Santa brings cheers for Indian investors

The Indian stock exchange rocked on 24 December with the benchmark index BSE-30 (Sensex) rising by 3.6%. This came as a pleasant surprise for many traders who were hoping a dull market following the trend of past few days. In the previous week the Indian stock market had shown loosing faith and in the last couple of trading session there was a tussle between bulls and bears with even results. With the festive spirit the markets have bounced back but are still to see the 20,000 mark for the Sensex which was crossed earlier this month.

There were couple of reasons for this spectacular performance. Gujarat elections, increased buying in IT stocks were the main reasons supporting the overall global market performance. Almost all the sector had contributed to this rise including the IT, banking, power, metals, etc. The stock markets world over are celebrating the festive season and Indian markets are no way behind them.

SEBI allows institutional investors to short sell

[India]

On December 20, 2007, Securities and Exchange Board of India, SEBI, has passed circular permitting institutional investors to short sell shares in Indian securities market. Previously, only retail investors were allowed to short sell. SEBI has also planned a securities lending and borrowing (SLB) scheme to provide platform for settlement of short sold securities.

“Short selling” is selling a stock which the seller does not own at the time of selling. If the view on a particular security is bearish (price is expected to go down), one can short sell now and buy later. The time for buying back securities short sold is till the end of week. The short seller has obligations to buy back the security.

According to SEBI guidelines naked short selling is not permitted in the Indian securities market. All investors have to mandatorily honour their obligation of delivering the securities at the time of settlement.

SEBI has also mentioned that institutional investor will not be allowed to do day trading. Also, the institutional investors will be required to disclose upfront at the time of placement of order if short selling.

It has also announced that securities traded in Futures and Options (F&O) segment shall be eligible for short selling.

Source: The SEBI circular is available on the website.

Top Fund of Fund company 2007

The top five fund of funds in June 2007, along with the firm's capital (million USD) as per the Alpha Magazine's ranking are:

Rank	Financial Institution	Assets
1	UBS	54749
2	Man Investments	50310
3	Union Bancaire Privée	45775
4	Permal Asset Management	35040
5	HSBC	33572

Source: Alpha

Top Hedge funds 2007 [Alpha Magazine]

The following ranking of the hedge funds by Alpha Magazine was published on May 2007. JP Morgan Asset Management leads the list with Goldman Sachs Asset Management a close second.






Source: Alpha

IFCI stake sale cancelled

[India]

The 26% stake sale in Industrial Finance Corporation of India (IFCI) has been cancelled. The leading bidders for the sale was Sterlite Industries & Morgan Stanley consortium. The price offered by the consortium was Rs. 110 while IFCI had put a lower limit of Rs. 107 per share. The conditions put by Sterlite - Morgan Stanley is believed to be the cause of IFCI calling off the sale. Management control might have been one of the major issues behind this. IFCI wanted them to be strategic investor without any management control.

Earlier IFCI was planning to convert some of its debt into equity and came up with the 26% stake sale offer. After the announcement of the stake sale IFCI's market price has risen several times in speculation of high offer price. IFCI used to trade at Rs. 10 per share level a year back. There have been other factors behind such a steep rise in its share price this year.






Source of data for chart: National Stock Exchange (NSE) of India

World Bank says China and India are 40% smaller

According to a preliminary estimate by World Bank, economies of the two highest growing countries, China and India, are over estimated by about 40%. This estimate is based on purchasing power parity (PPP).

The Chinese economy's new estimate is 5.3 trillion dollar where as it was valued at 8.8 trillion dollars earlier. China is still the second largest economy of the world second only to US and ahead of Japan, Germany and India. China's share of World's GDP is estimated to be 9% which was earlier estimated to be 14%. Japan with 7% of World's GDP is third largest economy.

US contribution to World's GDP has dropped to 23% from 29% using exchange rate data. Still its far ahead of the second largest economy, China.

India's GDP estimate has been reduced from 6% to 4% of World's GDP. Earlier India was ranked fourth, now it has come to fifth with small gap with UK and France. World's economy was also overestimated. Together top five countries comprise of more than half of World's GDP.

The new ranking by World Bank is based on prices of 1000 goods and services. World Bank said that the earlier estimates were less reliable and for the first time China has participated in the World Bank’s International Comparison Program and India has done so first time after 1985.

This is the first major global comparison of this kind using data based on PPP. World Bank President Robert Zoellick, in Beijing, warned that even the new estimate is not totally correct and only reflects prices in the cities. He also said that this should not be used to measure poverty levels. "One has to be extremely careful about trying to draw judgements about poverty based on these statistics," said Zoellick. World Bank said, "These results are more statistically reliable estimates,... ...It was the most extensive and thorough effort ever to measure PPPs across countries." "We're working with the Chinese government to refine that work and as I think that will be out some time next year," he said.

Fitch Ratings upgraded Axis Bank from AA+ to AAA

INDIA: Fitch Ratings has upgraded Axis Bank from a national long term rating of AA+(ind) to AAA(ind), individual rating from C/D to C and support rating from 4 to 3. According to Fitch Ratings 'The outlook is stable'.

Axis Bank is one of the top five banks in India by market capitalization. Axis Bank, a private sector bank, is a high-tech bank and has been chosen the best bank for the year 2007 by Business India. The bank has been growing at a very fast rate. The net interest income has risen at a CAGR of more than 50%. It is second to only ICICI Bank, India's biggest private sector bank which has recorded a CAGR of more than 60% during the last five years. Axis Bank has third largest number of ATM in India, the top two being SBI and ICICI.

Axis Bank, formely UTI Bank, was incorporated in 1994. It has done re-branding because of the completion of the period for the use of ‘UTI brand’ ends in January 2008. Axis Bank Ltd. has been promoted by the largest and the best Financial Institution of the country, UTI. Although government-owned institutions have a promoter’s stake in Axis Bank, it is a private bank and the third largest private bank in India. It has a network of 596 branches and 2502 ATMs.

Fitch Ratings is one of the three large global credit rating agencies. Fitch rates 6000 banks/financial institutions, including some 2400 insurance companies, more than 1400 corporates and 100 sovereigns as well as public finance, sub-sovereigns and structured finance transactions.

Top banks in India Market capitalization & sales

The top 40 listed commercial banking organizations in India are as follows (ranked on the basis of market capitalization):

	Market Cap (Billion Rs)	Sales (Billion Rs.)	Market Cap/ Sales
ICICI Bank	1,298	359	3.6
State Bank of India	1,218	531	2.3
HDFC Bank	594	102	5.8
Kotak Mahindra Bank	399	24	16.9
Axis Bank	350	71	4.9
Punjab National Bank	203	153	1.3
Bank of India	174	125	1.4
Bank of Baroda	152	123	1.2
Canara Bank	123	149	0.8
I D B I	118	85	1.4
Centurion Bank of Punjab	103	23	4.4
Union Bank (I)	99	97	1.0
Indian Overseas	97	80	1.2
Indian Bank	79	58	1.4
Yes Bank	70	12	5.8
Oriental Bank	64	66	1.0
Corporation Bank	60	47	1.3
Syndicate Bank	56	79	0.7
Federal Bank	55	25	2.2
Central Bank	54	77	0.7
Allahabad Bank	51	63	0.8
Andhra Bank	50	45	1.1
UCO Bank	46	65	0.7
J & K Bank	40	24	1.7
IndusInd Bank	39	20	1.9
State Bank of Mysore	36	26	1.4
Vijaya Bank	35	38	0.9
Bank of Maharashtra	34	36	0.9
State Bank of Bikaner	32	34	0.9
ING Vysya Bank	31	19	1.6
State Bank of Travancore	30	36	0.8
Karnataka Bank	26	16	1.6
Bank of Rajasthan	24	10	2.3
Development Credit Bank	24	6	4.1
Dena Bank	24	29	0.8
Karur Vysya Bank	21	11	1.9
South India Bank	18	12	1.4
City Union Bank	10	6	1.8
Lakshmi Vilas Bank	7	5	1.3
Dhanalakshmi Bank	3	3	0.9

The market capitalization is as on December and sales figure is trailing twelve months till quarter ending September 2007.

Top 20 Global Commercial & Savings Banks (Fortune)

The global top 20 commercial and saving banks along with their base country as appearing in the Fortune 500 list for 2007 are:

Bank Rank	Financial Institution Name	Country
1	Citigroup	US
2	Crédit Agricole	France
3	Fortis	Belgium/Netherlands
4	Bank of America Corp.	US
5	HSBC Holdings	Britain
6	BNP Paribas	France
7	UBS	Switzerland
8	J.P. Morgan Chase & Co.	US
9	Deutsche Bank	Germany
10	Dexia Group	Belgium
11	Credit Suisse	Switzerland
12	Société Générale	France
13	Royal Bank of Scotland	Britain
14	HBOS	Britain
15	ABN AMRO Holding	Netherlands
16	Santander Central Hispano Group	Spain
17	Barclays	Britain
18	UniCredit Group	Italy
19	Lloyds TSB Group	Britain
20	Mitsubishi UFJ Financial Group	Japan

Britain outscores others in number of banks in top 20 with 25% banks (5 out of 20) based in Britain. The country wise list is:

Country	No. in top Twenty
Britain	5
France	3
US	3
Belgium	2
Netherlands	2
Switzerland	2
Germany	1
Italy	1
Japan	1
Spain	1

Source: Fortune

Top European Financial Institutions / Commercial & Saving Banks

Again the same for Europe, commercial and saving banks in the Fortune global 500 list for the year 2007, is shown below . The list is only of top 15 banks of Europe. These are in overall top 100 Fortune ranking.

Banks	Banks	Overall	Financial Institution Name
Europe	World	World
1	2	18	Crédit Agricole
2	3	20	Fortis
3	5	22	HSBC Holdings
4	6	25	BNP Paribas
5	7	27	UBS
6	9	35	Deutsche Bank
7	10	36	Dexia Group
8	11	47	Credit Suisse
9	12	49	Société Générale
10	13	54	Royal Bank of Scotland
11	14	58	HBOS
12	15	67	ABN AMRO Holding
13	16	75	Santander Central Hispano Group
14	17	83	Barclays
15	18	97	UniCredit Group

The base country of these financial institutions are:

Financial Institution Name	Country
Crédit Agricole	France
Fortis	Belgium/Netherlands
HSBC Holdings	Britain
BNP Paribas	France
UBS	Switzerland
Deutsche Bank	Germany
Dexia Group	Belgium
Credit Suisse	Switzerland
Société Générale	France
Royal Bank of Scotland	Britain
HBOS	Britain
ABN AMRO Holding	Netherlands
Santander Central Hispano Group	Spain
Barclays	Britain
UniCredit Group	Italy

For the entire list of global 500 companies visit Fortune 500.

Needless to say the source of the above data is the Fortune Webpage.

Top Asian Financial Institutions / Commercial & Saving Banks

From the Fortune global 500 list for the year 2007 following are the commercial and saving banks of Asia. The revenues and Profits are for the financial ending 2007. The list was published on July 23, 2007 issue of Fortune Magazine.

Banks	Banks	Overall	Financial Institution Name
Asia	World	World
1	20	118	Mitsubishi UFJ Financial Group
2	26	170	Industrial & Commercial Bank of China
3	28	186	Mizuho Financial Group
4	29	194	Sumitomo Mitsui Financial Group
5	31	215	Bank of China
6	34	230	China Construction Bank
7	39	277	Agricultural Bank of China
8	46	349	Kookmin Bank
9	60	495	State Bank of India

The country to which these institutions belong are as follows:

Asia	Financial Institution Name	Country
Rank
1	Mitsubishi UFJ Financial Group	Japan
2	Industrial & Commercial Bank of China	China
3	Mizuho Financial Group	Japan
4	Sumitomo Mitsui Financial Group	Japan
5	Bank of China	China
6	China Construction Bank	China
7	Agricultural Bank of China	China
8	Kookmin Bank	Korea
9	State Bank of India	India

For the entire list of global 500 companies visit Fortune 500.

Source: Fortune Webpage

Global top companies by market value

These ranking were issued by Financial Times for third quarter of 2007. The data of prices and market capitalization for these ranking have been taken on 28 September 2007. FT publishes a list of top 500 global companies every quarter. The entire list can be accessed at the source link given at the end of this post.

Global 500 rank Sep 2007	Global 500 rank Jun 2007	Company	Country
1	1	Exxon Mobil	US
2	2	General Electric	US
3	12	China Mobile	Hong Kong
4	13	Industrial & Commercial Bank of China	China
5	3	Microsoft	US
6	4	Royal Dutch Shell	Netherlands
7	7	Gazprom	Russia
8	5	AT&T	US
9	6	Citigroup	US
10	10	Bank of America	US
11	8	BP	UK
12	17	Procter & Gamble	US
13	11	HSBC	UK
14	30	China Construction Bank	China
15	37	China Life Insurance	China
16	26	BHP Billiton	Australia/UK
17	9	Toyota Motor	Japan
18	23	Cisco Systems	US
19	19	Chevron	US
20	36	Sinopec	China
21	16	Total	France
22	15	EDF	France
23	22	Vodafone Group	UK
24	21	Johnson & Johnson	US
25	24	Berkshire Hathaway	US
26	29	Bank of China	China
27	14	Wal-Mart Stores	US
28	31	Nestle	Switzerland
29	18	American International Group	US
30	20	Pfizer	US

With the IPO of PetroChina in October, and its market value crossing a trillion dollars, the highest ever by any company, the rankings have changed with PetroChina coming right at the top.

Source: FT

Can Vikram Pandit, new CEO, rescue Citi?

Citi is having a bad time and so are its management. After the exit of Chuck Prince from the company, Citigroup was in search for a new visionary who could lead the company out of ongoing crisis. No doubt it must have been a tough task to select the CEO of such a large organization. Finally Vikram Pandit has been given the responsibility of chief executive of Citigroup.

Vikram Pandit, an Indian, is 50 year old and is a well respected investment banker. But this is the first time he will be leading a big corporation like citi. Critics doubt whether he could prevent citi from disaster. Pandit is looked as a cautious and conservative banker. Earlier he was Chairman and CEO of Citi's Institutional Clients Group.
Citi website has biography of Mr. Pandit. Some of key points are:"He was a founding member and chairman of the members committee of Old Lane, LP, a multi-strategy hedge fund and private equity fund manager that was acquired by Citi in 2007.
Prior to forming Old Lane, Mr. Pandit was President and Chief Operating Officer of Morgan Stanley's institutional securities and investment banking business and was a member of the firm's Management Committee....

Mr. Pandit earned a PhD in Finance from Columbia University in 1986.... "

After being appointed CEO, Mr. Pandit said:

"During this challenging time, Citi's role in the global markets is more vital than ever. We will address our issues head-on while continuing to deliver value for our clients, shareholders, employees and the communities in which we operate."

Citi's stock prices have fallen by more than 35% during last three months. This is first time in five years that its stock prices went below 30 dollar mark. Earlier citi group had declared huge write-downs of 17 billion dollars and decline in operating profits. Currently citi faces a debt threat and it has done a stake sale worth 7.5 billion dollars to Abu Dhabi Investment Authority last month. Citi is also planning to lay-off 17000 employees to cut costs.

During an interview with Business Week Magazine, Mr Pandit said:

“There are three things I’m focusing on. One, we have to make sure we have the right productivity levels. And that runs the gamut of putting capital to work correctly in the right places.

Job two is to look at every one of our businesses . . . individually and collectively, to make sure they are the right businesses and they are positioned for the future we see in financial services....”

List of Commercial and Savings Banks in India

Public Sector Banks

1 Allahabad Bank
2 Andhra Bank
3 Bank of Baroda
4 Bank of India
5 Bank of Maharashtra
6 Canara Bank
7 Central Bank of India
8 Corporation Bank
9 Dena Bank
10 Indian Bank
11 Indian Overseas Bank
12 Oriental Bank of Commerce
13 Punjab & Sind Bank
14 Punjab National Bank
15 State Bank of India (SBI)
15 Syndicate Bank
16 UCO Bank
17 Union Bank of India
18 United Bank of India
19 Vijaya Bank
20 IDBI Ltd

Associates of State Bank of India (SBI)
21 State Bank of Bikaner & Jaipur
22 State Bank of Hyderabad
23 State Bank of Indore
24 State Bank of Mysore
25 State Bank of Patiala
26 State Bank of Saurashtra
27 State Bank of Travancore

Private Sector Banks
Old
1 Bharat Overseas Bank Ltd.
2 City Union Bank Ltd.
3 Development Credit Bank Ltd.
4 Ing Vysya Bank Ltd.
5 The Karnataka Bank Ltd.
6 Lord Krishna Bank Ltd.
7 Nainital Bank Ltd.
8 SBI Commercial & International Bank Ltd.
9 Tamilnad Mercantile Bank Ltd.
10 The Bank of Rajasthan Ltd.
11 The Catholic Syrian Bank Ltd.
12 The Dhanalakshmi Bank Ltd.
13 The Federal Bank Ltd.
14 The Ganesh Bank of Kurundwad Ltd.
15 The Jammu & Kashmir Bank Ltd.
16 The Karur Vysya Bank Ltd.
17 The Lakshmi Vilas Bank Ltd.
18 The Ratnakar Bank Ltd.
19 The Sangli Bank Ltd.
20 The South Indian Bank Ltd.
21 The United Western Bank Ltd.
New
22 Centurion Bank of Punjab Ltd.
23 HDFC Bank Ltd.
24 ICICI Bank Ltd.
25 Indusind Bank Ltd.
26 Kotak Mahindra Bank Ltd.
27 UTI Bank Ltd.
28 YES BANK

Foreign Banks in India
1 ABN Amro Bank N.V.
2 Abu Dhabi Commercial Bank Limited
3 American Express Bank Limited
4 Antwerp Diamond Bank N.V.
5 Arab Bangladesh Bank Limited.
6 Bank Internasional Indonesia
7 Bank of America NA
8 Bank of Bahrain and Kuwait B.S.C.
9 Bank of Ceylon
10 Barclays Bank PLC
11 BNP Paribas
12 Chinatrust Commercial Bank
13 Chohung Bank
14 Citibank N.A.
15 Calyon Bank
16 Deutsche Bank AG
17 JPMorgan Chase Bank
18 Krung Thai Bank Public Company Limited
19 Mashreqbank psc
20 MIZUHO Corporate Bank Ltd.
21 Oman International Bank S.A.O.G.
22 Societe Generale
23 Sonali Bank
24 Standard Chartered Bank
25 State Bank of Mauritius Ltd.
26 The Bank of Nova Scotia
27 The Bank of Tokyo-Mitsubishi UFJ Ltd.
28 The Development Bank of Singapore Ltd.
29 The Hongkong and Shanghai Banking Corporation Ltd.

World's most powerful business person 2007 (Fortune)

Steve Jobs,
Chairman and CEO, Apple














Rupert Murdoch,
Chairman and CEO, News Corp.











Lloyd Blankfein,
Chairman and CEO, Goldman Sachs









Eric Schmidt, Larry Page, and Sergei Brin,
CEO; President, Products; President, Technology;
Google








Warren Buffett,
Chairman and CEO, Berkshire Hathaway











Rex Tillerson,
Chairman and CEO, Exxon Mobil










Bill Gates,
Founder, chairman of Microsoft



Source:Fortune Magazine

A man called Peter Lynch!!

Wall Street stock investor Peter Lynch is one of the greatest investor of history. He managed the Fidelity Magellan Fund from 1977 to 1990, during which period he beat the S&P 500 index benchmark in 11 of those 13 years, achieving an annual average return of 29%. The fund grew from $20 million in 1977 to $14 billion in 1990. The little known “Fidelity Magellan Fund” became the best performer mutual fund over that period. A $1000 invested in Magellan in 1977 became $21000 by 1990, when Peter Lynch retired after thirteen years.

Often called as a “chameleon”, Peter Lynch adapted to whatever investment style work in that time. The investment Guru says that the ability to think like an amateur has helped him to adapt right kind of strategy. He uses a common –sense approach to investment. Find out the whole story behind the company before buying the stock; then keep following the story after buying the stock. He says, “Don’t sell the stock if the ‘story’ is still good, whether the market is up or down.” In picking stocks Peter Lynch stuck to what he knew or could easily understand. He only invested for the long run and paid little attention to short-term market fluctuations.

Lynch consistently applied set of eight fundamental principles to his stock selection process. According to an article by Kaushal Majmudar, a CFA at Ridgewood Group, Lynch mentions about his checklist at conference in New York in 2005.

Know what you own.

It's futile to predict the economy and interest rates.

You have plenty of time to identify and recognize exceptional companies.

Avoid long shots.

Good management is very important - buy good businesses.

Be flexible and humble, and learn from mistakes.

Before you make a purchase, you should be able to explain why you're buying.

There's always something to worry about.

He is also famous for his books co-authored with John Rothchild on stock picking, “One Up to Wall Street” (1989), “Beating The Street” (1993) and “Learn to Earn” (1996) considered mandatory reading for any investor.

Presently (2007) he is serving as vice-chairman of Fidelity's investment adviser, Fidelity Management & Research Co. He is also involved in many philanthropic work since his retirement.

Some of his famous quotes are:

The Key to making money in stocks is not to get scared out of them.

I think you have to learn that there’s a company behind every stock, and that there’s only one reason why the stocks go up. Companies go from doing poorly to doing g well or small companies grow to large companies.

In this business if you’re good, you’re right six times out of ten. You’re never going to be right nine times out of ten.

Go for a business that any idiot can run – because sooner or later, any idiot probably is going to run it.

Top 10 most innovative companies of the world

The top 10 most innovative companies of the world according to BusinessWeek-Boston Consulting Group survey 2007 are:

2007 Rank	Company Name	Head Quarter, CITY	COUNTRY
1	APPLE	Cupertino, CA	USA
2	GOOGLE	Mountain View, CA	USA
3	TOYOTA MOTOR	Toyota	Japan
4	GENERAL ELECTRIC	Fairfield, CT	USA
5	MICROSOFT	Redmond, WA	USA
6	PROCTER & GAMBLE	Cincinnati, OH	USA
7	3M	St. Paul, MN	USA
8	WALT DISNEY CO.	Burbank, CA	USA
9	IBM	Armonk, NY	USA
10	SONY	Tokyo	Japan

Source: Business Week