Economic Report : Gold and Indian Economy

 The Indian economy is the seventh largest economy in the world by nominal GDP ($2.582 trillion Nominal, October 2015) and the third largest by PPP ($8.427 trillion PPP, October 2015).

India is running a trade deficit. India imports more than what it exports. India is the largest consumer of gold in the world. India accounts for more than 30% of the global gold market. The amount of production of gold in India is minimal and the need is met by imports. Gold constitutes 12.50% of the total imports of India. India imports 26.10% of total world production of gold.

Analysis Report: Titan Company Ltd. (BUY; Estimated Price: Rs. 450)

Introduction of Company

Tata Company Limited, established in the year 1984, is a joint venture between TATA Group and Tamil Nadu Industrial Development Corporation (TIDCO). It is the world’s fifth largest watch manufacturer. The company is divided in four main divisions- watches, jewellery, eyewear and precision engineering; in which jewellery accounts for its major chunk of revenue i.e. 79%. It has recently entered into the business of fragrances and accessories. Titan has four subsidiaries as on 31^st March 2015, namely Titan Time Products Ltd., Favre Leuba AG, Titan Watch Company Limited and Titan Engineering and Automation Limited. The company has a culture of innovation and they carry it through Innovation Bazaar, Interweave, Tata Innoverse, Innovation Centre and Titan Innovation Hub. Titan is also selected as Best Employer for "National Award for the Empowerment of Persons with Disabilities - 2014" by Government of India.

Analyst Report : NESCO Ltd. (BUY; Estimated Price: Rs. 1842)

Introduction:

NESCO was established in 1939 as a manufacturer of tools and surface preparation machines which are supplied to various industries in India. It started as an engineering firm but slowly diversified into two other segments, namely incubator (exhibition hall) and real estate (renting and leasing of offices). As its core operation was engineering products, the company had plants at multiple locations in Mumbai but soon it consolidated all the plants in a single 70 acre land brought in Goregaon on the Mumbai-Goregaon Express Highway.

Figure 1: The sectors in which NESCO operates

Quarter-I (FY 2015-16) Analysis Report: Atul Auto Limited (BUY; Estimated Price: Rs. 495)

Atul Auto Limited, which began its operations in 1992 at Rajkot, Gujarat, manufactures 3 wheeler auto rickshaws and their spare parts. It gets major competition from Bajaj Auto and Piaggio. The company recently expanded its production capacity from 48,000 units to 60,000 units at its Rajkot plant in July 2015. In the meanwhile, it has also been working on its Greenfield expansion in Ahmedabad. The company expects to be able to set up this facility by FY2016-17 or early FY2017-18. The capacity would be 60,000, which is likely to come up in two stages; 30,000 plus 30,000. The capacity utilized in FY 2014-15 was 86.6% with 41,598 units sold.

Economist Report : BASEL III- IMPLEMENTATION & CHALLENGES

 OVERVIEW

The third Basel accord is an international regulatory framework governing capital adequacy norms, stress testing and other liquidity related risks for banks around the world. It should be noted that adopting the framework is voluntary. The measures prescribed under the framework serve as a minimum standard for central banks around the globe to adopt in their home countries. The purpose of Basel-III was to strengthen the banking system and address the relevant risk factors in the wake of the 2007-08 financial crisis.

The second Basel accord had apparently lacked in the following respects-

·         Insufficient capital reserves

·         Lack of a uniform definition of capital

·         Underestimation of liquidity risk

The third accord attempts to overcome the above shortcomings as well as better address counterparty credit risk.

Basel-III was agreed upon by the members of the Basel Committee on Banking Supervision (BCBS), one of the committees of the Bank for International Settlements (BIS). BIS is of the nature of a limited international company owned by member central banks (including Reserve Bank of India). BIS is located in Basel, Switzerland. One of the purposes of BIS is to foster discussion and collaboration among central banks and serving as a banker to the central banks.

Apart from India, other members include China, South Africa, European Union, France, Germany, United States et al.

The full implementation of Basel-III is set to be completed by 31^st March, 2019.

The third Basel accord can be seen as addressing the following requirements-

·         Strengthening the global capital framework (ensuring minimum capital requirements and buffers)

·        Introduction of a global liquidity standard ( LCR-Liquidity Coverage Ratio, NSFR- Net Stable Funding Ratio)