COVER STORY

Sovereign Wealth Funds : A New Global Force

-- N Janardhan Rao and V Ratna

Sovereign Wealth Funds are fast emerging as a force to reckon with in the global financial market arena. They control a mammoth $2.5 tn in investments and are picking up assets in the US and elsewhere. However, as the trend grows, it is causing concern among the governments in developed nations where SWFs are stamping their presence in a big way.

© 2008 IUP . All Rights Reserved

ROUNDTABLE

Sovereign Wealth Funds: The New Rulers of Global Finance

-- Interviews conducted by N Janardhan Rao and V Ratna

Fueled by the growing oil profits and foreign exchange reserves, the Sovereign Wealth Funds (SWFs) controlled by governments in the Middle East and Asia have grown rapidly in both size and dominance in recent years. On the other hand, the growing influence of these funds is causing heartburn among policy makers and politicians in other countries, especially in the western world. Developed countries are now demanding that the promoters (read: governments) of these funds clarify their practices and intentions, as the growing clout of SWFs through ownership of major companies in the developed nations has the potential to invite political and popular backlash. Against this backdrop, The Analyst invited eminent experts to share their perspectives on the topic and other related issues.

© 2008 IUP . All Rights Reserved

M&AS

M&A Wave : Whither the Future?

-- Y Bala Bharathi and Sanjoy De

The M&A boom, fueled particularly by the US private equity players has declined in recent times. But, thanks to sovereign-wealth funds this slump may not lead to the early demise of the boom.

© 2008 IUP . All Rights Reserved

M&AS

Bank of America's Acquisition of Countrywide : Merger of Convenience?

-- N Janardhan Rao and PS Sharath Chandra

America's largest consumer bank expects that its acquisition of Countrywide will start generating savings to the tune of $670 mn over the next two years. However, the merger poses significant challenges as risks are huge.

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INDUSTRY

Logistics : Riding the Retail Boom

-- Y Bala Bharathi and Sanjoy De

The current boom in the retail sector has opened up hitherto untapped opportunities in the logistics space.

© 2008 IUP . All Rights Reserved

BUSINESS ENVIRONMENT

Food Prices vs. Biofuel : Priority Issues

-- N Janardhan Rao andPratichi Samal

The world is witnessing food price inflation as many crops are being diverted to biofuels.

© 2008 IUP . All Rights Reserved

BUSINESS ENVIRONMENT

Decoupling Myth : Debunked for Now

-- Y Bala Bharathi and Sanjoy De

The much-hyped decoupling theory, which advocates that the US and the rest of the world have decoupled, seems to be fast losing ground.

© 2008 IUP . All Rights Reserved

BUSINESS ENVIRONMENT

US Economy : Caught in Recession Blues

-- N Janardhan Rao and V Ratna

The current economic ills of the US are alarming as they have parallels to Japan's decade-long slump in the 1980s. Though the US housing market appears positively sedate at present, it certainly appears that the US productivity miracle may be coming to an end.

© 2008 IUP . All Rights Reserved

BUSINESS ENVIRONMENT

China's Trade Surplus : A Problem of Plenty

-- Amit Singh Sisodiya and Siba Prasad Pothal

China's trade surplus, which continues to rise unabated, however, has major trading partners like the US and EU calling for remedial measures including revaluation of renminbi.

© 2008 IUP . All Rights Reserved

BUSINESS ENVIRONMENT

Asset Price Bubbles : Lessons from Japan

-- Amit Singh Sisodiya and Imrana Moghul

It is hard not to compare the current crisis in the US mortgage market with the boom-and-bust that happened in the Japanese real estate market during the late 1980s.

© 2008 IUP . All Rights Reserved

BUSINESS ENVIRONMENT

Société Générale : Re-Emergence of Rogue Trading

-- GRK Murty

Once a trader is into fraudulence, it becomes a near impossibility for him to stop and he simply becomes a `mutating virus' of concealments and unauthorized acts. It is only agile internal monitoring systems that can arrest such speeding mutation of rogue trading.

© 2008 IUP . All Rights Reserved

COMMODITY MARKETS

Gold Prices : Will the Upward Trend Continue?

-- Chintan Karnani

In 2008 and 2009, gold prices will fall as and when inflation expectations fall due to higher base effect and the chances of US economy moving away from recession rise.

© 2008 IUP . All Rights Reserved

COMMODITY MARKETS

Precious Metals :A Golden Year Ahead

-- Jochen Hitzfeld

The escalation of the credit crisis in the US has significantly improved the environment for precious metals.

© 2008 IUP . All Rights Reserved

TECHNOLOGY

DVD Format War : Blu-Ray vs. HD-DVD

-- Amit Singh Sisodiya and Pratichi Samal

Warner Bros' move to dump HD-DVD in support of Blu-ray comes as a major boost to the latter. But the battle is far from being over.

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PERSPECTIVE

Indian Premier League : Cashing in on Cricket Craze

-- R Venkatesan Iyengar

The Indian Premier League (IPL), BCCI's answer to media mogul Subhash Chandra's Indian Cricket League, is all set to take off on April 18, 2008. While the astronomical amount that has been pumped into this venture could make one go figure-blind, doubts remain as to whether IPL would be a profitable venture in the long run.

© 2008 IUP . All Rights Reserved

APOLITICAL

RBI's Standstill Policy : Charting Its Own Course

-- grk

True to its tradition the Reserve Bank of India (RBI) has once again surprised the market. Looking at the Fed rate cut by an unprecedented 75 basis points, and the overall slowdown witnessed in industrial growth during the current year from 11.6 to 9.2% and a fall in growth in non-food credit, India Inc. anticipated a cut in domestic interest rate by the RBI. But the RBI has left all policy rates unchanged at its quarterly review of the Credit Policy.

© 2008 IUP . All Rights Reserved

ARTS AND ARTISTS

Medieval Indian Murals : A Perennial Legacy

-- Dr. P G Nirmala

In ancient India, citra-salas (halls of paintings) were constructed by kings for entertainment. An old Jaina story tells of how a certain King Jiyasattu, consigned a hall to the painter's guild delegating work to each family. It so happened that the daughter of an old painter, who used to bring her father's meals to him in the hall, one day, painted a peacock's feather in colors on the paved floor, entirely true to nature. Later, as the King was considering the paintings, he saw the peacock's feather and reached to pick it up. So much for the power of illusion!

© 2008 IUP . All Rights Reserved

ARTS AND ARTISTS

Currency Market Derivatives

-- Author: GRK Murty Reviewed by M Hanumantha Rao

With India's share in international trade at miniscule levels till a few years back, the excitement of the currency market was no more than a matter of curiosity and passing interest to an overwhelming majority of Indian businesses. The market was neither deep enough nor wide enough to facilitate big-time, complex operations. Sophisticated risk management products did not appear really relevant.

© 2008 IUP . All Rights Reserved