Flash news for CA students( Nov 2015 onwords )

its time to remove " CA " as prefix for CA students

Sensex up by 321 points yesterday because of rate cut in june. and expectations of rate hike by Fed in this year. only FII bought 2248 crores because of rate hike expectations in US ...................

Leading central banks

Sebi charges Murugappa chief, 3 more with insider trading

1. Sebi has charged Murugappa group chairman A Vellayan with insider trading in Sabero Organic Gujarat shares and ordered him to return Rs 2.15 crore made on the transaction
2. Three more individuals-- Gopalkrishanan C, V Karuppiah and M Subramaniam-too have been charged for the same violation.
3. Sebi's investigation analysed the trading pattern, KYC documents and bank account statement of the suspected entities which revealed that Gopalkrishanan had traded in the stock.
   

Relation between rate hike and stcoks falling is that :-

if rates are increased , there will be tightening in liquidity to companies.so investor will think that they might face some difficulty in getting working capital. so investors will book the profits and came out from the market.

Now in current case Fed told that they will hike rate in june, stocks fallen drastically. and again they told two days later that rate hike will take place later the year........so stocks went uppp..... 

Fed likely to raise interest rates later this year

• US Federal reseve is likely to stick with plans to raise interest rates later this year,with progress towards its employment and inflation goals helping allay concerns over the economy's recent weakness.
• central bank kept rates near zero since 2008 and bought $3.5trillion dollrs in bonds to pull economy from recession that had sent joblessness as high as 10%. 
• Unemployment is now cut almost half and runs near estimates of full employment and monthly job groeth so far this year has averaged 194000.

• The S&P 500 closed at a record high on Thursday after disappointing economic data bolstered expectations that an interest rate hike is likely to come only later in the year
• The S&P 500 (SPX) gained 4.97 points, or 0.23 percent, to end at 2,130.82 points, barely beating its previous record close of 2,129.2 from Monday.

Greece expects to reach a cash-for-reforms deal with its creditors in the next 10 days and intends to meet all its payments in June, the government's spokesman said on Friday.

What is the effect of interest rate cut on inflation and the economy?

When we talk about interest rates in genearl, we are referring to the rate at which  other banks can borrow overnight from central bank to full fill their reserves requirements.

NOW, WHAT ARE THE EFFECTS IF RBI CUT THE INTEREST RATE:-


ADVANTAGES:---

• A drop in the interest rates will bring down the cost of capital of corporates.
• companies will borrow more to produce more, they will hire more workers reducing unemployment
• increasing wage rates
• This will also increase consumer spending and hence  consumption
• Increased consumption will add to aggregate demand which in due course of   time will reflect in India's GDP.
• The increased borrowing will boost up the real estate market as people will increasingly take advantage of the low interest rate to take home loans..     

                                     

           

DISADVANTAGES:-

• A decrease in unemployment will increase inflation correspondingly
• Increased consumer spending will increase price level of goods thereby increasing retail inflation.
• Everything will become expensive
• The biggest disadvantage is rising inflation. Rates should be reduced only if we feel we can handle the inflation. 

                                             

Rahul Gandhi is expected to become the party president this year and intends to build the outfit similar to the one that existed during Nehru's time by promoting regional faces, senior Congress leader Jairam Ramesh said

DOW , S & P 500 Slighly lower after fed's minutes

- US stocks slighly lower after Fed's minutes.
- Officials at the Fed's April policy meeting believed it would be premature to raise interest    rates in June and that a bump in inflation was being offset by a weaker labor market and    softer data, according to the minutes.

UK inflation falls to record low -0.1% in April 2015.


Dated :- 19/05/2015

World's all stock exchages' timings

Greece's Deadline for next repayment to IMF - 05/06/2015

There's a deadline, which is June 5,he said - the date on which Greece's next repayment of a loan to the IMF falls due.

Greece faces payments of about 1.5 billion euros to the IMF next month. It made its last repayment of about 750 million euros to the IMF last week by emptying a holding account at the Fund.

Greece's labor minister said on Tuesday Athens would soon conclude a deal with its foreign creditors that could unlock further loans to the cash-starved country

Speaking on a late-night talk show on Monday, Finance Minister Yanis Varoufakis said the government hopes it can both make debt repayments and pay wages and pensions in June


Dated:-19/05/2015

- Greece said on Thursday that it had opened bidding for a 51 percent stake in Piraeus    port to three firms -- 

1. Cosco, 

2. Dutch container company APM Terminals,

3. Philippines' International Container Terminal Services.

Reason:-To fullfill one of the major demands placed upon Athens ( capital of greece)  by creditors from Europe and the International Monetary Fund.

Derivatives History in india

PARTICIPATION IN DERIVATIVE MARKETS IN INDIA:-

Derivative users in india:-

1. Financial Institutions - Not much participants when compare to financial institutions.

                                  - Banks use derivatives on int rates and currencies to manage credit risk.

2. Retail Investors         - Major participants in equity derivatives

Sensex up over 350 pts, Nifty above 8350; GAIL, HDFC gain

DATED:- 18/05/2015 closing

KETAN PAREKH Scam in STOCK MARKET

- He was a trainee of Harshad Mehta
- Formed network of brokers
- Identified and targeted 10 stocks ( K10 stocks).. i will give list below.
- Zee telefirms went up from Rs 127 to Rs. 2330 and Himachal futuristics Rs 194 to Rs.2553
- He used simple borrowing mechanism and BADLA SYSTEM
- Badla trading involved buying stock with borrowed money.( Maturity not exceeding 70 days)

Now here comes diagramatic presentation of scam  and K 10 Stocks List.

-Now can we do this???= answer is NO.Reasons are follows:-

1)Badla system was removed

2)All shares were put as collateral should be done so through NSE and BSE

HOW HARSHAD MEHTA DID THE SCAM:-

-27 Lakhs of shares misappropriated about 90 companies.
-4000 Crore scam
-Two instruments used 1}Ready forward deal  2} Bank receipt
- BR removed by RBI
- Holding banks of fake BR had to face losses.
-31/12/2001 death of the bull

Process of scam and impacts are below :-

Can we do this now????The answer is , NO. Because RBI was removed the BR.

without presenting BR , How BANK - B and BANK C , ( in above example) will issue the cheques??

FM( Arun Jaitley ) expects rate cut by RBI in next monetary policy review

Dated:-17/05/2015

RELATION B/W STOCK MKT AND CURRENCY & GOLD

ONE PICTURE TO UNDERSTAND HOW HAWALA MARKET WORKS