The financial lens

A surge in the stock market occurs when the demand for financial securities exceeds their supply (somewhat in the manner of fish markets). Unlike fish though, which are not easily storable, securities represent a variety of ownership rights over existing durable assets held by firms and used for their day-to-day operations. Purchase and sale of financial securities represent changes in ownership of already existing physical assets and not the creation of new equipment to increase productive capacity, employment and economic growth. So what affected the Indian Economy and Stock Market that even when economy was trumbling the Stock market Indices were Making New Highs. To understand this conundrum lets dial back a few months back to May 2019. Everybody thought that a struggling economy would dent Prime Minister Modi 2014 mandate but he shocked the whole world by improving upon his tally by crossing a breathtaking 300 seats in 2019 Lok Sabha election.The market broke into euphoric d...

Thomas Cook, the world’s oldest travel company, declared bankruptcy. After 178 years of being the biggest British name in holiday booking and inventing guided tours, the firm has gone bust. Founder Thomas Cook was a pioneer in the travel industry in the 19th century, just like Amazon or Google has been in the tech world in recent decades.Thomas cook was the first company that started off with packaged tours as cook thought that everyone wants to keep it simple,like you get the itinerary and accommodation planned by his company even before you travel. As another innovative offering, Thomas Cook issued traveler’s cheques in 1874, allowing his customers to exchange foreign currencies in other countries. Travelers were struggling to exchange different currencies back then, and it was unsafe to carry too much cash. Amid this situation, Thomas Cook offered a solution that became very popular. The network that Thomas cook build can be compared to present times Alibaba,Amazon,Google or...

Indian Economy, no doubt is passing through a sluggish economic growth since 2017 as compared to earlier years, although Indian Economy is still showing positive growth at the rate which may not be considered as very slow, if we go by the global economic growth standards. Over the past few weeks, Finance Minister Nirmala Sitharaman announced several measures to tackle economic slowdown. These steps have come after India's GDP growth in the first quarter of FY20 slowed to 5 per cent--the lowest in 25 quarters or in six years. Since it is capital formation, or investment, that drives growth in the economy, investment is an immediate source of demand as firms that invest buy goods and services to do so. It also expands the economy’s capacity to produce.   Indian investors have also become wary of the slowing economic growth as major companies, especially from the auto sector, have been posting huge dips in profits and even losses in many cases. Not just domestic investors but F...

G old prices have been soaring over the past few days, gold prices touched a six-year high of over Rs 40,000 per 10 gram of 24k gold and experts expect the price of the yellow metal to go up in future. What's driving sudden rise in gold prices? The uncertainty over US-China trade talks, developments in the global market and talks surrounding recession are some of the key reasons that have triggered a rise in prices of gold.The escalating trade tension between the two largest economies in the world is likely to push up gold prices further.The weak global economic outlook for the entire year is another reason why gold prices are surging. The yellow metal is considered as a financial instrument that does not erode in valuation during periods of economic disturbance. The trade war between the US and China, which is into its second year, has triggering fears of a global economic slowdown, roiling equity as well as currency markets. Apart from concerns about global slowdown a...

So the most talked about topic in the recent past and that is the US China Trade War. What is Exactly a  Trade War???. Trade war is nothing but two or more countries trying to stop the free movement of goods and services from one country to the other.  Over the past year, the world's two largest economies have imposed tariffs on billions of dollars worth of one another's goods.   US President Donald Trump has long accused China of unfair trading practices and intellectual property theft. In China, there is a perception that the US is trying to curb its rise.                                  Trump's tariffs policy aims to encourage consumers to buy American by making imported goods more expensive. So far, the US has imposed tariffs on some $250bn (£204.5bn) of Chinese goods, and China has retaliated with tariffs on $110bn of US products.     The point is to punish China...

It all started in 15th May 2017 when Enforcement Directorate had lodged an Enforcement case information report (ECIR) against Chidambaram Son Karti Chidambaram, INX Media and Its Directors (Peter and Indrani Mukerjee) along with couple of other under the provision of the prevention of Money Laundering Act (PMLA). INX Media had approached FIPB on March 13, 2007 for permission to issue 14.98 lakh equity shares and 31.22 lakh convertible non-cumulative redeemable preference shares of Rs 10 a piece to three non-resident investors under the FDI route. On May 30, 2007, FIPB cleared FDI of Rs 4.62 crore for INX Media. But it rejected the proposal of downstream investment of INX Media in INX News.   INX Media Refuse to obey the conditional approval of FIPB, and brought in over Rs 305 crore of FDI in the firm against the approved inflow of Rs 4.62 crore. As the directors realised that they wont be getting the funding they approached the then finance minister P. Chidambaram for the ...

During the AGM RIL chairman Mukesh Ambani announced that RIL will sell a 20 percent stake in its oil to chemical business to Saudi Arab Oil Company (Saudi Aramco). This is one the finest and the best announcements that Reliance has made after so many years of hard work in creating one of the best infrastructures for converting oil to chemical. Saudi Aramco will Acquire a 20 percent in oil business for an enterprise value of 75 Billion Dollars. This value addition will take reliance industries footprint global as far as the businesses are concerned and shareholders have a big win from the Aramco announcement as the share price on the very next day surges 10 percent. Brokerage houses have also revised price target due to the announcement made at the AGM mainly due to 2 factors,firstly the Aramco deal and Secondly that Chairman has made announcement that Reliance would turn into a debt free company by in  next 18 months and make it a de-risked company. As far as the EBITDA is con...