Russian Economy Stalls in Q3
Russian Economy Stalls in Q3
The Russian GPD posted zero growth in the three months to September, following a revised 0.14 percent expansion in the previous period, as a rise in internal trade and real estate activities was not enough to offset a drop in manufacturing.
On a quarter-on-quarter seasonally adjusted basis, fishing and farming activities shrank the most by 3.5 percent, followed by restaurants and hotels (-1.63 percent), health and social services (-0.88 percent) and construction (-0.8 percent). Manufacturing contracted 0.44 percent and the mining sector dropped 0.51 percent.
In contrast, financial activities posted the highest gain (3.26 percent), followed by agriculture (1.41 percent), internal trade (0.69 percent) and real estate (0.63 percent). Transportation grew 0.13 percent.
Year-on-year, the economy advanced 0.7 percent, slowing for the third straight quarter.
12/12/2014 1:49:39 PM
Russia Trade Surplus at 3-Month Low
Russian trade surplus shrank 24 percent to USD 12.93 billion in December of 2014 after declining 25 percent a month earlier.
Year-on-year, exports shrank 24.1 percent to USD 37.6 billion, following a 21.7 percent drop in November. Shipments to countries outside the Commonwealth of Independent States (CIS) dropped 23.5 percent while sales to the CIS countries – Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Tajikistan, Turkmenistan, Ukraine and Uzbekistan – fell 27.1 percent.
Imports declined 24 percent to USD 24.7 billion. Purchases from the non-CIS countries fell 21.9 percent while those from the CIS countries dropped 39.2 percent.
In November of 2014, Russia posted a USD 13.6 billion surplus.
Considering last three months of 2014, exports shrank 17.4 percent year-on-year while imports decreased at a faster 19.4 percent.
2/11/2015 1:16:12 PM
I have often seen people knowingly or unknowingly anchoring to the price of a stock, perceiving say a Rs 100 stock as cheaper than a Rs 1000 stock. Not only is this is bad because as an investor you should be worrying about the business fundamentals not the share price fluctuations, but does not consider the size of the business or the scale of it’s sales or profitability at all.
To illustrate this idea, consider the following
Current Price: Rs 39557
Nestle India Limited
Current Price: Rs 6923
Current Price Rs 224
Current Price: Rs 332
What does this tell you? Absolutely nothing of value on its own. This isn’t a race where a share starts at it’s face value of say 10 and continues growing from there on. Along the way, adjustments like splits, bonuses and share buybacks need to be considered.
Thus we get to the idea of number of shares outstanding. When you buy a share, you are buying a small % of the company, or to be precise 1/(no of shares outstanding of the company). You can use this multiple to figure out the market capitalization of the company as well as the total earnings.
Assume this cake represents the business
Each slice represents a share of the goods. Whether you slice it 10 ways or 20, the size of the cake is not affected by how it is sliced, only the size of the slice is changed. The quality of the cake is also completely independent of the size and manner of slicing. You can have a terrible large cake or a wonderful small cake (and vice versa) depending on the skill of the baker (management) and the ingredients used (fundamental economics of the business)
This post might seem simplistic to those who are aware of fundamental valuation, but I think this basic analogy needs to be drilled into every investor’s head.
Sustainable Value Creation is a new mode of business that addresses fundamental societal issues by identifying new, scalable sources of competitive advantage that generate measurable profit & community benefit.
Business at its best is organised around five implementation imperative for planning , managing & scaling a sustainable value creation strategy.
These imperatives are:
- Recognise the opportunity: Analyse the root causes of existig core business challenges to uncover underlying societal problems, that if addressed, may lead to new source of competitive advantage.
- Recalibrate your Radar : Pinpoint the optimal role the company can play in helping to address those issues by expanding internal & external networks to tap into trends. Improve the companys ability to screen ideas based on needs, uniqueness, strategic fit & core competencies.
- Research, Develop , Repeat : Plan& manage sustainable value creation initiatives as R&D projects & subject them to the same rigor as any corporate initiative, accomadating an iterative development cycle & being prepared to learn from setbacks.
- Rewire the Organisation : When bringing a project to scale, embed new governance structures, communications, incentives & metrics.
- Reinforce the Value : CEOs will need to assume leadership to ensure the entire company remains focused & motivated & its stakeholders committed.
Traders at the New York Stock Exchange: we need to think in terms of our future wellbeing, not just nominal returns. Photograph: Brendan McDermid/Reuters
- suspend belief in unprovable economic theory and employ those most intrinsic British qualities: common sense and moral compass.
- Since I am by profession an investor, let me start by asking a rather simplistic question: what is the purpose of investment? Common sense would surely steer one away from what most assume Milton Friedman’s answer would be – to maximise financial returns within the bounds of the law.