The Marketing Relevance Imperative

Unprecedented access to information and new technologies have empowered consumers and business buyers with the ability to tune out marketing messages with ease. In most cases, when given the choice, they choose to skip these messages. Whether it's using Tivo to zap television commercials or software to block online ads and email marketing, they're sending a message to all marketers: get relevant or we'll ignore you. While the noise level of marketing messages reaches an all time high and audiences become more and more fragmented, some marketers have reacted by turning up the volume and, at times, engaging in practices with questionable ethics, while others have chosen to become more relevant.
Piyush Joshi
PGDM-2nd sem

Understanding the Mind to get to the Heart of Buying Decisions

Malcolm Gladwell enlightens our thinking with his book Blink, a fascinating exploration of how decisions are made in the blink of an eye, before consumers even realize they’re making a decision. He suggests “we think without thinking.” Gladwell’s effort to share emerging insights into how our brains work is timely. In this decade, we are learning more about how humans think and feel and what drives our behavior than the whole of our discoveries in the time since Sigmund Freud dreamt up the idea of psychoanalysis. This has profound implications for marketing and brand professionals.

Varun Kumar Tiwari

PGDM-2nd sem

Banks request Govt to reduce tax-saving deposit term

Mumbai: The government has once again been requested by the banks so as to cut down on the duration of the tax-saving term-deposit scheme to three years from the ongoing five years.

They have justified about this step saying that the resources so raised not only support infrastructure lending that has gained traction over the last one year or so, but also suitably address the duration mismatch between assets and liabilities.
Banks have not been able to have more development in mobilizing funds under the tax-saving term-deposit scheme. Given that they could miss out on higher returns should interest rates head north, savers perceive the five years lock-in as too long a duration to commit funds.

“The tax savings term-deposit scheme in the current form is not favoured by savers as funds get locked in for five years. As premature withdrawal of the deposit is not allowed, the saver will have to forego an opportunity to earn better returns in case interest rates go up. Further, loan/overdraft against these deposits is not available,” said Mr K. Unnikrishnan, Deputy Chief Executive, Indian Banks' Association.

If the duration is reduced to three years, it would also result in the savers to willingly deposit their money in the tax-saving term-deposit scheme. A similar representation had been made by banks to the Finance Ministry last year also.

Around 8.5 percent interest is paid by all the banks on tax-saving term deposits.

According to the Bank Term Deposit Scheme, 2006, deduction is available on investments under Section 80C of the Income-Tax Act, 1961, on investments (minimum of 100 and up to a maximum of 1 lakh a year) in term deposits of five years' maturity in a scheduled bank.

Under Section 80C, premium towards life insurance and unit-linked insurance plans, subscription to public-provident fund, employee's contribution to provident fund, investment in National Savings Certificate and equity-linked savings scheme, and repayment of principal amount in a home loan qualify for deduction (up to a maximum of 1 lakh a year) from a taxpayer's gross total income.
JITENDRA KUMAR SINGH
PGDM SEM-2

practice pre-poning trade on listing day in IPO stocks

Mumbai: The Bombay Stock Exchange (BSE) plans to introduce pre-opening trade in IPO stocks on the day of listing, a practice that is currently only permitted for Sensex stocks and 20 other large cap counters.

"We are keen on allowing the IPO stocks to have a pre-open session on their debut day. We are talking to the market watchdog Sebi on this," BSE Deputy Chief Executive Ashishkumar Chauhan said.

As to how this would assist the debutante company, Chauhan said it will help avoid wild price fluctuations on the listing day, as it does with other stocks.

Explaining the mechanism, he said, "Instead of the 50 stocks that are allowed to have pre-open now, when there is a listing, the debutante scrip will also be part of the pre-open trade on that day."

On October 18 last year, both the BSE and National Stock Exchange (NSE) had started a 15-minute special pre-opening session to help reduce the extreme price volatility typically visible in the first few minutes of trade, as well as ensure better integration of domestic markets with international markets.

Normally, the market sees wild price fluctuation whenever there is any major event or announcement by a company like an M&A, open offer, delisting, debt-restructuring, credit-rating downgrade or upgrade and rumours regarding any such event.

Market watchdog Securities and Exchange Board had allowed the introduction of a pre-open session call auction on the bourses between 9 and 9.15 am last July.

In a call auction, participants indicate their willingness to buy or sell stocks by placing an order for a number of units at the prevailing price before the trading begins. This mechanism is known as the pre-open session call auction and is prevalent in all the leading global bourses.

According to market experts, pre-opening trade will help both retail as well as institutional investors by reducing price volatility due to multiple matching of orders at a single price, better price discovery and also dilute the impact of any major swings on the market.

Another advantage is a fairer market, especially for small and non-professional investors, because all trades get executed at the same price.

According to BSE officials, a uniform price band of 20 percent will be applicable to all eligible securities during the pre-open session.

In the first 15 minutes, investors can place orders for eight minutes, on the basis of which the exchanges will determine the rates at which trading will happen.

Till now, the pre-opening trade facility was only available to Sensex and Nifty stocks, besides another 20 large cap stocks in the case of the BSE to enable better alignment with the NSE
JITENDRA KUMAR SINGH
SEM-2

Mahindra Satyam Q3 net jumps by to 58.9 Crore

Mumbai: Mahindra Satyam, formerly known as Satyam Computer Services, reported an over two-fold sequential jump in consolidated net profit for the quarter ended December 31, 2010, to 58.9 Crore.

The company had reported a consolidated net profit of Rs 23.3 crore for the July-September quarter of 2010.

Revenue for the third quarter grew marginally to Rs 1,279.3 crore from Rs 1,242 crore in Q2, FY2010-11, Mahindra Satyam said in a filing to the Bombay Stock Exchange
Mahindra Satyam had reported a net loss of Rs 1,250 crore for the year ended March, 2010, giving a first view of its financials almost two years after founder B Ramalinga Raju admitted to cooking the company's account books for years.

"Our efforts of investing in core competencies have begun to show encouraging results.
JJITENDRA KUMAR SINGH
SEM-2

Banks scramble to save costs as interest rates soar

Indian banks are turning to low-cost deposits, refinancing debt and raising cheap foreign capital to protect margins squeezed by higher interest rates at home, bank officials and analysts said.
* IOB, REC, IDBI Bank to raise cheaper funds overseas
* Mid-cap banks shifting focus to CASA growth to ease margins
* Refinance, services to the fore as loan growth tapers off
India's central bank last month raised interest rates for the seventh time in less than a year and more rate hikes are on the card to curb stubbornly high inflation.
State-run lenders Indian Overseas Bank, IDBI Bank and Rural Electrification Corp (REC) are raising cheaper funds abroad, but most are turning to the low-cost current account savings account (CASA) deposits.
Foreign rates are at historical low levels, while domestic rates are high, HD Khunteta, director of finance at REC, s

March, leading to higher proportion of wholesale funding, partly from refinancing institutions.
Rather than focusing on balance sheet growth, we focus on churn and fee income, said Jaideep Iyer, president, financial management at Yes Bank says: We focus on non-interest income such as trade, forex, advisory services with the same clients. We are chasing more customers so that gives more granularity to our balance sheet.
Others like IDBI Bank are exploring options to refinance loans and deposits, shed high-cost bulk deposits and look to overseas borrowing.
IDBI plans to raise $1 billion by September as also Indian Overseas Bank, which plans to raise a similar amount, half before end-March.
If refinancing gives us a lower cost, or foreign currency borrowing gives us a lower cost, we will access those sources rather than deposit sources, said Melwyn Rego, executive director, IDBI Bank.
LOW-COST DEPOSITS
The focus on low-cost current account savings account (CASA) deposits has also...

aid, explaining the rationale.
Loan growth for most banks have been strong so far in FY11 ending...

been rewarding for lenders.
Cost of deposits is going up but we have been able to bring that down... we have been able to substitute high cost deposits with lower costs CASA and with refinancing, said S. Shridhar, chairman and managing director, Central Bank of India: CASA share of its deposits increased to 34.9 percent in Oct-Dec from 29.9 percent a year-ago, while its cost of deposits dropped to 5.7 percent from 6.1 percent.
Most mid-sized banks are targeting CASA of 34-35 percent over the next two years, in line with industry average.
Margins will be under pressure for mid-cap banks but what we have to look for is how much will margins come down, specially for those which have lower CASA ratios, said Vaibhav Agarwal, sector analyst at Angel Broking.
Agarwal recommends United Bank of India, J&K Bank, Dena Bank and Indian Overseas Bank amongst the mid-cap banks because of their dirt cheap...

JITENDRA KUMAR SINGH
PGDM SEM- 2

Sensex up 450 points; capital goods, auto, metals gain

MUMBAI: Indian markets continued to gain momentum as investors bought stocks across the board taking cues from positive global peers. The rally was led by stocks from capital goods, auto and metals space. Marginal dip in inflation to 8.23 per cent in January from 8.43 per cent a month ago also boosted sentiments.

At 3 pm; Bombay Stock Exchange’s Sensex was at 18185.21, up 456.60 points or 2.58 per cent. The broader index touched a low of 17857.12 and high of 18189.02 in trade so far.

National Stock Exchange’s Nifty was at 5453.45, up 143.45 points or 2.70 per cent. The broader index touched a high of 5453.75 and low of 5340.25 in trade so far.

BSE Midcap Index was up 3.36 per cent and BSE Smal-lcap Index moved 3.74 per cent higher.

Amongst sectoral indices, BSE Capital Goods Index rallied 4.51 per cent, BSE Auto Index gained 3.83 per cent and BSE Metal Index moved 3.49 per cent higher. BSE Oil&gas Index was up 0.83 per cent.

Tata Motors (6.07%), L&T (5.93%), Jaiprakash Associates (5.81%), BHEL (4.51%) and Jindal Steel (4.06%) were amongst the major Nifty gainers.

Reliance Communications (-0.72%) was the only index loser.

Market breadth was positive on the BSE with 2430 gainers against 467 declines.

Meanwhile, the European markets were in the positive terrain. FTSE 100 was up 0.13 per cent, DAX moved 0.45 per cent higher and CAC 40 moved 0.23 per cent up.

JITENDRA KUMAR SINGH

PGDM SEM-2