1

CHAANAKYA Issue 20| February 2019

INSTITUTE OF MANAGEMENT …for social change

2

Table of Contents

Editorial Note

1

Finance Club Activities - February 2019

2

Faculty Corner: January-February 2019

3

Students’ Corner: January-February 2019

4

Indian Stock of the Month

5

Woman Power at Estee Lauder

6

Sustainable Bonds

7

Rich Dad, Poor Dad (Book Review)

8

What After Retirement

9

The Wolf of Wallstreet (Movie Review)

10

Surprise Finance Facts

11

Things to do once you start earning

12

Economic Numbers Speak

13

1

Editor’s Note

Greetings readers! It is our pleasure to bring to you the contributions of the first year Finance student writers for the month of February 2019. The writers have put in their efforts on different topics and laced it with their creativity to put forth a variety of content ranging from highlighting the achievements of financial leaders and companies to noting the recent financial innovations and economic numbers. The issue also offers a brief overview of the recent regulatory announcements and actions as well as the unfortunate frauds that happened. We believe that this newsletter will provide you with a quick and balanced insight of the recent financial activity as well as a peek into the students’ co-curricular activities held through the Finance Club. Team Chaanakya expresses sincere gratitude to our Dean, Dr. Suniti Phadke, Head of Specialisation, Prof. Mareena Mathew, Faculty co-ordinator Dr. Priyanshi Gupta, our expert specialisation mentors and all the contributors whose active co-operation made this issue possible and fruitful. PASSIONATE TEAM Wishing our readers, a happy reading. Best wishes, Team Chaanakya

2

Activity No. Date Details

1. 1st February 2019 Finance club activity- Fintionary (guess the financial

word)

2. 8th February 2019 Finance club activity- Mock Auction

3. 12th February 2019 Corporate Interface on Wealth Management by Mr. Nithin Sasikumar,

4. 14th February 2019 Session on TrakInvest Virtual Trading by Ms. Urvi Babla,

Global Marketing Head.

5. 15th February 2019 Finance club activity - Finance board game.

Finance Club Activities: Feb 2019

3

Activity No. Date Details

1. 11th January 2019 Prof. Krishna MC attended a case study workshop in

Christ, Lavasa Campus, Maharashtra.

2. 18th -22nd January 2019 Dr. Bikramaditya Ghosh attended winter school at

Amsterdam, Netherlands.

3. 19th January 2019 Dr. Latha Ramesh attended seminar on “Valuation for

Startups” at IIM Bangalore.

4. 18th – 19th January 2019 Dr. Aparna Hawaldar attended an MDP on Marketing at

Institute of Management, CHRIST.

5. 30th January 2019 Dr. Aparna Hawaldar conducted an Acadex session on the

software Dedoose at Kengeri campus for HR

specialization students.

6. 30th February 2019 Dr. Priyanshi Gupta presented a research paper at

Research Colloquium held in Kengeri Campus.

7. 9th February 2019 Dr. Latha Ramesh and Dr. Aparna Hawaldar presented

research papers at NMIMS-TIES conference.

8. 15th February 2019 Publication of Book by Dr. Bikramaditya Ghosh.

9. 17th February 2019 Paper Publication - Management Accountant on

Corporate Governance by Prof. Aparna Hawaldar.

10. 19th February 2019 >Paper Publication by Prof. Mareena Mathew

>Article Publication in Deccan Herald by Prof. Latha

Ramesh on P2P lending.

11. 20th February 2019 Dr. Priyanshi Gupta and Dr. Bikramaditya Ghosh

presented research paper on Research Colloquium held

in Main Campus

Faculty Corner: Jan-Feb 2019

4

e of the eventruary 2

Students’ Corner: Jan-Feb 2019

Sr. No. Date

Organiser (Institute/college/university) Student Name Award Won

1 11-01-2019 St. Joseph College Harika Nalla Third Prize in Communal Pioneerdom

2 18-01-2019 IBS Selina Sourya Pattnaik Runners-Up

3 18-01-2019 IBS Shubham choudhari First prize

4 25-01-2019 Amrita School of Business Komal Kumar P First prize in Kaizen

5 25-01-2019 Jain university Surbhi Jaiswal First prize in business quiz

6 25-01-2019 Amrita college Vijayaraghavan V First prize in Kaizen

7 25-01-2019 Amrita School of Business Priyanka Hebbar Second Place in Kairos

8 08-02-2019 XIME Antony Francis First prize in

9 08-01-2019 XIME Amulya Anand First prize in Fintiative event

10 08-02-2019 XIME Vibin V Runners Up in Quintessence

11 08-02-2019 XIME Athira S Raj Runners Up in Best management team

12 08-02-2019 XIME Abhirami P Nair Runners Up in CSR Event

13 08-02-2019 XIME Sheikh Yusuf First prize in Best Manager

14 08-02-2019 XIME Priyanka Mishra First prize in Finitiative

15 08-02-2019 XIME Sara Susan First prize

16 16-02-2019 Thiagarajar School of Management

Sivarangareddy P

Runners up in Finance event in Yukti

17 26-02-2019

MATS Institute of Management, Jain University Anusha Agarwal

First Prize in Best Management Team

5

Bajaj Auto is the best stock performer for the month of Feb 2019 when compared to other stocks among 30

stocks in BSE SENSEX. This is shown in the table above as there was 9.75% gain respectively for Bajaj Auto. The

main reasons are mentioned below:

1. The increase in tax exemption to Rs.5 lakhs and standard deductions increasing to Rs.50000 are

expected to increase consumption of automobiles.

2. Before RBI’s Policy on providing flexibility to NBFCs, the auto shares of Bajaj Auto went up to 2.88

percent on Feb 6th.

3. Bajaj Auto’s share price was down for some time due to the non-response in effective handling

of the scrap dumped items for recycling purpose.

4. There was a buy call for the shares of Bajaj Auto, showing the sales up of Rs.6246.23 Crore that

is 15.96% in the same quarter and net profit after tax of Rs.1101.16 Crore.

5. Improvement in ROA, Net Profit Margin, Cash Ratio, Debt Equity Ratio and Cash Flows to Long

term debt along with focusing on internal strength than external weakness, helped in maintaining

good share price during the month.

Maria Reyona Joseph

MBA-H

Indian Stock of the Month

Stock 01-02-2019

20-02-2019

Change%

Bajaj Auto 2560 2809.65 9.75%

BSE Sensex

36311.74 35756.26 -1.53%

Sources:- yahoo finance; economic times, moneycontrol.com

6

Woman Power at Estee Lauder

Ms Tracy Travis is serving as the CFO and the Executive Vice President of Global Finance and Strategy of The Estée Lauder Companies Inc since August 2012. She has been lauded by several for her strategic thinking and her tenacity. She is responsible for global finance, accountancy, investor relations, information technology and strategy. She has also been part of several Fortune 500 companies such as Ralph Lauren Corporation, PepsiCo, Accenture etc. She holds an MBA in Finance and Operations Management from Columbia University and Bachelor of Science Degree in Industrial Engineering from the University of Pittsburgh. Her 2016 initiative “Leading Beauty Forward” to reallocate cost structure to invest in future growth was a huge success with the company’s net sales and earnings shooting up by 5% ($ 11.8 billion) and 12% ($ 1.25 billion) respectively compared to the previous year. FY 2018 was a year of robust sales and the profits increased by 25%. She also spearheaded Estée Lauder’s largest acquisition till date, Two Faced Cosmetic for $ 1.4 billion. She is truly an excellent role model for all young girls and women around the globe. She was named as one of the top 25 women in finance by the Treasury and Risk Management magazine in 2005 and in 2012 as one of the 100 most influential people in finance by the same magazine. In 2008 she was awarded the Best CFO Award by Institutional Investor magazine. In 2009 she made her place in the list of the top 100 African-Americans in corporate America by Black Enterprise magazine. In 2009, Ms. Travis was felicitated with a Distinguished Alumni Award from her alma mater, the University of Pittsburgh. In 2011, Ms. Travis was chosen to serve as an inaugural member of the Wall Street Journal’s CFO Forum.

REFERENCES: http://www.cfo.com/leadership/2018/09/time-to-shine-cfos-watch-2018/ https://www8.gsb.columbia.edu/about-us/board/tracey-travis https://www.bloomberg.com/research/stocks/people/person.asp?personId=1112153&privcapId=207221

Aparna R Rao

MBA-V&W

➢ She has authored as well as co – authored 17 books, the most popular called “Being Successful”.

➢ She has been part of acquisitions of licensed brands/geographies, capital structure efforts, strategic

business plans, investor relations strategy and a major global systems transformation.

Ms. Tracey Travis

7

Sustainable Bonds

FINANCIAL PRODUCT OF THE MONTH FEBRUARY

Do you know the fact that Universities abroad

issue bonds? Well, On February 11th 2019,

Concordia University became the first Canadian

university to issue a sustainable bond.

How does this financial product work?

Concordia’s $25-million senior unsecured bond offers investors a 3.626 per cent yield and

has a duration of 20 years — the longest for any sustainable bond in Canada, according to

Denis Cossette, the university’s chief financial officer. The bond will be used to reimburse the university of the

capital it spent on financing its Science Hub, which will be home to aquatic biology, microscopy, cellular imaging

and chemical and materials engineering labs for researchers. The majority of US universities opt for municipal

bonds, a financial vehicle traditionally preferred by US states or cities. The benefits are immense for institutions

with an eye on the future rather than short-term profit, said Emily Wadhwani, an analyst at Fitch Ratings, a credit

rating agency: “Municipal bonds have a lower cost of capital and wide market reach, as compared to other

financing vehicles

How did this product come into existence? Earlier there used to be a lot of public funding to the universities in

the USA. In the recent past there has not been much of a contribution from the public domain. Unlike India they

don’t collect capitation fee or any building fund as such or they burden it on the tuition fees collected by students.

Like how companies raise capital through debt, universities now have come up with a way to raise capital.

However there have been cases where universities come under a lot of debt burden and inflate the fees a bit. The

next big bubble according to Peter Thiel will be the student loan bubble in the USA, with $1.4 trillion debt

piled up in the system. It is relatively easy to get a student loan in the US, with a lot of subsidies being provided

to the students, and the banks being obliged to lend. Hence universities abroad have inflated its fees at will.

Why would people opt for such an investment? Unlike India there is an active participation in the bond markets

in the western countries. It clearly outpaces the 2.1 per cent being offered on the Canada 20-year Government

Bond. The U.S. 20-year Bond is yielding 2.9 per cent. Last year there was an ethical investing wave that saw the

country’s largest institutional investors more than quadruple their output in social and eco-friendly bonds.

A market under construction. Higher education is the new frontier for the bond market, as an increasing

number of universities issue bonds to finance debt or investment. Data held by Dealogic, a financial data

provider, shows that the value of bonds issued by education providers worldwide nearly trebled from $2.2bn in

2007 to $6.4bn in 2017. Some of the biggest US universities, including Harvard, Yale, MIT, Stanford and

Princeton, feature in the list of top borrowers. In most cases, the money is spent on brick-and-mortar operations,

from student residences to football stadiums and libraries.

JOSEPH ROSHAN SIBY

MBA V&W

8

“Rich Dad, Poor Dad” is authored by Robert T. Kiyosaki and Sharon Lechterand was first published in 1997. The book speaks about the financial knowledge that should be taught from an early age for effectively managing one’s wealth. The book is an eye opener as to how the rich manage their wealth and takes proper planning to retain it while the poor ends up losing even the small earnings they have earned. The story is narrated through two contradicting personalities -Rich dad and poor dad. Poor dad is the author’s father and the rich dad is the father of the author’s best friend. As a young boy the author felt intimidated by his rich classmates. He was driven by the passion to make money but little did he know of how to make money. He asks his dad for advice but he was not satisfied with his answers. He turns towards his friend’s dad who turned out to be rich business man in the area. The author listens to him but

enters into a dilemma with a contradictory view of his father and the rich man. The rich man’s advice however turns out to be his life lessons he practised. The lessons from the rich dad provided valuable insights to the reader. For those who are afraid of investing, Kiyosaki says the more knowledge you have about your investment, the less risky it becomes. It is very important for the person to understand the investment one has to deal with. The author however says that it is not formal education that brings knowledge but the work in the field that equips a good investor. He mocks MBA graduates referring to them as “Bean counters” who aggressively cut cost and inflate prices and thereby kills the business. Even though the book was published in 1997, it is still valid to the current situation as well. Even though Indians are known to be good savers but Indians are not up to the mark in the matter of investing. Indians are overspending in gold and other assets which do not have long term intrinsic value. Reading "Rich Dad, Poor Dad" convinces reader to stop having the mentality of working for money. Instead, Kiyosaki has made me realize that dealing with money isn't as intimidating as I thought and that the more I learn, the easier it is for me to take control of my finances. The author highlights the absence of an education system that teaches financial literacy and knowledge along with the normal academic subjects. This is a very relevant fact in India where financial literacy is considered only for students in the finance domain. According to a survey by Live Mint, 76% of adults don’t know about basic financial concepts. It is high time to change our system and bring up a society with sound financial knowledge. As finance students at IMCU I would like the students to introspect the role they can play to help our society.

Rich Dad Poor Dad (Book Review)

• For those who are afraid of investing, Kiyosaki says the more knowledge you have about

your investment, the less risky it becomes.

• Even though Indians are known to be good savers but Indians are not up to the mark in

the matter of investing.

• Reading "Rich Dad, Poor Dad" convinces reader to stop having the mentality of working

for money.

• The author highlights the absence of an education system that teaches financial literacy

and knowledge along with the normal academic subjects

Arun Jacob MBA I

9

What After Retirement? Just like old age retirement is a fact that everyone has to face and for middle class people who are mostly

dependent on their monthly salary for their livelihood, retirement is a nightmare for them as the monthly cash

flow will come to a stagnant leading to liquidity crunch for meeting unprecedented medical expenses and other

personal needs. Efficient planning and judiciously investing in funds that beat inflation will help to manage your

retirement effectively. Here I have discussed some financial services predominantly useful for retirees.

➢ Pension Loan

Pension loans are the loans that you can take against your pension this will help retirees to meet their

emergency requirements, mostly only public sector banks such as SBI, PNB, Union Bank, Dena Bank, Vijaya

Bank offer such services. 10-18 times pension is offered as the loan amount and loan amount depends also

on the age of pensioners. Spouse of the main pensioner is also eligible for loan but the amount being

restricted. Tenure of repayment ranges from 24-60 months.

➢ Retirement Funds

There are a handful of retirement services available which help us to plan our retirements better, besides

these services can help retirees to save your tax money under Section 8OC. Moreover, they come with 3-4

variants according to investor profile, like pure equity, pure debt, hybrid aggressive, hybrid conservative

each having unique asset mix according to the risk profile of investors. ICICI Prudential Retirement Fund,

HDFC Retirement Savings Fund, TATA retirement fund are few best players in market.

➢ Reverse Mortgage

Reverse mortgage is most suitable service for asset rich but cash poor senior citizens where it helps them to

meet their day to day needs by the monthly payment, they get over their asset (typically house), only senior

citizens are eligible for reverse mortgage also residual life of property should be at least 20 years. 50000 cap

is set for monthly payments and 50% of the loan amount being maximum lump sum limit. However, the

borrower has the obligation of maintaining, insuring and paying of all property related taxes.

Reference

• https://economictimes.indiatimes.com/wealth/invest/should-you-invest-in-retirement-funds-to-save-for-your-old-age/articleshow/68020784.cms

• https://premium.thehindubusinessline.com/portfolio/personal-finance/the-pros-and-cons-of-loan-against-pension/article26296159.ece

https://www.livemint.com/Money/3ExMaNycbKkzQXpDS72w7O/WHYREVERSEMORTGAGE-IS-UNPOPULAR.html

Deepak Nandakumar

MBA I

Key words

• Financial service for retirees

• Reverse mortgage

• Pension Loan

• Retirement Funds

10

The movie depicts the life of a true-life character Jordan Belfort who made great fortunes from the stock

markets. The character enters into the world of stock market as a stock broker.

Here Mr. Belfort is being advised by his senior that a stockbroker’s ultimate aim is

to make money for oneself. Mr. Belfort also involves himself in substance abuse

and various other activities thus losing control and discipline in his life. Mr. Belfort

along with his friend founded Stratton Oakmont and they started recruiting their

friends by teaching them the art of selling. Over a period of time his firm started

selling Blue chip stocks and IPOs. His company grew really well where a bunch of

sales executives trained on how to make huge commission by trading their

customer’s stock and not by making a proper portfolio for them. His firm is brought under the scanner when his

firm makes $22 million in 3 hours by securing an IPO illegally. After serving his sentence in the prison Mr. Belfort

makes a living by organizing seminars on different sales technique.

The movie is based on The Wolf of Wall Street (book), it is a memoir authored by Jordan Belfort himself. The

spoils he gained after embezzlement of funds is extravagantly showcased. The movie has a fast pace, this is to

accommodate the entire run of events in a short duration. This movie directed by Martin Scorsese, has

incorporated the dark side of the portrayed characters and also blends in an Antihero theme rather than a

conventional “villain” theme. Martin Scorsese has directed hits such as Goodfellas (1990), Taxi Driver (1976) etc.

Leonardo was deliberately mis casted as the lead antihero to focus on what the book lacked in. The book failed

to showcase what effects the public had due to the abuse of the financial system. The movie succeeded in

making Leonardo (lead role) the face of the systematic abuse of the financial system for illicit gains. The pace of

the movie is consistent with a clear objective of depicting the life of extravagance and drug abuse. The movie

altogether has a clear objective of depicting the consequences of being unethical and vying for illicit gains.

The Wolf of Wall Street

(Movie Review)

H KRISHNAN MBA-I

Not concentrating on the customer in creating a proper portfolio for the customer.

Illegal money laundering by Jordan Belfort.

Lack of discipline in life that affected his work relatively.

Self-Centered Business motives which can harm the individual or the organization as a whole

11

Surprise Finance Facts

References: https://rbi.org.in/Scripts/ms_anecdotes.aspxhttp://www.aabri.com/manuscripts/172590.pdf https://www.cnbc.com/2019/02/13/jp-morgan-is-rolling-out-the-first-us-bank-backed-cryptocurrency-to-transform-payments--.html

Priyanka Hebbar

MBA- V&W

India's GST is based on the Canadian

model.

Vijay Mallya is the first person to be booked under a new law (Fugitive Economic Offenders Act) to deal with those who commit financial

crimes

JP Morgan is the first major United States

bank to create its own cryptocurrency

‘JPM Coin’

The word “bankrupt” is from the Italian ‘banca

rotta’, which means ‘broken bench’

The East India Company Double Mohur was the

inspiration behind the RBI Seal (Logo).

The Coinage Act of 2011 allows issuing of coins up to a denomination of Rs. 1000.

Parents(either father or mother not both) are

allowed to open a Public Provident Fund (PPF)

account on behalf of their minor child?

‘Pygg’ is an orange colored clay that was used to make

jars and dishes that held money. The word eventually morphed into “piggy bank.”

In order to provide monetary needs for

Research scientists, Wells Fargo established the ATM

at McMurdo Station, Antarctica.

12

I was in 8th grade when my ammi started giving me 200 Rs a week for my travel expense of which I required only Rs.150 a week. So technically I had Rs.50 every week as my pocket money. I used to set aside money in a piggy bank. From then, the only way I knew to earn was by setting aside money till you have enough to buy what you want. But, then I chose commerce for higher studies learned how to make money from money. 9 out of my 10 friends knew how to earn money but none of them knew how to manage money. They managed to go broke by 20th of every month. This is true for almost everyone who has an intention of working at any point of their life. Here are some ways through which you can save your money without cutting down on life. 1) Do Not Use Money as a Distraction- The

problem with our generation is that we use money

to get over our stress and insecurities. We often use

money to get over our stress and insecurities by

spending on shopping (so called retail therapy),

cigarettes, junk food etc. Suppose in 1 month you

spend 200 per day so one month it amounts to Rs.

6000 and in a year it amounts to Rs.72000. If you

had invested it in mutual funds then you can get up

to Rs. 4.9 lakh sin 2.5 years. Imagine the travelling

you can do with it!

2) Pay Less- Paying less doesn’t mean you have

to bargain every time you shop. In fact, it is

somewhat absurd to bargain with a street vendor

while holding a phone worth Rs. 80,000! Paying less

means spending your money smartly. It means, for

example, to use uber pool to commute to work and

using methods of payment where you pay less for

the benefits earned.

3) Cook at Home- Lets do a quick math- The

average amount spent on food is- Rs.450 (Breakfast-

Rs.50, Lunch-150, Snack-50 and Dinner =200). Now

in a month it adds up to Rs. 13500. So do a math and

you will realise how much you can save if you start

making your own food rather than buying junk food.

This is both health friendly and pocket friendly.

4) INVEST IN YOURSELF- Use money smartly by

investing in self-development because the most

important asset is you yourself. Investment in self

pays the best interest.

It is said that the best and the worst financial

decisions are made on the first of every month. So,

if you want to save money then you need to do

these things on the first of month. Do the below

steps and it will help you invest wisely-

1) Pay Your Bills at Beginning of Month- Paying

them off at start of a month will lower your burden

and you won’t end up paying extra as fine.

2) Set aside the amount you want to save-

Suppose you earn Rs. 30,000, Subtract the money

you need in a month for food, rent, bills etc, save the

rest and follow the financial discipline to save the

amount allocated for per day expenses.

3) Impose A Luxury Tax On Yourself- So suppose

on a lousy day you spend 2k on junk food, or

alcohol or impulsive shopping, then 50% of the

amount you save in next month. So, continuing

our example, you save Rs. 9000 plus Rs. 1000 so

total Rs. 10,000

4) Bonus Tip- there are thousands of investment

opportunities in market. But first create an

emergency fund- DO NOT TOUCH THIS

EMERGENCY FUNDS. Also keep it as liquid as

possible and easily accessible for you

Jeen Mariyam Joy MBA V&W

Things to do once you start earning

Everybody knows to make money, but only few know how to make

money from money. So, which side do you belong?

13

Economic Numbers Speak Economic

Indicator

Jan 15,

2019

Feb 15,

2019

%

Change

Comments

SENSEX 36,318.33 35,808.95 -1.40% The loss in the Oil & Gas, IT and Technology industry pulled down the prices of the index as well. India’s key indexes capped their worst weekly decline in nearly four months.

Nifty 50 10,805.45 10,724.40 -1.49% The metal, healthcare and auto sector shares fell in February which caused Nifty to fall by 0.20%.

S&P 500 2,610.30 2,775.60

6.33% The index performed well mainly because of the progress in the US-China trade deal. In February oil prices boosted the prices of energy stocks. These events contributed to the 6.33% gain in the S&P 500 index.

FTSE 6,895.00 7,236.68 4.96% The positive news from the US-China trade deal and the positive quarterly performance of Nestle, AstraZeneca and Airbus have led to gains on the index.

Gold 29,490.40 30,343.70 2.89% The gold prices were trading at a higher rate on February 15th, 2019 but were steady during Trump's speech about the Sino-US trade deal and due to the wedding season demand in the Indian market.

Oil 3,698.00

,

5.73% The oil prices rose as there were chances of a global slowdown. In addition to the slowdown the prices rose on account of the Venezuela oil crisis.

INR to

USD

71.10 71.36 -0.36% In early February the rupee value fell drastically ahead of the RBI's policy review meet. The rupee value also fell because of the rise in crude oil prices and losses in Asian currencies.

Repo Rate 6.50% 6.25% 3.8% With the RBI's new monetary policies coming out on 6th February,2019 the repo rate will reduced to 6.25% and this expected to reduce cost of borrowing in the economy and will boost growth.

Indian 10-

year Bond

rate

7.47% 7.57% 1.30% The increase in the Indian 10-year Bond rate shows us that the Indian economy is not performing well. The increase in bond yield indicates that the bond prices have fallen and this is not a good indicator for the economy.

ARADITHA CARMEL ROYAN MBA V&W

14

Newsletter Team

H

Headof Specialisation:

Prof. Mareena Mathew

Faculty

Coordinator:

Prof. Priyanshi

Gupta

Amulya

Anand

1827536

Chandana

N

1827739

H

Krishnan

1827613

Rohini N

Sharma

1827652

Sherin

Varghese

1827655

Zeba

Ayesha

1827659