Thursday, September 25, 2008

On the trail of Teekli’s ‘tiger’

With reports of a tiger lurking in Teekli, a little known village in the outskirts of Gurgaon, B&E set forth in the wilderness of this small village, tracking the pug marks...
T he recent news peg of a tiger lurking somewhere in the villages of Gurgaon triggered my venture to Teekli, a village in the outskirts of Delhi. Just a while after the car cantered effortlessly through the narrow road with endless shades of green on either side, a familiar face among a group of villagers drew my attention. It was Lakhi Ram whose statement and appearance in one of the dailies had spurred curiosity and wonder. “It isn’t recent. The animal has been around for years now. Many cows and goats have been killed and eaten. Gopi’s cow was found half eaten yesterday. I can also show you the pug marks in the field. Sher to hai yahan (There’s a tiger for sure),” he concluded while the others nodded in affirmation.

Lakhi Ram and two others agreed to take us to the interiors of the wilderness where he had seen the pug marks. After a rickety ride through the vast mud-packed spread amidst the Aravalis, we stopped the car and took to the feet in search of the evidence of the striped beast. “Here it is!” called out Lakhi Ram. There were deep imprints of claws in the damp mud. “I told you I have seen pug marks. And there are people in Ansal Farms who have seen the ‘tiger’,” he informed us. Unsure whether the pug marks was of a tiger, leaopard or another carnivore, we took pictures for its verification from a wildlife expert, and headed on the hunt for witnesses.

On our way through the stretches of green towards Ansal Farms, we chanced upon a shepherd who provided us with some more interesting facts. “I have seen the animal. But it isn’t a tiger. It doesn’t have stripes, it has spots,” explained Ganga Ram. “These villagers don’t recognise the difference. I have been living here for years and have seen hunters who would hunt tigers. But what roams around here is a cheetah. And not just one. Many! About four-five of them,” he said. Must be a family of leopards, I thought.
My mind instantly absorbed Ganga Ram’s words, considering that a tiger could not have strayed as they had long disappeared from the neighbouring wildlife reserve, Sariska. Ganga Ram narrated an incident when one of his goats was hauled away in his presence by one of these beasts. On requesting, he agreed to take us through the woods where he claimed to have often seen a ‘cheetah’ pass by. He spoke all along as we followed him through the trees and scrubs, rambling about his life in this wild outskirt of the city... of the Ansals acquiring this land, of the dwindling number of animals in jungles... Interestingly, he has a neelgai (blue bull)which plays a sheep dog and protects his goats by signaling them to change course on sensing trouble ahead. He suddenly halted, abruptly cutting short the conversation.

“There! I have seen the ‘cheetah’ there.” I stood with anticipation, gazing at the grassland from atop the elevated mount, hoping to catch a glimpse or get to hear the animal’s call, which had created a stir. It was for quite some time that we stood, silently, the breeze whistling through the trees. Was it plain bad luck or was there no carnivore there, I asked myself. On further investigation and finding pieces of bones (presumably that of a cow) strewn around, and the claims by the security guard (of the entire stretch that comprises Ansal Farms) of having seen a leopard a few days ago, reinstated my belief of a wild shadow’s existence. “They haven’t harmed a human yet. They only feed on cows and goats for survival. They shouldn’t be captured and taken away,” said Ganga Ram, as he was taking leave, his smile highlighting his wrinkles. Inspite of repeated attacks on their cattle, the intrepid villagers too were of the same opinion.
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Source :
IIPM Editorial, 2008
An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

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ZEE BUSINESS BEST B SCHOOL SURVEY
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Wednesday, September 24, 2008

This zero can unleash big value

Resources conserved can be easily reallocated to other priorities
Zero-based budgeting! A method of budgeting or a technique businessthat sets all budgets to nil at the beginning of the financial year or a period. It requires government departments to justify all their expenditures, not just those exceeding the budget. Money is allocated to the departments and not just based on previous year’s budget (plus or minus some percentage).

This method is detailed, and provides a comprehensive analysis of objectives and needs. That essentially implies that it is not only a budget, it is also a tool to plan and strategise. But to implement such a detailed and immaculate plan, requires managers to evaluate cost effectiveness of their operations, threadbare. Also, management participation in planning & budgeting is expanded to all levels of the organisation. The Union Government’s first acceptance of Zero-based budgeting was for the Department of Science and Technology through its Memorandum of December 1983. Later in 2006, Deputy Chairman of the Planning Commission, Montek Singh Ahluwalia, emphasized that in the 11th Plan, moves must be made to shift towards Zero-based budgeting.

On the negative side, countries following Zero-based budgeting fail to focus on their long term achievements, while focusing too much on short term expenditures. Even the reviews and analysis required to be carried out cannot be handled within the normal cycle of the budget process spread over a few months. But all in all, the need for Zero-based budgeting can hardly be over emphasised in a situation of resource crunch, when demands far outstrip resources.

It is absolutely essential that the government’s resources be conserved, by eliminating wasteful expenditure, removing duplication or multiplication of expenditure and making expenses prudent, most fruitful and efficient. Well, it sounds good but will we implement it?

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Source :
IIPM Editorial, 2008
An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

Read these article :-
ZEE BUSINESS BEST B SCHOOL SURVEY
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IIPM in Financial times (Print Version)
IIPM makes business education truly global (Print Version)
The Indian Institute of Planning and Management (IIPM)
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Tuesday, September 23, 2008

Murkier it gets

Growing complexities in financial instruments are making regulation tougher and increasing the risk quotient
If necessity is the mother of all inventions than greed has to be the mother of all necessities. On May 18, 1986 Ivan Boesky – the king of junk bond (high yielding debt) gave a speech at the University of California at Berkeley’s Business School, which also happens to be his Alma Mater. He said “I think greed is healthy,” he told his enthusiastic audience. “You can be greedy and still feel good about yourself.”

Greed has been the epicentre of all frauds, misappropriation, manipulation and what not… from the time man existed on the Earth to the recent Société Générale fraud. The recent instance in Société Générale reminds us of Gordon Gekko, a character loosely based on Ivan Boesky in the movie Wall Street in which he says, “The public’s out there throwing darts at a board, kid, I don’t throw darts at a board; I bet on sure things.” The 31-year-old trader, Jerome Kerviel, who worked on Société Générale European equities derivatives desk was accused of taking ‘massive fraudulent’ positions to the tune of $75 billion in 2007 and 2008 on European equity market indices, leaving them with 4.9 billion euros of losses. Kerviel joined SocGen in 2002 and was trading in one of the ‘most basic’ financial instruments in the ‘most complex’ world of derivatives contracts. What Kerviel did and possibly could have done raise serious questions on growing complexities of financial markets and lacking regulation or risk management practices. From basic derivatives to complex junk bonds and most sophisticated sub-prime mortgage-fame Collateral Debt Obligation (CDOs), all led to some of the biggest financial frauds of all time. CDOs are basically pooling of bonds, loans or credit-default swaps & using their income to pay investors interest. According to Alan Greenspan, CDOs butchered the sub-prime market.

Similar was the case with junk bonds or for that matter all structured products, which tend to have short life. Their basic premise was on more leverage, which only delayed the inevitable write-offs. By 1990, of 104 small companies that had been involved in public issues of Milken’s junk bonds, 24% defaulted on their debt or were bankrupt. “Many companies financed M&As through junk bonds and carrying interest rates as high as 20%, in turbulent times like the ongoing one, there are chances of future default,” says Agost Benard, primary credit analyst at S&P. Junk bond data is disappointing too. In January, junk bonds dropped an average 2 cents on the dollar. An additional 7 cents would create losses of about $50 billion, based on the $709 billion of debt in Merrill’s high-yield index. “There must be a limit as to how many you can create, and we’re way past that limit as far as I am concerned” says Alan Greenspan. Recently, European Central Bank President Jean-Claude Trichet too called for an examination of risk management practices at financial institutions.

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Source :
IIPM Editorial, 2008
An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative
Read these article :-
ZEE BUSINESS BEST B SCHOOL SURVEY
B-schooled in India, Placed Abroad (Print Version)
IIPM in Financial times (Print Version)
IIPM makes business education truly global (Print Version)
The Indian Institute of Planning and Management (IIPM)
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Monday, September 22, 2008

No money for your dreams, honey!!

In between the extremes of private equity and microfinance, the common man is still deprived of money to start a simple business
At the annual ritual of Kolkata Book Fair that has become an impeccable part of the Bengali culture, one would often come across dozens of art students, from the city’s fine arts colleges, selling paintings for pittance of Rs.30-Rs.40. Looking at those creative indulgences, many of which might have got tagged as masterpieces if they were to find a place among scores of art galleries which are raking millions now, one would easily conclude that if there were ever a need to find an ideal example of the quintessential slip between the cup and the lip, India is the ideal sojourn for that. India has often been the land of contrast. A land where many a paradoxes co-exists, be it feminism and female foeticide or over-supply of funds, coupled with lack of funds for new entrepreneurs.

In last few years, no other words probably have got as much mileage the way ‘microfinance’ & ‘private equity’ have entered the mental lexicon of upwardly mobile Indians. So while the legendary Md. Yunus has become a household name, the daily bombardment of news of how private equity investors are making strategic investments in Indian companies and how their crucial involvement is helping India Inc., to have a better foothold in global biz, has also become a routine affair. Assocham forecasts that private equity (PE) funding in India is expected to be $48 billion by 2010. Such forecasts are justified as in 2007 itself, the private equity investments in India have been nearly $17 billion, in a year when the total value of cross-border deals involving Indian companies was worth more than $70 billion. Similarly, microfinance also got much impetus, thanks to the incredible feats of Md. Yunus. In a country where about half of its population still don’t have access to banking, advent of microfinance is a boon. So on one hand, there’s advent of global private equity funds like Carlyle, Blackstone, Warburg Pincus, ChrysCapital & Temasek into India, and domestically too there have been sprouting of such equities like IDFC Private Equity, Infinity Venture Capital Fund, UTI Venture Funds & ICICI Venture, on the other hand, many conventional banks like Bank of Baroda, SBI, ICICI, Yes Bank & even ABN AMRO have been foraying into microfinance. Reports state that by 2010, amount of microfinance in India would be about $3 billion.

So where do we go from here? Well, the halo over both private equity and microfinance is essentially a reflection of the failure of conventional banking in India. For years, industry craved to get the right kind of support system from financial institutions to fund their expansion. While initially it was the tentacles of license raj and small scale industry policies which prevented India Inc. to achieve the critical scale, later it was the paranoia of reducing the Non Performing Assets (NPA) that prevented many banks from increasing their exposure to industry. Add to these, was the domestic high interest rates at a time when interest rates are plunging all across the world. This eventually forced the industry to look towards the private equity partners for assistance. And the rest is history. Today the upper layer of Indian Inc. hardly bothers to run after Indian banks for their funding as they can go for external commercial borrowings, private placement of equity and initial & secondary public offerings. If at all there is need for further funds, the foreign banks with bigger money bags are there to satiate the appetite of India Inc.. Incidentally, today when the likes of Tatas have to raise money, the like of SBI clears a loan of $1 billion for the Tata–Corus deal in just five minutes, lest some foreign bank do it faster. So while private equity has been able to make Indian companies get less worried about funds-in-need, the question is whether it is same for all or only for ones in the upper layers? Are private equity players too following the same trodden path as has been followed by India’s financial institutions, i.e. lend only to those who already have it?

In the book, Creating a World Without Poverty, Muhammad Yunus writes, ‘None of us likes the idea of apartheid. We object when we hear about such a system in any form, anywhere. We all understand that no one should suffer because s/he happened to be born in a certain race, class or economic condition. But our financial institutions have created a worldwide system of apartheid without anyone being horrified by it. If you don’t have collateral, you are not credit-worthy. To the banks, you are not acceptable on our side of the world.’

For Complete IIPM Article, Click on IIPM Article

Source :
IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

Read these article :-
ZEE BUSINESS BEST B SCHOOL SURVEY
B-schooled in India, Placed Abroad (Print Version)
IIPM in Financial times (Print Version)
IIPM makes business education truly global (Print Version)
The Indian Institute of Planning and Management (IIPM)
IIPM Campus

Top Articles on IIPM:-
'This is one of Big B's best performances'
IIPM to come up at Rajarhat
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The Hindu : Education Plus : Honour for IIPM
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The Hindu Business Line : IIPM placements hit a high of over 2000 jobs
Deccan Herald - IIPM ranked as top B-School in India
India eNews - IIPM Ranked No1 B-School in India
IIPM Delhi - Indian Institute of Planning and Management New Delhi ...domain-b.com : IIPM ranked ahead of IIMs

Saturday, September 20, 2008

Back to square one!

Bush performs another peace ritual in Palestine towards the fag end of his presidency even while the region continues to burn
President Bush wrapped up his Israel trip last week, visiting the Mt. of Beatitudes in Jerusalem where Jesus is believed to have said “blessed are the peace-makers” & ruins of the biblical city Capernaum on the Sea of Galilee. Quite symbolical a start is for a man who has waged two ugly wars in the name of fighting terrorism. Given the past seven years in power, nobody would doubt Bush’s ability to make rhetoric on all the issues, whether it is the domestic economy, ‘war on terror’ or the West Asian peace process. Does his recent visit to the Holy Land mean anything other than a damage control exercise organised by conservatives in the White House?

Well, before the November 2007 Annapolis peace conference, observers had issued sceptical notes against Bush’s diplomatic gambling. Invariably, American presidents in their last year in power, use soft hands in dealing with the West Asian conflict. And now, it’s Bush’s turn. After holding talks with Palestinian Authority (PA) President Abu Mazen in Ramalla, West Bank, Bush challenged the “sceptics” saying, “I believe it’s going to happen that there will be a signed peace treaty by the time I leave office.” Is it as easy as taking a decision to bomb a weak Saddam Hussein regime in Baghdad? Many experts would disagree. Speaking to B&E, the Director of Gulf Studies Programme at JNU, Prof. Gulshan Dietl said, “Bush’s political clout is weaning tremendously. This visit is a theatre set for his own personal history.
Not only that, the leaders who have to reach an agreement are domestically too weak to take any decision. So, this visit is not going to change anything in the ground.” Two months after Annapolis, it’s obvious that the US & Israel are unlikely to take any step beyond their conventional understanding of the national identity of Palestinians. All this is happening amid reports that Israel, with the tacit support of the PA, would attack and reoccupy the Gaza strip, which has been under the control of Hamas since last June. Hamas on the other side declared, “The only dialogue with the enemy will be with rifles & rockets.” If Israel is going to do that, the entire region would be plunged into a civil war. Even if the PA, by any chance, reaches a political agreement with Israel, as years go by, the number of “core issues” only goes up, not down.

For Complete IIPM Article, Click on IIPM Article

Source :
IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative
Read these article :-
ZEE BUSINESS BEST B SCHOOL SURVEY
B-schooled in India, Placed Abroad (Print Version)
IIPM in Financial times (Print Version)
IIPM makes business education truly global (Print Version)
The Indian Institute of Planning and Management (IIPM)
IIPM Campus

Top Articles on IIPM:-
'This is one of Big B's best performances'
IIPM to come up at Rajarhat
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The Hindu : Education Plus : Honour for IIPM
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IIPM Delhi - Indian Institute of Planning and Management New Delhi ...domain-b.com : IIPM ranked ahead of IIMs

Wednesday, September 17, 2008

Lowly Asians...

Discriminated everywhere
Discrimination never leaves Asian (especially South Asian) alone, be it inside the boundaries of their motherland or outside. According to a recent report, many Asian-American voters faced discrimination from voting officials during 2006 mid-term elections in the United States.

The report alleges that poll officers were hostile towards Asian-American voters, particularly those not fluent in English. Moreover, 83% of voters who were asked to show identification, for authentication, which was not required. The Asian-American communities are primarily immigrants (670,000 persons) and covered under the provisions of the Voting Rights Act. With America having more than 10 million Asian-Americans which accounts for 3.6% of its population, this type of discrimination will create a serious threat to voting patterns. These discriminations are just not confined to the US but can be even experienced in other developed countries like the UK and Canada.

Asian migrants who came to the US in search for better lifestyle and jobs may soon neglect these election and other political participations, if such biased treatment and persecution is practiced.And you call yourself democracy.

For Complete IIPM Article, Click on IIPM Article

Source :
IIPM Editorial, 2008
An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

Read these article :-
ZEE BUSINESS BEST B SCHOOL SURVEY
B-schooled in India, Placed Abroad (Print Version)
IIPM in Financial times (Print Version)
IIPM makes business education truly global (Print Version)
The Indian Institute of Planning and Management (IIPM)
IIPM Campus

Top Articles on IIPM:-
'This is one of Big B's best performances'
IIPM to come up at Rajarhat
IIPM awards four Bengali novelists
IIPM makes business education truly global-Education-The Times of ...
The Hindu : Education Plus : Honour for IIPM
IIPM ranked No.1 B-School in India, Management News - By ...
IIPM Ranked No1 B-School in India
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The Hindu Business Line : IIPM placements hit a high of over 2000 jobs
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India eNews - IIPM Ranked No1 B-School in India
IIPM Delhi - Indian Institute of Planning and Management New Delhi ...
domain-b.com : IIPM ranked ahead of IIMs

Tuesday, September 16, 2008

The Perfidy Kings!

The stock markets always rise over the long term! So what, if a short term “correction” happens! Be the long term strategic investor rather than the daily punter!...

...And their vices
The murmur of an analyst with Angel Broking, fighting to keep back words, was quite striking to us, “A correction to an extent of 900-1,000 points in the market was on the cards, but this huge fall came as a surprise to us!” Surprise? Wouldn’t ‘terribly shocking’ have been a better description? After scaling a historic high of 21,206 on January 10, the Sensex touched a terrifying low of 15,322 in the opening session of January 22. No doubt, ‘Correction’ is an accepted corollary to a dramatic climb in a financial market. But what started as a mere correction turned out to be mayhem on the bourses. Investors lost over Rs.15,000 billion with major indices tumbling over 16%. As on January 24, the Sensex had thankfully crawled back to the 17,000 levels and around.
But why did this happen in the first place? B&E’s analysis threw up incisive answers and more questions... P.V. Jarolia, an analyst with the topline domestic brokerage firm Asit C Mehta, claimed, like other experts, “The correction was long overdue, what was awaited was a spark and the Reliance Power IPO just did that. Excess liquidity was soaked by the IPO.” Of course, the mega issue did make various indices fall due to a crunch in liquidity (a whopping $180 billion was sucked out of the market). But can only this be blamed? In fact, not at all! From January 15 (inaugural day of the Reliance Power issue, a Tuesday), till January 18 (closing day, Friday), the Sensex fell only by a relatively low daily average of 425 points.

Clearly, this was only a discounted normal correction. But what was never clearly reported was the fact that FIIs, who from January 1 till January 16 had net flows totalling a positive Rs.30.59 billion, started very shrewdly becoming net sellers on January 17 and 18, the last two days of the Reliance Power issue. Imagine this, the net FII status of these two days was a stupendous negative Rs.44.65 billion! And the moment this happened, on the opening day of the next week (January 21, Monday), a majority of retail investors were forced by their brokers to square off their over-leveraged positions immediately.

And how can brokers do that? Don’t retail investors have the right to hold on to their stocks over the long term? Not at all! Because of a small little issue called margin-trading. All stock brokers now in India entice their retail investors with the margin concept, which encourages investors to use only 20% of their own money to trade, added on to 80% of funds borrowed from brokers at 0% interest! How attractive, right? Except for the fine print, where brokers are allowed to automatically sell off their clients precious holdings to maintain liquidity levels.

By January 23, the aggregate of FII net flows since January 17 had reached an unbelievably huge negative of Rs.105.03 billion! And why did FIIs do this? “Clearly, fears of a recession in the US dealt a major blow to sentiments,” says R. K. Gupta, MD, Taurus Mutul Fund to B&E. Seriously? Was it really because of a fear of an impending US economy recession? Or of the long standing sub-prime crisis? Of course not! Read the next story to understand why news and effects of the US economy slowdown and sub-prime crisis have been in the know since the past three quarters. There is nothing dramatic that occurred in the past week to support an FII pull back theory. Even the Goldman Sachs ‘recession’ warning came almost a fortnight ago (January 9; just a day before the Sensex was at its historic highest, and when FIIs amusingly were amazing net buyers to the tune of Rs.10.53 billion on a single day)!

For Complete IIPM Article, Click on IIPM Article

Source :
IIPM Editorial, 2008
An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative
Read these article :-
ZEE BUSINESS BEST B SCHOOL SURVEY
B-schooled in India, Placed Abroad (Print Version)
IIPM in Financial times (Print Version)
IIPM makes business education truly global (Print Version)
The Indian Institute of Planning and Management (IIPM)
IIPM Campus

Top Articles on IIPM:-
'This is one of Big B's best performances'
IIPM to come up at Rajarhat
IIPM awards four Bengali novelists
IIPM makes business education truly global-Education-The Times of ...
The Hindu : Education Plus : Honour for IIPM
IIPM ranked No.1 B-School in India, Management News - By ...
IIPM Ranked No1 B-School in India
Moneycontrol >> News >> Press- News >> IIPM ranked No1 B-School in ...
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The Hindu Business Line : IIPM placements hit a high of over 2000 jobs
Deccan Herald - IIPM ranked as top B-School in India
India eNews - IIPM Ranked No1 B-School in India
IIPM Delhi - Indian Institute of Planning and Management New Delhi ...domain-b.com : IIPM ranked ahead of IIMs