Investment

Keeping up With Indian Economics From Home

December 5, 2010 By admin Leave a Comment

: Image via Wikipedia

If you’re interested in economics, particularly in India, you can keep up with what’s taking place right from the comfort of your own home. You don’t have to go out into the world to know what’s taking place in it, and you don’t even have to leave in India to keep track of the things that are going on in its economy. If you don’t have a good computer, though, you can have trouble staying up with those kinds of things, because the Internet is the best place to get good information.

Make sure your computer and Internet provider are capable of handling all that you want to do. You may need to get a faster Internet speed, update drivers, download a new program, or make other changes to get what you’re looking for, but you can certainly find the information that you want about the Indian economy. Also, keep in mind that there are many sources of information and that some of them are more legitimate than others. If you aren’t sure about the source you’re getting your information from, it’s a very good idea to check with other sources so you get the entire story.

That’s especially true if you have a business that will be affected by the Indian economy or if you’re thinking of investing in it. You don’t want to end up losing money because you’re not paying enough attention to the kind of information you’re getting and where it’s coming from. Even one bad investment or business decision can be quite costly, so be sure that you know what you’re doing and that you get an advisor to help you if you need it. That way, you’ll be able to make the right choices, learn what you need to about the Indian economy, and be better-prepared to move your business and investments forward.

Filed Under: Imports & Exports Tagged With: Asia, Business and Economy, Economic growth, Economy of India, Government of India, India, Investment, Manmohan Singh

India: An Ideal Place for Investment

November 12, 2010 By admin Leave a Comment

: Image via Wikipedia

From a “developing nation,” India has become a serious contender for superpower status. Like building credit after bankruptcy, India has painfully and slowly rebuilt its economic status. Believe it or not, there’s even celebrity bankruptcy in India. Strong growth in industrial sectors, increased consumer confidence and changing global sentiments have made India a favored destination for investors. According to a report submitted by The United Nations Conference on Trade and Development (UNCTAD), India ranked third in foreign direct investments in 2009. The report predicts that in the coming years, the country will be among the top five destinations for foreign investments. Japan, the U.K., U.S., Canada and many other top players consider India to be the next big ticket for investments.

There are many good reasons for investing in India. India is one of the largest economies in the world. Its strategic location gives access to a large South Asian market. Low cost skilled labor along with professional managers, no tax on profits from exports, rich mineral and agricultural resources, balanced fiscal incentives, consumer power, a stable and dependable democracy with a benevolent social outlook, and a large English speaking population make it very attractive to foreign investors.

The health care industry in India, for instance, has one of the largest numbers of Joint Commission International (JCI) approved hospitals outside the U.S. The IT sector has made India a power to reckon with, and it’s expected to grow around 15.5 percent by the end of this year. The telecom industry has been the most favored player for foreign investors, with the rural market still remaining largely untapped. According to the BMI India Retail Report, the total retail sales are expected to grow from $353 billion US in 2010 to $543.2 billion US by 2014.

Among the 200 companies that are part of the Global Growth Companies (GCC), India has the second highest representation with over 18 companies. And that says it all.

Filed Under: Business Culture Tagged With: Foreign direct investment, India, Investment

Investing in Agriculture: Indian Economics

November 10, 2010 By admin Leave a Comment

: Image via Wikipedia

No company can sustain itself on weak profits, the timid quarters. Numbers do not favor businesses – they instead reflect the always pressing need to seek out investments and new ideas, transforming simple dollars into genuine revenue. And this has caused many to consider India and its opportunities; specifically those relating to the agricultural industry.

The sheer mass of a nation has lent itself easily to the production of wheat, dairy products, forestry and more – each of which is exported throughout the world, sent to countries that have limited resources and no way to meet their publics’ demands. Indian economics therefore is dominated by agricultural; and this has led it to become a solid investment for those who wish to improve their finances and strengthen their companies.

The reasons are as reliable as they are obvious:

One: Certainty. No investment can be deemed wise unless there is faith in its returns. Assurance must not be assumed. It must instead be known, with no danger of a product suddenly becoming obsolete. The value of Indian crops has enabled them to become second among the world’s exporters. This allows for a guarantee in investing and seeing a subsequent profit.

Two: Multiple resources. The purpose of filtering dollars through outside sources is to generate higher rewards. This can rarely be accomplished by a singular effort. It instead requires a variety of investments – and India allows each of those to reflect agriculture. Farming, timber and more can be sought.

Three: Stability. There are to be few risks in finance. The intention is to find security, not frustration. Indian economics have been steadily rising throughout the decades, offering any potential investors to feel safe with their decisions. The market is deliberate, not wild.

There was once an assumption of refusing India, believing it to be too great a concern. Now, however, companies are understanding the infinite value to be found there. It’s a gain of profits and ease.

Filed Under: Economic Growth Tagged With: Asia, Barack Obama, Economy of India, India, Investment, Manmohan Singh, New Delhi, United States

The Caution and Patience of Investing In India

November 5, 2010 By admin Leave a Comment

: Image by Getty Images via @daylife

Expanding your money means having to put your money to work. There are a lot of ways that people can move their money around in their favor but with every move comes a potential pitfall. Investments are a great start to the money making process, and are essential in moving yourself from comfortable to wealthy. You can invest in a business, like your friend’s restaurant, but that isn’t always recommended. The other thing, and the more logical investment, is to invest in the markets.

With the potential to invest in the markets there are many investors who believe that investing in the United States market is a trap and therefore would rather sink their money into foreign markets like the Indian economy. There is a lot of reason to be excited about the potential to invest in India. It’s a country that has a very strong economy and its wealth is building every day.

Still, investing in a foreign market is a risky endeavor if you aren’t doing your part to research the market. If you want to get serious about investing in a country like India, then you need to make sure you know what you are getting into.

The first thing you want to do is stay away from any single stocks. India might have a company like Nike that does really well but if you don’t know anything about its presence in that country and what the long term prospects of it are then you might want to steer clear of it.

The best advice you can get is to invest in the country as a whole. Find funds or stocks that are tied in to the performance of the whole market. If you can do that then you are limiting the chances of losing your money.

Filed Under: Industries Tagged With: India, Investment, United States

Foreign Direct Investments: Indian Economics

October 24, 2010 By admin Leave a Comment

: Image via Wikipedia

The notion of countries trading wares and services is not uncommon. The world has seen an increase in such processes, with borders blurring and financial markets becoming entwined. Economic success is no longer deemed an isolated thing. It is instead the product of much compromise – and nations place their trust (and dollars) in each other, taking advantage of resources and laborers.

In recent years, however, India has become a considerable recipient of such progress. With its vast miles, abundant agricultural possibilities and impressive population (second only to China and capable of supporting any potential business), it has been chosen as an industrial destination – with countless countries seeking to reap its many rewards.

This is known as foreign direct investments and should be understood by all; if only since its relevance is quickly rising among the global economy.

Defined simply: foreign direct investments are the efforts between two individual countries, relating to their participation with labor, expertise and profits. This is most commonly seen within the process of outsourcing. Companies will transfer certain positions overseas, finding the benefit of specialized help and lower costs. They then in turn provide a guarantee of jobs and increased benefits to employers.

It is a symbiotic relationship and assists in stimulating productivity. Indian economics is now defined to it, ranking second in the world for outside investments (only China receives more as of 2010 and this is expected to change within the following decades). Billions of dollars each year are generated through the cooperation of differing nations – and this has secured the market, allowing it to grow beyond any assumption.

Foreign direct investments contribute to one third of India’s economy. This is an impressive percentage that is predicted to increase throughout the impending years. The advantages of choosing this country are simply too well known within the world. A decrease is the most unlikely of scenarios.

Filed Under: Economic Growth Tagged With: Asia, Business, China, Economy of India, Foreign direct investment, India, Investment, United States

Business Finance Investments in IT: Role of IT Service Management

October 6, 2010 By admin Leave a Comment

: Image by pittigliani2005 via Flickr

Total cost of ownership is a concept that shows an asset’s real worth. People make the mistake of basing an assets business finance worth on its contract values. Cost potential arises from a variety of possibilities that the asset might be subject to. Even difficult is to calculate the return of business finance investment. Investment values and asset values can be derived from the return-of-investment (ROI) indicator. But ROI sometimes ignores the costs associated with invested business finance.

IT infrastructure costs are constant. Technology upheavals are not overnight affairs. They take time, resources, and sound business finance investment discretion. Many a times, in the mundane chore of carrying out IT tasks, experimentation is kept on the backburner. Controllable as it might seem, IT costs on normal infrastructure maintenance and repair is never assessed for a cost recovery. Presumably, IT business finance theorists feel that IT costs can be reined when the need arises.

So how can a mechanism be established that controls and balances out IT costs? Measures for this are still out in the desert. Considering that IT costs are never in the scheme of things of business finance returns on investment.
In organizations, managements fail to understand the direct and indirect benefits of business finance investments in some areas. IT is one of those. IT is most often than not seen as a support activity. Business finance revenue is not directly attributed to its presence or absence. Now perspectives are changing with the inclusion of IT Service Management (ITSM) in the scheme of things. IT service management deals with the management of IT infrastructure. More on the customer-centricity front, ITSM seeks to map IT directly to business goals.

ITSM allows companies to make more purpose-driven business finance investments. Competitive advantage being built notwithstanding, companies now can crisscross roads of business with the roads of IT. By doing this, companies will arrive at business finance cost models that leverage the linking up of IT with drivers of business goals.

Therefore, ITSM seems to be an excellent choice for companies to standardize their IT business finance decision making.

Filed Under: Business Culture Tagged With: Business, Corporate Finance, Financial services, Investment, IT service management, Rate of return, ROI, Total cost of ownership

Understanding Liquidity Risk

September 18, 2010 By admin Leave a Comment

: Image via Wikipedia

In business finance, any security/asset/investment that has a good salability value has less liquidity risk. Anything that can be easily realized as money in less time is a highly liquid asset. Assets that are not highly liquefiable have high liquidity risk. Though simple in definition, understanding liquidity risk is like a universe. It is vast, and sometimes unsubstantiated.

When the odds looks stacked against a business, it might be forced to go for asset liquefaction. Inability to sell assets sets-in when the market is down. This situation is that of stubborn market liquidity. In the same vein, when a business approaches banks to bail it out and the banks go asunder, then it experiences stubborn financial liquidity. When talking in terms of banks; any bank that can raise business finance from its own kitty is said to have a low liquidity risk.

To tackle liquidity risk, there are some methods adopted by business finance vendors like banks, investment companies, and venture funds. In risk management, liquidity risk has a low occurrence rate. Reputational liquidity risk is another version of liquidity risk that limits business finance for companies based on factors like reputation. Stress tests need to be conducted to expose a business’s capacity to generate business finance when it is needed the most. Based on the results, plans have to be drawn up to factor-in any predicted situations.

Analyzing and quantifying the long-term run-up of an asset is important. Asset-life assessments reveal the longevity and flexibility of an investment-class that provides ample support to last a business. Business finance forecasts or cash flow projections are another way to assess liquidity risks. Prediction mechanisms have to be established that predict the future behavior of cash flows. In this way, the availability or non-availability of cash can be determined during a time frame.

Understanding liquidity risk in business finance is important. Investor and customer confidence being the prerogative in these times, businesses have to predict, and preempt business finance situations. Though methodologies are not well developed to counter liquidity risk, all it requires initially is some basic business common sense.

Filed Under: Workforce Tagged With: Bank, Business, Cash Flow, Finance, Investment, Market liquidity, Money, Risk management

Infrastructure Finance in India

September 17, 2010 By admin Leave a Comment

: Image by seaview99 via Flickr

India’s robust growth during the recent decades can be attributed to infrastructure finance. Leading the developing countries list, India is growing at a rate of over 8 percent GDP. Business finance institutions have been instrumental in providing the financial support in the infrastructure space. Infrastructure needs to be complemented with business finance resources. But India has been well supported with business finance for infrastructure development activities.

Approving the inclusion of business finance in the infrastructure space, the government is laying a lot of impetus on the importance of the role of infrastructure finance companies. That’s specifically the reason why the eleventh five year plan of the Indian government foresees business finance investments in infrastructure to the tune of twenty crores plus. Directing the planning commission to encourage private business finance investment in infrastructure, the prime minister’s office has laid its objective clearly.

With the auguring of non-banking finance companies, the situation looks even better. Business finance in infrastructure will be given support by the Reserve Bank of India, which has developed specialized policy compartment for it. Infrastructure needs these special entities to fund exorbitant amounts that are difficult to raise in the market.
Infrastructure Financing Companies that have good credit ratings and over 300 crores in funds are given the go-ahead. Now that the Reserve Bank of India has made provisions to infrastructure finance companies, business finance in infrastructure will get more thrust.

Borrowers for business finance can expect to get more finance, since infrastructure companies can legally mobilize more than a quarter of its funds. This might not be over-leveraging, but does add more flexibility to the scheme of things in business finance. Single-group multiple borrowings can take more than forty percent over existing funds from infrastructure companies.

Infrastructure finance thrives on funds that have been invested for longer periods of time. Though individual investments are tough to come by, institutions like the World Bank and the Asian Development Bank are providing able assistance. Teaming up with these institutions, the government is ensuring long term investments in infrastructure.

Filed Under: Economic Growth Tagged With: Asian Development Bank, Business, Finance, Financial services, India, Investment, Reserve Bank of India, World Bank

Business Finance Sources

September 13, 2010 By admin Leave a Comment

: Image via Wikipedia

Enterprises need to take cognizance about the sources of business finance. Common knowledge as it may be, many people are still not sure where to reach out for funds. Businesses need business finance not just at the initial stages, but also during different stages of business progression. Different businesses will have different sources of finance. It all depends on which business finance source suits which business.

Business finance can be short-term or long-term. Based on the need, both these categories have their respective business finance sources. A trade credit is a short-term business finance option. Any credit that is offered by a supplier to a manufacturer, without the need for immediate cash payment is called as trade credit. For example, a supplier might provide a manufacturer raw material for production. Payment will not be made immediately, but after an agreed period of time.

Some banks provide short-term business finance by allowing businesses to overdraw money from their accounts. Overdraft facilities are made after a prior agreement by the bank with its customer.

Share capital has been on top of the list for long-term business finance options. A company will sell its stocks to shareholders in return for cash. It can also be defined as a process by which a company raises business finance by issuing common or preferential shares to investors. Investors may be individuals or institutions.

Venture capital is germinal business finance, invested purely for long-term results. Venture capital is also known as seed funding. Investment funds or wealth management companies will identify high-potential companies who are at their nascent stages of development. By investing at the grass-roots level itself, venture funds always have a long-term vision in mind. Venture capital is also given to established companies that have business finance needs for expansion or diversification purposes. Often, even expansion or diversification offers potential as that of a new company.

The growth of the IT sector can be largely attributed to venture capitalists who have provided business finance keeping a long-term perspective. From the year 1995, the software, hardware, and IT industry boomed, leaving venture capitalists with enormous wealth.

Filed Under: Business Culture Tagged With: Business, Business and Economy, Company, Corporate Finance, Finance, Financial services, Investment, Venture capital

Foreign Currency Convertible Bonds (FCCBs) in the Indian Business Finance Scene

September 7, 2010 By admin Leave a Comment

: Image via Wikipedia

Foreign Currency Convertible Bonds (FCCBs) are prepared and disbursed in the currency of the borrower. A foreign national bank lending business finance to a company located in another country will issue a foreign currency convertible bond in the local currency of the company. Foreign investment institutions and banks will have the benefit of using these bonds as both a debt instrument as well as an equity instrument. From this we understand, that it is a win-wins situation for the investor and the borrower. Investors benefit if the share value of the company they have invested in increases.

Indian companies on account of their enormous business finance needs can tap into the potential of foreign money markets. In a bull-market scenario, foreign currency convertible bonds were a cheap business finance option. But the situation is changing. After the recession, debt has increased. Plunging stock prices have made companies resort to offering sweeteners. By lowering their share prices, companies hope that foreign currency convertible bondholders will take the shares instead. What it also does is that the FCCB holders can now have a greater pie of equity. More foreign investor equity presence means lesser control for Indian companies over the scheme of things.

Given the fickle nature of the equity markets, the Indian government has laid some measures to neutralize the vagaries of business finance conditions. Investors or issuers are now allowed to make revisions to the conversion prices of foreign currency convertible bonds. The issuers can set the conversion price at a higher rate in a timeframe of 6 months. They can either take a two-month average of the company share price or a six-month average.

Conversion rates have been problematic. During the Bull Run from 2003 to 2007, conversion rates were pegged highly. Driven by the assumption that the stock markets will continue their bull run, FCCB holders promised themselves attractive returns. After the recession, everything has come down. Markets are now driven by common sense, at least not by suspicion. Now companies are faced with either trying to get the conversion in or pay the debt.

Filed Under: Economic Growth Tagged With: Bonds, Business, Convertible bond, Currency, Investing, Investment, Stock, Stock market