1. January 2011, Volume: 11
Sensex 18395.97 Nifty 5512.15 Dollar 45.76 Gold 19660 Silver 42525 Crude Oil ($) 97.75
Investeurs Chronicles
INSIDE
• Current Chronicles
• Cover Story – Nuclear
Power neither green nor
sustainable
• Open Forum – PARTY
SPOILER- Inflation
impinging on Asia’s
growth
• Emerging Markets
• Outlook -Steel
• Financial Q
Investeurs Consulting P. Limited
S-16, U.G.F, Green Park Ext. New Delhi-110016, www.investeurs.com

2. India's Cadila Bolstered by a stellar
India's Suzlon Energy, Healthcare and Bayer performance by private
the world's third- HealthCare, unit of Bayer sector developers, the
largest wind turbine AG, have agreed to set up power capacity addition
maker, has signed an during the first nine
a joint venture to market
order worth about months of the current
products locally,
$1.28 billion for 1,000 fiscal has already
including women's
megawatts of wind surpassed the record
healthcare, metabolic 9,585 MW achieved in
power projects with disorders and oncology. 2009-10. Of the 9,730-
Caparo Energy India. The equal joint venture MW added during April-
Caparo Energy India is named Bayer Zydus December this fiscal,
a wholly owned Pharma would source the private sector
subsidiary of AIM listed Bayer's existing products accounts for more than
Caparo Energy. in India while Cadila half the new capacity at
Healthcare would 4,986 MW. While a new
record of around 14,000
contribute its healthcare
MW is expected for the
drugs and diagnostic
full year.
imaging and other
More…
products.
More
More…….
…
The government may High onion prices India's central bank on
infuse Rs 15,000 crore again pushed up food 25th January hiked its
($3.3 billion) into the inflation marginally, short-term lending and
country's largest lender prompting analysts to borrowing rates by 25
State Bank of India in anticipate another basis points that could
Current Chronicles
the next fiscal year.The round of rate hike by make commercial,
money will be allocated RBI. The country's housing and auto loans
in the budget for the food inflation rose to dearer. RBI Governor
2011/12 fiscal year The 15.57% for the week Duvvuri Subbarao hiked
government is also ended January 15. The the repurchase or repo
likely to infuse another food inflation was rate to 6.5 percent from
8,800 crore into other 15.52% for the week 6.25 percent and reverse
state-run banks for ended January 8. repo rate to 5.5 percent
helping them meet their from 5.25 percent. Other
capital adequacy ratio. rates like cash reserve
ratio and statutory
liquidity ratio remained
unaltered.
More…..
More…….
More…….

3. Cover Story
Nuclear power is neither «green» nor «sustainable»
Energy requirements move in tandem with population growth, & with the United Nation prediction of global population of 8.2 billion by 2030,
demand for energy is bound to increase substantially. This coupled with increasing standards of living for many people in developing nations mean a
substantial jump, of about 76% by 2030 in demand, in an energy deficient world.
This has given way to a prevailing belief that the current model for the world’s energy policy is not sustainable due to its inadequacy in meeting
surging demand, depleting fossil fuel stocks around the world & detrimental effects on environment. This pose a serious concern regarding the
security of energy supply at affordable prices in the context of increasing needs of energy, notably in developing countries that are enjoying rapid
economic growth. To cite an example, China’s energy use which was half to that of USA in 2000, overtook it in 2009.
Obvious answer to above concerns lie in the diverse group of renewable energy sources: wind, solar, tidal and wave energy to hydro, geothermal and
biomass-based power generation. Apart from hydro power in the few places where it is very plentiful, none of these is suitable, intrinsically or
economically, for large-scale power generation where continuous, reliable supply is needed. Probed further solution seem to exist in the power of an
atom. An atom is the smallest particle of an element, but when combined effectively it can be very advantageous for the world at large. Popularly
known as nuclear energy, it apparently holds the key to eco friendly, sustainable, economical, large scale power generation requirement of the world.
Since nuclear energy is widely perceived to be a nearly carbon-free electricity generation source and benefits from a large and diversified fuel
resource base, many countries, including some that have been historically skeptical, are now expressing a renewed interest in it. But is it as good as it
seems? The cost-benefit analysis of nuclear energy for current & future generation at the heart of the debate regarding its potentially increased role
in a future sustainable energy mix.

4. Exposing the myths: Nuclear power does not produce CO2
Nuclear power is not greenhouse friendly. While electricity generated from nuclear power entails no direct emissions of CO2, the nuclear fuel cycle does
Cover CO2 during mining, fuel enrichment and plant construction. Uranium mining is one of Nuclear Power neither green nor sustainable
release
Story the most CO2 intensive industrial operations and as demand
for uranium grows CO2 emissions are expected to rise as core grades decline. In comparison to renewable energy, nuclear power releases 4-5 times more
CO2 per unit of energy produced taking account of the whole fuel cycle.
Also, with its long development time, a nuclear power programme offers no short-term possibility for reducing CO2 emissions.
Exposing the myths: Nuclear power is safe & Secure
High risks: Despite a generally high security standard, accidents can still happen. It is technically impossible to build a plant with 100% security. A small
probability of failure will always last. The consequences of an accident would be absolutely devastating both for human being as for the nature. The more
nuclear power plants (and nuclear waste storage shelters) are built, the higher is the probability of a disastrous failure somewhere in the world.
Problems of security, safety and environmental impact have been perennial issues for the nuclear industry.. There is also the very serious problem of
nuclear proliferation and trafficking.
The exposure risk to workers in the uranium mining industry is also great.
Exposing the myths: Nuclear power can provide an endless source of energy
Consumption
Country
(in watts/person)
Ghana 27
The average global electrical generating capacity for 2009 was about 2.2 terawatts (2.2TW, or 2.2 trillion India 56
China 293
watts). Divided among the estimated 6,790,000,000 humans alive as of July 2009, this provided 325 watts/
Poland 384
person. Of that output, actual power consumed was 301 watts/person. (See the attached table) These South Africa 500
figures are for electricity consumption only. Britain 646
Germany 759
The time frame needed for formalities, planning and building of a new nuclear power generation plant is in France 780
the range of 20 to 30 years in the western democracies. In other words: It is an illusion to build new nuclear Netherlands 848
Australia 1176
power plants in a short time.
United States 1439
The energy source for nuclear energy is Uranium. Uranium is a scarce resource; its supply is estimated to Sweden 1695
last only for the next 30 to 60 years depending on the actual demand.
Under no circumstances can nuclear power be considered to be sustainable

5. Cover Story Nuclear Power neither green nor sustainable
Exposing the myths: Nuclear power is sustainable
With the virtual demise of the Fast Breeder research programme and no foreseeable commercial development of fusion reactors, the belief that nuclear power
can supply an endless source of energy is fast disappearing. The Japanese Monju Fast Breeder reactor has been inactive since a serious accident in December
1995, whilst the French Superphoenix and the breeder reactor programmes in the UK have been permanently closed.
Diminishing uranium supplies and the failure of the breeder reactor programmes mean that nuclear power will not be able to make a long-term contribution
to meeting the world’s energy needs.
Exposing the myths: Nuclear waste disposal and storage solutions are perfect
Nuclear power plants produce extremely long-lived toxic wastes, for which there is no safe means of disposal. As disposal is not scientifically credible, there
is no option other than interim storage of radioactive wastes. This means that the legacy of radioactive wastes will have to be passed on to the next
generation. Producing long-lived radioactive wastes, with no solution for their disposal, leaving a deadly legacy for many future generations to come is
contrary to the principle of sustainability.
Conclusions
Nuclear energy is recognized as one of the greatest scientific discoveries of the past century due to its beneficial effects on an array of fields, like, power
generation, medicine, instrumentation, & control systems. Beyond doubt, it fits in to the bill of intellectual capital worth passing to future generations. In this
bonhomie, however, let’s not turn a blind eye to the ill effects of this energy form. It poses some serious danger on both safety, & environmental fronts. In
fact, it is one of the most expensive ways to reduce carbon dioxide emissions. Also, there are no proven strategies for permanent safe storage of nuclear
waste with a very real health risk. Precisely, Nuclear power is uneconomic, unsustainable and unsafe.
For long, nuclear energy enthusiasts have cribbed about unfair reputation attached to nuclear power. World, in its quest to quench rising energy demands
have started bowing to its argument. Rising energy demand is a reality but consequential critical dependence on nuclear energy is a misplaced notion!
Perhaps, not entirely detrimental to mankind, and ecosphere, but nuclear energy do have some serious cost attached to it. It is for us to dwell, and decide
upon the price we are willing to pay.

6. PARTY SPOILER- Inflation impinging on Asia’s growth Open Forum
momentum
After a stellar economic performance post financial crisis of 2008, Asian
economies are now grappling with high inflation. Consequently, inflation
projections are going up, & growth forecasts moving down across the region.
Inflation fears have set in, with tightening policy and rise in interest rates on
cards which would result in slowdown in growth.
India is at the vanguard of these fears with further increase in food inflation,
money market tightness, deposit and lending rates moving up, upward bias
of the oil price in immediate future, and widening current account deficit.
There has been acceleration in both input and output prices. Output price
index for India rose in December 2010 for the third straight month to reach
its strongest since May 2010, while input costs reached to their steepest level
since April 2010. India industrial activity is 6.1% above full capacity
China Period Figure
utilization, which means pricing power is back. It’s no wonder then that RBI China property prices Nov 2010 7.70%
is concerned about inflation as also reflected through multiple rate hikes in China CPI (yoy) Nov 2010 5.10%
Producer Price Index (yoy) Nov 2010 6.10%
the preceding year. Hongkong
CPI (yoy) Nov 2010 2.90%
Malaysia
However, India is not a standalone case of inflation pangs. Around Asian CPI (yoy) Nov 2010 2.00%
continent, inflation is giving tough time to the governments, and the Central
Banks. Chinese inflation surged to a 28-month high of 5.1% in November
Hence, for most of the Asia, asset bubbles and rising CPI continue to be the
driven by sensitive food articles, higher rental prices and increased labor
key risks to growth. As such Asia and the Pacific region growth is forecasted
costs. It represents a double edged monetary phenomenon with excess
to fall to 7% in 2011 from 8.3% in 2010. Fall in GDP is mainly on account of
demand, and higher commodity hording level. Elsewhere, core inflation in
high commodity prices, & oil prices. Oil prices, alone, could shave off 0.8
Indonesia surged to a 20 month high near 6.96% in December due to lower
percentage points of regional growth in 2011.
coal and palm oil production. Consumer prices came in at 3% higher during
the same month compared with year-ago period. Hongkong, Taiwan, Vietnam,
South Korea share similar sentiments of rising prices.

7. Open
Forum
Despite downside revision in growth projection for the region, yet it isUrgently required are corrective, and preventive anti inflation measures.
believed to remain strong enough to deal with burgeoning inflation to negateOptimistic growth forecasts have to be ably assisted by prudent
inflation negativities. Asian factory output powered ahead in December tomacroeconomic measures. Governments and Central banks have started
underline emerging markets continuous growth even as growth is stilltaking cognizance of the fact. Apart from the multiple rate hikes by the
lackadaisical in developed economies. South Korea’s factories posted their Indian Central Bank in 2010, and more to come in 2011, China has intensified
strongest growth in December in seven-month. its monetary tightening through a 25bps interest rate hike and 50 bps hikes
in the required reserve ration in December 2010. Thailand and Korea have
Nevertheless, relying merely on the growth prospects of the region will prove hiked interest rates in middle of January 2011. Many Asian countries are also
suicidal in the long run. Assessing the overall scenario, it becomes evidentimplementing different measures to cope with rising food prices, one of the
that interest rates are too low across much of the developing Asia. Secondly,major contributors to the stubborn inflation in the region. Korea has unveiled
output gaps, which measures economic growth with its potential have closed measures to strengthen control on pricing irregularities, and boosting food
everywhere except Japan, which means that building up of price pressure issupply along with tariff cuts. Indonesia has announced elimination of tariffs
under way. Along with it, factors like rising commodity prices and massiveon import of products like, wheat, soybeans, & livestock feed. India is also
capital inflows threaten towards an even higher Asian inflation. considering ban on some food exports.
The challenging part of the scenario, which the continent is waking up to, is
dealing with inflation when capital inflows to the region have still not dried
up. Monetary policy is still loose in much of the Asia.
The writing on the wall is clear: Asia needs to get its act together through
monetary policy tightening .Any dillydallying or soft stance on it would mean
a harsh landing for the entire continent.

8. Brazil lifts interest rates to curb inflation Emerging Markets
Brazil, which is one of the world’s fastest Sarb admits limited success on rand Philippines: Govt asks central bank to keep
growing economies, has admitted that inflation is South Africa has had measured success in rates steady
spiraling out of control.As a result; the central countering the effects on the rand of high capital The Department of Finance (DOF) is brushing
bank has lifted its key interest rate half a inflows by increasing foreign exchange reserves, aside market fears that the low-interest rate
percentage point to 11.25% in a bid to tame said a Reserve Bank official on 28th January. South regime has come to an end, citing inflation and
inflation, which at 5.91% exceeds the Africa drew higher capital inflows in 2010, along other macroeconomic indicators that remain well
Government’s target of 4.5%. Meanwhile, Brazil‘s with other emerging markets that had more within target. On the sidelines of the launch of
economy, which is the largest in Latin America, attractive rates than developed nations. Inflows PSETrade on 26th January, Finance Secretary
grew more than 7% in 2010 and is forecast to into the bond market tripled to R58.6bn in Cesar Purisima told reporters that there is no
expand between 4.5% and 5% in 2011. 2010.This was one factor that helped push the rand reason for the Bangko Sentral ng Pilipinas (BSP)
up more than 25% in the past two years. to raise interest rates. The BSP early this week
Russia's January CPI may double to about 2% - said inflation this month is forecast to range
Kremlin aide South Africa: Experts warn against tax for NHI from 2.7 percent to 3.6 percent. For the whole
Russia's consumer price index is likely to rise to The elephant in the room on budget day next year, inflation is forecast to average between 3
about 2% in January 2011 from 1% in December month will be the national health insurance; (NHI) percent and 5 percent. Last year, inflation
2010, presidential economic aide Arkady said Ernst & Young's tax advisers on 27th averaged 3.8 percent, or well within the 3.5
Dvorkovich said on January 21, according to RIA January.They said that while the impact on future percent to 5.5 percent BSP target range.
Novosti. Dvorkovich's forecast is lower than a expenditure around national health remains
preliminary estimate by theEconomic uncertain, it would not be good if this became "just Russian firms seeking $1.86 billion in London
Development Ministry, which expects January CPI another tax". IPOs
at 2.1-2.3%. The Federal State Statistics Service "We must be careful where the funding comes Russian companies are seeking to raise a
said on January 19 that prices had risen 1.4% from," said general tax director Rob Stretch. combined $1.86 billion from London stock
since the start of the month to January 17 Stretch said South Africans are already feeling the market floats in coming weeks as pent up
compared with 1.2% in the same period in 2010. heat from additional taxes like import duties. He demand and a revival in Russian equities help
noted, for example, that cars in SA cost 30% more swell the IPO pipeline. "Sentiment has swung in
than those in the UK. Russia's favor over the past month or two -- there
have been more inflows into Russian equities its
way," said Yaroslav Lissovolik, chief strategist at
Deutsche Bank in Russia.

9. Steel Outlook
Outlook
Steel seems to have become synonymous todemand is expected to emanate from emerging Call Rates as on 29th January 2011 → 5.60%-6.75%
volatility in past couple of years. This trendmarkets .China, especially, holds a significant Commodities
appears to continue for this year as well, withposition in this demand outlook. If it continues Aluminum (1 kgs) 107.65
volatility in steel price to be the only prediction. with its investment expenditures then demand for Copper (1 Kg) 428.30
Hence, prices are expected to move in a quite widesteel will definitely get a boost. However, restraint Zinc (1 kg) 102.05
range of post recession highs to 2010 lows.on Chinese investment expenditure is the biggest Steel (L) (1000kg) 30000.00
Volatility is forecasted to be a certainty on back ofdownside risk to steel prices. Currently, downside As on 29th January 2011
drained out inventories, at the mill, distributor, &risk seems to be weaker.
consumer level. This is the reason
behindAnother major emerging market, India is all set to Forex
customers stocking up despite increase in price ofsee a 10% increase in demand by the end of 31st Forward Rates against INR as on January 29th
steel in the recent months, and industry wideMarch. .All major developing markets are 2011
Spot Rate 1 mth 3 mth 6 mth
operating rate below 70%. registering a higher economic growth with a US 45.84 46.06 46.6 47.27
Euro 62.91 63.2 63.89 64.72
stronger emphasis on infrastructure development.
Further worries are on raw material front. The key Sterling 72.76 73.11 73.92 74.9
As a result, 2011 will see a higher steel demand, Yen 55.48 55.76 56.44 57.32
inputs for steel production are iron ore, coking Swiss 48.53 48.79 49.38 50.14
globally.
Franc
coal, scrap, electricity, & natural gas. Of these, Source: Hindu BusinessLine
prices of both iron ore, and coal has startedPutting precisely, an abysmal state of inventory
showing upward movement in the past fewlevel along with expected surge in raw material Libor Rates as on January 29th 2011
months due to disruption in supply chain owing tocost, & demand this year would eventually lead to Libor % 1 mth 3 mth 6 mth 12 mth
massive floods in Australia’s largest coalswinging steel prices in the year 2011.Price of hot US 0.26 0.30 0.45 0.78
Euro 0.83 1.01 1.24 1.56
exporting region. Coal prices have gone up byrolled coils are expected to be in range of Sterling 0.60 0.78 1.07 1.53
Yen 0.13 0.19 0.35 0.57
around 56% & iron ore fines are now costlier by650-750US$ per tone in 2011,slabs from
Swiss Franc 0.14 0.17 0.24 0.52
around 40% compared to a year ago. It is not just550-625US$ per tone, & scrap from 350-400US$ Forward Cover % as on January 29, 2011
coking coal and iron ore prices that have gone up,per tone. This suggests more volatility, and in 1 mth 3 mth 6 mth
US 5.84% 6.72% 6.33%
even scrap prices are much higher. Naturally, steelsome ways more opportunities, for those who Euro
5.61% 6.32% 5.83%
companies are switching to measured price hiketrade either commodity steel or steel equities. Sterling 5.61% 6.32% 5.83%
moves, and if the trend persists, more price rise Yen 5.61% 6.32% 5.83%
will be underway.
Swiss Franc 5.61% 6.32% 5.83%
However, it also signifies an unhealthy scenario for Source: Hindu BusinessLine
global steel industry in form of disruptive
Still another factor which is working in favor of
production schedules, and capital investments.
uptick in steel prices is economic recovery in

10. Financial Q In Focus
1. This term is derived from the Greek word
Going down the memory lane
'Oikanomia' means "House Management". What is
it?
2. Name the first Indian woman CEO of a Foreign
Bank?
3. He is the pioneer in mutual fund industry and often
referred as the Father of Index Fund investing. He
created the first S&P 500 Index fund. Identify this
famous person?
4. What is the exchange rate of one currency for
another over a fixed period of time called?
5. In which country's coins you can found the
following lines imprinted, 'This is the root of all
evils’?
6. In India where is the Paper for the currency Policy response of RBI to inflation in India in last two years:
manufactured?
Date Inflation Repo CRR
7. Which word was derived from the French word
Bougette meaning 'Little Bag'? 24.05.08 8.90 7.75 8.25
8. What does 'Asset Tripping' mean? 19.07.08 12.50 8.50 8.75
9. What are the Bonds that carry low ratings with 30.08.08 1.40 9.00 9.00
correspondingly higher yields called? 31.12.09 8.50 4.75 5.00
10. In money market, what is the term used for the
31.05.10 10.30 5.25 6.00
non-convertible paper money?
(1) J Stacey Adams (2) The Johari Window (3) Word Of Mouth (4) Acid
31.12.10 8.80 6.25 6.00
Test (or 'Quick Ratio') (5) Ajanta Quartz (6) An investor who is prone
to rash, emotional decisions as he lacks a proper trading strategy,
is known as a sheep in financial lingo. (7) Greshams Law (8) London
Metal Exchange (9) Rupert Murdoch (10) The Mouse Answer of Quiz: 9