Pratik Bora

So to start with here it goes -

Today i would like to discuss on most talked about correlations existing in market. I am presuming that people reading this blog are having meagre knowledge like me. So 1'st i would get some ground work done and then we will take off.

Basics -

1. Let us suppose 1$ = 45 Re . Now if i say that Re strengthens then this means Re appreciates / Dollar depreciates / Dollar weakens hence now 1$ = 40 Re. Strenghtening of Re adds to bottomline of importers and strenghtening of dollar adds to bottomline of exporters.

2. Gold and Crude oil almost move in same direction unless OPEC intervenes because both are global commodities. But crude oil is more liquid [ both in absolute sense and trade sense ;-) ] and hence more volatile than gold. Hence you can interchange gold and crude oil in coming lines.

Correlations -

Rise in inflation -> increase in interest rate -> more dollar deposits in India -> rupee strenghtens/dollar weakens -> importers benfit/exporters lose -> markets slow down/tumble -> Gold appreciates.

NOTE - I am a student and hence contest my views if i am wrong at some point but appreciate me if you feel what i have written has done some value addition on your part !!

I hope i have served the purpose in crisp and simple way.

There is one famous Chinese story.Here it goes:-

Once upon a time there was a farmer X in small village.He had a single horse.That horse also ran away one fine night.All villagers came to give condolences and said to farmer X that it was sheer stroke of bad luck.Farmer X replied-Who knows?I will Keep moving as before.Soon after there was some disease broke put which affected working potential of all other farmers' horses.All villagers said to farmer X-Good luck.Farmer X replied-Who knows? I will Keep moving as before.Soon after some more days farmer X's horse returned and he was disease free.All villagers said to farmer X-Good luck.Farmer X replied-Who knows?I will keep moving as before.After some more days batallion came to village and took farmer X's horse as it was disease free.All villagers said to farmer X-Bad luck.Farmer X replied-Who knows?I will keep moving as before.

On same lines is unfolding of budget- a mega economic event.High amount of speculations on new policies being roll out,ammendments in old policies etc. and markets keep moving in tandem with these speculations till actual budget is rolled out.

Like this year also the speculation is that Finance minister will be able to chart out the path for 8% GDP growth.But pulling out on stimulus,scrapping off the oil and fertilizer subsidies' partially,stringent policies to tackle fiscal deficit,rise in excise duty are all on cards. So growth of GDP at 8% seems questionable.

But then other school of thought is that after China only India can become big time feeder for western economy post downturn.So budget will consist of policies to leverage on this very opportunity.This may include positive surprises on 3G,MNP,GST,PE-VC funding etc.

So finally markets are heading to...no one knows.

People in Exchange have not welcomed the move of SEBI to extend trading hours by 55 mins from new year.People like brokers,sub-brokers,mutual fund,foreign investors have all voiced together that Extended trading hours will put pressure on back-office operations.

The main objective of extending the trading hours on Prima facie was to capture on volumes which Indian bourses lose due to early start of SGX(Singapore Exchange Ltd).But there was ban on participatory notes to trade in Nifty futures a year back so volumes plumetted.But now this ban is uplifted.Also volume on SGX is around 6% in value terms compared with NSE's volume(daily).Also SGX starts at 6:30 am indian time so starting Indian bourses at 9:00 am won't serve the purpose!!

Also one more objective of Extending trading hours was to be in "Sync" with Global markets.Given the present timings this is possible for Asian and European Markets but even if trading hours are extended till 5:00 pm it won't be possible for to open with American Markets(open at 7:00 pm).

Conclusion:-The step taken by our National Exchange on prima facie is good but then some policy should also be rolled out to address problems arising out of it.

With Nifty shooting up 150 points and India setting mammoth total of 414 runs in one day match v/s Sri lanka,we can conquer more "New Peaks on this Flat world!!"This is how :::----

Debt ratings in India are given by private rating agencies.They are one of most sanctitiful agencies and are highly honoured.But still with recent economy fiasco,some eye brows have raised! Debt market is bigger than any other market in India with very low retail participation, so it calls for some attention.

Now suppose Government itself becomes rating agency and that too mandatory then things might turnaround.Turnarounds might be:-

Conclusion:-This might sound too unrealistic but if worked on then it can turn out to be good option!!

Debt market is saying instead of-"Abuse me" -----"Ab use me"!!

It is always in recession the famous debate topic spurts that "Personalized profits and socialized losses is the way Capitalist class works!!" And then soon the fire spreads and this topic goes for different stage shows like it becomes GD topic for most of B-schools,on Media channels.in Newspapers etc.So i will not be touching the general thought process of presenting the points For and Against the Topic. However Being Capitalist is only best alternative if customized in particular way.

And now comes the Bizzare:- Laxi and Party went for movie called "London Dreams".This is not Bizzare,the bizzare is without taking any review into account the Mr. Gentleman(Laxi) audaciously went and enjoyed the movie.Thus his Risk gave him Returns and his balance sheet as usual got balanced in terms of Risk and Return!!

Inflation rate in India is calculated using WPI method.WPI stands for Wholesale Price index.But in most developed nations inflation rate is calculated using CPI method.CPI stands for Consumer Price Index.

There was "Open-outcry system" prior to Stock Exchange establishments. This system was then replaced by more organised,wider system known as "Regional Stock Exchanges". These Regional exchanges were then replaced by even more wider,organised and demutualised Exchange known as "NSE" and "BSE". If this development continues then we may soon have WWSE(World Wide Stock Exchange) for all countries together! A wild idea.
Now on same lines if the fall of Dollar continues and Indian markets continue to surge then we may sometime see the equation as

Re 1=USD 50 and not as USD 1= Re 50.

What impact this will have:-
Re 1 = USD 50:-

But this blog & its content comes with title "IF...."