Welcome to the real Stock Exchange!!! Share Shah

The economists will tell you that there are many reasons for rise and fall of share prices, usually after the fact. Economists assume that people are only driven by rational pursuit of self-interest. They will tell you that macro economic indicators show the state of the economy. They will talk about good and bad fundamentals. Company earnings are expected to influence share prices. They will tell you that the P/E ratio is the right indicator for how much to pay for a given amount of earnings. But some stocks have such higher multiples. The main reason being expected or anticipated perception of growth. If a company has a bright outlook and is expected to grow rapidly, investors will usually be willing to pay more for a given increase in a company's earnings.
   In a perfect economics' world investors would be as cold and calculating as a computer. They would buy and sell investments without emotion, passion, infatuation or antipathy. Their decisions would be solely to increasing their overall economic well being. They would select only the investments that would add to their wealth. Decisions that would add less or even diminish the portfolio's total value would be rejected. Unfortunately, however, behavioural science has shown that people do not make machine-like decisions. The investment selection process is actually more human than analytical. Feelings of loss pride and regret clutter or even confound the process. Very often, investors choose the investment alternatives that provide them with psychological solace rather than the ones that offer them economic benefits. In recent years, a large volume of research has begun to identify the psychological and behavioural factors that can impact an investor's decision-making process. Some people might call these factors idiosyncrasies, anomalies or behavioural oddity. They also could aptly be described as simply human nature. Knowing more about them means knowing more about us.
   But the underlining fact is that what many scientists forget is that many of our decisions are based on expectations ... rational or otherwise. Once upon a time in a village, a man appeared and announced to the villagers that he would buy monkeys for Taka 10. The villagers seeing that there were many monkeys around, went out to the forest and started catching them.
   The man bought thousands of monkeys at Taka 10 and as supply started to diminish, the villagers stopped their effort. He further announced that he would now buy at Taka 20. This renewed the efforts of the villagers and they started catching monkeys again.
   Soon the supply diminished even further and people started going back to their farms. The offer rate was increased to Taka 25 and the supply of monkeys became so little that it was an effort to even see a monkey, let alone catch it!
   The man now announced that he would buy monkeys at Taka 50! However, since he had to go to the city on some business, his assistant would now buy on behalf of him.
   In the absence of the man, the assistant told the villagers. "Look at all these monkeys in the big cage that the man has collected. I will sell them to you at Taka 35 and when the man returns from the city, you can sell it to him for Taka 50." The villagers squeezed up with all their savings and bought all the monkeys. Then they never saw the man nor his assistant, only monkeys everywhere!!!

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Holiday Desk

India's Supreme Court has allowed French company Lafarge to carry on mining operations in the northeastern Indian state of Meghalaya for extraction of limestone and manufacturing cement at its plant in Sylhet, Bangladesh.
   A special bench of the court headed by Chief Justice KG Balakrishnan, in an interim order last Friday, allowed Larfarge's plea.
   The French firm had challenged the order of the Indian Ministry of Environment and Forests issued earlier in May this year asking the company to stop work at quarries on the grounds that mining was not permitted in forest areas.
   Lafarge transports limestone from its mines in Meghalaya to its cement manufacturing facility in Bangladesh.
   The French company had contended that the ministry's order amounted to putting an end to supply of raw material to its US$ 255 million cement project in Bangladesh as it was fully dependent on limestone from East Khasi Hills in Meghalaya.
   However, the apex court asked the company to reconfirm whether all necessary clearances were in place now that the area had been declared as a forest. The company will have to submit a cost-benefit analysis and a feasibility report.
   The order by the court was passed after the court-appointed amicus curie submitted that the French firm should be allowed to continue its operations keeping in view the international sensitivities and the cement project, which was already in place.
   The amicus curie, in his report, said, "the low level of economic development of the hill states (or some other non-hilly states) is a compelling factor in favour of development that may justify such projects in eco-sensitive areas."
   "But then such projects should ensure that not merely some or significant but every conceivable benefit from the project is available for development of such an area-not neighbouring countries," he said.
   Lafarge had said the Meghalaya government had given no-objection for setting up of a new cement factory in the state and its mining activities were less than five percent of the total deposits.
   "It's not that we are sending everything to Bangladesh. We will have such activity in the state and will contribute to overall development, including employment-generation, in the state," counsel for the French company Mukul Rohtagi contended.
   Lafarge had filed an application under the Forest Protection Act seeking permission for non-forest activity in the forest area. It said the Indian Environment and Forests Ministry had earlier allowed taking limestone to Bangladesh by a 17-km conveyor belt and reversal of the stand rendered its plant non-operational.

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SAARC trade barriers to go in 6 months

Holiday Desk

Pakistan Commerce Secretary Syed Asif Shah said the non-tariff barriers (NTBs) to trade within the SAARC region would go in the next six months. "I'm hopeful about removing all the NTBs or those would substantially be reduced within the six months," Shah told local business leaders at a breakfast meeting at Hotel Sheraton.
   A press release issued by Pakistan High Commission to Bangladesh adds, Syed Asif Shah held a meeting with the leading members of business community of Bangladesh on the 26th of November in Dhaka. Mr. Shah is leading the Pakistan delegation to the 13th SAARC CEC meeting.
   On the Bangladesh side, the business delegation was led by Mir Nasir Hossein, President FBCCI, and attended by Mr. Hossain Khaled, President Dhaka Chamber of Commerce, Mr. Anwar-ul Alam Chowdhury (Parvez), President BGMEA, Mr. Md. FazIul Hoque, President, BKMEA, Mr. S.M. Shafiuzzaman, President, Bangladesh Aushad Shilpa Samity, Mr. Kamran T. Rahman, Chairman, Bangladesh Jute Mills Association, Mr. Obaidur Rahman, President, Bangladesh Indenting Agents' Association, Mr. Aftab ul Islam, Director, FBCCI, Mr. Zahid Hossain Tukun, Vice President, Jessore Chamber, Mr. Md. Hasen Ali, President, Rajshahi Charnber, Mrs. Selima Ahmad, President, BWCCI, Mrs. Sabrina Islam, President, Wom€r Entrepreneurs' Association, and representatives from other leading trade bodies participated in the meeting.
   The meeting was also attended by the High Commissioner of Pakistan Mr Alamgir Babar, and senior officials of Pakistan's Commerce Ministry, members of the delegation and High Commission's representatives.
   The Commerce Secretary briefed the meeting on the economic liberalisation drive of the Pakistan Government and the opening of the domestic market for foreign trade, business and investment. He stressed that the two sides explore avenues to further enhance bilateral economic cooperation in keeping with the large potential that exists between the two countries. He also briefed on the outcome of the recently concluded SAARC CEC meeting.
   Mr. Mir. Nasir Hussain and leading representatives of Bangladesh's business community agreed on the need for steps to increase bilateral trade and commerce. Direct shipping and market access were also discussed, including for pharmaceuticals, women entrepreneurs' products and finished jute goods. Commerce Secretary, Syed Asif Shah, assured them that Pakistan was ready to work with Bangladesh address the issues, including as part of FTA process.
   The meeting provided a useful opportunity to interact and exchange views first hand on a wide range of trade and commerce-related issues of mutual interest. Both sides agreed that the private sector had to be the driving force behind enhanced economic cooperation. Several areas for cooperation and joint ventures were identified including textiles, leather, light engineering and sports goods sectors.

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