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COVER
STORY
Meltdown
of Stock Markets
-- K Seethapathi T Jyotsna
Indian
share markets witnessed the biggest crash since the stock
scam of April 28, 1992 following the uncertainties over future
of economic reforms. Large selling by the FIIs and hedge funds
added significantly to the crash on the Sensex as foreign
investors are looking for a commitment from the government
towards the continuation of reforms and the promise of stable
governance. Irresponsible comments from politicians further
amplified the disaster. Politicians must understand that markets
hate uncertainty.
© 2004 IUP. All Rights Reserved.
COVER
STORY
Market
Meltdown: A Global Perspective
-- Arindam Banerjee
May
17, 2004, a date that would take some time to be wiped out
from the memory of investors. The markets fell, fell and fell.
And it took some time to get back somewhere close to normalcy.
Was this fall triggered by mere domestic incidents? Perhaps
not. The article tries to go beyond the claims of the common
man and tries to provide some insights as to what went wrong
and how the global markets reacted to that.
© 2004 IUP. All Rights Reserved.
TREASURY
Can
Capital Account Convertibility Make the Elephant Dance?
-- Dr. T Satyanarayana Chary
Capital
Account Convertibility is one of the essential parameters
for India to integrate the economy with global economy. But
the question is how far the Indian economy is strong enough
to allow full capital convertibility and who will give financial
guarantee to India if Indian economy collapses due to full
Capital Account Convertibility? In the context of globalization,
every economy is supposed to go in for capital account convertibility,
if not today, maybe tomorrow.
© 2004 IUP. All Rights Reserved.
TREASURY
Monetary
and Credit Policy for 2004-05
-- Vivek Jain
The
annual monetary and credit policy announced by RBI has taken
adequate care for the strengthening of the economy and it
considers the need for monitoring of the local and international
business environment. Moreover, the policy presents a road
map towards the implementation of the Basel II Capital Accords
in Indian Banks and RBI has asked banks to develop their risk
management systems. The corporate has welcomed the policy
even though it does not have major changes.
© 2004 IUP. All Rights Reserved.
TREASURY
Chinese
Currency: Will it Float?
-- N Janardhan Rao
The
debate over revaluing the Chinese currency is gathering momentum.
In the US, this issue has become a politically sensitive issue.
With the yuan becoming an important currency in Asia and even
globally, the demand for making the yuan fully convertible
is becoming an important issue in the global media. Whatsoever,
the floating of Chinese yuan should be accompanied by deep
reforms. All eyes are on the mainland to see whether it will
float the yuan or not.
© 2004 IUP. All Rights Reserved.
RISK
Whole
Company Securitization _ A New Asset Class
-- Amit Singh Sisodiya
The
whole company securitization is getting momentum as a viable
financial tool in the corporate world. Traditionally, the
securitization was in respect of a particular class of assets,
but WCS breaks almost all the boundaries of traditional securitization
and now the entire cash flow of the business is being securitized.
The main impediment for the WCS is the novelty of the concept
itself. But the final question is whether WCS is an appropriate
financing method for any business.
© 2004 IUP. All Rights Reserved.
RISK
The
New Investment Heaven: Commodity Futures
-- Vinay Mahajan
The
commodities are gleamingthat's not true about gold alone,
but for all the exchange traded commodities in general. Do
the small investors have any role to play here? Incidentally
yes. How difficult or easy is it to invest in these markets?
Well, it's altogether a different arena; so rules of the game
are different as are the tricks of the trade. What is required
here is a little bit of acquaintance coupled with some fundamentals.
© 2004 IUP. All Rights Reserved.
FOREX
Globalization,
Trade Facilitation and Trade in Services
-- Dr. Ganti Subrahmanyam
Trade
facilitation came hastening to the forefront of WTO issues
as the international business community increasingly expressed
concern for greater transparency, efficiency, and procedural
uniformity of cross-border transportation of goods. Trade
in service is relatively a new phenomenon and the main barriers
for the sluggish growth are due to severe entry barriers.
The WTO negotiations on trade in services gathered pace with
the adoption of the negotiating guidelines and procedures.
Still the road ahead is lengthy and potholed.
© 2004 IUP. All Rights Reserved.
FOREX
Surging
Forex Reserves: A Frankenstein's Monster?
-- GRK Murty
We
have traveled from a very precarious position of defaulting
on our external payment obligations to a most solvent position
among the emerging economies: The foreign exchange reserves
rose from a miniscule $5.83 bn as on March 1991 to $118 bn
by April 30, 2004. What a transformation! The forex reserves
have grown by $16 bn during the first four months of 2004.
Indeed, the flow of dollars has been so massive in the recent
past that in a single week the dollar accretion is reported
to have been $3.70 bn. But the moot question is "why anxiety
at mounting accretions?" and that is what this article examines.
© 2004 IUP. All Rights Reserved.
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