FINANCE MIRROR

INSIDE THIS ISSUE:

STOCK MASTER V O L U M E - 1 I S S U E - 2 D A T E : 2 4 N O V E M B E R 2 0 1 3

VIRTUAL TRADING
RUPEE DEPRECIATION -

Net bad loans of 40 banks soar by 38 per cent in April-Sept

The net bad assets of the 40 listed banks have jumped 38 per cent to Rs 1,28,533 crore during the first half of this financial year, from Rs 93,109 crore at the end of the last financial year. According to a study by NPAsource.com, of the total 40 listed banks, 14 banks have reported more than 50 per cent jump in their net non-performing assets (NPAs) during these six months. NPAs are likely to cross Rs 1.5 lakh crore by the end of 2013-14. "The share of top 10 banks in net NPAs has come down to 67.8 per cent in September from 70 per cent in March 2013. Net NPAs of seven banks were higher than 3.5 per cent at the September quarter as against none at the March quarter," the study said. During the second quarter, top public sector banks like State Bank of India, Bank of Baroda, Punjab National Bank, Central Bank, IDBI Bank and Union Bank have all reported more than 30 per cent rise in net NPAs. For SBI, net NPAs rose to 2.91 per cent from 2.44 per cent in Q2. However, on a sequential basis, NPAs of the nation's largest lender came down by 39.23 per cent. The rising provisions for bad assets pulled down the net profit of the bank by 35.03 per cent. "Net NPAs in the banking system is likely to touch Rs 1.5 lakh crore by March 2014 as two more quarters are remaining in the current fiscal year and the situation is worsening every quarter," Devendra Jain, chairman and managing director of the portal, said. "With interest rates expected to remain high at least for the remaining fiscal and the economy and corporates in poor shape, banks have a tough road ahead," he added. Jain further said more pressure on NPAs will come in next two quarters as many restructured loans of last year will get converted to NPAs. Gross NPAs as of the September quarter stood at Rs 2,29,007 crore, 27 per cent higher when compared to Rs 1,79,891 crore as of March quarter for these 40 listed banks. By:- Anand Sharma

RUPEE AT ALL TIME LOW

FINANCE TERMINOLOGIES Investor Do's & Donts In Stock Market

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A NEW BUZZ IN BANKING-IMPS

request is made through your Mobile phone / Internet Banking. This service is available 24x7, throughout t the year including Sundays and any bank holiday. Below is the list of participating banks. IMPS Funds transfer is available through I Mobile, SMS banking and internet Banking. You will need a 7 digit MMID (MOBILE MONEY IDENTIFIER) number to transfer funds through IMPS. Mobile Money Identifier (MMID) is a 7 digit code issued by a participating bank to their Mobile Banking registered customers for availing IMPS service as a beneficiary. You will have different MMIDs for different accounts and all these could be linked to a single registered mobile number. This IMPS service is currently available for Funds transfer between ICICI Bank and the following Banks: Allahabad Bank, IDBI Bank, State Bank of India, Axis Bank, Bank of Baroda, Bank of Maharashtra, State Bank of Patiala, Syndicate Bank, Bank of India. By:- Divya Singh

IMPS Immediate Payment service is an interbank electronic instant mobile money transfer service through mobile phones. IMPS service from ICICI Bank helps you access your Bank Account and transfer funds instantly. The beneficiary account is credited immediately when a Fund Transfer

STOCK MASTER VIRTUAL TRADING

A method of trading where beginner traders can practise without investing or using real money. this is made easy with the help of online trading. because in online trading most calculations are done by computers. It is used to test out new strategies without risk and also to educate inexperienced investors. Also known as paper trading or virtual stock trading. Participating in virtual stock market game introduces the inexperienced player to the world of stock markets and share trading. Advantages of virtual trading1 The players get to work on their special skill like logical thinking and taking important decisions 2 Playing the online stock market game along with friends

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results in better coordination and communication among the participants 3 The virtual stock game also provides valuable insight regarding investments and savings Working of stock market stimulation game:The game requires the participants to have a virtual account with certain virtual money The participants are required to take decisions based on real life stock market scenario. Buying and selling of real stocks using the virtual money boosts the confidence and morale of the participants and prepares them for the real stock markets. The only thing real is the various indexes associated with the stock exchanges These indexes allow the participants to decide when to buy a share or when to sell it. Stock market has been organized in our college also. It has been organized in ISBM department under the guidance of parul bhargava. Students from different colleges have also participated in that. it was a great activity. Students have learnt a lot from it. Students from different colleges have participated with great zeal.
Students who want to do share trading or students who are inexperienced in dealing with securities should definitely play virtual trading game,, as this game will help them in making decisions. Their logical thinking skills will increase and most importantly they will learn a lot from it.. By:- Bhavneet Singh Bedi

RUPEE DEPRECIATION - RUPEE AT ALL TIME LOW

Its all over the news. Indian Rupee hit the all time low mark of 60 rupees against the US dollar. On 20th June, 2013, Indian Rupee hit the all time low, sending waves of worries to Indian Government, IT industry and to common man. The Petrol price have been increasing after that to hit the mark of 76.90 Rupees per liter in Mumbai. For most the non-commerce background people, what does the present unchecked and rapid Rupee Depreciation mean? In simple terms, Rupee depreciation means that the rupee has become less valuable with respect to US dollar and Americans can buy more from Indian markets by spending the same amount of dollars, which in turn means that our exports are more lucrative to US. Reasons which cause the rupee to fall in comparison to dollar are: will close soon.

Oil prices: The price of oil is one of the most important factors
that put pressure on the Indian rupee. India is in the unfortunate situation that has to import more of its oil to meet local demand, which is increasing year after year. In international markets, oil prices are quoted in dollars. Therefore, as the domestic demand for oil increases or increases the price of oil in the international market, the demand for dollars increases also to pay our suppliers to oil imports. This increase in demand for dollar weakens further rupee.

Volatile domestic equity market: Our market has been unstable for some time. Thus, the FII are in a dilemma whether to invest in India or not. Although they have brought registry entries for the country in this year it is likely they may be considering taking their money out of the equity market, which could re-entry results in fewer dollars in India. Therefore, the decrease in supply and increase the demand for dollars as a result of the weakening of the rupee against the dollar. By:- Aman Jaiswal

Demand Supply Rule: The value of the rupee is the simple rule of
demand and supply in the economy. If demand for the dollar in India is more than its supply, dollar appreciates and the rupee depreciates. Similarly, when the supply of dollars in India increases its demand, the value of the dollar decreases in terms of rupees. The demand for dollars can be created by importers requiring more dollars to pay for imports or FII to withdraw their investments and take dollars out of India, creating a shortage of supply of dollars, which in turn may increase the demand for dollars. On the other hand, the offer can be created by exporting dollars bring more income or FIIs bring more dollars in India to boost investment.

Dollar gaining strength against the other currencies: The

central banks of the euro area and Japan are printing excessive money because their currency is devalued. Furthermore, U.S. Fed has shown signs of ending their stimulus. Therefore, making the U.S. dollar stronger against other currencies like the Indian rupee, at least in the short term. One does not really know when Helicopter Ben will close the door and leave the printing of money, but it is doubtful if the door

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Finance terminologies
Basis point : One hundred basis points make up a percentage point, so an interest rate cut of 25 basis points might take the rate, for example, from 3% to 2.75%. Stop Loss: An order placed with a broker to sell a security when it reaches a certain price. A stop-loss order is designed to limit an investor's loss on a security position. Also known as a "stop order" or "stop-market order". Index: : A quantity whose variation represents market fluctuation (The Standard & Poor's 500 index measures the overall change in the value of 500 stocks of the largest firms in the US.) Real rate of return : The percentage of return on an investment over one year after adjustments for inflation or deflation. Dead cat bounce : A phrase long used on trading floors to describe the small rebound in market prices typically seen following a sharp fall. Fundamental analysis : An analysis of stocks based on fundamental factors, such as company earnings, growth potential, etc., to determine a company's worth, strength, and potential for growth Impairment charge : The amount written off by a company when it realises that it has valued an asset more highly than it is actually worth. Junk bond : A bondwith a credit rating of BB+ or lower. These debts are considered very risky by the ratings agencies. Typically the bonds are traded in markets at a price that offers a very high yield(return to investors) as compensation for the higher risk of default. Certificate of Deposit : (CD)Short-term debt instrument issued by scheduled commercial banks excluding regional rural banks. They are unsecured instruments that mature between three months to one year. Coupon : Interest rate on a debt security that the issuer promises to pay to the holder until maturity Usually expressed as a percentage of the face value of the security. Securitisation : Turning something into a security. For example, taking the debt from a number of mortgages and combining them to make a financial product, which can then be traded (see mortgage backed securities). Investors who buy these securities receive income when the original home-buyers make their mortgage payments. Swap : A derivativethat involves an exchange of cashflows between two parties.

Investor Do's & Donts In Stock Market

which varies according to the investment strategy adopted.

Carry out due diligence before registering as client with any inter-

mediary. Carefully read and understand the contents stated in the Risk Disclosure Document, which forms part of the investor registration requirement for dealing through brokers. trading activity, especially low price stocks.

Given below are some general DOs and DON'Ts for investors:
Do's :

Be cautious about stocks which show a sudden spurt in price or

Dont's :

Always deal with the market intermediaries registered with SEBI / Don't deal with unregistered brokers / sub - brokers, or other un Collect photocopies of all documents executed for registration as a Don't execute any documents with any intermediary without fully
client, immediately on its execution. Ensure that the documents or forms for registration as Client, are fully filled in. understanding its terms and conditions. stock exchanges. registered intermediaries.

Give clear and unambiguous instructions to your broker / agent / Don't fall prey to promises of guaranteed returns. depository participant. Always insist on contract notes from your broker. In case of doubt Don't blindly follow media reports on corporate developments, as
in respect of the transactions, verify the genuineness of the same on the BSE website. the market intermediaries. some of these could be misleading.

Don't deal based on rumors or 'tips'.

Don't forgo obtaining all documents of transactions, in good faith

even from people whom you know.

Always settle the dues through the normal banking channels with

Don't forget to take note of the risks involved in an investment. Before placing an order with the market intermediaries, please Don't get misled by guarantees of repayment of your investments
check about the credentials of the companies, its management, fundamentals and recent announcements made by them and various other disclosures made under various regulations. The sources of information are the websites of Exchanges and companies, databases of data vendor, business magazines etc. through post-dated cheques.

Don't hesitate to approach concerned persons and then the appropriate authorities.

Adopt trading / investment strategies commensurate with your riskbearing capacity as all investments carry some risk, the degree of

Don't get swayed by promises of high returns.

By:- Om Prakash

Editor:- Aman Jaiswal M.B.A. 3rd Sem.