World Of Finance

          World Of Finance by Vijaya Sai.M Why  dollar is  considered  as currency  king?Why the influence of dollar on various assets is very high?How it influences us this time around, however remains to be seen. Understanding the dollar is as important as understanding commodities, equities and bond cycles. The currency is a global benchmark and it is this dollar link that completes the economic cycle as assets interact with each other. Unfortunately, we do not pay much attention to this link. The geographical bias, lack of inter-market knowledge, single asset focus and cycle blindness restrains our understanding of the currency. The dollar is as important as gold. The two assets mirror each other and run contrary. If gold strengthens, dollar weakens and vice-versa. It is the classic interaction between the tangible and the intangible -- gold and commodities being the hard or tangible assets and the dollar being the...

          World Of Finance by Vijaya Sai.M   Finance minister Pranab Mukherjee began presenting the Union budget for 2010-11 in the Lok Sabha today after the Cabinet approved the document. Here are some of the highlights of his budget speech. The Indian economy was facing grave uncertainty. Growth had started decelerating when the interim and full budget for 2009-10 were presented. At home there was added uncertainty because of subnormal southwest monsoon.Yet, the economy now in a far better position than it was eight years ago. India weathered the economic crisis well and emerged from the global slowdown faster than any other country. First challenge before the government is to quickly revert to high GDP growth path of 9%.Expects 10% economic growth in the near future. Second challenge is to harness economic growth to make it more inclusive and consolidate gains. Third challenge is to overcome weakness in government's public delive...

          World Of Finance by Vijaya Sai.M Railway Minister Mamata Banerjee appeals to business houses to join hands for building partnership with Railways. Presenting Railway Budget for 2010-11, Banerjee says a special task force will be set up for early clearance of projects. No fare hike for passengers. Railways not to be privatised; It will remain with the government, says Banerjee. While not privatising, Railways have to develop business models for improving earnings, says Banerjee. Railways 2020 vision document will contain short, medium and long-term goals. Commitments fulfilled to the maximum. Out of 120 trains announced in last budget, only three remain to be flagged off because of lack of broad-gauge lines, says Banerjee. Plans to launch a pilot project for fire detection.The government also plans to construct more underpasses for safety, the minister said while presenting the Railway Budget. Railways to start six water bottl...

          World Of Finance by Vijaya Sai.M As we step into a new decade, the growth drivers for the economy are diverse and robust, but so are the challenges ahead. India is today poised to enter a phase of exponential growth and development. From an unlikely global player stagnating at a low rate of growth in the 1980s, to a nation of great potential, India’s economic transformation has been remarkable. Given this transformation, and the strength of the fundamentals supporting it, the next decade promises to be exciting for the Indian economy. To understand what is possible, I always look at proxies from the world around us.  The best and most recent example is that of China. China grew at a CAGR (compounded annual growth rate) of 9.5% for over 25 years since it began its economic reform process in 1979. The impact of such high growth was phenomenal. China’s GDP grew tenfold over this period. According to China’s official statistics,...

          World Of Finance by Vijaya Sai.M Credit enhancement is a key part of the securitisation transaction in structured finance, and is important for credit rating agencies when rating a securitisation. The credit crisis of 2007-2008 has discredited the process of credit enhancement of structured securities as a financial practice as the risk was not assessed correctly and defaults began to rise. If the credit rating was properly assessed and higher interest rates assigned to structured securities, then the crisis may have been averted. Types of Credit Enhancement   There are two primary types of Credit Enhancement: 1.Internal 2.External. Internal Credit Enhancement Excess spread The excess spread is the difference between the interest rate received on the underlying collateral and the coupon on the issued security. It is typically one of the first defenses against loss. Even if some of the underlying loan payments are late or defa...

          World Of Finance by Vijaya Sai.M What are securities? Securities are financial instruments that represent a creditor relationship with a corporation or government. Generally they represent agreements to receive a certain amount depending on the terms contained within the agreement. What are fixed income securities? Fixed-income securities are investments where the cash flows are according to a predetermined amount of interest, paid on a fixed schedule. What are the types of fixed income securities? The different types of fixed income securities include government securities, corporate bonds, commercial paper, treasu...

          World Of Finance by Vijaya Sai.M What does Fixed Income Security mean? An investment that provides a return in the form of fixed periodic payments and the eventual return of principal at maturity. Unlike a variable-income security, where payments change based on some underlying measure such as short-term interest rates, the payments of a fixed-income security are known in advance. Kinds of Fixed Income Securities: 1.Government securities, 2.Corporate bonds, 3.Commercial paper, 4.Treasury bills, 5.Strips etc. Fixed Income  Securities relevance in Indian context: Government Securities( G-Sec ) : In India G- Secs are issued by the Central Government , State Governments and Semi Government Authorities such as  municipalities, port trusts, state electricity boards and public sector corporations.  The Central and State Governments raise money through these securities to finance the creation of new infrastructure as...

          World Of Finance by Vijaya Sai.M Hi Friends this is a must  watch clip if you would like to know about Sub prime crisis which shook world economy.