries, transactions involving millions

dollars- all get adrenaline going on and the pace is fanatic!! This game is not for the faint hearted and it impliSurvival of the Fittest!!!

Merely having raw data or digestible information is not adequate. Interpretation of these leads to knowledge. Wisdo

i.e. application of knowledge is the final frontier.

The foreign exchange field is omnipotent impacting all functional areas of organization marketing (for pricing

finance (for funding) and HRM (for remuneration). Though this article is appearing in finance magazine Chaanakya

scope is universal for all areas of management.

Foreign exchange activities involving opportunities and challenges. There is a tapestry of variables, glories defea

forecasting coping contingency management and impact of factors beyond ones control startling similarity

weather forecast meteorological department. There is a saying that whoever can control the weather, can rule th

world. This seems to be apt for foreign exchange scenario in this corporate world.

Do you have spirit of adventure, the mental and physical agility as well as the competence to handle this fascinatin

field to make money for your organization and yourself, while enjoying the excitement?

Thats the million dollar question!

Letter From Our Guide

Started in September 2007, Chaanakya the fortnightly news letter, is an initiative by the self motivated students othe Christ College Institute of Management, with the purpose of providing themselves an opportunity to exprestheir views on the important developments in the financial markets and to keep abreast of the events in this area.

am very convinced that this initiative has the potential to have lots of positive effects amidst the students today awell as tomorrow in their corporate lives. The variety in the coverage makes it an interesting and useful reading. Thcolumn Pearls of Wisdom enables the students to be in touch with their seniors and gain from their experience sfar, in facing the challenges of corporate life. I am sure Chaanakya in course of time, would be a binding force fothe students of CCIM and its alumni. The current issue being the 14 th and the last issue for the present seniostudents of finance stream, I congratulate all of them for their invaluable contribution to Chaanakya. I alsunderstand that the present junior students are in full readiness to take this initiative forward successfully and congratulate the seniors for showing proactive-ness for preparing the juniors to get ready for this fruitful adventurI wish each one of the students a very successful career and a very happy personal life.

Always yours,

T.S.Ramachandran

Professor, CCIM

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INVESTORS CHECKHow to read an offer documentFollowing are the must-read sections in an offer document:Risk factors: This is the first section in the offer document. It is the duty of the company to disclose all conceivable risk

to performance. However, try and focus on the ones that are specific to the company (client concentration, lega

disputes, heavy indebtedness, exposure to risky revenue streams) rather than general risks that affect all companies ithe industry or the country (disasters, terrorist attacks, slowdown in economy).Objects of the issue: This section explains how the proceeds of the offer will be deployed. A detailed break-up of thexpenses and an implementation schedule is usually provided. Reading this section will help you determine if your monewill be invested in projects that will deliver higher returns than what the company is currently able to achieve. It will alsotell you when these projects will begin to pay off.Business overview: If you are familiar with the industry, you can quickly skip to the business overview of the companyThis section should give you a detailed picture of the various segments and markets that the company operates in, it

competitive strategy and some aspects of its operational performance such as capacity utilisation, terms of joint venturagreements, existing resources and facilities and competition.Financial Statements: The consolidated profit and loss account and balance-sheet are the main financial statement

you need to look at and these should be read along with the management discussion and analysis. This should provid

you a basic overview of the companys revenue streams, profitability, debt and cash levels. Good offer documents woulhave a detailed break-up of segment sales and profitability and clearly explain factors that helped or hurt performance ieach of the last three-five years.

A quick scan of these basic sections should suffice and help you raise the right questions when talking to your broker

financial adviser, rather than just take their word (remember, they could have vested interests) for it.

Please mail your valuable feedbacks, reviews at chaanakya.ccim@gmail.com

Buzz Word

Balloon maturity

Any large principal payment due at maturity for a bond orloan with or without a sinking fund requirement.

Market clearing

Total demand for loans by borrowers equals total supply ofl loans from lenders. The market, any market, clears at the

equilibrium rate of interest or price.

Take a powder

Used in the context of general equities. Temporarily cancel

an order or indication in a stock by a customer, whileunrepresented interest still exists. Also called Back on theShelf.

Bai-kai

Mainly applies to international equities. Two-sided market

Book Quotes:

The great, unreported story in globalization

about power, not ideology. It's about how finan

and business regularly, continuously insert th

own self-interested deals and exceptions into ru

and agreements that are then announced to tpublic as "free trade.- William Greider

Learn to adjust yourself to the conditions you ha

to endure, but make a point of trying to alter

correct conditions so that they are most favora

to you- William Frederick

Tag Lines:

The citi never sleeps - CITI BANKCITI BANKCITI BANKCITI BANK

No FT. No Comments- Financial timesFinancial timesFinancial timesFinancial times

dont just book it. Thomas cook it -

Thomas cookThomas cookThomas cookThomas cook

the power to be your best- APPLEAPPLEAPPLEAPPLE

A. ISE (Inter connected Stock Exchange of India)

B. The Leela (Hotels, Palaces and Resorts)

C. State Bank of Travancore D. PBS

A.

C. D.

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Contributions made by :

Article Nikhil PurohitNews Anup Rajan &

Ashish PoddarDid you know, Quotes SukruthaStock Ratnas, Quiz LavanyaGraphs Gnana DeviLogos, Taglines & Editing Arihant Patawari

Fouzia TaranumInvestors Check Diwakar GroverInterview Sasmit K. SahuBook Quotes, Buzz Word Nikhil MehtaCoordination Manish Sinha

Thanks !!!

This will be the last issue of Volume 1, Chaanakya, whichwas initiated by the finance students of 2006-08 batch.1st April 08 will mark the beginning of Volume 2, Issue 1 and will be taken

up by 2007-09 batch.

Special thanks to all the senior students, especially the ones mentionedbelow who have strived to bring the newsletter upto this stage.Anshu Awasti, Bhavana Kataruka, Sindhu B. Navali, Savita Chacko, Simi Thomas, Usha V Murthy, Jaishree, Gopal Pai, Soumya Ranjan, AjayDhuvri, Lohit G, Fa. Baiju, Anand Neeraj, Eric M Samuel, Ravi Shekhar,Ritesh Verma, Mathew A Thomas,

Special Thanks to our Professor and guide, Mr. T. S. Ramachandran forfacilitating, guiding and encouraging the endeavor.