DARE - Because Entrepreneurs Do

Book fairs are no more the same old book fairs catering to publishers only. Over the years, book fairs have expanded their scope and are not confined to print media only. Book fairs today organizes seminars, are a marketplace for audio, TV, film and digital channels, and cater to lots of other activities.

Print industry the world over is going through hard times. It is not that people have stopped reading, but the medium of access to written material have changed significantly. The biggest factor contributing towards this trend is the gaining popularity of electronic medium. One major factor which may lead to fall in popularity of book fairs is the Internet. The Internet is more efficiently catering to the motive and USP of the book fairs by creating a marketplace where publishers and readers come in contact. Also availability of rare books and small publishers which used to be in these book fairs is no more a selling point as most of them are now available online.

However still many countries and various other organizations host book fairs and have experienced substantial foot falls in such events. One of the reason to host such event is the social factor. However large and increasing number of visitors in some cases requires an explanation. One of the possible reasons for this may be book fairs being seen as a marketplace not only for publishing industry but for other areas too mentioned above. Other could be rising literacy rates, knowledge of book fairs to much larger section of population due to improved and effective advertising.

However, these events have still not lost their sheen. Delhi book fair which is starting from August 29, has witnessed ever increasing number of exhibitors and visitors along with the growing presence of overseas participants. Apart from the business angle, Delhi book fair also has a social angle. London book fair too is expanding its scope and is like a global marketplace for rights negotiation and the sale and distribution of content across print, audio, TV, film and digital channels. Other famous book fairs like Frankfurt book fair, Tokyo international book fair are also coming up with new ways. Also online book sellers target and showcase themselves in these book fairs which gives them decent publicity. So the key is, how to adapt and how to respond to changes.

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The Delhi High Court on 30 July, 2009 ordered that it will be compulsory for two-wheelers manufacturers and dealers to provide helmet at the time of the sale of the vehicle. The judgment however was not welcomed by All India Helmet Manufacturers Association (AIHMA) on the belief that it will create monopolies. Also there are high chances that it will not be welcomed by people those who already own a helmet and are purchasing a new vehicle nor by those who prefer to buy a helmet which is not available with the dealer.

Anyways, if it is made mandatory, that a vehicle will come with a helmet, then it might push the demand for helmets by these dealers and manufacturers. Economy in which almost 8 million two wheelers are sold annually will create a demand of atleast 8 million helmets annually. Taking a conservative figure that a helmet costs around Rs 250 would suggest that helmet industry will be worth of Rs 200 crore annually for India only. This can certainly open up the opportunity for helmet manufacturers. However there are chances that it may result in monopolies as cited by AIHMA, but if the dealers are allowed to choose their helmet manufacturer/supplier then it may not lead to monopoly and instead may give the opportunity to small helmet manufacturers.

There are two main reasons for better prospects of helmet industry. First, that with this ruling, those buyers of two-wheelers, who do not use helmets and hence do not buy it, has no option but to buy a helmet with their purchase of a two-wheeler. Second, that there has been increasing trend in the sale of two-wheelers and the industry is expected to perform much better in the coming future with increased reach and sale in rural areas. So both these reasons will push up the sales of helmets significantly.

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According to World Travel and Tourism Council, India's travel and tourism industry will be around USD 100 billion in 2008. And the rough estimates suggest that it will be  USD 275 billion industry by 2018.

However in the last one year, large sections of the tourism industry has been hit badly. Major factors that affected the industry are global economic slowdown, increase in terror activities and instances of influenzas like A/H1N1 infection (swine flu). This has contributed significantly towards the fall in number of tourists and hence overall revenue of the tourism industry. Impact has been more severe on foreign tourists. And the most important concern is that revival of the industry does not seems to be around and industry is experiencing large fall in advance bookings.

Technology on the other hand has affected significantly the businesses and business-models of tour operators and agents or the middle-men in tourism industry. Availability of online information, tickets and hotels booking have impacted these tour operators in a big way and especially those engaged in ticketing and hotel-booking. Particularly, small agents and operators those who could not afford to set up their online portals or/and do marketing for themselves are the hardest hit. Earlier tourists use to approach these middle-men but now a tourist has the mechanism to contact or reach the service provider directly. With the availability of the information on internet, booking sites, online payment facilities etc, tourists do not very often visit or take the help of tour operators and agents.

However technological advancements have created opportunities like of online ticketing and bookings sites. Some of the sites in such domain are makemytrip.com, yatra.com and so on. But Indian Railways ticket being available online have impacted tour operators/agents directly. There has been no replacement for it as tickets are directly offered by railways.

However there are many new opportunities that are coming up in tourism sector. It is just that some section of tourism has got hit. A country like India has huge potential in this sector. Opportunities like Eco-tourism, Educational-tourism, Medical-tourism that are fairly untapped till date can be very lucrative. Estimates suggest that value of medical tourism would be around USD 2 billion by 2012 in India. Furthermore development of tourists spots which is high on agenda would attract larger number of both domestic and foreign tourists. Also rising income will lead to more Indians visiting abroad. Euromonitor International estimated that outgoing international tourism expenditure from India will be around USD 21 million by 2011.

So it might be the case that some businesses in tourism sector have suffered due to global factors and technological development especially in the field of IT. But still new opportunities are there. In entering these new sphere like eco, medical, educational-tourism, existing players in tourism certainly has the advantage. Know-how of the industry could be used effectively by such small players and potential could be tapped. At the same time fair gains could be appropriated by new entrants too.

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Both fundamentals and sentiments play a crucial role in determining stock/share prices.

Sentiments definitely affect share prices in the short run. For example bullish sentiment during 2006-07 in the Indian stock market, had its impact almost on share price of every company. Indexes of Bombay Stock Exchange and National Stock Exchange went up by almost 130% between June 2006 and December 2007. Some part of those gains could be explained in terms of improved fundamentals, but definitely sentiments played the part too. Also, large intra-day movements in recent time and large swings within short period of time could not be explained by fundamentals. Often speculative transactions are held responsible for these trends but speculation in itself is seldomly based on fundamentals changes.

Also, if we believe that price changes are determined purely by  fundamental changes, then this would lead us to commit two major errors. First, we have to believe that fundamentals are that quick to change thereby affecting prices but that is unlikely the case. And  other, we have to assume that there is complete flow of information about fundamentals which is also often not the case.

In the long run stock/share prices are primarily based on fundamentals. Stock/share prices tends to reflect real worth of a company in the long run. But it should be noted that such prices may never be there that reflects real worth of a company. It is only the case that share prices move in such a way in the long run that they try to reflect approximate value of the company.

But then why the sentiments should be of importance to a long term investor? The reason is sentiments in short run actually affect the fundamentals of the companies in the long run. For example, Reliance Power (RPL) and other several companies were able to get their Initial Public Offers (IPOs) when the market was flushed with bullish sentiments. That bullish sentiments was used by companies like RPL that have been able to get huge capital. Without that bullish sentiment, it would have been very difficult for RPL to raise that much capital at that price. However, this huge capital will certainly impact the performance of the company in the future. So it shows that how a short run sentiment affects the long run working of the company.

So to sum up, share price of a company is determined by the working and future scope of a company. But sentiments and expectations do affect the price in the short run. These sentiments can affect in someway the company in the long run and thereby its future share prices.

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Do you know that one of the reasons for the government to come up with new ferratic stainless steel coins which replaced the old cupro-Nickel coins was the abrupt rise in prices of metals. High metal prices which peaked in third quarter of 2007 made the metal value of a coin more than the face value of that coin. In other words, the metal value of a Rs two coin was more than two rupees. The result? Illegal melting of coins to obtain metal which was worth more than the face value of that coin.

For example, old two rupee coin was made of cupro-nickel alloy and is 6 grams in weight. When metal prices peaked, its metal worth was approximately Rs 4.50. So a person melting coin would gain Rs 2.50 on each coin! So coins held by someone are worth more than the face value or what those coins might be worth of to that individual.

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