Indian brands in the Superbrands 2009-10 book

has released the 2009-2010 Superbrands book featuring 91 of India’s strongest consumer brands.The brands in the media and entertainment category include Tata Sky ,Adlabs, Pritish Nandy Communications, Dainik Bhaskar, Dainik Jagran and Filmfare.Apollo Hospitals and Crocin in healthcare and pharmaceuticals category, Barista in FMCG,Hero Cycles in Auto, HSBC in Banking, The Taj in Hospitality and Kingfisher Airlines in aviation sector are amongst many categories which have made it to the Superbrands book.After a recessionary pressure,Superbrands was able to achieve participation from 91 brands - exactly the same number it reached in 2007 when markets were surging forward.

Capital market: Dominated by QIPs and ADRs

Qualified institutional placements (QIPs) (It is a faster capital-raising tool, whereby a listed firm can issue equity shares, convertible debentures or any securities except warrants. It is a quick ways of raising fund, relatively hassle free and involves fewer regulatory requirements) seem to have come of age in the corporate fund-raising arena.

Despite economic slowdown stalking the first half of 2009, companies raised more funds through QIPs and depository receipts (DR)( A depository receipt (DR) is a type of negotiable or transferable financial security that is traded on a local bourse but represents a security or equity.) American depository receipts (ADR) and global depository receipts (GDR) - during the year so far, compared to the peaks seen in 2007.

Companies raised Rs 28,312 crore through 41 issues during the last 11 months by placing their stocks with the qualified investors compared to Rs 20,011 crore raised during the entire 2007. In 2008, the funds raised through this means was at a low of Rs 2,104 crore, according to the data compiled by leading investment banker SMC Capitals.

By 2007, QIP was not so popular a means of raising funds, as the first QIP was launched just in September 2006. And the corporate fund raising was well diversified across the sources then, including domestic and foreign. Thus, QIPs have come back with a greater degree than is expected after the markets bounced back on the first signs of economic revival. This provided an opportunity for the funds-starved firms to set their houses in order, after the collapse of Lehman Brothers in September, 2008 and the subprime credit crisis that followed.

However, the same cannot be said in the case of other modes of fund raising, such as initial public offerings (IPOs), follow-on public offerings(FPOs) and rights issues, or international sources such as foreign currency convertible bonds (FCCBs).

Companies raised $ 3.16 billion (over Rs 14,500 crore) in the first 11 months of 2009through DRs, which surpassed the 2007 level of $ 2.64 billion (over Rs 12,000 crore at the present conversion rate of Rs 46.18 per dollar). In 2008, It(DRs)has touched about $ 100 million.

So we can say that,In 2007, GDP (gross domestic product) and high level of investment drove the merchant banking activity. Now, excess liquidity is driving it.
India, along with China, has been attracting most of the global investments over the last few months,adding to the liquidity infused by the domestic stimulus packages.This is reflected in the firming up of the equity prices and other asset classes such as gold and metals.

In 2007, companies resorted to listing of DRs to gain global reputation. Now, there is no need for such moves as Indian companies are sought after globally. As DRs are dollar-denominated, they have become less attractive in the post-Lehman Brothers' scenario.FIIs are preferring non-dollar assets to the dollar-denominated ones, with the confidence in the US economy declining.

Unlike QIPs, DRs are populated by a few big issues. Sterlite Industries alone accounts for $ 1.5 billion or nearly half of the $ 3.16 billion raised through DRs. Other major issues included Tata Motors and Tata Power.According to experts, In 2010, India and China will remain major destinations for global investments, though valuations here are not cheap any more.

Tata Teleservices Outperformed Industry leader

Tata Teleservices, India's sixth-ranked mobile operator, added 3.87 million subscribers in October, maintaining its lead for a third straight month, data from an industry body showed.

Tata Tele, 26 per cent owned by Japan's NTT DoCoMo(meaning "anywhere" in Japanese ,Do Communications Over the Mobile network), was the first operator to launch a per-second billing plan, deviating from the industry norm of per-minute billing, which saw a strong response and forced bigger rivals to match it.

India is the world's fastest-growing cellular market, with monthly signs up averaging about 14 million this year.

Tata Tele, which operates both on GSM and CDMA platforms, saw its mobile subscribers rising to 50.7 million in October from 46.8 million in September, data released by the Association of Unified Telecom Service Providers of India (AUSPI) showed.

Market leader Bharti Airtel added 2.7 million mobile users in October, taking its total to 113.2 million, and third-ranked Vodafone Essar gained 2.98 million users to 85.8 million.

Mukesh Ambani's new business arm :Milk Business

Milk is newest business muscle for industrialist Mukesh Ambani as his corporate dairy is looking for refrigerator space at mom and pop stores, in addition to vending from Reliance Retail stores.
With the beginning of sale of 'Dairy Pure' through general milk retailers, compared to mostly through Reliance Retail-owned stores now, the company expects further growth in this business. The milk business turnover grew nearly three-fold to over Rs 178 crore last fiscal.
For making an competitive edge in milk market in terms of pricing, Reliance Retail is trying to lure customers with 10 per cent extra milk in every packet than that of its rivals for the same price. The market is mostly dominated by state cooperatives.
Amul, the country's largest milk retailer, believes a sizeable market presence cannot be built overnight in the milk business and needs a strong procurement and marketing network.
Still, Reliance Dairy Foods Ltd, the milk and dairy products arm of Reliance Industries Ltd (RIL), saw its turnover grow nearly three-times last fiscal - from Rs 65.77 crore in 2007-08 to Rs 178.05 crore in 2008-09.
The company believes the business would grow as it was also looking at expanding the product portfolio besides processing and packaging facilities.
Reliance Dairy Foods' assets stood at Rs 82.23 crore at the end of last fiscal, up from about Rs 39 crore in 2007-08, as per information in RIL's annual report. RIL forayed into the organized retail business in 2006 with the inception of its subsidiary Reliance Retail Ltd (RRL).

What is the Volatility Index and what does it indicate? How is it different from other market indices?

The Volatility Index (VIX) is an indicator of the market mood in the short term. It is a widely used measure of market risk and is constructed by using the prices of Nifty options (puts and calls). The India VIX was launched by the National Stock Exchange (NSE) in April 2008.

The VIX value is the percentage by which investors expect the markets to move in the next 30 days. So, if the VIX is at 30, investors are expecting the markets to change by 30%.

The VIX is different from other market indices because it is a forward-looking index. The Nifty, Sensex and other market barometers are price indices. Their values reflect the prices of the stocks in these indices. For instance, the Nifty closed on 19 February at 2,789.35 point, up 13.20 points or 0.48% from the previous closing. This level of the Nifty reflected the prices and market capitalisations of the 50 shares in the index.

On the other hand, the VIX tries to capture the market sentiment that is likely to prevail over the next 30 days by using the prices of Nifty derivatives. The VIX value for 19 February was 42.00 which means investors expect the Nifty to move 42% by 19 March.

Inverse relationship
The VIX has an inverse relationship with the market. When the markets tanked in the last week of October 2008 and the Nifty fell by almost 500 points in two days, the VIX shot up from 45% to 70% . So, the VIX goes up as the market becomes fearful and falls when the market feels confident about its future direction. This is because option prices tend to rise when investors expect the markets to be volatile and this pushes up the VIX. On the other hand, if investors don’t expect the markets to move very sharply, the prices of index options decline, bringing down the VIX.

Contra indicator
for contrarian investors, the VIX provides important clues to the future direction of the market. A high VIX value of over 50 indicates a high degree of panic in the market, which is seen by the contrarians as the best time to buy. On the other hand, a low VIX value of less than 30 suggests that the market will be range-bound and there is complacency among investors. Contrarians generally see this as an opportunity to short-sell.

Volatility futures
While most other indices have derivatives that can be bought and sold, there are no tradable products based on the India VIX. The NSE wants the market participants to first understand the concept of the India VIX and what it signifies before any derivative product is launched.

Regulators move that can affect you

MARKETS
According to SEBI, any issue of Indian Depository Receipts (IDRs), which would allow a foreign company to list its equity shares on the Indian stock exchanges, would have to reserve at least 30% of the issue size for retail investors.
MUTUAL FUNDS
The apex sectoral body for mutual funds, AMFI, has issued a fresh code of conduct for mutual fund intermediaries like agents and distributors, mandating them to disclose all commissions received from different schemes. This move, carried out on Sebi’s directive, attempts to make mutual funds more accountable.
TELECOM
TRAI has rescinded its plans to ask operators to charge customers on a per-second basis so that they can enjoy the benefit of paying only for their usage. The telecom regulator now says that the model will not be mandatory for operators.
INSURANCE
IRDA has introduced disclosure norms for insurance companies, effective from 1 November 2009. Insurers will be required to make data for the past four-five years available and will have to provide disclosures on a quarterly basis. This will include a company’s investment profile, solvency, liability valuations and business statistics. These norms are in line with the International Association of Insurance Supervisors standards.

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