Category Archives: Finance

FuturesMarket

Interest Rate Futures (IRF) new product in Market

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On Monday (i.e. 20th Jan, 2014) a new product has been launched in MCX Stock Exchange Ltd. name “Interest Rate Futures”. This product for 10 years benchmark bond has attracted the highest volume of 1.5 billion rupees.

The same product will be launched by National Stock Exchange (NSE) from 21st Jan 2014, while Bombay Stock Exchange (BSE) will launch this product from January 28.

The product has given the reasonable start on MCX and NSE. About Rs.930 crore volumes done on MCX as of 20th Jan and about Rs300 crore was done in the morning as of 21st Jan. So it’s a good start.

It looks like this product will be successful in the market because of its new design. The two very differentiating factors which may help this product to become successful are:

  1. Firstly instead of theoretical bond this is now 10 years actual bond linked product. This is now physical bond which is now trading in the market. So, we can say that future contract is unique in Indian market.
  2. Second is the most important factor which makes this product very unique. This product is now a cash-settled contract. One can settle the price of the contract at the time of maturity. In this you don’t have to deliver the bond.

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Clearly with above new changes in the contract I think market is interested in this new product. And this is what market was asking from a very long time and this has been given to the market this year. So one can say that going forward this product will do well.

How to pick the Right Credit Card

A credit card is like a life saver for those who know how to use it and at the same time it’s capable of inflicting dreadful damage if used improperly. Here are few important things you should consider while selecting a credit card.

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  1. Spending Behavior:
    First thing you need to decide what kind of credit card user are you going to be? Are you the kind of person who’s going to use it for everything or you requiring it for the emergencies? Also give a thought about how are you going to pay your credit card bills? Your spending behavior is and your usage is of utmost important to decide the right credit card for you.

    • If you’re going to clear your credit card bill every month then you don’t need to bother much about interest rates. Look for a card with zero annual fee and maximum grace period.
    • If you’re someone who’s going to opt for flexi payments on your credit card outstanding the interest rated definitely matters you. So pick up a card with lowest interest rate and minimum annual fee.
    • In another case if the card is only for emergency purpose then pick up a card with lowest interest rate and minimum or no annual fee.
    • On the contrary to the above point if you require a card for everything you buy then lookout for a card with higher limit and best reward programs.

    So it’s very important for you to sit down and first analyze the requirement and the purpose for which you’ll be using your credit card.

  2. Checkout the interest rate:
    Each credit card gives an APR (Annual Percentage Rate), it can be a fixed rate or variable depending upon the Financial institute. At times offer rates are short lived and changes after a certain time. So please ensure the rates applicable once the offer ends.
  3. Card Limit:
    Credit limit is the total amount of money the issuer is ready to lend you. Credit Limit for an individual is decided based upon the credit history, monthly income, credit liabilities of the applicant, the limit can vary from few thousands to lakhs of Rupees.
  4. The Charges applicable to your cards:
    Most of the credit card issuers earn money from you by charging you various charges like transaction fee, balance transfer, cash withdrawal using your Credit Card, yearly subscription charges, reward point consumption charges, credit card re-issuing charges, late payment charges etc. So make sure you are aware of the rates and the possible charges on your card.
  5. Reward Programs Benefits:
    The sole purpose of all the credit card issuers for having a reward program is to induce the customers to use their card more often. All major credit card issuers have numerous reward programs to offer their clients. If you do lot of traveling then there are many card companies which offer frequent flyer miles, discounts on hotel, or car rental etc.

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Bankruptcy Concerns Grow Over Brazil Billionaire’s Oil Company

Eike Batista is in a trouble.  Whether or not Eike Batista is out for the count is another story.  His OGX(oil company), which was once the promise of a private oil sector in Brazil after government run Petrobras found so much oil it had to distribute it with others.

Now venture capitalists are concerned whether Batista can pay a 45 million USD short term debt oli company has coming due in October.  OGX owes more than just 45 million USD.  Over the next 10 years, Batista is worked oil company owes 3.6 billion USD. Moody’s last week gave Batista’s bond-holders another hit to the arm when it lowered Batista’s OGX bond-rating — already totally junk — to so poor quality it might as well be dirt.   Oil company went from Ca to Caa2 with not positive outlook.

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BNDES(Brazil’s National Development Bank), lost a whopping R462 million USD (about 220 million USD) on Batista, which accounts for nearly 50% of what BNDES loaned the company, according to São Paulo daily Estado de São Paulo.

BNDES has loaned billions of reals in companies of Batista, from oil company to his troubled MMX(mining firm).  Now Brazilian politicians are looking forward if it was wise to lend this much $ to one man who is not as good at throwing and catching different undertaking as people judged him to be.

Batista is one of the lot of money having man in Brazil. But his on-going issues with his fleet of companies is a clear danger to Batista’s billionaire status.

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