INDIA: an emerging ground for work

India was a closed economy till many years even after independence and did not allow other countries to carry out operations within the country to protect our own interest. There were companies operating with lots of government rules and regulations. After the 1991 policy of LPG (Liberalisation, Privatisation and Globalisation), India opened its doors for other countries to operate with more flexibility and independence and less government control.

India has remained a hot-spot for most of the global companies due to its low cost labour with good brains. Another reason was that the country itself has huge potential to demand various products due to its vast population. It attracted many companies to start their units within the country and operate on a large scale. It also attracted because of its geographic location as it was easy to satisfy the demand generated in the east through India. There was easy availability of resources like land, labour, raw materials, etc which made it more promising for the companies to start their operations.

Later China began to capture the market by further low wage rates for the labours, availability of large number of labours both skilled and unskilled, huge population, availability of resources, etc. Companies started setting their units in China because of further cost advantages. This became a challenge in front of India.
Current situations in China pose a different picture for its own labour market as well as for India. The government of China has thought to increase the minimum wage rate for all the labours to increase the internal consumption of the country. This move taken by the government has led to problems for various companies which were operating in China for cost advantages. The increase in the cost will remove their advantages around the world and will no longer make them competitive. The labours also started striking in their companies which has led to halts in the production schedules and huge losses, but this move forced the companies to raise the wages of the employees working in their company. Some companies also started raising the wages in order to attract good employees from other companies. The sudden move has disturbed most of the operations of many multinational companies which has made them re-think about their operating locations. The most affected companies into the highlights are Foxconn Technologies and Honda Motors who are under huge pressure of increasing wages to retain their employees and continue their operations in the country. The situation has made them to re-think about their style of running operations and managing the employees.

“Opportunity remains opportunity only if it is grabbed at the right time”

There is a huge opportunity in front of India as the next best option for the companies to move their operations seems to be India with all the promising features. Here, the government can take a move to attract the companies by incentivising them and help our country to progress rapidly. Any step taken at this movement will make our country more attractive and attract huge inflows in the form of various green-field operations as well as export earnings by exporting from these companies. This can also help to achieve our 2020 vision to be on the top in the global charts in terms of everything.
Here, the government of India should take a right step in order to be more attractive for various companies to relocate their operations from China to India.

STOCK MARKET OR STUCK MARKET...???

The market conditions are unstable yet so stable. There has been a huge movement in the share prices of various shares both positively as well as negatively making the market stable around 16500 since so many days.

The market has taken a leap from 13913 on 25^th May, 2009 to 16619 on 2^nd June, 2010 taking it 2700 points up with constant fluctuations. It has touched 17970 on 7^th April, 2010 on the peak whereas it has also touched 13589 on 26^th May, 2009 on its trough. The market was expected to move upwards after the drastic fall up to 8325.82 on 6^th March, 2009. It’s a cycle which repeats on its own. After reaching the peaks of 20827.45 on 11^th January, 2008 creating huge profits and liquidity in the market it crashed with heavy correction taking away all the wealth created.

The market basically works on the real estate cycle which has 5 year boom and 5 year burst and stagnation. The market remains stable and upwards till the time the real estate is in boom and crashes when there is a burst in the real estate market. Also, it heavily depends on the market operators who are masters in their business and turns the market as per their whims and fancies. One should not think of beating them in their business by playing opposite tricks as it will be of no use. One should walk the way the market operators are walking; if they are trying to push the market up by buying, one should buy whereas when they are trying to push the market down by selling, one should sell.

There are various other factors pulling the market which are internal to the company which help in changing the market demand and supply creating the change in the market conditions. Some of the factors include Mergers and Acquisitions which affected many companies including Tata Steel, Tata Motors, Bharti Airtel, etc. There is a trend in the market about the mergers and acquisitions which has created huge ups and downs in the market. Everyday there are mergers in some or the other sector like pharmaceutical, food and beverages, banking, etc.

Some other factors for market fluctuations includes frauds by the company, change in the company’s management, new rules and regulations by the government, etc.

There has been a huge positive movement in all the sectors since the beginning of the year 2010 giving hopes to the wholesale and retail investors in the market. There were also many IPO’s launched giving positive signs in the market and helping the market to stabilize or move positively.

The current situation is not suitable for the new investors to enter into the market but is very good for study. Everyday there are fluctuations which are huge and tough to understand for the new investors. One can wait and study the market and track its movement for better understanding. The time is correct for the short-sellers and intraday traders who can understand the market properly and predict its movement to make profits. If an individual has stock bought at lower price and is confident for profits, then he should hold it further till the time market stabilises and wait for the right time to sell. If he has generated enough profits out of its holdings then he might sell and not wait further as there might be a negative movement in the market decreasing his profits.

It will be advisable to analyse and understand the market and the stock prices of various shares in the market. This will help an individual to earn from the market positively and not incur losses. Such study will also bring in market sentiments and controls and also reduce the speculation game which makes the market a gambling place. If the prices move further below the expectations, one should buy that share and hold it till the right movement and sell the holdings if the prices move beyond expectations. Also, an investor should always create a target price and profitability from the market. Such practice will always protect the investor from heavy losses and safeguard his interests.