If you have decided to pursue the post-graduate program in management, your next stage will be to gear up for the selection process for admission to a B-school of your choice. Before starting off with the preparations, you must understand the selection or admission process and the right approach needed to taste success in these competitive entrance examinations.

The selection process to get admission to a top-notch business school involves the test of your attitude, aptitude, time management skills,and knowledge—academic as well as general.Generally, all the b-schools follow the three-step process starting with written test, followed by a group discussion, and concluding with a personal interview to assess the attributes such as analytical and communication skills.

This post will help you achieve a detailed understanding of the different stages involved in the selection process,to help you secure admission to the desired two-year management program.A written test, the first step in the selection process, marks the first stage of elimination and is a test of your abilities to complete tasks under pressure and timelines.This is the most crucial stage in making it to a high-ranked business school as the elimination ratio is quite high at this stage. The written test comprises of different sections aimed at testing your aptitude and responsiveness.It features:

• questions from mathematics that you have studied till tenth standard to test your accuracy within time constraints,
• a section on English language that checks your skills of comprehending a passage, extracting the relevant information from it,and your command over English vocabulary,
• a section on reasoning which includes analytical and logical reasoning to gauge your analytical and problem solving competencies,
• questions that need to be answered using the data provided to test your data interpretation skills, and
• a section on general knowledge to test your awareness about the latest happenings of the world.

To be successful in the test, you need to have the right mix of speed and accuracy as well as good time management skills to be able to attempt all sections of the question paper within the stipulated time frame. During the course of your preparation, you can take mock tests offered by several coaching classes and websites to measure your performance periodically. It will help you identify upon your weak areas and analyze your performance in various sections thereby equipping you with a knack of solving questions within the specified period.

Once you are through with the written test, the next step,which also forms the core of the selection process,is the group discussion stage. During the group discussion, you will be asked to participate in a discussion with other aspirants. The topic of discussion could be from a wide range of subjects such as current affairs, business news, politics, social issues or any popular topic. This is a formal discussion intended to bring your inherent attributes such as leadership quality and convincing skills to the fore,as well as test your knowledge, with respect to the latest developments in different spheres at national and international levels.Your performance in the group discussion reflectsthe following key attributes among others:

• confidence level
• team-spirit
• leadership skills
• awareness
• intelligence quotient (IQ)
• emotional quotient (EQ)
• assertiveness
• receptiveness
• ability to see different perspectives

One of the best ways to prepare for the group discussion stage is to form a group and have mock discussions on a diverse range of topics from academics as well as current happenings in the political, economic, scientific and social spheres.Mock group discussions will help you perceive a given scenario from different perspectives, lending you an in-depth understanding of the subject, thus widening your perceptions about the number of ways the issues can be seen and addressed.

After the group discussion, the final stage in the selection process is facing the personal interview. In the personal interview, the focus may be largely on questions related to your goals and aspirations in life and how the MBA program will help you accomplish your dreams, apart from the generic questions.The interviewers may even put up questions from topics not relevant to your course of study such as your leisurely pursuits, which implies that they are assessing your personality and not just your knowledge and skills.

Facing an interview without proper preparation can spoil all your effortssince this could be the most critical stage towards fulfilment of your career aspirations. Hence, this involves conscious preparation from your end to be successful at this stage, to help you stand out among other contenders.Participating in mock interviews with the peer group will help you a lot in developing self-confidence, and regular practice will give you an understanding on how to articulate your answers and responses in a way that you do not sound too mundane and monotonous.

Your composure and articulation during the personal interview round will speak for your preparation and forethought, leaving a positive impression on the interviewers. Sometimes, the first impression that you leave on the interviewers makes all the difference and is enough to clear the final hurdle on your endeavour to get into a B-school of your choice. Another aspect that you need to focus upon is your personality and body language, which speaks volumes about your attitude in general. Having a confident body language with a pleasant countenance makes a good combination to create a lasting impression.

Some business schools also include micro presentations as a part of the selection process to test the presentation skills of the aspirants. Presentations are meant to analyze the knowledge, preparation, confidence, public speaking skills, and convincing ability of the aspirants before their selection for the MBA program.

So, you can now understand that the objective of various stages entailed in the selection process is to test your cognitive abilities as well as the different aspects of your personality. This means that making it to a good business school will require rigorous preparation on your part with equal emphasis on all the aspects evaluated in the selection process. Hard work and preparation always pay, so the only trick is to go fully prepared.

In the last 3-5 years there has been an explosion in the jobs in Analytics. To provide adequate training and coaching, we now have a long list of institutes which run courses on Analytics. So which course works best?

My take is ‘it depends’ . It depends on your requirement, the experience you have and what you want to achieve by doing the course.  I am putting down the 5 courses which I would explore if I had to do undergo training in Analytics :-

THE NEW ENTRANTS

1.      ISB Biocon Certificate Programme in Business Analytics :- ISB Hyderabad

This is a new 1 year course and, as with all things ISB, it has a very robust curriculum . It covers not only the concepts and practical in a very interesting mix of physical classes and online assignments (which can be done from home). It is focussed on people with a minimum of 2 years work experience and fresher’s with Analytical bent of mind. It covers a plethora of software (SAS , MATLAB, XLMINER, ARENA etc.)

http://www.isb.edu/certificate-programme-in-business-analytics/programme-overview

2.      Bachelor of Science (Business Analytics) :- NUS National University of Singapore

This 4 years programme offers a common two-year broad-based inter-disciplinary curriculum where all students will read modules in Mathematics, Statistics, Economics, Accounting, Marketing, Decision Science, Industrial and Systems Engineering, Computer Science and Information Systems. After the first two years of studies, students will be equipped with the necessary foundational knowledge to take more specialised modules in their third and fourth years

http://www.comp.nus.edu.sg/is/ug-bsc-ba.html

THE OLD AND ESTABLISHED COURSES

3.      Advanced certificate program for Business Analytics :- IIT Bombay

This is a 1 year course (class on Sundays 3pm – 6pm) it focuses on enterprise analysis and requirements analysis, documentation and implementation. Participants learn the ins and outs of the data modeling, the power of entity relationship diagramming and best practice in system design, solution implementation and impact communication. Taught over the ground breaking Interactive Onsite Learning Technology, it helps participants to attend lectures without compromising their daily routine and at the ease of their own locations.

The sessions are delivered on Hughes HughesNet Global Education interactive learning platform. Students will be awarded an Advanced Certificate in Business Analytics from Shailesh J Mehta School Of Management, Indian Institute of Technology Bombay

http://www.hughesnetfusion.com/advanced-certificate-program-business-analyticsiitb.php)

4.      Business Analytic & Data Mining- ISI Mumbai

Business Analytic & Data Mining program is designed to guide business analytic professionals in analyzing large quantities of data in order to extract previously unknown interesting patterns such as groups of data records (cluster analysis), dependencies (association rule mining), classification of data, reduction of data dimension and predictive analytic. Participants are expected to have knowledge of basic statistical techniques, application and interpretation and some experience in analytics is preferred.

http://www.isimumbai.co.in/pdfs/dmba-brochures.pdf

5.      Foundation Course – Jigsaw Academy (online) :- A personal favourite in the online learning space , aimed at  beginners

The Foundation course has been designed by industry experts who have applied analytics to solve business problems in a variety of fields like retail, FMCG, financial services, telecom and health care. The instructors use their real-world experiences to teach you analytical skills that are most valuable at the work place. Teaching is of statistical concepts, analytical skills and analytic tools (Excel and SAS language). The aim is to be able to make business decisions based on statistics. The biggest draw is that no prior knowledge of Statistics, SAS or analytic techniques is required. The Videos make it easier to study (much less boring)

This is a three month course with classes on Saturdays and Sundays.

http://www.jigsawacademy.com/jigsaw/courses/foundation-analytics

6.      Executive program on managing business decisions- IIM ,Calcutta

This course aims to equip practitioners with key concepts and tools of Modelling and Business Analytics. The program assumes that the participants would have working knowledge of basic management functions and hence would focus mostly on application areas of management. Applicants should be working professionals/self-employed (Need to submit supporting proof), with minimum 3 years of work experience post completion of graduation is required .The program is delivered through classes held at NIIT Imperia Centres for Advanced Learning once a week on Sunday (2.00 PM to 6.00 PM)

http://www.niitimperia.com/executive-program-on-managing-business-decisions

7.      Master of IT in Business –Analytics (MITB-AT):- Singapore Management University

SMU MITB (Analytics) is Asia’s first professional master’s programme to meet this demand (1 year full time course / 2 years part time course) . Co-designed by leading global and regional sector firms from hospitality, tourism, supply chain, retail, healthcare, public sector and telecommunications, it promises a robust and systematic understanding across processes, operations, data, technology solutions and management supervision. It is aimed at professionals with a background in Computer Science, Information Systems, IT, Engineering or the Sciences. A GMAT score is a must. This is a course which is well recognised in the industry .

http://www.smu.edu.sg/programmes/postgraduate/mitb

If you want to discuss which course would suit you or share feedback on the article, please feel free to contact me at subhashinitripathi@yahoo.com , 9731107798.

With the recession and the dropping economy, most of the students and the parents developed apprehensions about joining a management program. Also, with the boom in the education sector, we saw emergence of several institutes, coaching, and universities developing everyday with new range of courses.

Thanks to the Reality TV, even the professional courses got a jump and the Indian population suddenly started looking at the professional courses which were about hobbies and passion. People could relate to them as careers as they too started offering good money and constant workflow.

We see a lot of students and the parents – who have this dilemma of why an MBA holds better prospects than the professional courses when they are offering quicker placements, are charging lesser fee and are comparatively short-term. The comparisons are fine but they are not futuristic. Most of the times – the packaging of these courses is so fine & perfect that they the students give-in to the outwardly glamour of the offering.

We do not say that the professional courses do not good. They are good, they add value to one’s career, they help in earning a living and they shall be pursued. But this comparison is not fair as MBA is something which empowers one to excel further in their careers. It is not just about education and knowledge; it is about attitudes and practice. It is about experiential learning through real time examples, trainings and assignments.

MBA is a level up to these courses. It broadens the horizon of a human brain and helps them think different and teaches us how to chase the different dream and go ahead to follow it.

So what is it that makes an MBA a better deal? Or why it is important to have a business education in any career? To list a few reasons –

Holistic Outlook towards Business

MBA education covers a holistic perspective of business & economy. The course is designed in such a way that it provides you with an overall view of things, businesses and people. The limitations of knowing just thing vanishes in an MBA program as it makes the person learn with a wider perspective, it enables a group dynamics and hence helps the students get a broader insight about people and practices.

Provides Better Networking Ability & Opportunities

In management education, like we mentioned lot of learning happens through practice, through working together and thorough exposure of the outside world is a need for successfully completing the management education.

For me, B-School is where you meet people — your classmates, faculty, speakers, recruiters. MBA fosters the need to be well networked in the students who pursue this course. It enables a person to learn in team and enhances the group productivity. Unlike short term courses it enables – better sharing of knowledge and tactics among the student groups.

If I give a thought to the networking opportunities an average student at IBS gets in an MBA Program, there are lots. Initiating right from the day one of joining, a student not only meets the batch mates and the teachers but also gets to connect to various other B-school students & corporate in the management festivals, the corporate exposure during the Summer Internship and the Management Research Project further facilitate the students in networking.  Then there is the largest Alumni base – which is an existing network for all those who join the bandwagon.

Allows you to work in more than One Sector

The Corporate sector now demands people who believe in becoming the ‘Jack of all trades and master of few’, gone are the times when just one qualification/ specialization was enough to work, excel and grow. Times have changed and so are the recruiters and employers.

An MBA Program allows you to work in more than one sector. Some B-schools including IBS offers dual specialization to help the students excel in two different profiles. Even the job roles these days demand a variety on skills & knowledge. A multi-talented person is always preferred in a group, among friends and even for a job.

Offers Practical Guidance & Mentoring

Mentoring is a unique concept of b-schools. No other courses, degrees offer you a faculty guide and project mentors and that restricts the personal growth and change in attitude which is required at the onset of corporate lives or jobs.

An MBA programs offers you faculty guides, corporate mentors who provide the required hand-holding at various junctures of learning & training and this we believe are one of the most significant shaping stones for any student or trainee. Whereas, most of the professional courses, students are left on their own – with the lecture-listener-examiner relationship.

New Skills, Better Growth and Packages

A management program helps students attain & develop many new skills during the program. Let us take an example of a management festival or an art conclave; the students who participate learn new skills while managing the show. The team who works on sponsorship – learns to manage finance & relationships, some learn hospitality, others learn team management and some learn leadership.

These skill-sets help the students in growing early as they are exposed to certain situations, they have worked before in teams and hence they know about it.

A good b-school ensures they work on this overall learning pedagogy and hence the students get better packages as they truly deserve it.

Helps in Entrepreneurship

In the above points, we have talked about – how an MBA changes the perspective, the personality and the skill-set of a person. It broadens the horizon and hence makes then think about the business perspective. It develops a thought process which is led by logic and the students are empowered enough to get into the technical know-how of things to understand them.

IBS has got an exciting base of alumni who are now entrepreneurs and to continue the trend, there is an Exclusive Entrepreneurship Cell which allows the students to dream big and help them in turning their dreams into reality.

The reasons slated above are few of many but are all time-tested. Any knowledge or skill attained helps the growth of an individual but when you have to choose something better; MBA certainly offers the brownie points.

The usual process of selection in an MBA program involves a written test followed by a group discussion and the personal interview rounds. While the personal interview is just one of the stages in the selection process, it can be the most important one, carrying the highest weightage in your overall performance expectations.

Your success in an interview depends on how well you respond to questions and drive the interview in a direction where you get to highlight your best skills. This is the only round in the selection procedure where your success isn’t affected by other participants and you can create a unique and effective impact on the panel members.

While we all know that life may not give us second chances all the time, a few tips can be helpful to make a good first impression at your interview for selection to the MBA program at the B-school of your choice. Let us have a look at some of the proven formulas for success in the personal interviews.

Dress right for the interview: This can give you an edge above the other candidates as your interviewers will in all probability see you before they hear you.So, knowing what to wear in an interview can help you strike a chord with the interviewing panel even before you’ve even introduced yourself. For girls, the advice is to avoid heavy perfume, makeup, and jewelry on interviews. Boys should preferably go with a clean-shaven look, short hair, and polished shoes. Both girls and boys should dress up in proper, neat and ironed business suits.

Show up on time: Reaching the venue late can be bad for the first impression,showing that you did not take enough pains to make it on time. If possible, you must try to time your travel to the venue from your place of stay, at least a day in advance just so that nothing goes wrong on the final day. Keep extra time for unforeseen delays such as traffic jams in your planning.

Perform a last minute check: It is good to have a look at yourself in the mirror before you enter for the interview for that tie knot that just might not be right. Make sure that your phone is switched off and put away in your pocket or bag. Carry only the essential certificates and degrees and have those ready neat, organized, and accessible.

Enter the room confidently and offer a firm handshake: For most of the students, this is the first interview of their lives. So, it is absolutely normal to be nervous before the interview. However, stay calm to avoid fumbling while you speak and maintain composure to look confident. Reinstate that with a firm handshake to look more convincing.

Check your smile: Be nice to everyone you meet right from the interview coordinators up to the senior-level executives. Remember, everyone’s opinion counts. Some interviewers even make it a point to check how you behaved with the front desk people when you entered the B-school to find out about your overall personality.

Know yourself, prepare well: From the long-term preparation involving your education and personal background to studying about the potential B-school and its culture, make sure you have precise information about the particulars of your records, about the B-school you are attending the interview for and the current happenings across the world. Follow news on TV and newspapers till the morning of interview day. You never know what could be a point for discussion in the interview.

Show interest: Even if you have gone for the interview to some B-school, which is not your primary choice for pursuing the MBA program, show your interest to the interview panel. So, when someone from the interviewers asks you “Why are you here at this B-school?”, you should be able to answer in a convincing manner. Portraying your disinterest may work against you and may result in your rejection, a major confidence buster at the time you need it the most.

Avoid filler words: Be as confident in your speech as your body language. Avoid filler words such as “umm”, “okay” and “like” to make up for the gaps in between sentences when you need time to think what to say next. You may instead compliment the question by saying something like “That’s an interesting question”to buy some time and structure your answer before starting to speak.

Make a mark for yourself: When asked to introduce yourself (generally the first question at every MBA interview), you should try to say what makes you unique rather than just explaining what you did. You are your best advocate and marketer under such circumstances. So,make the most of the opportunity by portraying yourself as the best and highlighting your Unique Selling Proposition.When asked questions about your weaknesses and the mistakes you have made, be natural and authentic, explain what you learnt from the experience, and don’t get defensive.

Pay equal attention: If you are being interviewed by several people at the same time, give everyone equal attention.You never know who might turn out to be the real decision maker. Never undermine the person sitting towards the side of the table and end up making eye contact or shaking hands with only the people sitting in the center.

Keep a positive attitude: Expressing a positive attitude is the single most valuable first impression you can make. If you are excited and able to show the interviewers that you are interested, your potential selectors will definitely be considering you for selection within two minutes of you walking through the door. The right attitude can actually have that good an impact on the panel members.

Be a good listener: A good interviewee must also be a good listener. Listen to the questions attentively and try to interpret them in terms of what the interviewers are looking for. The questions and the way in which they are asked, generally, provide clues to what the selection panel members need and expect. Never cut across or interrupt when an interviewer is speaking. Assuming the question before it is completed and giving pre-emptive answers gives a negative impression.

Remember that your key to success for selection to the MBA program in the primary business school of your choice is the personal interview. You get just a few seconds to make a good first impression and it’s almost impossible to be able to change it after the opportune moment has gone.

The majority of efforts that you need to put in for interview preparations involve common sense. And with just a little extra thought and preparation, you can perfect your unique style to make every first impression not just good but great!

Introduction

As the current financial year draws to a close, it is worth introspecting on the changing preferences of small investors and attempt to look for patterns and trends driving the change. whose investments  and  returns have  seen  a  roller  coaster ride against  the changing  macroeconomic  backdrop.

The beginning of financial year gave  first signs  of  economic  slowdown, In  the  first  quarter of fiscal  year  2013/14, GDP  grew  at disappointing  4.4%. Inflation was stubbornly high, The CPI inflation hovered around 10.24%.The currency value of Indian rupee against dollar slipped to  its  all  time  low of  Rs 69 during the year, also the  persistent  current account  deficit  on  account  of huge  gold  imports  invited  regulatory  action  of  hiking  import  duties  on  yellow metal and  imposing  quantative  restrictions  on  its  imports.  Much to  their  chagrin   small  investors  who  looked  at  gold  as  a  safe  haven  for  investment  and  hedge  against  inflation soon discovered that  this asset  class  which  had  outperformed  in  the  last  few  years  would  soon  start  losing  its  sheen.

Gold as a financial Asset

The lure for the yellow metal for the Indian investor is not new.  The  cultural  milieu  of  Indian  masses  has  always   made   gold  as  an  attractive store of value . However  post  2008,  after  the  financial  crisis of  US,  when  investors   started  seeing erosion in their  dollar  denominated   wealth,  the appeal  for  gold increased more  than  ever  before.  Across  the  world   with  weakening  of  the  strongest  currency-the US  dollar,  investors  started  turning to  gold   a  safe  investment  option.  Even before the beginning of financial crisis, gold was outperforming.  The super cycle  of  commodities  that had  been  on  account  of  various  factors  such  as  FED  quantative  easing, China  and  emerging  markets  growth  story,  had  seen  a  meteoric  rise  in commodity  prices ,  where  investors  had  begun  “financialisation  of  commodities” gold    too  was  not  an  exception. In  India which  had  a huge market  for  jewelry too was seeing  a  paradigm  change  and   consumers  had  begun  looking   at  gold as  an  investment  option. Gold unlike many other asset classes offer these unique advantages

• It acts  as  a  hedge  against  inflation
• It  insulates  the  investors against  currency  depreciation
• It acts as a refuge against economic and political turmoil.
• It’s a store  of  value  for  the  cash  economy  especially  in rural  India ,  which   hitherto  is  still some distance away from financial  inclusion.

The psyche of the small Indian investor suited gold; whilst real estate has always created wealth; the myriad issues of large outlays, complex holding patterns, inheritance issues coupled with illiquidity made the small investor shy away from it. Gold on the other hand offers sensory pleasure (“I-can see-touch-and hold it”) can be bought in small quantities and above all can be encashed even in the middle of night makes the appetite for gold almost insatiable.

A large  number  of  avenues  such  as   Gold ETF , commodity  derivatives,  gold  coins  against  the  traditional  jewelry  added to where   consumers  could  avail    the  high  returns  of  yellow  metal. As  seen  in  the  graph  below the  upward  climb  in  returns of  gold   continued  from  to   till   July  2013.

       Graph1:    Daily   Prices of Gold Rs/10gm: 2008-2014

Source:  MCX

As  per  the  CSO  estimates  between 2007-08 and 2012-13, investment in valuables –gold and other precious metals, including jewellery increased five-fold from 53,592 crore to 266,482 crore.

On May 22nd. 2013, on the announcement of tapering of quantitative easing by the U.S. Fed, gold became the biggest loser internationally. However, Indian investors were still protected because of rupee depreciation, and still high inflation. The capital  flight  and  the looming  problem  of   current  account  deficit which  was  weakening  the  rupee prompted the  policy  makers  to   take  stringent  policy  actions   against gold .Being recognized  as  a  major  import  and  a  drag  on  our  current account  asset .Duty hikes and quantitative restrictions were imposed. Gold being an unproductive asset derive its value from future appeal. As more and more people flock to buy gold, the confidence on gold as an investment increases.  However due  above  reasons ,  gold  saw  a period  of   stable  to  lower  prices  and  this  convinced   investors that   gold had  seen  its  peak.  The  confidence  in  gold  investment  being lost, investors  started  taking  a  backseat  and  started looking  at  other  alternatives

Last year, India imported over 847 tons of gold but new restrictions on gold imports may bring down this figure drastically, analysts said. Festival demand has weakened due to higher prices and lower imports but consumer preferences are changing to platinum, diamond jewelry and light weight gold jewellery,   India lost its position as the single largest consumer of gold.

Inflation Index and Tax free   bonds

To wean away  the  Indian  investors  from  gold ,  the  Indian  policy  makers introduced more appealing  form  of  inflation  index  government  bonds, It  was  claimed  that  these  bonds  had  better  appeal  Unlike  their  original  form,  these  bonds  in  their  new  avatar   were  linked  to   the  CPI  index  instead  of  WPI.  However   liquidity and    predictability issues continue to bog them down.  Indian Investors preferred certainty and good returns to liquidity and showed inclination towards high coupon tax free bonds instead.

Mutual Fund and Insurance products

In India, life insurance has typically been looked at as an investment plus protection. Thus, in the investment aspect, it is not very different from mutual funds. The biggest flush of investor funds came into these products in the heyday of financial markets during 2007-2008. These are often called SIPs (Systematic Investment Plans), and ULIPs (Unit Linked Insurance Plan). They are structured to invest regular amounts systematically, mostly in the equity market. However, post the 2008 subprime crisis, market crashes, quantitative easing, and some subsequent recovery, these plans were not making much money. In addition, after 2011, when investors were walloped by high inflation, they were itching to cash in when they broke even on these investments. Consequently, in late 2013, as the equity markets inched towards new highs, mutual funds and insurance companies saw heavy redemptions by investors in these schemes. The retail  participation  in  equity  linked mutual  fund  schemes  were  strongest  in  2008,  the  retail  inflows   stood  at  Rs 32,247crores.   In  comparison  to  this  the  last  two  years  have  seen   an  outflow  of   retail   investors.  In 2013, the outflow of retail segment from these products was Rs 11162.8 crores. [1] A part of the money redeemed from these schemes has gone to high coupon and tax free bonds as the investors preferred these, even though they carry liquidity and some credit risk. These instruments had also become more attractive due to the rising interest rates in the economy resorted to by the central bank to keep inflation and depreciation of the currency under check.

Small Saving Schemes

India’s gross savings rate has declined since 2007-08, and stands at around 30.1 per cent of the GDP. Investors have allocated a part of their savings to high coupon and tax free bonds. The other part has flowed into the older favorite, small savings schemes. Many investors are flocking back to small saving schemes as investors on account of increasing number of scams in various chit funds, Investors are looking for safety that these government instruments provide. Instruments such as post office time deposits and National Savings Certificates (NSCs) are again being revisited The  post  office and  monthly  saving  schemes  make  up  substantial portion These schemes along with fixed deposits are perceived as risk free. Net Inflows this financial year are expected to   turn   positive to the tune of Rs 1,100 crore.  This is a substantial improvement   from previous years which saw a net outflow. In 2011-12, for instance, there was a gross negative outflow of Rs 21,800 crore from all small saving schemes. Although the interest  rates  in  these schemes  are  not  attractive, and  high  inflation  actually  depresses  the  real  returns ,but these  schemes  score  on  account  of safety cushion. Instruments  such  as  PPF  also  have  a  competitive  edge  on  account  of  tax  free  income they offer.

Conclusion

Some insights  about  the  investment  behavior   and  preferences   of  small  and  medium  financial investors have been  touched upon in  this article. The financial year has seen falling economic growth rates and high inflation. Both these macroeconomic variables have dented the saving rates.  As small  investors grapple with  erosion of  real returns  on account  of  high  inflation   and  low  saving  rate,   they  keep  shifting  their  investment  preferences  in  favor  of  asset  that  insulates  them against  high  inflation. A shift  from  equity  mutual  funds  and  gold  to  high  coupon  and  tax  free  bonds  is  discernable.  If RBI measures  to  tame  inflation  and  governments commitment towards  the path of  fiscal  prudence  hold  water   bringing  forth milder inflation in the coming  financial  year .The small investors  may start  showing   renewed  interest  in   equity  linked  investment  products.

Introduction

The past week has been a harbinger of turbulence in emerging market currencies. The Argentinean peso fell by over sixteen percent in official value against the US dollar. This has been the steepest ever since Argentina had defaulted on its debt in 2002.This triggered an erosion of confidence in other emerging markets. The Turkish Lira plummeted to record lows, and the South African rand too weakened. Two external macroeconomic linkages that were responsible for weakening of currencies are the uncertainty of Fed tapering, and concerns about global growth in general and China in particular. In comparison the Indian Rupee has not been affected as severely due to the proactive stance of the policy makers.

China

The recent PMI data which is recorded below fifty indicates economic contraction due to slowdown of manufacturing sector in the Chinese economy.  The  decision  of  China  to  shift   from  investment  led  growth  to  consumption led  growth   over  a  period  of time too would  have a global impact. The  fastest growing  economy  in  the world has  had a massive  appetite   for  commodities, and has seen  fastest  growth in imports from the commodity complex’ of  metals and  energy in the past decades. These commodities were funneled into its infrastructure and manufacturing sector. This was financed by underpriced massive loans from its state run banking sector, leading to huge accumulation of debt. The export growth  rates of China on  account  of slowing  of USA  and  Europe after  2008  crisis have  been  declining. In addition its   increasing debt overhang has forced its policy makers to  veer  their gigantic  economy towards consumption led  growth .The  commodity  exporting   emerging  nations  have  seen  a  fall off in  their exports, especially to China. Current Account deficits are widening   putting   a pressure on their currency fuelling   inflationary pressures. All this series of events are coinciding with Fed tapering of QE3.

Federal Reserve Tapering

On May 22nd, 2013 that the word ‘taper’ entered the lexicon of capital markets when the Federal Reserve chairman Mr. Bernanke first broached the possibility of tapering QE3 (Quantitative Easing, 3rd Tranche). Markets across the world panicked, emerging economies struggling with unsustainable current account deficits were the hardest hit. Indian rupee for instance fell from Rs. 54 to the dollar to nearly Rs. 68 against the dollar. This negatively impacted equity and bond markets as foreign investors with ETF allocations fled.  Bond markets saw the sharpest outflows. The panic reaction from markets sobered the Fed. The Fed in its wisdom in a surprise move, decided to postpone the taper in September, without outlining a time frame. Consequently markets rebounded and rose to touch historically highs by December across the world. It seemed  the  markets  had  forgotten  that  this  was  just  a temporary  measure.  However as the US economy continued to gather steam and a budget balancing deal was struck. Any uncertainty surrounding the fiscal and monetary framework got removed. The positive momentum of US economy prompted the Fed to announce a 10 billion dollar taper in QE 3 program in January 2014.

India’s preparedness

In May 2013,  after Fed  indicated  the  possibility   of  tapering ,  India  was in  dire  straits. The  three  pressure  points  that  emerged were the unsustainable current  account  deficit (which had risen to 4.8% of GDP);  the possibility  of  a ratings  downgrade by international credit rating agencies to junk;  and lack of adequate foreign  exchange reserves to  fight  a  speculative attack on  the rupee. The finance minister vowed to maintain the path of fiscal consolidation and bring down the fiscal deficit to below 5% of GDP. Various cuts in plan and non-plan expenditure have been instituted It was around the same time that a change of guard was happening in the RBI. The new incoming RBI governor, with the finance minister rolled out several measures to setup a bulwark against these pressure points.

RBI instituted several measures to protect the currency, these were 

·         Current Account Deficit Management

Oil and gold were the main factors   causing the ballooning deficits. Import duties on gold were hiked, and later a proportion of the quantity of imports were tied to exports. Petrol prices were decontrolled fully and diesel partially to partially pass on international prices to the domestic consumer, thereby lessening subsidies, and allowing elasticity to play a part in controlling consumption. This led to improvement in CAD as can be seen in graph 1.  In 2012-13 it stood at 4.8% of GDP but after the measures fell to 1.2% of GDP

Graph 1:  India’s Current Account Deficit as a Percentage of GDP

·         Shoring up of Forex Reserves

Limits on foreign borrowings were eased for corporate as a start, then, the RBI came out with a program to bring in dollars through the FCNR (Foreign Currency Non Resident) route. Banks were encouraged to raise hard currency deposits, and the RBI subsidized the hedging costs of these deposits at 3.5%, whereas the market prevailing rate was double that. Limits on FII investment in rupee debt were also liberalized.

·         Curtailing speculation

RBI squeezed liquidity in the domestic market to prevent easy liquidity from being leveraged to speculate on the forex markets. Short term interest rates were hike by 300% at the MSF (Marginal Standing Facility). Quantitative limits were placed on banks borrowing at the repo level. These steps stemmed the outflow of foreign currency, bolstered our own reserves, and instilled some confidence in foreigners on their India investments. The FCNR swap itself brought in 34 billion US Dollars into the country. The  danger of rating down grade too was averted by promise of continued  reduction in fiscal deficits, further  easing  of  bond  investment  limits  among  several  others . Due to these measures, and the Fed’s decision to postpone tapering, confidence in India rebounded. FII investments came in, and the rupee rebounded. Today, India’s foreign exchange reserves are comfortable. As  can  be seen in graph 2 ,   Foreign  Exchange  reserves  which  had  started  dipping  after   FED  announcement  started  bolstering  up.

Graph 2:  Indian Foreign exchange Reserves ( US  billion  dollars)

Conclusion

It seemed markets became too sanguine about having factored in the Fed tapering. Last Wednesday, when the Argentina’s currency crisis exploded and spread the contagion to other countries, the markets became jittery. The Indian rupee, in contrast stood at 62.66 against the U.S. Dollar.  The  laudatory  efforts  of  our  new  RBI  governor  to bolster the economic  defenses  against the  depreciating  currency in  2013  need  to  be  acknowledged.  It  has  been  because  of  these  efforts  that India  has  been  comparatively  less  affected till date. It  might hence be construed  and  hoped that India will not be  dramatically  affected  by  the  current  currency  crisis  enveloping   the emerging  nations.

Contributed by Prof. Sarika Rachuri (Faculty, IBS Mumbai)

With the BRIC economies gradually becoming irrelevant, a new group of emerging economies has caught the attention of the investors. The MIST nations — Mexico, Indonesia, South Korea and Turkey — are the four biggest markets in the Goldman Sachs equity fund named GSYAX. These economies more than doubled in size in the past decade overtaking Germany last year. The common parameters that put these economies together are a large population, significant share of global GDP and common membership of G -20.

Jim O’Neill , of Goldman Sachs who coined the new acronym  said “ the MIST nations each account for at least 1 percent of global GDP and are likely to see that share increase this decade” Of the four countries, O’Neill said Mexico and Turkey have the most potential. Although the MIST nations have outperformed the BRIC nations by growth rate, they are much smaller in comparison to the BRICS in absolute size or population. Total GDP for the MIST nations was $3.9 trillion in 2012, which is less than one third of the $13.5 trillion BRIC economies. China alone had a GDP of 7.3 trillion according to Bloomberg. The MIST nations also have less than 500 million people, compared with a population size of 2.9 billion in the BRIC nations.

Despite being smaller in size, all the MIST nations have a stable domestic consumption with significant investment in infrastructure. Internet and mobile usage has significantly increased in these economies. All four economies ranked higher than the BRIC countries on the Geneva-based World Economic Forum’s 2012 trade openness index.

South Korea was ranked 34 out of 132 and Indonesia 58th. By contrast the earlier giants like Russia was much lower in position 112 and India at 100. The strengths of these nations are low labour costs especially in Mexico, a growing retail and manufacturing industry and strong exports. Mexico, Latin America’s second-biggest economy, recorded huge auto exports which helped it to outpace Brazil for a second year. This was in spite of a slow Chinese market. Indonesia has the fourth largest population in the world and is Southeast Asia’s largest economy. Although GDP per capita is only $4,880, Indonesia has potential domestic market with a strong middle class. Indonesia’s economic growth accelerated to 6.37%last year. It was fuelled by increase in domestic spending and investment. Indonesia has an added strength of being a financial centre for many Investment banks, as well as a growing energy sector. In Turkey, double digit growth in exports due to an increased focus on Africa and Middle East has helped generate growth.  A strong pool of entrepreneurial talent has diversified the Turkish economy. Turkey also has a strategic position of being a natural bridge between Europe and Asia. Turkey also boasts of tourism as a major revenue earner and its unsaturated markets are a hot destination for the FDI. The fastest growing economy in this group is South Korea with a per capita GDP of $ 27,000. South Korea has emerged as one of the fastest growing nations of OECD with a strong focus on R&D and retail. South Korea stands a little differently than the other three nations on parameters such as demographics, development and growth. South Korea was an emerging market almost twenty years ago and hence its inclusion in the group is debatable. South Korea lacks the young population of the other economies. Only 16% of the population is below the age group of 15 compared to 25% in the other MIST nations. However South Korea’s growth trajectory has been sharper than all the other three countries making it a role model.

Although the initial exuberating with the MIST economies is justified, the future projection needs to be realistic. The challenges to the MIST nations are varied. While Mexico faces the highest rate of corruption and organized crime, Indonesia faces a very complex regulatory environment and insufficient infrastructure.  South Korea’s aging population makes it heavily reliant on exports and thus vulnerable to global cycles. Turkey on the other hand faces a large current account deficit despite a growing tourism industry. Mexico suffers from sluggish investment, high vulnerability to global disturbances and high interest rates. The IMF projects the Mexican economy to grow 3 percent next year. According to IMF , Indonesia’s economic growth will slow to between 5 percent and 5.5 percent in 2014 -15 , compared with 6.2 percent last year .The Current account deficit is also expected to widen to 3.5% of GDP . Suitable fiscal and monetary policies in Turkey have stabilized growth rates to 3.8% although the current account deficits have increased and inflation is outside tolerance limits. The International Monetary Fund (IMF) has revised down the 2014 growth outlook for South Korea, due to exposure to global economic downturn.

Despite these reality checks, each of the MIST countries has potential for growth. The BRIC economies are plagued by excessive dependence on global demand especially China and Brazil. The high costs and administrative obstacles dissuade the foreign investor. Country specific issues such as lack of infrastructure in Brazil and India, the authoritative regime in Russia and the vulnerability of China speak of insufficient attention to the investor. In contrast, the cost advantage in manufacturing seen in Mexico, the young population in Turkey with the strong services sector, and the size of the domestic market in Indonesia are catalysts for future growth. With appropriate fiscal and monetary policies any mist on these countries’ future can be removed and the new bloc of emerging economies can satiate the investors’ appetite.

Contributed by Prof.Swaha Shome and Prof. Davinder Suri (Faculty, IBS Mumbai)

When you decide to take up the post-graduate program in management, you are faced with several issues including:

• the choice of B-school from among the several available options
• the choice and availability of your electives for specialization at the B-school of your choice
• the placement track record of the B-school
• the industry interface of the shortlisted B-schools
• the teaching methodology used
• the presence of well-qualified and experienced faculty
• the infrastructure
• the industry perception of your choice of B-school and
• the fee structure

In addition to the above parameters, there is yet another area that needs your attention.You need to decide upon the geographical location, from where you want to pursue the MBA program with respect to the professional avenues it holds for you. With many business schools having their presence in different cities across the country, you may find yourself confused over your choice of B-school and its respective location.

Prior to your zeroing-in on a location for pursuing the management program, you must be clear about your prospects from the MBA program and how it will equip you to achieve your goals in life. To help you take this decision, let us focus on the implications that the geographic location of a business school can have on your career path and professional as well as personal growth.

Some locations hold more relevance from the placements perspective based on different industry verticals. Some studies and researches have indicated that cities located in Western India may offer better opportunities when it comes to overseas placements particularly in the Middle-East.For individuals aspiring to take up positions with the global firms in the overseas business environment, the cities of Mumbai and Pune emerge as the most desired places. Pune offers ample professional avenues in the IT industry to give your career the needed head-start.It also has a number of automobile companies, especially the leading car manufacturers of the world.

If you are willing to study international business as a specialized discipline during the course of your management program, Mumbai, being a port city, could be a good choice that can help you secure a job offer in the global market. Likewise, if your interest lies in making a career in finance, Mumbai, the financial capital of India, is the perfect destination for you to give your profession the much needed boost. Also, with the major players in the corporate segment headquartered in Mumbai, it has evolved as a centre abounding in finance jobs catering to different management levels.

Information technology (IT) as a management specialization is the foremost choice of the aspirants, especially when they come from a background in Information Technology, such as Bachelor in Computer Applications or an engineering degree in computer science. Bangalore, also known as the IT hub of India, gives you the chance to explore the immense potential that it has with a sizeable presence of leading software companies in the city. The capital city of Karnataka will give you ample opportunities to tap your technical talent. Moreover, this IT city offers you the chance to be employed with a small entrepreneurial venture in a challenging role, or be a part of the large software enterprise having a firm hold in the market.

Dubbed as the cyber city of India, Hyderabad is another important destination with respect to the prospects and potential it holds for the aspirants looking forward to a role in the Information Technology industry.These IT cities of Bangalore and Hyderabad have emerged as the most sought after places with respect to the various employment avenues they offer in the IT industry and the quality of work culture, according to recent trends.

There may be some who, after completion of their management program, would like to explore the career choices in the manufacturing sector. Getting an opportunity to be employed with a manufacturing plant gives you a chance to see and understand the processes involved in the different units of the plant. Moreover, your knowledge of project management can come in handy in planning, scheduling, risk management, quality management, quality assurance and quality control of the various manufacturing processes.

Ahmedabad, being one of the highly industrialized cities of Gujarat, unlocks a world of opportunities for you to exploit your competencies in different verticals of the manufacturing sector,which include textiles, chemicals, fertilizers, electrical engineering, petrochemicals, and cement. Another location which has emerged as the industrial hub of north India is Gurgaon in Haryana. An important part of the National Capital Region (NCR), the city surely holds promises for those interested in making a career in the manufacturing industry with an increasing number of industries setting up their manufacturing units here.

Another pertinent issue that may come in the way of your thought process while choosing the right geographical location to pursue a management program is whether you want to stay closer to or away from home? There are aspirants who do not want to join a business school of repute having its campus in their native town. One of the main reasons cited for this trend is that during the two-year management program,the students get to know about different cultures and get to live and bond with students coming from different parts of the country.

Living away from home can also help imbibe a lot of confidence as you get your first lessons on self-management through your personal experiences. After all, the management program is aimed at transforming your inherent characteristics into the most preferred attributes of the business market, self-confidence being an important aspect of your personality. Staying away from your home or city also helps to widen your horizons through a learning experience with respect to the prevalent cultures and customs of your country.

So, we can conclude that your choice of the geographic location of a B-school can have long-term implications on your career.If you base your decision on your interest areas for the various industry verticals, it can go on to be a stepping stone to success in your corporate endeavours. So, think, analyse, prioritize, and then decide which city should be the best possible option for you to pursue the management program.