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India 2.4
Analysis of Economies-China
China --- the Dragon
China Debt to GDP ratio is at 282 %
It means that China income is 100
and it has to repay 282 back to world
investors
Banks NPA at 30 %
Huge Excess capacity
Many cities called as Ghost Towns
Analysis of Economies-China
China is biggest producer and consumer of
many commodities
China slowdown has caused commodities
cycle to slow down world wide
China dumping its products in world markets
at cheap cost
This causes damage to world economies
Indian CEAT companies makes tyre for Rs.
20,000 but China dumps same tyre for Rs.
12000
Indian Companies makes fan for Rs. 1400
but China dumps for Rs. 400
Analysis of Economies-China
China has devalued its currency
This led to Currency War and all the Asian
Countries currencies also became weak
China has invested $1.1 trillion in US
Economy which it uses for tactical pressure
China has shifted from One Child Policy to
Two child policy
Shift from Investment led Economy to
Consumption led model
GDP has lowered from 9% to 6.6% with
downward revision to 6.2%
Japan
Japan Debt to GDP ratio is at 229 %
Its GDP is -0.8 %
Officially they have declared that
they are into Recession
Average age of person is 52 years
Negative interest rates (charges
deducted for depositing money into
bank )
Japan
Japan Central Bank has announced
QE of $265 billion
Money to be spend on consumption
Effort to revive economy
Europe
Europe Debt to GDP ratio is 92 %
Europe unemployment is 25 %
Greece Debt to GDP ratio is 177%
Spain is 120 %
Italy is 160 %
No clear plan how to solve this huge
pile of debt capital
US Economy
US GDP growing at 2.2 %
Unemployment rate down at 5.1%
which is at 40 years low
US could create more than 2 lac jobs
per month in last more than 1 year
FED has increased its first interest
rate in December 2015 by 0.25%
Impact of US Fed Rate Hike
In Dec 2015 US Fed hiked its interest
rates
The result was Indian stock market
saw in January 2016 and Feb 2016
outflow of Rs. 14000 crores
Emerging markets fear that with US
hiking its interest rates, there could
be
What is Investment ?
Investment is a process where we
forego current consumption for
future growth
Surpuls funds have to be parked for
getting higher future returns
Why to Invest ?
For Higher Education
For marriage
For retirement life
To beat Inflation
To increase standard of living
What is Nominal and Real
Return
Fixed Deposit has 8 % Interest which
is the nomial rate of return
Inflation is 6 %
Real rate of return is 8 6 = 2 %
Inflation reduces the purchasing
power of money
Average inflation in India is 6 to 7 %
Instruments of Investment
Equity Shares
Mutual Funds
Fixed Deposit
Provident Fund
Insurance
Gold
Property
History of Stock Market
First stock market started in 9th July
1875.
Native Share and Stock Brokers
Association
Now known as BSE
At that time membership fees Rs. 1
There were some 318 members
Current scenario
Today 23 stock exchanges in India
Major ones BSE (Bombay Stock
Exchange ) and NSE (National Stock
Exchange)
NSE formed in 1994
Daily Turnover of stock
markets
BSE Cash segment Rs. 4000
crores
NSE cash segment Rs. 15000
crores
NSE FO Rs. 1,50,000
crores
What is IPO ?
It refers to Initial Public Offering
The company for the first time goes
to public to raise the money
IPO market is also known as Primary
market