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On Holidays

In the past couple of weeks a lot of things happened in the economic world.

The Indian e-commerce sites claimed their sale as success, and there were many things that went wrong.

The markets took breather after the  holidays ..

Rest I have gone phishing… should soon update the posts once be back from the holidays .

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Market Efficiency

I dare to write on this topic as it is the most intense and debatable topic in the financial markets over the years.blog

The author of “Fooled by Randomness” and “The Black Swan” Nassim Taleb became the anti-theorist in finance arguing that the Nobel committee should be sued for awarding Harry Markowitz, Bill Sharpe and Merton Miller http://www.bloomberg.com/news/2010-10-08/taleb-says-crisis-makes-nobel-panel-liable-for-legitimizing-economists.html

But the Guru of Corporate finance Aswath Damodaran did a posting replying to him on the market efficiency models. http://aswathdamodaran.blogspot.com/2010/10/nassim-taleb-and-nobel-committee.html View full article »

India being emerges as one of the big market for (M&A) Mergers and acquisitions, in the last decade. The market for M&A is expected to bloggrow at a very rapid pace and sooner we may see many hostile bids by the Indian companies, as they are very uncommon in India. Hostile takeovers must be recognized as manifestations of a market for corporate control. Advanced economies regulate M&A activities only from competition angle.

Private equity continuing to invest capital into India Inc,  Hope that there would be some hostile takeovers because that is something Indian market badly needs to ensure good value creation for the shareholders.

Few of the cases which I can recall for hostile take over in India are Abishek Dalmia on Gesco and Arun Bajoria on Bombay Dying. Both were medium-sized barons outnumber their bigger peers, and follow quite different paths when it comes to running their businesses – owning substantial stakes in their business and thus less vulnerable to takeover. View full article »

Investment Bankers Pitch

The weekend was adventurous for India; last night PM Mr Modi did the hard selling for India, obviously learning by itself for blogInvestment bankers. The pitch was very strong in the economic sense.

I was reading Traders Guns and money over the weekend and found some interesting jargon and pitches made by the Investment bankers.

Statement: As a Leading dealer with a global platform, we are the major player in the market.

Translation: We have spent a fortune to build this business and are now prepared to spend millions more subsidizing your requirements.

Statement: We have one of the most talented teams in this space.

Translation: Our staff are vastly overpaid and on huge guaranteed bonuses. View full article »

Commodity derivatives markets started in India in 1990s, The National Agriculture Policy, announced by the government in blog2000, advocated the development of futures markets so that consumers and producers of commodities could use these contracts to procure commodities at a more rational price than at the Minimum Support Price (MSP) set by the government, which came with a large cost to the exchequer. This set in place a drive of reforms in these markets, following the reform model that had lead to the development of the Indian equity markets previously.

In 2003 commodity futures contracts started trading on electronic exchanges with a nation-wide reach. Counterparty credit risk, that was a serious problem in the older exchanges, was eliminated using netting by novation at clearing houses similar to their more visible equity derivatives cousins. Total traded View full article »

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