Finxpress - January 25, 2015

Term of Week

In Focus

Opinion

Personality Tech World

Options | 6

Panono: New World of

Panoramic Photography |12

Shikha Sharma |11

Is America Complacent

about Currency War | 4

JANUARY 25, 2015 | A FINNICHE INITIATIVE

Obama visits India—A

Seminal Movement | 2

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India would celebrate its 66th Republic Day on 26th January 2015. Republic Day in India

is celebrated every year with great honour on 26th of January to honour the Constitution

of India as it came to force on the same day in the year in 1950. This year US President

Barack Obama would be the Chief Guest on this occasion, becoming the first US

President to be invited.

Club FinNiche releases its weekly magazine FinXpress, with the In Focus talking about

the ‘Obama visits India– A Seminal Movement’. The Opinion gives an overview of ‘Is

America Complacent about Currency War?’ The term of the week describes “Options", a financial derivative that represents a contract sold by one party to another party. Do have a look at the market section, Tech world which brings to you about Panono: New World of Panoramic Photography and Personality of the week, Shikha Sharma.

Club FinNiche welcomes any comments, suggestions or criticism regarding the

magazine. Please do write to us and share your ideas.

Happy Reading!

Regards

The Editorial Team

Club FinNiche

January, 25 | 2015 | Volume 31

Obama visits India– A

Seminal Movement

Is America Complacent

about Currency War

Options

Shikha Sharma

Panono: New World of

Panoramic Photography

Defense - Minimizing the

restrictions for trade

Climate issue - Technology

transfer from US to India for

reduction in emission of green-

house gases

Relaxation in nuclear liability

law

- By Shreyans Dhariwal

US President Barack Obama will be visiting

India on 25th Jan for a three day tour mainly to

improve the bilateral relation between the two

countries and discuss on some of the key

areas like nuclear energy, economic

cooperation, defense and climate issue. The

visit is expected to be a landmark in pivoting

the relationship between the two countries to

a new level. Succeeding the Modi visit to US

last year, the initiative taken by US President

to visit India could deepen the chemistry

between the two veterans, and bring a myriad

of Investments and Technology advancements

to the Indian corridor.

As a token of honor, Mr. Obama will be the

first US President as chief guest for the 66th

Republic Day celebration at Rajpath New

Delhi. At the later hours of the day, he will be

meeting business leaders and CEOs for

interaction. On 27th Jan, Obama and Mr. Modi

will be aired on Radio in the show “Mann ki

Baat” to directly connect to two-thirds of the

Indian masses.

Some of the top issues that can be addressed

during the three day visit are:

Defense

India is one of the world’s biggest importer of

weapons and US became the biggest exporter

to India in recent times, both countries can

try to minimize the restrictions for trade

between them. Various initiatives can be

taken for joint production and co-

development of defense equipments and

platforms. Further they can look forward for

the renewal of the 10 year bilateral defense

partnership and increase the FDI cap in

defense.

Climate Change

India ranks third in emission of green house

gases, thus entering into use of renewable

sources of energy can cut down the emission

rate. This would require massive investment

and technology transfer from US to India.

After an agreement with China last year, US is

looking for an agreement with India too to

bring down the emission level at a particular

level.

Nuclear Energy

India has enacted the Nuclear liability law in

2010, according to which the vendor for the

nuclear supply will be liable for any kind of

accidents. This prevents private players like

G.E., Westinghouse from entering into the

Indian market and keeps the nuclear deal

between India and US partially inactive. India

needs to give provisions to this law and bring

in insurance companies that would give

guarantee to the nuclear suppliers and make

Nuclear power plants operational by

increment of nuclear energy capacity from US

companies.

Investments from US for

powering Make in India

concept

New Framework for advance

pricing model

Allow FDI in B2C market

Bilateral Agreement between

both countries to prevent

double payment of social secu-

rity contribution by immigrants

Investment

Within the wide spectrum of the India-U.S.

engagement, great opportunities lies in the

area of defense, energy and technology.

Under the Make in India concept which is

focused on sectors like power, electronics and

communica t ions, high technology

engineering, India would like to manufacture

products and services that are consumed not

only in Indian market but also in the global

market. To fast pace this endeavor we would

like to partner with US and bring in their

world best technology and huge investing

capabilities to build India into global power.

Intellectual Property rights and Bilateral

Investment Treaty will be some of the other

key issues for discussion.

Tax Issues

Both the countries will be looking forward to

resolve the transfer pricing issue which acts as

a barrier between various multinational

companies. The major concern lies in the

markup and tax dues on the cost of services

provided by Companies like IBM, Nokia,

Cairn India, and Vodafone. India and US are

planning to come up with new framework in

the form of advance pricing agreement

wherein dynamic mark-up will be levied on

companies based on the activities performed

instead of the fixed mark-up model. The new

agreement will resolve software development,

IT and litigation issues.

FDI Issue

US Senators have pleaded to the President for

encouraging the Indian Government to allow

FDI in the Business to Consumer (B2C)

market for the e-commerce sector, wherein

foreign players will be allowed to sell their

products directly to the consumers. Currently

FDI is existing only in the Business to

Business (B2B) market, wherein foreign

players can sell their products via middleman

to the consumers. This would help in

doubling the US exports and entry into new

markets.

Benefits to Immigrants in US

India is also looking forward for linking up a

totalisation pact with the US government, that

would prevent the double payment of social

security contributions by temporary

immigrants, first at home and second in the

country where they are deployed. This would

come as a boon for Indian IT Professions

working in US for short assignments.

Currently US provides these social security

benefits to person who has stayed for more

than 10 years or atleast 40 quarters.

-by Mohana Krishna Kummara

The depreciation increases the

cost of imports and boosts

exporters’ competitiveness,

aiding the effort to revive

inflation that data tomorrow will

probably show is the weakest

since 2009

Every time value of Indian currency is

devalued against dollar many of us think that

RBI is worried about its devaluation and want

to increase its value. Well, the fact is RBI is

more worried for the stability of rupee than its

increase or decrease of its value against dollar.

Sometimes countries even try to deliberately

devalue their currency against a reference

currency or a basket of currencies. This is

manly to increase their exports and drive their

economies towards higher growth.

Driving down exchange rates are no more “a

polite conversation to have”. Majority of the

leaders among the world today are

comfortable in openly talking about their

plans to drive down exchange rates. The

phrase “currency war” is already a part of

mainstream disclosure. In Davos, which is a

host to World Economic Forum, Goldman

Sachs President Gary Cohn said that currency

war has begun two years ago when japan

Prime minster Shinzo Abe’s policies started

pushing down Yen’s rate. It did not take long

for the Europeans to feel the pinch and they

also started devaluating their euro. Now ball

is again in Japan’s court. US is just sitting and

watching their currencies rally as everyone is

trying to devalue their currency.

Here is the graph showing the Japanese

exports (Shown in billions of yen) which

slumped in 2011 and 2012, then rallied since

Abe’s devaluation of their Yen:

RBI has slashed the Repo rate

by 25 bps from 8% to 7.75%

on Thursday. As the As ECB hesitated to introduce more

stimulus euro area exports have stagnated :

According to the Bloomberg’s correlation-

weighted indices, a gain of 2.83 percent has

been recorded by U.S. dollar against a basket

of other developed nation currencies, and the

yen has gained 4.77 percent. Even before the

ECB’s quantitative easing program has started

euro is down 4.88 percent. Just the talk of

quantitative easing has made European

exporters much more competitive.

According to The Economist's Big Mac index,

January 2015 edition, which uses the price of

the McDonalds staple in various countries as

a measure of purchasing power parity, U.S. is

already overvalued against euro. The index

showed it was undervalued just in July. That

standard is not definitive, of course, but it is

the reason to wonder whether the ECB's plans

for additional might be on the overaggressive

side. Even at the expense of inflation Europe

is planning to increase its economy.

Even as Europe is making its competitive

move by devaluing its currency, the U.S.

government is acing relaxed. To prevent

currency wars it is not making any

threatening references to gentleman’s

agreements among the world leaders. Even

treasury raised no red flags about any

countries that might be devaluing their

currencies competitively in its latest version of

the report, which came out last October. It

may be because U.S. have called on many

countries in the world to take decisive action

to get their economies to grow.

It is true that in order to keep its growth at

rapid pace, the U.S. needs a global boost. But

its complacency about the scale of planned

ECB action may nonetheless be misguided.

European manufacturers can take advantage

of U.S. market but Americans are the ones

that will become uncompetitive in Europe.

Other central banks -- those in India and

Canada, among others – to weaken their

currencies, have been cutting rates. Dalio

predicted that like in 1980’s this may lead to a

“short squeeze” on US dollar, which required

concerted action from central banks to curb

the dollar's rise and prevent the U.S. economy

from tanking. This time, because countries

such as Italy see QE as their big chance to

restore growth, such action is far less likely.

Rather than to raise production closer to U.S.

level it is much easier to print money.

- By Gayatri Pandit

Options is a contract which gives the buyer

the right, but not the obligation, to buy or sell

an underlying asset or instrument at a

specified strike price on or before specified

date. If the buyer exercises the option i.e. the

buyer want to conduct the transaction then

the seller has obligation to complete the

transaction by buying or selling the security.

For this right of fulfilling transaction, buyer

pays premium to seller.

There are two types of options:

1. Call option: In this the owner i.e. the buyer

has right to buy something at specified

price, so that the buyer would want the

stock to go up.

2. Put option: In this, the owner has right to

sell something at a specified price, sot hat

the buyer would want the stock to go

down.

Call option is more frequently traded in

market.

The value of option have two parts:

1. Intrinsic value: It is a difference between

strike price of the option and market value

of security.

2. Time value: It is value of option which is

discounted to the present value.

The basic trades in stock option are as follows:

Long Call: If it is expected that the stock price

will go up, the trader may bay a call option at

fixed price. The buyer has no obligation to

buy the option, until expiration. If the stock

price at expiration is above the exercise price

plus premium the buyer is at profit. However,

if at expiration the stock price is less than the

exercise price, then the buyer will let the

contract to expire and will only lose the price

of premium.

Short Call: If the stock price is going down,

the trader will short the call. The seller will

have no obligation to sell. If the stock price

goes down the exercise price, the seller will

make a profit equal to premium. On contrary,

the loss will be unlimited.

Long Put: If the stock price is decreasing, the

trader can buy the right to sell the stock at

fixed price. The buyer of put option have no

obligation to sell until expiration. If the stock

price decreases more than the exercised price

plus premium then the buyer of put is profit.

However, on a contrary side the buyer of put

will lose the amount of premium paid.

Short Put: If the price of stock is increasing as

per trader, then he can sell a put. The trader

selling the put option have no obligation to

buy the stock if said by buyer. If the stock

price is above the exercised price, the trader

will make profit equal to premium. However,

if the stock price is below the exercised price

plus premium then trader will be in loss and

the loss is equal to full value of stock.

Options are used in different ways. They can

be used to speculate which is relatively risky

and this is generally used by traders. Options

can also be used to reduce the risk of holding

an asset which is generally used by hedgers.

Options is a contract which

gives the buyer the right, but

not the obligation, to buy or sell

an underlying asset or

instrument at a specified strike

price on or before specified

date.

In this the owner i.e. the buyer

has right to buy something at

specified price, so that the

buyer would want the stock to

go up.

n this, the owner has right to

sell something at a specified

price, sot hat the buyer would

want the stock to go down.

INDIAN MARKETS

Indian shares ended higher, hitting record highs for the fourth straight day, led by blue-

chip stocks, tracking a global rally after the European Central Bank launched a

landmark bond-buying stimulus programme that buoyed investors' risk appetite. The

benchmark BSE index rose 0.94 percent to 29,278.84 after marking a record high of

29,408.73. The index gained 4.1 percent for the week. The broader NSE index closed up

0.85 percent at 8,835.60 after hitting an all-time high of 8,866.40 earlier in the session. It

closed 3.8 percent for the week. Both the indexes gained for the seventh consecutive

session.

BSE SENSEX

CNX NIFTY

Open High Low Close

SENSEX 28,249.84 29,408.73 28,197.36 29,278.84

NIFTY 8,550.05 8,866.40 8,531.50 8,835.60

COMMODITIES

EXCHANGE RATES

INTERNATIONAL MARKETS

Commodity Unit Rs / Unit % Change

Gold 10 grams 26800.00 0.26

Silver 1 kg 36833.00 1.65

Crude Oil 1 bbl 2983.00 -12.00

INR/ 1 USD 61.4988

INR /1 EURO 69.6166

INR/ 100 JAPAN YEN 51.9500

INR / 1 POUND STERLING 92.1621

Open High Low Close

NYSE Comp 10,682.00 10,869.00 10,589.46 10,788.33

NASDAQ 4,655.84 4,771.18 4,601.10 4,757.88

S&P 500 2,020.76 2,064.62 2,004.49 2,051.82

FTSE 100 6,550.30 6,841.70 6,548.00 6,832.80

CAC 4,388.67 4,673.30 4,367.24 4,640.69

DAX 10,231.58 10,704.32 10,149.77 10,649.58

NIKKEI 225 17,000.78 17,532.06 16,911.58 17,511.75

Hang Seng 23,971.23 24,896.22 23,590.05 24,850.45

Twitter acquired missed call marketing platform ZipDial for $35 million

Twitter acquired India-based missed call marketing platform ZipDial for $35 million and

this gave a ray f light on the compact but budding expat start-up community in India. This

will also help Twitter to operate as there are substantial hurdles to operate in such an

emerging market. This acquisition basically targets India’s growing domestic consumption

market as in India a company can build something with a long-term value proposition. This

will also help other start-ups to emerge. According to many analysts, this deal will do well

for India’s burgeoning entrepreneurial ecosystem. The clients of ZipDial are Unilever,

Amazon, Facebook, Disney, Gillette and Twitter. These clients have used the missed call

platform for placing orders, receiving coupons or entering contests. Twitter acquired

ZipDial with an aim to make great content more accessible to everyone through the ZipDial

platform. On the other hand, Twitter can now use the platform to reach developing markets

users with meager data plans or patchy internet connectivity. Additionally, this acquisition

will help India to stand as the fastest growing country.

Amazon India may emerge as the fastest E- tailer to touch $2 Billion turnover

Amazon India has forecasted to sell goods worth $2 billion by the end of this fiscal year.

Thus if done, it will become the fastest e-tailer in the country to cross this mark. Delhi-based

Snapdeal took more than four years to cross this mark while India’s largest e-tailer Flipkart

took almost seven years to reach $2 billion sales. Amazon started its operations in India in

June 2013, it already crossed the $1 billion mark in September last year. Thus it will take less

than 2 years for Amazon India to reach $2 billion sales becoming the fastest e-tailer in the

country. Experts believe that the reason behind the speedy growth of Amazon is its

positioning to offer an array of goods from books to adult diapers across various cities. They

come up with one new category every 14-15 days. E-commerce is a very growing sector.

E-tailers are betting on more Indians switching to shopping online with a projection of 200

million new consumers by the year 2017. Under Amit Agarwal, the country head of

Amazon India, the company has been to increase the seller base from 100 in the year 2013 to

more than 18,000 in 2014. In just 19 months, the company has built eight warehouses across

seven states. Flipkart has 13 warehouses connecting 4000 sellers in 300 cities.

Nokia has signed a $200 mil-

lion contract with Bharti Airtel to

build the country’s first 4G

Network in the 1800 MHz band

in six telecom circles.

Home-bred Lava International to sell new brand on its own online platform

Lava International will soon launch a sub brand of its popular Xolo brand of smartphones

exclusively on an e-commerce platform it is developing. It wants to replicate the success of

foreign rivals Xiaomi and online-only strategy of Motorola. But Lava International has yet

not disclosed the name of the sub brand. After the launch of its own website, Lava will

become the second Indian smartphone maker after Micromax to follow in the footsteps of

the global majors which witnessed success through online platforms. Another motive to

launch own website is to bring price stability for Lava products in the country.

Zomato, the online restaurant listing guide, is likely to raise fresh funding

Fast growing Zomato is likely to raise fresh funding of up to $80 million as it is currently

aiming to recruit more people and expand business in two continents including US. Zomato

bought a total of six companies last year. Now presently it is not thinking for going any

acquisition, rather it wants to expand its reach in US, Canada and Australia. The fresh

funding can help the company to get valued about $750 million. The company was valued

at $660 million in its last round of funding in November. For making new markets to be

profitable, Zomato has to work on its structure and people.

Domestic Airlines can save money due to fall in fuel prices

Because of sharp decline in fuel prices, Indian domestic airlines are expected to save $400

million in the current fiscal. This can also trigger the turnaround for the loss making

aviation sector. Fuel accounts for half of the operating costs of an airline in the country. Thus

24% fall in fuel prices can actually save 12% of the total operating costs. This sharp decline is

a major source of relief in the aviation sector.

Shikha Sharma was born to a soldier who

travelled all over India, before settling down

in Delhi. She graduated in economics from

the Lady Sreeram College, Delhi. She also

completed her Masters in Business

Administration from the Indian Institute of

Management in Ahmedabad.

Timeline

1980: She started her career with ICICI as a

project officer.

1992: Set up ICICI Securities which was a

joint venture of ICICI and J. P Morgan.

1995: Moved to ICICI Securities and was

deputed to J.P. Morgan.

1997: Rejoined ICICI as the General Manager

in charge of Strategic Planning and

Development.

1998: Became the Managing Director of ICICI

Personal Financial Services.

2009: Became the Chief Executive Officer,

Managing Director of Axis Bank Limited and

Chairperson and Associate Director of Axis

Asset Management Company Limited.

She made ICICI Prudential what it is today. It

is the organization she built from scratch; the

leading player in the life insurance business.

In her 28 year old association with the ICICI

Group, she was instrumental in setting the

foundation for the bank's personal financial

services business. Here, she also launched an

innovative micro insurance cover of 1 dollar a

month for poor people in India. In December

2008, under her leadership, ICICI Prudential

commanded a market share of 13 %.

Born to an Army officer, She maintained

discipline in her life and this disciplined

showed right through her career too. In a

male dominated financial world, she carved a

niche for herself. She is the kind of person

who considers every job that comes towards

her as a challenge.

She is one of the two women entrepreneurs

who are at the helm of a private bank in

India. In a male dominated banking and

insurance sector, she, with her exceptional

leadership qualities, made ICICI Prudential,

the largest private insurance company in the

country. She has left behind a legacy which is

followed by millions of women aspirants.

Awards and Accolades

'Woman Business Leader' by CNBC TV18,

2007

'Business Woman of the Year' by

Economic Times, 2009

Ranked 89th in the list of 'World's 100

Most Powerful Women' by Forbes

magazine, 2010.

Nov 19 , 1958

IIM Ahmedabad

Launched an innovative micro

insurance cover of 1 dollar a

month for poor people

Panono which has created a whole new world

of panoramic photography is not just a

panoramic camera. It captures 100 megapixel

panoramic shots with 360 degrees field of

view. It is integrated with 36 cameras and

captures every direction at once and you are

placed in the center of it.

How it works?

It is a bit different than the way we capture

pictures .We have to throw it straight up in

the air and cameras will automatically trigger

at their highest point giving perfect shots

without any blur effects. It can also be used

manually by helding it in the hand and

pressing the button. Camera should be

mounted on a tripod when capturing indoor

pictures or in low light situations, howerver

daylight conditions are better preferred for

capturing panoramic shots. It can be triggered

remotely by setting a timer or by using the

Panono app .For a quick shot hold the camera

in your hand and press the trigger button.

After the pictures are captured an instant

preview will be sent to mobile device via wifi.

On an average it can save upto 400 shots,

which can then be transferred to PC via wifi

or USB. Panono has a cloud which

automatically stitches the individual images

of your shot together to form a seamless

panorama. Panono cloud can be synchronized

with its panono app with which your android

device or smartphone will take you into the

middle of the panorama. You can spin the

device around and experience the moments

360° x 360°.

Exploring your panoramas in your web

browser is possible with the panono cloud

which offers everything you need to manage

your panoramic shots. You can zoom the 108

megapixel details as you move within the

picture. They can be shared easily through

social media channels, panono platform or

through emails. It provides you with privacy

settings which will let you define with whom

you want to share. Embedded codes can be

used to share selected panoramas on your

website.

- By J.Sindhuja

11 cm

Approximately 440 g

36 fixed-focus cameras

108 megapixels

iOS 7+ and Android 4+

via USB cable

Approximately 400 Panono

shots

WiFi, USB cable