Favourable situation Developed in Stock Markets by Institutional Investors

Topic: Positive Impact on Stock Market by Institutional Investors

Institutional Investor’s risk to invest in Indian Stock markets which is in bad state has had a positive impact Globally, resulting in pooling of Investments in Stock market all over the world. State Street Global Markets an US based research and Trading firm has pointed out that the Global Investor Confidence Index increased by 3.6 points to reach 82.6 in july compared to 79 points in june.

According to Professor Ken Froot from Harvard University, Investors are willing to extract some value at current prices even by taking huge risks. The Investor Confidence Index is measured by taking into account the buying and selling pressures of Institutional Investors.Greater the interest to invest in Equities greater is their Confidence Index.

Confidence Index of North American and European Investors witnessed fall. The North American and Asian Investors are positive over their intension to Invest in Equities in the second quarter of 2008.

Source: DeccanHerald, Business, July 28, 2008

FII’s gaining supremacy in Stock Markets

Topic: Effect of FII’s in Stock Market

The Stock Market has shed over 7500 points in span of 6.5 months in year 2008. There are many speculations over this loss and the most accepted speculation is that Indian Economy is now being more susceptible to Global happenings in the field of Finance at present than any other time in the past.
The Indian Economy is in a state of resonance with the happenings at the International Stage in Finance.

The most feared events which are effecting the Global Economy are:
1) The recession
2) Cut down in Interest rates
3) Mortage Sub-prime crisis in U.S

About 33% of the Transactions made in the Bombay Stock Exchange(BSE) and National Stock Exchange(NSE) are entirely under the control of Foreign Institutional Investors(FII). FII’s share in overall turnover has increased from 8% in 2001 to 35% in 2007. Huge Investments from FII’s will lead to uptrend in the
Stock Market while withdrawal from the Stock Market will lead to crash in the Stock Market.

The reason for Huge Investments by FII’s in Developing Economies

According to World Bank’s Global Development Finance 2008, the investment that are made in Developing Economies are in a upward movement, the inflows to Developing Countries increased from $164.5 billion in 2001 to $1.3 trillion in 2007. This increase in capital flows is mainly attributed to greater Return on Investments(ROI). The major benefactors of this investmensts are the 35 Developing Economies which includes China, India,South Korea, Latin American countries and North African countries.
The capital inflows is mainly distributed in the following areas:
1) Buying up companies
2) stock market
3) Giving Loans

Investments in Stock Market from private capital flows have gone from $0.84billion to $43billlion in span of 5 years.

IIM Alumni’s Entrepreneurial Success

Topic: IIM And Entrepreneurship

“Stay Hungry, Stay Foolish” a book written by IIM-A Alumni Rashmi Bansal, was released during the Entrepreneurship meet at IIM-A organised by its “Centre for Innovation Incubation Entrepreneurship”(CIIA). This book depicts the stories of 25 alumni from IIM’s who achieved great success.

According to Ms. Bansal all of these Entrepreneurs had one important quality in them that is they believe in words “Dare to Dream, Dream to Dare”. They believe in power of dreams.

One success story is about R.Subramaniam from IIT-M and graduated from IIM-A in 1989. He went on to build the countrys largest grocery chain- Subhiksha, which has over 1030 stores nationwide by quitting the job from Citigroup.

Another success story is about Narendra Murkumbi an IIM-A graduate in 1994, who started a venture-manufacturing and refining sugar, which gained him the status of billionaire. This venture “Shree Renuka Sugars” now has a turnover of Rs. 1000 crore. Others featured are Deep Kalra, who graduated in 1992 and is chief initiator of “makemytrip.com”. Sanjeev Bikchandani is another featured Alumni, whose naukri.com is a listed company now. Anand Halve another featured Alumni set up his own consulting firm Chlorophyll.

Source: The Hindu, Business, June 30, 2008

Role of Science Parks in Entrepreneurship

Topic: Role of Science Parks

According to The International Association of Science Parks(ISAP) there are nearly 365 in number spread across nearly 70 countries involving 11000 companies providing employment to nearly 68000 people.
There are four types of Science Parks namely:
1)      Alliance-Driven Science Park
2)      University Driven Science Park
3)      Company Driven Science Park
4)      Cluster Driven Science Park

Science Parks acts as Centre for encouragement of the innovative ideas to bring the product into reality. Science parks acts as spring board for development of Entrepreneurship through constant mentoring and monitoring of the Innovative Ideas. Example  is the Science park in the Kerala which has been constantly involved in bringing the ideas of young Entrepreneurs in the forefront.

 

Science park acts as a stimulator for regional and national economic growth. With the establishments of Science Parks countries such as China, Finland have been able to achieve greater national Economic Growth. Science parks in addition to invoking innovation, R&D also play the role of  Economic development. China through establishment of regional and National level Science Parks to the tunes of 100 have able to increase the countrys economy by 4-5%. Latin American countries being aware of the happenings of Bussiness World have also pledged to take up initiative in setting up Science Parks. Science Parks have a major role to play in the economies of  Developing countries such as China, India.
   

Science Parks lays great emphasis on new innovative technology, practical skill development and also to a greater extent on environmentally oriented workspace. Science park has an important function of increasing the networking among Entrepreneurs at various levels such as state, national and International. The network consists of Science park, business community, legal and Management group and various other consultants.

 

Science Parks have also been involved in the development of regional education sector and community.Science parks influence has gone vast beyond imagination. They have been key influencers in the formulation of Universities Curriculum. They have also helped Universities formulate curriculum in field such as Entrepreneurship that help to develop future business. They have also influenced  in setting up the research agendas for Universities.

 

 

Slowdown in Aviation Industry

Topic: Aviation Industry Gasping for breath

The increase in crude Oil price in the International Market had a negative impact in the Aviation Industry, particulary the low-cost and domestic airlines operating in India due to rising aviation Turbine fuel prices. Reduction in the domestic passenger Traffic and the increase in operational, overhead costs have been another areas of concern for the Industry. Thanks to the Merger and Acquisition in the Aviation Sector which includes Kingfisher taking over Deccan and Jet Airways taking over Air Sahara that helped them increase their capacity of flying space thus helping them to overcome the onslaught to a slighter extent. All the airlines have recurred losses in all the quarters of 2007-08. ATF accounts for nearly 40% of overall operating costs by airlines.

The expansion plans for their operation, their orders for new aircrafts, their hiring of pilots and engineers to suffice the deficiency in the sector, the Airport Authority of India’s(AAI) plan to modernise 35 non-metro airports in the country are all under stake considering the slow down.

Due to increasing inflation and Nuclear deal crisis with the U.S, faced by the Government has stood as obstacles to provide help to airlines by the Civil Aviation Minister Praful Patel. The Minister has proposed to relax the five year norm followed to provide oppurtunities to Private airlines to fly on International Routes due to decrease in domestic traffic.

Corporate houses in order to reduce their operataing costs due to inflation and rising flying prices have gone on to adopt the teleconference method or other modes of Transport such as train for maintaining the work flow, which had devastating effect on Aviation Industry. To cope up with all such effects the airlines have gone in for reviewing their fleet acquisition, reduced the number of flights to some destinations, have opted to defer fund raising from abroad and other ways to cut costs and save fuel. Several non-airfare revenue such as Joint Venture partners for setting up Maintenance, repair and overhaul (MRO) units should be followed, as adviced by some leading Financial Consultants working in this field. The liberalization in FDI policy has to used to the maximum extent by the airlines.

Source: The Hindu, June 30, Business