Wishing You All a Very Happy New Year

BlackSwan FMS wishes all readers and investors and students of Financial Markets a very happy and exciting New Year 2012.

India's Financial Markets - A guest lecture

RLP Securities, a member of NSE in the interest of promoting Market awareness would like to provide a free of charge guest lecture to any MBA college or B-School.

1. It will be of 2 hr duration.
2. Covers broadly the Indian Securities Market on the lines of NCFM Securities market Advanced Module.
3. The students will have the benefit of learning from Market practitioners and live market data is used for exemplifying the concepts.
4. Interested people can contact  Gangineni Dhananjhay  9391319721  for further details

Coaching for MBA Finance Students in SAPM & DERIVATIVES

We at BlackSwan Financial Markets School have started an initiative to train MBA Finance students in the areas of Security Analysis & Portfolio Management and Derivatives.

1. This is a  40 hr program. Daily 4 hrs for 10 days. Starts from 4th Jan 2012.
2. This program would strengthen their foundation in SAPM.
3. I would like to use INVESTMENTS by BKMM and NSE's IAPM workbook.
4. This training will be of help in doing MBA Finance projects also.
5. Mr Harikrishna Karri a well known MBA Finance faculty will lead this MBA Tutions project.

India Finance Confrence 2011

I have traveled  to  Bangalore to attend IFC 2011 @ IIMB.

1. Today is the  pre conference tutorial day. There were two sessions on Stochastic Caluculus and International Finance. More than 50% gone above my head.
2. I could make friends with one person who has done his PGDM from IIMC and presently working with CBIT. We had good conversation.
3. I am very much impressed by the ambience and style of IIMB.
4. From IIMB store I purchased two T-shirts and carry bag for their brand value.
5. I spent good amount of time at their library.
6. From tomorrow the actual conference starts.

Quant Finance - Books I am reading

I am fortunate to get hold of three books on quant finance - Thanks to my friend B N Reddy who has kindly brought it from USA via his daughter. I find it very common to see people who have not read any literature on quant finance to deride it which has become a fashion.

1.  FAQs on Quantitative Finance by Paul Wilmott. A legendary name in Quant finance and creator of CQF.
2. My Life as a Quant by Emmanuel Derman. A physicist's take on Finance and markets.
3. Quants by Scott patterson. Where he sketches about colorful personalities like Aaron Brown, Paul wilmott, Ed Thorp, Jim Simons .
4. I like to think  Victor Niederhoffer of DailySpec as the original quant.

Committee Reports on Indian Markets & Financial system

There are important committee reports on Indian Financial system at various points of time. This is an effort to gather them.  Any serious finance student should be aware of their contents and be able to quote from them. I have collected here reports  which are latest and available on the net.

1. Top of mind is Dr Raghuram Rajan's   CFSR. It is a must read and contains  excellent exposition of Indian financial system.
2. Another report is MIFC by Percy Mistry.
3. Bimal Jalan's report on Stock Exchanges Ownership
4. J R Verma Committee report
5. LC Gupta committee on derivatives
6. Narayana Murthy committee on Corporate Governance.

Day 1 @ QFW 2011

I had the pleasure of being a participant at QFW 2011. Some of my observations are

1. We had a pleasant welcome by the Coordinator Dr Sastry and  interaction by Director IDRBT Dr Sambamoorthy.  Infact the Director's remarks are very relevant and interesting.
2. Inaugural address by Dr Subir Gokarn  focused on financial system design and macro perspectives and how quantitative models can be addressed to real life problems.
3. There was a fascinating overview by Dr Aparna Gupta of RPI on the  Quant Finance.
4. Dr RNS Gupta of IIT- Kanpur had given a talk on probability and statistics.
5. Very good intro on ANN by Dr Ravi of IDRBT
6. I had nice interaction with Dr Aparna Gupta of RPI, made friends with lot of participants  like Dr Prasad from IIM Indore, Crisil and Other participants from XLRI School of Business and IGIDR, MSE.
7. One faculty member from IIMB was very active and posed lot of interesting questions. She is from the area of Investments which I had later found out from interactions with her.

QFW 2011 - Workshop on Quant Finance

I am happy to be selected for the  Quantitative Finance Workshop ( QFW 2011).

1. QFW 2011 is scheduled for DEC 14- 17,2011 at IDRBT , Hyderabad.
2. Topics are very interesting ranging from R to  ANN.
3. I am looking forward to meet John Teall , former ASE Member and author of  FINANCIAL MARKET ANALYTICS.
4. This is a prestigious program co-conducted by  IGIDR, IIT-Kanpur, RPI, IDRBT.
5. I hope to brush up my R skills with finance examples which have been generously shared by Dr Kiran of NISM at his EERF 2011.
6. Perhaps I can connect better with Dr John Teall with his Stock exchange and academic background.

Trading platforms in Indian Markets

Often students new to the markets want to know various types of Trading Platforms/ Softwares available.

1. NOW :  This is the platform promoted by NSE. This is abbreviated as NEAT ON WEB. NEAT Stands for National Stockexchange Automated Trading. This I found to be of great interest to jobbers or Day traders as its response time for orders is very high. NSE quotes

"NSE today allows members to provide internet trading facility to their clients through the use of NOW (NSE on web), a shared web infrastructure.''

    2 . ODIN : This is a trading platform of Financial Technologies which is a pioneer in this area and promoter of MCX and MCX-SX. ODIN  stands for Open Dealer Integrated Network.

    3.  FOW : Fast Trade on Web. Detailed description here.
 
    4. BOLT : BSE Online Trading System

     5. NEAT: National Stock Exchange Automated trading

     6. Trade Tiger  from Share Khan : Offers best charting features . I had traded with their software and for a  student of charting this is the best bet.

     7. Trader Terminal from  India Infoline
 
     8. PIB : From India Bulls
 
     9. NEST  from Omnesys.  This company also offers Algorithmic and Rule based trading.

   10. POINTER from Ventura securities













    

 

Some Good Books on Academic Finance by Mirza Rafath

I have seen the blog of Mirza  Rafath who is a MBA faculty and runs highly successful training for students.
I quote his comments on two books which I also liked most when as an associate professor in VJIM. I have adopted those books for my finance specialization classes. I really cherish that experience as the students are very demanding and expected the best. I learned a lot from them.

The Second preference must be given to the Text Book of P.G. APTE’s “INTERNATIONAL FINANCIAL MANAGEMENT”. Almost all college libraries will definitely have this book. The book covers more than 90% of the syllabus and is written with Indian perspective. Any student who wants to follow OU MBA SYLLABUS for IF must prefer P.G. APTE’s books. This book provides knowledge + covers majority of syllabus. IF any student is interested in using both books Levi’s and Apte’s, then that would be excellent because one gives international exposure and the other Indian.

Another best book by foreign authors is INVESTMENTS: ANALYSIS AND BEHAVIOUR BY MARK HIRSCHEY AND JOHN NOFSINGER TATA MCGRAW HILL (SPECIAL INDIAN EDITION).

Link to Mirza Rafath's BLOG.

IndiaVIX

I post here an abstract of a  paper on IndiaVIX which is under review of Indian Journal of Finance coauthored by myself, Dr D Raghunatha Reddy of JNTU SMS, Dr TNL Prasad , DGM ( Finance ) of NCC.

                  INDIA VIX:           Examining the Negative and Asymmetric                       

                                                 Volatility Index – Market   Return Relationship

This paper examines the behavior of India Volatility Index (India VIX). We study two aspects: First, the negative correlation between changes in India VIX and market returns. Second, the asymmetric nature of the changes in India VIX with respect to market returns. S&P CNX NIFTY Index has been used as a proxy for the market and the study period covers March 2009 through November 2011. Using OLS Regression method on daily data this study finds an inverse relation between movements in India VIX and movements in the NIFTY. The study reveals the asymmetric nature of the Volatility Index- Market Return relationship. This study is useful for understanding the behavior of India VIX and helps policymakers in the design of appropriate instruments based on India VIX for hedging and risk management.

Keywords: Volatility Index, Hedging, Derivatives, Indian Stock market

Improving MBA(Finance) Education at Colleges

Some observations of my experience of teaching and interacting with MBA( Finance) students at Colleges on how to improve the quality.

1. Usage of NCFM Materials : These materials will be useful for correct and latest understanding of  market structure and deign. Some of the textbooks are at least 5 years out of touch with market realities.
2. Market Simulator                 : Finance students can get real feel of the market by using tools like NSE pathasala.
3. Market Based Approach         : Understanding finance from the prism of financial markets will help sharpen the understanding. Corporate finance also should be linked with market based approach.
4. Financial Newspapers              : Students should be encouraged to utilize ET, BS to understand real-time market happenings
5. Market Experts                        :  Colleges can invite market experts and experienced professionals from brokerages, regulators and other market infrastructure institutions to share their experiences.
6. Standard Text Books                : Text book selection is also important from my experience. For ex INVESTMENTS by Bodie, Kane, Marcus, Mohanty suits very well to  Indian examples against say, Fischer and Jordan. Same is the case with   Options by HULL & BASU. ( By the way I am looking forward to interacting with Mr . Basu at IFC 2011 at Bangalore IIM)
7. Empirical approach                     :  Finance concepts can be operationalized using data from NSE, BSE websites . Use data to illustrate which will enhance the experience of students.
8. Charting Tools                             : There are free Technical analysis tools offered by NSE like TAME .These can be utilized to demonstrate Technical analysis real time.
9. Business Channels                         :  Students should practice listening to  Channels like CNBC, ET NOW, BLLOMBERG, NDTV PROFIT at least one hour daily. Well give known anlysts like Udayan Mukherjee, Lata Venkatesh  give good insight into latest happenings.
10. Statistical orientation                   :  lectures should  preferably be less of personal opinion and more of statistics based approach.
11. NCMP                                           : It is advisable for MBA( Finance) students should at least get a NCMP Level 1 certification before they finish their degree which willl differentiate them from others in the job market.

NSE Certified Market Professional Level 5

NSE has introduced NCMP Level 5 under its NCFM umbrella.

1. It is awarded to candidates passing 11 + NCFM Modules.
2. 4 New modules were added which are very interesting for a student of finance.
3. NCFM helps to standardize and bring the Indian context to finance body of knowledge.
4. As academics depend on US texts, quality  Indian material is lacking particularly in the areas of market practices and design. NCFM materials will bring classsrooms to a common platform which I think is a positive externality(in economics jargon)
5. I would believe this has prompted NSE to launch tie-ups with universities for MBA( Financial Markets) and BBA ( Financial Markets) courses.
6. I would expect more NCFM modules in areas like  Technical analysis, Advanced Derivatives, Financial Journalism,Statistics for Financial Markets which come to my mind straight away.