29.11.2007

• Something about ballooning
• The DGCA is set to notify guidelines for ‘balloon aircraft’ and incorporate them in the CAR (Civil Aviation Requirements).
• A company starting ballooning is required to have a start-up capital of Rs. 25 lakh.
• A hot air balloon travels by moving with the wind. An airship on the other hand is a buoyant aircraft which is propelled through the air in a controlled manner.
• A hot air balloon varies in cost from Rs. 30 lakh to Rs. 3 crores. The ideal weather for flying these machines is winter when outside temperature is low and air-pockets are rare. While a small balloon can take off with two passengers in its bucket, a bigger balloon may fly with 25 passengers.
• World’s largest SWF
• The Abu Dhabi Investment Authority is the world’s largest sovereign wealth fund with about $650 bn in its corpus.
• BRPSE Chairman resigns
• Mr. Prahlad K Basu has resigned.
• Mr. Nitish Sengupta has taken over as the Chairman BRPSE.
• BRPSE: Board for Reconstruction of Public Sector Enterprises.
• “Open Interest” in derivatives markets
• Want to get a lowdown on this concept? Take a look at today’s “Simply Speaking” column in ET. But some basics:
• Open interest is the total number of outstanding futures and options contracts at any point in time. In other words, these are open or yet to be settled contracts. The level of outstanding positions in the derivatives segment is one of the parameters widely tracked by the market.
• In the futures segment, open interest data need to be read along with price changes in the futures contract. A rise in open interest in a futures contract along with its price indicates bullishness, which means investors are creating long positions. Investors may benchmark the price changes in the futures contract to the underlying (the cash market).
• In the options segments, a change in open interest in put or call options enables traders calculate the put call ratio – a popular sentiment indicator of options traders world-wide, which is the number of puts divided by the number of calls.
• New credit scoring model launched by CIBIL along with TransUnion
• This model will predict the likelihood of a customer becoming a defaulter in more than 91 days on one or more lines of credit.
• The scoring model factors in the payments history, outstanding debt, credit account history, recent credit inquiries and the different types of credit the borrower has availed of.
• An individual should have availed at least one loan six months ago for CIBIL to rate the borrower under this new model. The scoring will range from 300 to 900 points, where 300 is for the worst-rated individual, while the best rate would be 900 points.
• CIBIL: Credit Information Bureau of India Limited. Its Chairman is V. Santhanakrishnan. At present, CIBIL members include 77 banks, 32 NBFCs, 6 State Financial Corporations, 10 Financial Institutions and 2 Credit Card companies. There is a move to allow the RRBs also into the fold sometime soon.
• India’s Uranium needs
• The mines at Jaduguda have a uranium content of just 0.6% while the one that is coming up at AP is expected to yield 0.3%. But internationally commercial ores have up to 15% Uranium.
• Till now, our nuclear power plants have looked economical because of huge, bomb-related implicit subsidies. But to produce large-scale nuclear power on commercial terms, India requires high-grade uranium ore, or enriched uranium. This is a key reason why India needs clearance from the Nuclear Suppliers Group for imports.
• About wealth inequalities
• Do you remember we noted something about the Gini coefficient sometime back in our blogs? Today a very good article titled “Rise of billionaires: Threat to growth?” appeared in ET. I recommend reading it at least once.
• It argues that inequalities in wealth in not as bad as it may appear after all. Especially in the context of India. Let’s look at the arguments:
• Though the real wealth at the top has risen sufficiently to cause a significant increase in wealth inequality in the country, the consumption based Gini coefficient was approximately the same in 2004-05 as in 1983 and 1993-94.
• There is no case for leveling the billionaires of India for at least three reasons:
• Replacing a billionaire by 1000 millionaires may reduce wealth inequality but it is almost sure to increase conspicuous consumption that is regarded as socially repulsive. The thousand millionaires are likely to have much greater propensity and time to spend their money on fancy cars, homes and gadgets than one billionaire.
• For poverty alleviation, the ownership of wealth matters far less than how it is invested and spent. A billionaire is far more likely to invest his billion proactively and use it for philanthropy than a thousand millionaires.
• The presence of a few billionaires is a powerful inspiration to other entrepreneurs.