Finance Articles

Finance articles section focuses on various concepts of finance like budget, stock market and economics of various products & services. Apart from these articles on global financial institutions, different banking systems and topics of international importance in the field of finance are present.



Mergers vs Strategic Alliances vs Joint Ventures - The Difference 30 October 2010

As a business professional or an MBA student, you would have frequently encounter the words like mergers, acquisitions, joint ventures or strategic alliances. But most of us would not know the exact difference between these words. They are used interchangeably in a lot of news items and conversations but in theory they are different and it is essential to understand the difference.

 

Future vs Options 30 October 2010

Options and futures are most common terms of derivatives that are often used interchangeably. The following article will explain the two in very lucid terms.

A future is a contract to buy or sell the underlying asset at predetermined date at a predetermined price. If you buy future, then you are promising to pay the price of the asset at a specified time. If you sell future, then are promising to transfer the asset to the buyer of the asset at a specified price at predetermined date.  So futures market is place where buyers and sellers meet and act today to make sure what they want to do in the future. Futures market arose from the need to reduce price risk.

 

 

Asian Financial Crisis 30 October 2010

The Asian Financial crisis which affected the south East Asian countries in 1997 has lot of similarities with the subprime crisis which engulfed the entire world. During 90s many Asian nations were experiencing unprecedented growth fueled by easily availability of credit. Borrowing in dollars was much cheaper for the companies than in their own currencies.This was because of low interest rates offered by the United States central bank. Economies of South Asia maintained high interest rates attractive to foreign investors looking for high rate of return, as a result of which Asian economies received a large inflow of money. Asian real estate market experienced high rate of growth with government hardly taking note of them and put risk management practices in place. This led to increase in asset prices.

 

3G Economics - Indian Perspective 30 October 2010

India is one of the few countries which have not rolled out 3G services to its fullest. Recent auction of 3G spectrum saw Indian telecom companies doling out close to $15 billion as license fees. The numbers may look exorbitant but telecom companies would have estimated its potential while paying so high license fees.

 

IPL - The Financials 19 September 2010

Indian Premier League (IPL) is a domestic T20 competition held in India once every year. It was the brainchild of Lalit Modi and was initiated by BCCI. The IPL works on a franchise-system based on the football club style of hiring players and transfers. The IPL can be considered as a marriage of cricket, entertainment and business. Under this franchisee based system, an individual/corporate wanting to own a team will have to pay a stipulated amount to BCCI to get the ownership. Tostart with the league would have 8 teams which would be expanded to a maximum of 10 for the next ten years.