The leading private player in Education Sector in India has been growing with help of its two verticles: ICT( Information & Communications Technology) and SMART class. Both of these verticles have helped it grow and become the eighth player on the global list. Educomp's success can be mapped with the 4 Cs required to judge a business:
Credibility: Its revenue growth has established credibility in the Indian Education Sector and its affects can be seen in the stock price hike from a mere 1k level in January 2009 to cross 4.5k in the month of July
Capital: Educomp has allocated Qualified Institutional Placement(QIPs) in order to raise capital for the purpose of raising growth capital and it has announced that it has no plans to buy back its existing FCCBs
Creativity: Its Smart Class initiative backs its creative skills
Content: The increase in the number of schools it tapped in the past few years proves the spread of effective education in the country
Thursday, July 9, 2009
Wednesday, July 8, 2009
Why is Insurance sector Sensitive??
Let me highlight few of the happenings during sub prime crisis in insurance sector:
Remember how the CDOs were re-insured by the credit agencies in order to boost up investment even though these CDOs lacked the credibility due to the fact that the high risk securitites were being hidden under the tranches??
That was the main reason for the crash because the sectoral performance was highly over estimated. So bringing in more FDI in this sector at the current point would mean a high chance of the same happening in the Indian Market.
If FDI is brought into this sector at this point of time and the projected growth of the sectors is estimated to be higher than the actual level then we will see speculations growing and bringing a crash in India as well leading to a fall even before India rises to overtake the so called economic leaders at this interesting time of recession.
Remember how the CDOs were re-insured by the credit agencies in order to boost up investment even though these CDOs lacked the credibility due to the fact that the high risk securitites were being hidden under the tranches??
That was the main reason for the crash because the sectoral performance was highly over estimated. So bringing in more FDI in this sector at the current point would mean a high chance of the same happening in the Indian Market.
If FDI is brought into this sector at this point of time and the projected growth of the sectors is estimated to be higher than the actual level then we will see speculations growing and bringing a crash in India as well leading to a fall even before India rises to overtake the so called economic leaders at this interesting time of recession.
Rate the Budget 2009- 10
I give it a 7 out of 10 considering the following factors:
It is not the time to look at the budget being sector specific at this point of time. It is necessary to understand the overall state of the nation which needs to follow inclusive policies at this juncture. The recession has still not loosened its grip and hence the following factors needs to be looked at, at this point of time and I am happy it has been taken care of my by our honourable minister:
1. Bring up the sectors which have been hit the most like infrastructure and IT.
2. To bring up the standards of our economy in sectors like education and healthcare to be ready to be a high potential Investment platform in the near future( when recession looses its grip).
3. And to remain a partially closed economy when it comes to sensitive sectors like insurance and banking.
Please provide your rating rationales
It is not the time to look at the budget being sector specific at this point of time. It is necessary to understand the overall state of the nation which needs to follow inclusive policies at this juncture. The recession has still not loosened its grip and hence the following factors needs to be looked at, at this point of time and I am happy it has been taken care of my by our honourable minister:
1. Bring up the sectors which have been hit the most like infrastructure and IT.
2. To bring up the standards of our economy in sectors like education and healthcare to be ready to be a high potential Investment platform in the near future( when recession looses its grip).
3. And to remain a partially closed economy when it comes to sensitive sectors like insurance and banking.
Please provide your rating rationales
Monday, July 6, 2009
Budget 2009-10
Market sentiments hit the stock market badly today. It was because of the hype created by media and "Experts" who gave an unrealistic view of budget this year. Too many expectations had cropped up and made the market rally up above 15K in the morning but as soon as our honouable Finance Minister presented the budget and made some realistic announcements the market slipped to 14k. It is said to be the biggest market fall since 2001 on budget day. It is really sad to see such reaction on such a steady and potentially growing budget. Few of my friends had bought call in the morning of as high as 180 and it went down to 18 at the end of the market hour... To add to their wounds I said "you should have bought put" [;)]
Good Luck Infra!!
Good Luck Infra!!
Sunday, July 5, 2009
Deflation- Prices must be going down.......
India facing a negative inflation for three consecutive weeks. But we cant see any decrease in commodity prices. Why so??
The reason is very simple : Last year we saw inflation rising at high rates and this year the base effect has led to Deflationary figures.
And of course the slackening of demand has effected the same.
What does this mean for future ??
It means we will see high inflation figures next year due to the base effect again and re-vitalisation of demand affects....
The reason is very simple : Last year we saw inflation rising at high rates and this year the base effect has led to Deflationary figures.
And of course the slackening of demand has effected the same.
What does this mean for future ??
It means we will see high inflation figures next year due to the base effect again and re-vitalisation of demand affects....
WPI over CPI - But why???
Why is WPI used in our country while all other use CPI??
Indian market is unorganised in nature. A single commodity costs different at may be two side by side located shops. Hence to avoid this disparity and to decide on the price to be considered India takes the wholesale price of the commodities in order to produce the inflation figures. Thus the wholesale prices are considered to be a benchmark price of any commodity in India.
Wholesale price would mean the price at which a commodity is traded in its wholesale market.
Indian market is unorganised in nature. A single commodity costs different at may be two side by side located shops. Hence to avoid this disparity and to decide on the price to be considered India takes the wholesale price of the commodities in order to produce the inflation figures. Thus the wholesale prices are considered to be a benchmark price of any commodity in India.
Wholesale price would mean the price at which a commodity is traded in its wholesale market.
Cause of RECESSION well defined??
Charles Calomiris, professor of financial institutions at Columbia University Graduate School of Business, said the crisis is only the worst episode of what he described as "the most destructive 30 years of finance in world history". He further said: "As soon as prices flattened — long before they declined — the game was up. If you understood the securities you knew this . . . I don't think I was the only one who recognized this" in 2006, when the housing bubble imploded, he said.
Compounding the problem was a lack of corporate governance in the major bank holding companies in the U.S., where managers purposely underestimated the risk of the financial instruments they were buying, thereby ignoring shareholders' interests, Calomiris said.
Pension funds, mutual funds, insurance companies and the like were barred from owning more than 1 or 2 percent of any single public company, allowing bank holding companies to fragment and weaken their ownership structure by regulatory design.
"There were no retail investors . . . They were all sophisticated institutional investors who were buying these securitized instruments," he said. "You have to be honest — there was a problem here on the buy side. People were consciously doing what they were doing to underestimate the risk and pretend that the risks were less than they were."
Compounding the problem was a lack of corporate governance in the major bank holding companies in the U.S., where managers purposely underestimated the risk of the financial instruments they were buying, thereby ignoring shareholders' interests, Calomiris said.
Pension funds, mutual funds, insurance companies and the like were barred from owning more than 1 or 2 percent of any single public company, allowing bank holding companies to fragment and weaken their ownership structure by regulatory design.
"There were no retail investors . . . They were all sophisticated institutional investors who were buying these securitized instruments," he said. "You have to be honest — there was a problem here on the buy side. People were consciously doing what they were doing to underestimate the risk and pretend that the risks were less than they were."
A Parody I found in this time of Recession!!
Original Song Title: "Its The End Of The World As We Know It "
Original Performer: R.E.M.
Parody Song Title: "We're Deep In Recession And They Knew It"
Parody Written by: Mark Scotti
It's here, have some fear...
Too late, we saw the housing fake.
Lender snakes, over extend - Fannie Mae was not afraid.
Buyers start packing in, listen to defaults churn -
Yards start growing weeds,
Banks stuck with their deeds.
Look at your watch,
Kick in the crotch, plead, jobs go, gas blows.
Living structure splatter no hope in sight, things tight.
Liars on a wire, disputing mistakes made by our government for retired and safer life.
Big blur, never coming in a hurry with the resources to save our necks.
Scheme and scheme, new order look like chumps, weathered flop.
Look at that bank's blame! Fine them.
Oh no, savings go, bankrupt nation, chicken coop, what'll we do.
Lend oneself, help oneself.
Banks serve their own needs, listen to sounds of greed.
Had us so enraptured that the downfall left our sight - right.
It's symbolic, melancholic, damn, fright, no light, feeling very disliked.
(Chorus)
We're deep in recession and they knew it.
We're deep in recession and they blew it.
We're deep in recession and they knew it, we're out of time.
Set your clocks - Bitching hour. Didn't pay bill got no power.
Read and learn, concern, try to make yourself yearn.
Don't just be uniform and disconcerning, unforgetting.
Every effort escalates. Voices now improve our fate.
Light a candle, save the voltage. Don't clown, don't clown.
Don't get dreams crushed, crush.
Oh yeah, this seems so clear - new frontiers. Fight for aid with no fear!
They should regret, they should regret, they should regret, those lies.
Re-offer some solutions; re-offer us alternatives, a new design.
(Chorus)
We're deep in recession and they knew it.
We're deep in recession and they blew it.
We're deep in recession and they knew it, we're out of time.
(It's time we got thrown a bone)
(Repeat)
We have our rights, don't skip an instrumental plan to provide.
What will give delight? Calm, like fine wine.
Recover from the dead, stimulus, and safer banks.
Unite parties, no fakes, money back, soon!
Not alcoholic, patriotic, scams, in check, right? Fight!
(Chorus)
We're deep in recession and they knew it.
We're deep in recession and they blew it.
We're deep in recession and they knew it, we're out of time
Original Performer: R.E.M.
Parody Song Title: "We're Deep In Recession And They Knew It"
Parody Written by: Mark Scotti
It's here, have some fear...
Too late, we saw the housing fake.
Lender snakes, over extend - Fannie Mae was not afraid.
Buyers start packing in, listen to defaults churn -
Yards start growing weeds,
Banks stuck with their deeds.
Look at your watch,
Kick in the crotch, plead, jobs go, gas blows.
Living structure splatter no hope in sight, things tight.
Liars on a wire, disputing mistakes made by our government for retired and safer life.
Big blur, never coming in a hurry with the resources to save our necks.
Scheme and scheme, new order look like chumps, weathered flop.
Look at that bank's blame! Fine them.
Oh no, savings go, bankrupt nation, chicken coop, what'll we do.
Lend oneself, help oneself.
Banks serve their own needs, listen to sounds of greed.
Had us so enraptured that the downfall left our sight - right.
It's symbolic, melancholic, damn, fright, no light, feeling very disliked.
(Chorus)
We're deep in recession and they knew it.
We're deep in recession and they blew it.
We're deep in recession and they knew it, we're out of time.
Set your clocks - Bitching hour. Didn't pay bill got no power.
Read and learn, concern, try to make yourself yearn.
Don't just be uniform and disconcerning, unforgetting.
Every effort escalates. Voices now improve our fate.
Light a candle, save the voltage. Don't clown, don't clown.
Don't get dreams crushed, crush.
Oh yeah, this seems so clear - new frontiers. Fight for aid with no fear!
They should regret, they should regret, they should regret, those lies.
Re-offer some solutions; re-offer us alternatives, a new design.
(Chorus)
We're deep in recession and they knew it.
We're deep in recession and they blew it.
We're deep in recession and they knew it, we're out of time.
(It's time we got thrown a bone)
(Repeat)
We have our rights, don't skip an instrumental plan to provide.
What will give delight? Calm, like fine wine.
Recover from the dead, stimulus, and safer banks.
Unite parties, no fakes, money back, soon!
Not alcoholic, patriotic, scams, in check, right? Fight!
(Chorus)
We're deep in recession and they knew it.
We're deep in recession and they blew it.
We're deep in recession and they knew it, we're out of time
Will floating freely hurt us after a while????
The decision of changing the market cap based index calculation to free float index is a good one considering the objectives of having a stock Index in any country.
The main objective if we define is to capture the overall market picture that is to say an ideal index would be one whose movement would be highly correlated to all possible portfolios in the market.
SO to have a correct picture of the MARKET the shares which are traded in actual market should be taken into consideration and not those which include shares held by promoters, strategic holders, government, etc.
Even though the change in process might hurt some stocks due to low weightage but it will give us the true picture and transparent results in future.
The main objective if we define is to capture the overall market picture that is to say an ideal index would be one whose movement would be highly correlated to all possible portfolios in the market.
SO to have a correct picture of the MARKET the shares which are traded in actual market should be taken into consideration and not those which include shares held by promoters, strategic holders, government, etc.
Even though the change in process might hurt some stocks due to low weightage but it will give us the true picture and transparent results in future.
Saturday, July 4, 2009
Investing in India
The reason why International Companies like Pearson are entering the Indian education sector is:
India has a huge untapped market and hence has huge scalability.
We can see a lot of international exposure to Indian education sector by having proper regulations in place for foreign universities to enter the Indian market. Stanford University and Oxford University have shown interest in setting up campuses in India and hence this matter should be looked into very carefully and act upon it immediately.
If these matters are taken care of then we can stop high percentage of high potential students to go out from India for pursuing their desired career training.
Investment in the sector will go up with liberalisation of the sector especially the formal education sector (Primary, Secondary, Higher Secondary and Higher education)
India has a huge untapped market and hence has huge scalability.
We can see a lot of international exposure to Indian education sector by having proper regulations in place for foreign universities to enter the Indian market. Stanford University and Oxford University have shown interest in setting up campuses in India and hence this matter should be looked into very carefully and act upon it immediately.
If these matters are taken care of then we can stop high percentage of high potential students to go out from India for pursuing their desired career training.
Investment in the sector will go up with liberalisation of the sector especially the formal education sector (Primary, Secondary, Higher Secondary and Higher education)
Edu SECTOR in India- is it neglected??
Few things that Indian government is looking forward in education sector at the present scenario are as follows:
1. Increasing the quality of education in Indian schools to raise up the standard of Indian education at par with that of the global education. Global education emphasizes on technical education rather than just preliminary education.Hence, special emphasis is on industry ready professionals.Improving quality of education would mean having a good standard of trained teachers in place along with a good infrastructure in place which can be ensured by optimum utilisation of additional funds being allocated for the same.
2. Successful completion of increasing number of higher educational institutes in India would increase the number of students having higher education which will increase the market size of Indian education market.
3. Increasing literacy in the past years shows an improvement in the primary education market in India. That doesnot imply much improvement if we take into consideration the rate of drop outs at upper primary level.The number of primary education schools are being increased but there is a lack of adequately trained teachers and infrastructure.
3. The high percentage of private schools in India and an increasing number of enrolment in the same means a high acceptability of the same by public. PPP is in a prominent growth phase in every sector of India and hence Education sector should be no exception. PPP would ensure high standard of education in the country.
The increased fund outlay for Sarva Siksha Abhiyaan in the recent years show no negligence by Indian govt. on the improvement of the standard of education. But how is the literacy measured in an economy?? We do see increase in the literacy rate in the country but how effective are these figures?? please find out....
1. Increasing the quality of education in Indian schools to raise up the standard of Indian education at par with that of the global education. Global education emphasizes on technical education rather than just preliminary education.Hence, special emphasis is on industry ready professionals.Improving quality of education would mean having a good standard of trained teachers in place along with a good infrastructure in place which can be ensured by optimum utilisation of additional funds being allocated for the same.
2. Successful completion of increasing number of higher educational institutes in India would increase the number of students having higher education which will increase the market size of Indian education market.
3. Increasing literacy in the past years shows an improvement in the primary education market in India. That doesnot imply much improvement if we take into consideration the rate of drop outs at upper primary level.The number of primary education schools are being increased but there is a lack of adequately trained teachers and infrastructure.
3. The high percentage of private schools in India and an increasing number of enrolment in the same means a high acceptability of the same by public. PPP is in a prominent growth phase in every sector of India and hence Education sector should be no exception. PPP would ensure high standard of education in the country.
The increased fund outlay for Sarva Siksha Abhiyaan in the recent years show no negligence by Indian govt. on the improvement of the standard of education. But how is the literacy measured in an economy?? We do see increase in the literacy rate in the country but how effective are these figures?? please find out....
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