In the last 19 years, out of 13 times when the Sensex closed higher in the first week, on nine occasions it also ended the month in positive territory
How will January 2010 end for the markets? That seems to partly depend on how the first week ended. A study conducted by Moneylife has found that on most occasions, a positive start to the first week has led to the market gaining for the entire month of January. Over the last 19 years between 1991 and 2009, on 13 occasions the market made gains during the first week. Out of this, on nine occasions, the index also ended the month at a higher level. The Sensex has closed the first week of this year at a higher level, so this is a positive signal for investors. The phenomenon of the index closing higher at the end of the first week is explained by the fact that market participants start the New Year on a bullish note. Interestingly, of the nine times that the index ended higher for the first week as well as the entire month, on six occasions, it also ended the March quarter at a higher level.
What happens when the index ends the first week on a negative note? Interestingly, the same trend persists. Of the six times when the Sensex declined in the first week, on five occasions it also ended the month at a lower level.
As part of the UID project, the government plans to introduce a micro-payment platform that would allow for easy transactions in unbanked areas of the country. It will also create a nationwide network of BCs for enabling interoperability
The government’s ambitious unique identity (UID) project, under the stewardship of Nandan Nilekani, proposes to introduce a micro-payment platform that would make use of mobile technology. This platform would enable business correspondents (BCs) to carry out instant transactions at the remotest places in the country. The BC model has been implemented by the government in its efforts to tap the unbanked population in the country, as a part of its financial inclusion measures.
This micro-payment platform would function through low cost devices (or micro ATMs), said Mr Nilekani at Monday’s Banking Conclave 2009-10 in Mumbai. Also, these ‘micro ATMs’ would function as a network through connections with other banks across India. This would enable a person to instantly deposit or withdraw funds regardless of the bank associated with a particular BC. However, he mentioned that for this platform to become a reality, an inter-bank switch (similar to the National Financial Switch) would be required to make the system interoperable. Mr Nilekani pointed out that the National Payments Corporation of India (NPCI) would look into the matter.
Speaking at the conclave, Mr Nilekani said, “This will create a whole new paradigm in the financial inclusion process. What we propose is really creating, in effect, a low cost, high volume equivalent of an ATM network. This device will be based on a mobile phone connection and would be made available at every BC. Customers would just have to get their identity authenticated and withdraw or put money into their bank accounts. This money will not come from the ATM, but from the cash drawer of the BC.”
Stressing the importance of having these BCs connected, he added, “It is essential that it is made an interoperable system. Customers should be able to go to any BC to withdraw money, regardless of who is the merchant bank of the BC. It is similar to the way bank ATMs operate. If we have these BCs connected, it would also lead to more competition, thus bringing down transaction costs for customers.”
Mr Nilekani was also optimistic about the success of financial inclusion efforts, pointing out that various things are coming together at a very opportune and critical time to make it more feasible. These include the adoption of new technologies by the banking system, the spread of the mobile network, easy verification of identity supported by the UID project, the large flow of money between people through remittances or government welfare schemes and the regulatory environment being amenable to put things together.
Decades of battering (through unresolved grievances) and discomfort with automated systems have...