Tuesday, February 27, 2007

Oscars 2007

Best Director: Martin Scorsese – The Departed

Unbeknownst to the Massachusetts state police department, crime boss Frank Costello has placed a mole in its ranks: cadet Colin Sullivan. The police succeed in infiltrating Costello's organization as well, however, providing a credible criminal background for undercover cadet Billy Costigan, who manages to gain Costello's trust.

Best Picture: The Departed

Best Actor: Forest Whitaker – The Last King of Scotland

Forest Whitaker plays Idi Amin, the notorious Ugandan dictator whose charismatic personality cannot mask the savage brutality of his actions. An idealistic Scottish doctor working in Uganda unexpectedly finds himself selected by the nation's dictator, Idi Amin, to serve as his personal physician. As young Nicholas Garrigan succumbs to the seductive extravagances of palace life, he also becomes an eyewitness to the horrors and brutality of Amin's regime.

Best Actress: Helen Mirren – The Queen

As Queen Elizabeth, Helen Mirren portrays the British monarch facing changes in her traditional role during the difficult period following the 1997 death of Princess Diana. In the days immediately following the death of Princess Diana in 1997, public grief turns to outrage at the perceived lack of response to the tragedy on the part of Britain's royal family. As the recently elected Prime Minister Tony Blair urges her to be more responsive to the mood of the nation, Queen Elizabeth confronts the changes that modern life has forced on the centuries-old monarchy.

Best Supporting Actor: Alan Arkin – Little Miss Sunshine

Alan Arkin portrays the salty, heroin-addicted Grandpa, who joins his family on a road trip to California, where his granddaughter has entered a children's beauty pageant. Seven-year-old Olive dreams of winning a children's beauty pageant and convinces her family to drive her from their home in New Mexico to California for the Little Miss Sunshine competition. Along for the ride are Olive's father, a failed motivational speaker, her heroin-addicted grandfather, silent brother, suicidal uncle, and her increasingly frustrated mother.

Best Suporting Actress: Jennifer Hudson – Dreamgirls

Jennifer Hudson plays Effie White, a talented singer whose weight leads her manager and lover to relegate her to a back-up role in her singing group. The Dreamettes, an African-American Motown trio, are spotted at a 1962 talent contest by the ambitious CurtisTaylor Jr. Sensing the women's potential as pop music crossover stars, Taylor renames them the Dreams...and relegates plump lead singer Effie to a backup role behind the more glamorous Deena.

Saturday, February 24, 2007

Reader input on Euro-currency

I received an email asking me to post the content of the email in the blogs. I did not have the time to go through the full text in a critical way to offer my comments on his points. I encourage you all to join the debate by offering your comments. Here goes full text of the email…

Hi Friends

This blog is doing really well to brush up our concepts. Here is my understanding of the "Euro-common currency of European currency".

Major Advantages are:

  1. It will ease the exchange rate conversion with the countries in the group & thereby facilitate the trade & movement of Capital, Goods/Services, labour.
  2. It will boost the Export and import.
  3. No to Transaction costs. Transaction costs will be completely eliminated.
  4. Price Transparency. It will easily allow the goverment & even common man to compare the prices of the same good with prices from many nations. Hence may help in price gain during Export.
  5. No uncertainties while price is fluctuating. A common currency for all.
  6. More efficiency & effective trade.
  7. Feeling of Partnership. A healthy relationship will prevail between the members of the common currency, who will always help each other in time of needs. So chances of war will decrease.
  8. No race for arms & ammunition between the members(countries) (as in southeast asia).
  9. More money will be used by nation in building itself then wasting it on futile causes of wars. Budget of Pakistan, India, USA show about 30 % is used in strengthening its forces.
  10. Political pressure on countries to control their inflation, otherwise they will be devalued, so growing economy with controlled inflation.

Major Disadvantages are:

  1. Loss of independent monetary & exchange rate policy.
  2. It will require the coalition panel with representative from every country to decide the policy, will surely lead to some of the members unhappy because there will always be some members(countries) which will appose the policy & hence a system like voting will be used, which will surely affect the relationships between the governments.
  3. Loss of Sovereignty. Central banks will be undemocratic because it will not be elected body moreover the country where the bank will be have more say or authority on workings of bank.
  4. If a country needs to delate its economy in a limited time then somewhere it has to compromise with its employment capacity in country, in a summarized manner we can say it will put downward pressure on its economy.
  5. It will lead to an unstable system, if by chance any one country moves out, will lead to decreased or loss of faith by other members.

So we can really see it does have some disadvantages but with more advantages. I really think it’s in favour of a nation if it joins such a common currency.

This is all from side.



Sachin Jain

Associate Software Analyst

Induslogic Inc. Noida

Contact me @ +91-9999-410953

mail me : sachin.jain@induslogic.com

Wednesday, February 21, 2007

About ASEAN, EAS and Others


The ASEAN is a regional trading group of the South-East Asian nations. The Association of Southeast Asian Nations or ASEAN was established on 8 August 1967 in Bangkok by the five original Member Countries, namely, Indonesia, Malaysia, Philippines, Singapore, and Thailand. Brunei Darussalam joined on 8 January 1984, Vietnam on 28 July 1995, Lao PDR and Myanmar on 23 July 1997, and Cambodia on 30 April 1999.

The ASEAN region has a population of about 500 million, a total area of 4.5 million square kilometers, a combined gross domestic product of almost US$ 700 billion, and a total trade of about US$ 850 billion.

Though the ASEAN Declaration states that the aims and purposes of the Association are: (1) to accelerate economic growth, social progress and cultural development in the region and (2) to promote regional peace and stability through abiding respect for justice and the rule of law in the relationship among countries in the region and adherence to the principles of the United Nations Charter, it essentially remains as a regional trading block.

Look at its trade figures. While the combined GDP is almost about the same size as that of India’s, its total trade is more than its GDP. That is where it derives its strength from. Usually it runs a current account surplus with the rest of the world in trade.

Mr. Ong Keng Yong of Singapore is the current Secretary General of ASEAN.

East Asian Summit

The East Asia Summit (EAS) is a pan-Asia forum to be held annually by the leaders of 16 countries in East Asia, with ASEAN in a leadership position.

The first summit was held in Kuala Lumpur on December 14, 2005. The Kuala Lumpur declaration and the Avian Influenza Prevention, Control and Response declaration were signed by the 16 leaders during the first EAS. It was agreed to hold future EASs in conjunction with the annual ASEAN meetings.

The 2nd East Asian Summit was held recently in January, 2007 soon after the 12th ASEAN summit there. The outcome of the 2nd EAS is an agreement on a concerted region-wide effort to harness alternative sources of energy to ensure continuous energy supply for their growing economies in the face of dwindling world oil reserves.

ASEAN + 3 refers to the 10 ASEAN member countries, and China, Japan and South Korea. ASEAN + 6 refers to the East Asian Summit signatories. They include ASEAN + 3 and Australia, New Zealand and India.

China wants to keep India out of the EAS process. Though not openly, it has surreptitiously been lobbying for the exclusion of India. But Japan has not allowed China’s point of view to prevail.

Russia participated in the first EAS as an observer and has expressed desire and even requested to become a member. Their position as a future member is supported by China.

East Timor is a candidate ASEAN member seeking membership within five years (from 2006); presumably new members of ASEAN would also join the EAS.

Pakistan and Mongolia have been proposed as future members by Malaysia.

Papua New Guinea has been proposed as a future member by Australia.

The United States has now stated that it hopes to have some role in the future of the EAS.

The European Union has indicated it wishes to have a role as an observer.

However, ASEAN has decided to freeze new "membership" of EAS for at least two years (which would seem to cover the second and third EAS).

ASEAN Regional Forum

The ASEAN Regional Forum is an informal multilateral dialogue of 25 members that seeks to address security issues in the Asia-Pacific region. The ARF met for the first time in 1994. The current participants in the ARF are as follows: ASEAN, Australia, Canada, People's Republic of China, European Union, India, Japan, North Korea, South Korea, Mongolia, New Zealand, Pakistan, Papua New Guinea, Russia, East Timor, and the United States. Bangladesh was added to ARF as the 26th member, starting from July 28, 2006.

Tuesday, February 20, 2007

About controlling inflation: again

I have been asked in the chat box on Indian Current Affairs blog like this:

“can we say it is becoz of inflation crude prices has gone up”

I answered to that as below:

“NOOOOO. Crude prices are decided by the international markets. Crude is not a commodity sold as such in India for consumers.”

I don’t how many of you have taken it for granted, how many of you have written it off as incorrect and how many were agnostic.

Inflation, being a hot topic, viewed at any which way, the debate will rage for some more time to come. And more and more reams would be written about it. Today’s ET has an excellent debate on the topic again. Without much beating around the bush, let me make two points here:

  1. Rising international crude prices will have an impact on inflation in the country. It is a different story that the country’s financial managers (read the FM, the PM and the RBI) will do their best to soften the impact for the common man in their own way. They may prefer not to pass on the entire burden of the price impact directly to the common man. But if it is not direct, its impact will anyway be felt indirectly. You have to pay your dues some day. An abnormal increase in fuel costs would certainly lead to higher transportation costs and this would in turn lead to higher commodity prices. There may be some time lag; but how long will that lag be, is anybody’s guess. Perhaps, the current bout of inflation seen in the last few weeks is a result of the hardened international crude prices during most of the middle and end parts of last year.
  2. Most of the experts keep talking of supply side pressures as being responsible for inflation. They also say that the measures initiated now – viz., reducing the import duties and tightening the money supply, are only short term measures and that long term measures need to be taken. What measures constitute this ‘fundamental’ approach to tackle supply side pressures? Aggregate supply can be increased through:
    1. Greater investment and capacity creation
    2. Increase in educated labour force
    3. Improved productivity in the use of existing resources
    4. Technological change and innovations.

Saturday, February 10, 2007

About FCCBs, GDRs and ADRs

Let’s look at some of the definitions and details from the web on these instruments.

Foreign Currency Convertible Debenture. A type of convertible bond issued in a currency different than the issuer's domestic currency. In other words, the money being raised by the issuing company is in the form of a foreign currency. A convertible bond is a mix between a debt and equity instrument. It acts like a bond by making regular coupon and principal payments, but these bonds also give the bondholder the option to convert the bond into stock.

These types of bonds are attractive to both investors and issuers. The investors receive the safety of guaranteed payments on the bond and are also able to take advantage of any large price appreciation in the company's stock. (Bondholders take advantage of this appreciation by means warrants attached to the bonds, which are activated when the price of the stock reaches a certain point.) Due to the equity side of the bond, which adds value, the coupon payments on the bond are lower for the company, thereby reducing its debt-financing costs.

A Global Depository Receipt or Global Depositary Receipt (GDR) is a certificate issued by an international bank which can be subject of worldwide circulation on capital markets. GDRs are emitted by banks, which purchase shares of foreign companies and deposit it on the accounts. Global Depository Receipts facilitate trade of shares, especially those from emerging markets. Prices of GDRs are often close to values of related shares.

An American Depositary Receipt (ADR) is how the stock of most foreign companies trades in United States stock markets.

Each ADR is issued by a U.S. depositary bank and represents one or more shares of a foreign stock or a fraction of a share. If investors own an ADR they have the right to obtain the foreign stock it represents, but U.S. investors usually find it more convenient to own the ADR. The price of an ADR is often close to the price of the foreign stock in its home market, adjusted for the ratio of ADRs to foreign company shares.

Depositary banks have numerous responsibilities to the holders of ADRs and to the non-U.S. company the ADRs represent. The largest depositary bank is The Bank of New York.

Individual shares of a foreign corporation represented by an ADR are called American Depositary Shares (ADS).

The level of compliance to be shown by the company, with the laws of the country where its ADRs or GDRs are traded will depend on the type of float it decides to have. Whether it just wants its stock just to be available to the foreign investors or whether it wants to raise money from foreign shores etc., will decide the depth of the compliance levels.

The government came with a scheme during 1992/1993 to allow the Indian Corporate Sector to have access to the Global Capital Markets through issue of Foreign Currency Convertible Bonds (FCCBs)/Equity Shares under the Global depository Mechanism.

The guidelines were liberalized from time to time and the recent initiatives are listed below:

  1. Pricing guidelines for Indian listed companies FCCB/ADR/GDR were brought in alignment with SEBI's guidelines on domestic capital issues.
  2. Unilisted companies issuing FCCB/ADR/GDRs are now required to have prior or simultaneous listing in domestic stock exchange(s).
  3. Unlisted companies, which have issued ADR/GDR/FCCB, now required to list in domestic market by 31 March 2006. However, unlisted companies which had accessed FCCBs, ADR/GDRs in terms of guidelines at 22 May 1998 and are not making profit, be permitted to comply with listing condition on the domestic stock exchanges within three years of having started making profit. However, no fresh issues of FCCBs, ADR/GDRs by such companies will be permitted without listing first in the domestic exchanges.
  4. In order to rationalise the ADR/GDR guidelines further, Government exempted the companies, going in for an offering in the domestic market and a simultaneous or immediate follow on offering (within 30 days of domestic issue) through ADR/GDR issues wherein GDRs/ADRs are priced at or above the domestic price, from the requirement of the revised pricing guidelines.
  5. Unlisted Indian companies, which had issued FCCBs, ADRs/GDRs prior to 31 August 2005 and are not making profit are also permitted to sponsor such issues against existing shares and are permitted to comply with listing conditions on the domestic stock exchanges within three years of having started making profits.

Globalization -- The Indian way

In today’s ET we have an excellent piece written by Raj Bhandari on globalization. Read the full article here. I recommend reading it at least once because, what I have excerpted will act as reminder notes for you; you would get the ability to expand it as and when needed if you read it at least once.

While answering the question -- How did India reap the benefits of globalization, he comes up with some succinct answers. I excerpt below his solid points:

  1. Emergence of a self reliant middle class equipped with strong knowledge base with technical qualifications.
  2. Using the vast and vibrant domestic market both as a testing ground and spring board in so far as manufacturing is concerned.
  3. Strong presence of NRIs in developed countries occupying senior management positions in several MNCs reposed confidence in Indian managerial competence and leadership.
  4. Well established democratic political framework, respect for rule of law, free and open social setup, large young population ingrained with quick adaptation and absorption capacity of new technologies have all created a responsive realization that India is marching ahead.
  5. Awareness amongst all sections of people of a bright future which changed their perception, thinking and actions.
  6. The lust for greater participation in the world economy by expanding their business horizons, through rationalization of their core businesses, acquisitions and mergers both at home and abroad and creating a synergy on global scale have brought tremendous opportunities and challenges for India to move ahead in the world markets.
  7. Different cuisines, diverse cultural ethos, distinct dialects, and other forms of diversification in race, religions, regions etc., have all crafted a unity of purpose in re-engineering of globalization in a typical Indian way.