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Morgan Stanley plans to hire several hundred traders: Report

1 Feb 2010, PTI

LONDON: The US-based financial services major Morgan Stanley plans to hire several hundred traders over the next few years in an effort to boost its under performing securities business, says a media report. Attributing to Morgan Stanley CEO James Gorman, the report by the 'Financial Times' said that the company plans to boost its under-performing securities business by hiring several hundred traders over the next few years.

The securities business is crucial to Gorman's strategy of reviving Morgan Stanley's fortunes after a loss-making 2009 by marrying a strong investment bank with a large US retail brokerage operation, the report noted. Gorman, who took over as CEO from John Mack in January, told the newspaper that Morgan Stanley's sales and trading unit had failed to reach many of the investors and companies who wanted to do business with the bank.

"We need to seriously grow our footprint in products like currencies, equity derivatives, commodities. We could easily be 25 per cent bigger than we are. (Investors') bias is to do more business with us, the burden is on us to deliver," Gorman said. According to the publication, Morgan Stanley hired 350 people in the securities business last year.

SOURCE: THE ECONOMIC TIMES

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Auto Industry: Hiring & salary hikes to nearly double, this yr

1 Feb 2010, ET Bureauu

NEW DELHI: The automobile industry has held steady on the growth track in India, and both hiring and salary hikes are likely to nearly double this year, riding on domestic demand and economic recovery. With the economic slowdown eating into growth last year, salary increases averaged 5-7%. This year, that count is all set to hit anywhere between 10% and 12%, taking the effective top end for high-fliers to 16-17%.

The global slowdown did not bite companies in India too hard, though, and hiring continued on domestic demand for cars, SUVs and motorcycles. With the recovery kicking in, the situation can only get better. The industry’s fortunes have been helped by market leaders Maruti Suzuki (cars), Hero Honda (motorcycles) and Mahindra & Mahindra (utility vehicles) notching up good growth. “Maruti took a long-term perspective on people strategies during the downturn so we didn’t disturb salaries. Now with a strong recovery, our compensation packages will be aligned to the market and the performance of the company,” says SY Siddiqui, MEO (administration, HR, IT & finance).

The company, he says, will take a call in June on the new structures but “it will be a strong double-digit figure very competitive over last year and the overall market.” Maruti was an exception with its 9.5% average wage hikes last year. This year, that should go up to around 11-12% on an average, which means the high-fliers can expect around 16-17% or more though the laggards could be stuck with last year’s industry average of around 6%, according to automobile industry experts. Maruti also added 725 people to its roster last year; this year, the figure will go up to around 940.

Like Maruti, M&M too is looking to “significantly improve” the payout this year said Rajeev Dubey, president-HR, aftermarket and corporate services. “Last year, it was subdued, and in line with the industry average of 6-8%.” M&M will finalise its wage plans by August. “Hiring last year was not as intense as it will be now as the economic environment is emphatically better. Salaries will also be on the higher side this time around,” Mr Dubey said.

SOURCE: THE ECONOMIC TIMES

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Indian companies unfazed by Obama's anti-outsourcing call

29 Jan 2010, ET Bureau

BANGALORE: A day after US President Barack Obama reiterated his plans for creating new jobs, amid rising double-digit unemployment in the US, India’s nearly $60-billion outsourcing industry remained hopeful that its top export market will continue to grow with more companies seeking to cut costs by outsourcing work to low-cost locations. On Wednesday, Mr Obama vowed in his first State of the Union speech that he will make creation of local jobs his top priority in 2010, and hinted that his government could end tax breaks for companies creating jobs overseas.

This is not the first instance of Mr Obama upping his anti-outsourcing rhetoric. In May last year, he had said American companies’ shipping jobs overseas will be required to pay more taxes, and that tax-deferral benefits for such companies will be ended. “It’s a tax code that says you should pay lower taxes, if you create a job in Bangalore, India, than if you create one in Buffalo, New York,” Mr Obama had said. Som Mittal, president of Nasscom, the country’s association of software exporters, said Mr Obama has several short- and long-term pressures to cope with, but that does not mean any significant impact for the outsourcing industry. “We will be their solution and not the problem,” he said in an interview.

The proposed ‘jobs bill’, which is aimed at creating more local employment in the US, is focused at reviving manufacturing, retail and construction jobs. Last year, Mr Obama had suggested that his government would end tax incentives for American companies creating jobs overseas by removing ‘deferred tax’ on foreign income for these companies. However, no specific proposal has been brought forward to outline the execution of this move.

Mr Obama also mentioned that his government would double America’s exports and also work on the bilateral trade agreements. “These cannot be achieved by following protectionism,” said Mr Mittal. Experts argue that such protectionist measures are short-sighted because many US companies derive significant revenues from outside the country, and any protectionist stance could lead to a backlash in other markets. Some of the top outsourcing customers, include Citigroup, GE and JP Morgan.

SOURCE: THE ECONOMIC TIMES

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Wipro hikes salary, good news for IT

30 Jan 2010, TNN

BANGALORE: The smiles are back in Silicon Plateau. Wipro has just handed out salary increments to all its employees. With effect from February 1, employees will get a pay hike in the 8% to 12% range with some even getting a 15% increase. Such a hike comes after a long dark tunnel — of 12 to 18 months — when employees went through a difficult period of layoffs, uncertainty, additional work loads, and salary freeze. A Wipro employee said she received the increment letter which indicated a 12% increase in salary. Several other employees also said they had received increment mails.

Wipro's head of HR Pratik Kumar, however, declined to talk about details. "Hikes are in the pipeline. We mentioned it during our third quarter financial results. We'll make a further announcement regarding the hike and percentage etc. only in February," he said.

A couple of mid-tier Wipro executives said the hike is a morale booster. "I was seriously exploring a job change. Now that I'm getting a hike close to 15%, I guess I should stay back," a senior project manager said.

Infosys had given a single-digit increment in October. It had announced an across-the-board raise and promotions with effect from October 1, 2009. Domestic salaries went up by 8% while onsite pay rose by 2%. "During the October-December quarter, our variable pay has been 100%, against 92% in the previous quarter. We'll be thinking of a further salary hike only in April 2010," said its HR head T V Mohandas Pai.

SOURCE: THE ECONOMIC TIMES

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Marriott chain to hire 3,000 by 2010 end

30 Jan 2010, TNN

CHENNAI: Hotel chain The Marriott International is planning to hire around 3,000 employees by the end of 2010, said a top official. It is developing around 7 new properties in places including Chennai, Pune, Bangalore and Chandigarh. “At an average of about 400 people per hotel, we are looking at hiring close to 3,000 people by the end of 2010,” said Gurmeet Singh, area director human resource (India, Maldives and Pakistan) of Marriott International. He said this figure included the project in the Maldives (scheduled come up in the first quarter in 2011). “Normally, 20-30 % of our hiring needs are met through internal movement.”

The company conducts a training programme for hotel management graduates. “About 5% of our entry level assistant managers come from this programme.” He said the chain is ‘heavily dependent on’ relationship hiring. Relationship hiring are recommendations from existing employees. “This hotel (Courtyard by Marriott, Chennai) spends close to 3-4% of its revenues on training,” said Singh. It also sets aside close to $750 for each manger every year for training. There are 326 managers in India alone.

With India’s hotel industry offering more choices, (around 421 hotel projects are in the pipeline), the industry is slated to become more competitive not just for workers but also for the employees, said Singh. The hospitality industry faces talent contest from banks, call centers and airlines. “In these industries, the rate of pay is much higher and for the industry itself the profitability rate is also higher,” he said. There is a need to sell an attractive pay package to the ‘new talent’.

In the hotel industry, the salaries will see a better year in 2010. “There will atleast be a double digit growth in salaries,” Singh said, while adding that there would be a 12-15% increase in salaries in the hotel chain.

SOURCE: THE ECONOMIC TIMES

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US jobless claims see a decline, layoff fears ease

29 Jan 2010, Bloomberg

WASHINGTON: Fewer Americans filed first-time claims for unemployment insurance last week and total benefit rolls shrank, indicating companies are nearing the end of staffing cuts as the economy recovers. Initial jobless applications declined to 470,000 in the week ended Jan. 23, higher than anticipated, from 478,000 the prior week, Labor Department figures showed today in Washington. The total number of people receiving unemployment insurance dropped to the lowest level in a year and those receiving extended benefits also fell.

Companies may want to see accelerating sales before taking on more staff after making the deepest payroll cuts in the post- World War II era. Federal Reserve policy makers yesterday said that while consumer spending is expanding, it is partly being "constrained by a weak labor market."

"We're still improving at a very moderate, very slow pace," said Julia Coronado, a senior economist at BNP Paribas SA in New York. "The economy is having difficulty making the transition from the ending of firings to the beginning of hiring."

SOURCE: THE ECONOMIC TIMES

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Tech Mahindra, HDFC queue up to recruit DU students

28 Jan 2010, IANS

NEW DELHI: Heralding better days ahead for the capital's students, several top notch companies like Tech Mahindra, HDFC and Dell are queuing up at Delhi University (DU) for recruitment and hundreds of scholars have bagged offers in the last few days. "Placements in this academic session have been a resounding success so far. The ongoing placement drive which started January 25, has attracted over a thousand students daily and the renowned companies conducting the interviews are elated at the overwhelming response," DU's central placement cell chairperson Seema Parihar said Thursday.

HDFC Life Insurance has already offered jobs to 88 students after interviewing 787. Leading technology firm Tech Mahindra Ltd shortlisted 40 students and finally selected 32 of them for jobs after interviewing 487 students from different colleges of the university. North Delhi Power Limited (NDPL) conducted a written test. From the 320 participants, they have shortlisted 170 students and will send their final offer letters on Monday, Parihar said.

Similarly, BPO company Gen Pact, which has a long association with Delhi University, had a series of personal interviews with 736 students and finally narrowed down the choice to 72 students. Research firm Capital IQ have narrowed their search to 375 for selection of technology quality analysts. The final list shortlisted students will be known early next month. Parihar said Dell will come in search of technical research associates early next month. To help students find jobs, DU has started a placement cell and authorities said the response from companies so far was encouraging.

SOURCE: THE ECONOMIC TIMES

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Macy's to cut 1,500 store-level jobs: Bloomberg

28 Jan 2010, REUTERS

Department store operator Macy's Inc is cutting 1,500 jobs effective March 6, Bloomberg reported, citing two people familiar with the matter. The affected jobs are store-level positions, the people told the news agency. Earlier this month, Macy's said it was closing five of its namesake department stores, affecting about 307 employees, as it pares underperforming locations.

Macy's could not immediately be reached for comment by Reuters outside regular US business hours.

SOURCE: THE ECONOMIC TIMES

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Oracle Corp plans to hire 2,000

27 Jan 2010, REUTERS

NEW YORK: Software maker Oracle Corp, which is near to closing its $7 billion acquisition of computer maker Sun Microsystems Inc, plans to hire 2,000 sales and engineering employees, the Wall Street Journal reported. The new hires will outnumber the cuts Oracle is making in Sun's head count, the Journal said, citing an interview with Oracle Chief Executive Larry Ellison.

Oracle plans to focus on selling computer systems that combine hardware and software, the Journal said, with Ellison saying that the company will announce two such systems in the next year. The paper said Ellison declined to provide details, except to say he expected systems that combine hardware and software to become a multibillion-dollar market.

A spokeswoman for Oracle, which plans to unveil its strategy for Sun publicly on Wednesday, was not immediately available for comment.

SOURCE: THE ECONOMIC TIMES

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Pre-placement offers hint at a promising 2010

4 Jan 2010, ET Bureau

MUMBAI: It’s placement time at Mumbai’s B-schools. Activity levels have picked up, and there is a palpable sense of buoyancy after a not-so-great 2009. So, what’s on offer?

At the Narsee Monjee Institute of Management Studies (NMIMS), the ball has been set rolling with lateral placements. This is for students who have at least two years of work experience. The process, which began in the first half of December 2009, saw companies like Deloitte, KPMG, GE, Infosys, Wipro, ICICI Bank, JP Morgan, P&G and Cummins taking part. “In all, more than 35 companies took part. More than 40% of the batch has already been placed through lateral placement,” said NMIMS vice-chancellor, Rajan Saxena. The batch strength of the core MBA programme at the institute is 250. Most institutes are tight-lipped about which companies will be on campus for the final placement. At the city’s Jamnalal Bajaj Institute of Management Studies (JBIMS), the class of 120 is upbeat, since around 30% of them have pre-placement offers (PPOs) or pre-placement interviews (PPIs).

Importantly, those who were on campus to recruit the 2010 batch for summer internships included Hindustan Unilever, Procter & Gamble, PepsiCo, Britannia, JPMorgan Chase, Deutsche Bank, Citigroup, ICICI Bank, Deloitte Consulting, Vodafone, Idea Cellular, GlaxoSmithKline, Novartis and Ranbaxy. The placement season here kicks off relatively late — in early February — while it starts on January 6 at NMIMS. According to the placement committee at JBIMS, PPOs and PPIs have come from industries like FMCG, banking and financial services, tele-communications and pharmaceuticals.

At the SP Jain Institute of Management & Research, the process kicks off in the third week of February. According to the institute’s chairperson, external relations Abbasali Gabula, there have been 66 PPOs/PPIs for the class of 175 students. Among the key recruiters for the autumn internships for the class of 2010 were Microsoft, Citigroup, P&G and HUL. Meanwhile, the mood at the National Institute of Industrial Engineer-ing (NITIE) is positive too. Among the recruiters who will be on cam-pus in early January will be HSBC, Yes Bank, P&G, E&Y, PwC and TCS. Companies will look to recruit a batch of 136, while the total number of students, taking the other post-graduate students into consideration, is 229. “Altogether 25 students have received PPOs to date. Among the first-time recruiters are Amazon and Crisil. In all, there should be 90-100 companies, about 20% more than what we had for the class of 2009,” points out Ashok Pundir, the institute’s associate dean (Placement). The way things are shaping up, the 2010 placement season for Mumbai’s B-schools looks promising.

SOURCE: THE ECONOMIC TIMES

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TCS, Wipro, Infosys in a hiring mode but look for seasoned hotshots

4 Jan 2010, ET Bureau

KOLKATA: The new year is going to bring a lot of cheer for the country’s seasoned IT professionals. Leading IT companies like Tata Consultancy Services (TCS), Wipro, Infosys, Mahindra Satyam and Cognizant have once again started recruitment in the middle and senior level, which were largely on hold since the recession. The companies are now undertaking such senior-level hiring to bid for big-ticket IT deals which are now opening up in the West. It is usually from January onwards that clients prepare their IT budgets and invite bids. Headhunters estimate that some 3,000 senior professionals have been hired by the Indian IT sector in the October-December 2009 quarter.

Mahindra Satyam, for instance, has roped in a battery of senior professionals to rebuild the company and bid for large deals. It has roped in Vijay Anand Vaderu from Wipro to head strategy, Sudhir Nair from Infosys to drive infrastructure management division, Bobby Gupta from IBM to head sales in Australia and Ram Ramchandran from HCL to head Asean region. A couple of senior people will soon join the US operations. Patni Computer Systems has recently appointed Naresh L Lakhanpal from Deloitte & Touche to head its American operations, V Mathivanan from Singapore Network Services as president of its Asia-Pacific operations, and Vijay Mehra, who was the global CIO at Essar Group, as executive VP.

“The signs are encouraging since October last year, after more than three quarters of complete freeze in lateral hiring by the IT firms,” says leading headhunter Ma Foi CEO E Balaji.

SOURCE: THE ECONOMIC TIMES

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25,000 Indian-origin British doctors to return to India

4 Jan 2010, 0030 hrs IST, IANS

NEW DELHI: Nearly 25,000 British doctors of Indian origin are set to return to India within two to four years and some of them are "most likely to join the seven AIIMS-like institutions" proposed to be set up by the central government. "There are around 15,000 young Indian-origin doctors undergoing training in different parts of Britain who will return to India," Ramesh Mehta, president of the British Association of Physicians of Indian Origin, told media.

"Also, at least 10,000 senior doctors of Indian origin who are retiring from their jobs in the UK, are set to return to India," said the doctor, currently on an Indian tour. He said they have already talked to the Indian health ministry and have got a favourable response. "The government has allowed us to come back and practise." He said the ministry told the association that there will be a problem in finding quality doctors to man the seven new medical colleges modelled after the All India Institute of Medical Sciences (AIIMS). "We believe that these young doctors who are undergoing training in the UK currently, can be of great help in the new AIIMS-like institutes," he said.The central government has given a go ahead to seven AIIMS-type medical institutions in Bihar, Chhattisgarh, Madhya Pradesh, Orissa, West Bengal, Uttar Pradesh and Rajasthan. Each of these institutes will come up with a cost of Rs.300 crore (Rs.3 billion).

Each new institution would have an 850-bed hospital, including superspecialty facilities and 39 departments covering all major disciplines of medicine. The medical colleges will also have the provision to take in 100 undergraduate students each per year as well as facilities for imparting Post Graduate and doctoral courses in various disciplines. Mehta also said the Indian government's plan to start a three-and-a-half-year rural medical course can benefit from these British doctors. "We are ready to play a part in training doctors whom government will post in rural areas." The health ministry and the Medical Council of India (MCI) have proposed to start a rural medical course called Bachelor of Rural Medicine and Surgery (BRMS) in district hospitals. This will help doctors to get posted in rural areas and improve the healthcare delivery system at village level.

SOURCE: THE ECONOMIC TIMES

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Cognizant makes 700 job offers at Anna Univ campus

22 Dec 2009, ET Bureau

CHENNAI: IT services major, Cognizant on Tuesday announced that it has made 700 job offers to students of Anna University’s constituent colleges in Chennai. Coming in the top slot among bulk recruiters, Cognizant picked up the students through a two-day long campus recruitment process covering students from almost all branches of the UG and PG programmes. Welcoming the ‘future Cognizant associates," Cognizant corporate marketing and research VP R Ramkumar said Anna University, along with its constituent colleges, is the largest contributor to Cognizant’s talent pool of fresh graduates in each of the last several years across India.

"It is with justifiable pride that we can say that the alumni of this reputable institution, along with several others globally, have helped sculpt Cognizant with a difference," he said handing over the list of selected students to the University vice-chancellor, Prof R Mannar Jawahar. "One critical aspect of our recruiting is the fact that we are branch/discipline agnostic. This helps us substantially today in solving the business problems of customers across industries by leveraging technology. With structural changes happening across industries and sub-industries, there is an increasing need for much deeper domain specialisation.," Mr Ramkumar added. Noting that in addition to students from core circuit branches (computing, electronic, electrical and instrumentation), he said the students from different disciplines of study added immense value to Cognizant.

SOURCE: THE ECONOMIC TIMES

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Exterro to double headcount in India

22 Dec 2009, ET Bureau

COIMBATORE: Exterro, a US-based $12 million privately held legal enterprise software company is looking to double its headcount in India and triple its revenue in 2010. The company headed by an Indian-born US citizen has set up a development centre here. "We are planning to book space in the upcoming Tidel Park in Coimbatore to house around 250 to 300 employees. In the first phase, we will expand our operations here by doubling the head count to 90 in 2010," Exterro’s president & CEO Bobby Balachandran told ET.

The company started in 2004 at Portland, Oregon in US by four Indian-born promoters with an investment of $1.5 million is looking to finance its expansion plans through private equity and venture capital. "We are in process of infusing around $15 million to increase revenue by three times in 2010. We will go for an IPO by the end of 2012," he added.

SOURCE: THE ECONOMIC TIMES

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UK still in recession as output shrinks

23 Dec 2009, ET Bureau

LONDON: Britain remains the last major economy in recession according to official data released on Tuesday, although signs of recovery emerged as the country’s output shrank less than previously forecast.

The Office for National Statistics said that British gross domestic product (GDP) contracted by 0.2% during the July-September period compared with the previous three-month period. Although the data was better than a previous ONS estimate of minus 0.3%, analysts’ consensus forecast had been for a revision to minus 0.1%. Britain officially ends 2009 as the only top economy in recession after the eurozone, France, Germany, Japan and the US have all emerged from a deep downturn that was sparked by the global financial crisis. “Gross domestic product contracted by 0.2% in the third quarter of 2009,” the ONS said in a statement.

SOURCE: THE ECONOMIC TIMES

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US economy grows 2.2%

23 Dec 2009, ET Bureau

WASHINGTON: The economy in the US expanded in the third quarter at a slower pace than anticipated as companies curbed spending and cut inventories at an even faster pace, reductions that have set the stage for acceleration in growth. The 2.2% increase in gross domestic product from July through September compares with a 2.8% gain previously reported by the Commerce Department in Washington. Improved consumer spending combined with a record drop in stockpiles this year will promote increases in production that may keep the world’s largest economy growing well into 2010. At the same time, companies such as Dell point to gains in business investment that signal growing confidence the expansion will be sustained. “All signals point to a strong fourth quarter,” Nigel Gault, chief US economist at IHS Global Insight in Lexington, Massachusetts, said before the report. “Growth is shaping up at around 4 percent as the inventory cycle turns upward.”

The projected pace of growth was based on the median estimate of 73 economists in a Bloomberg News survey. Estimates ranged from gains of 2.5% to 3.7%. The GDP report is the third and final for the quarter. The government’s advance estimate two months ago was 3.5%. The economy shrank 3.8% in the 12 months to June, the worst performance in seven decades. The four consecutive decreases through the second quarter mark the longest stretch of declines since quarterly records began in 1947. This month’s revisions also showed a bigger gain in earnings than first estimated. Third-quarter corporate profits increased 10.8% rather than 10.6%, marking the biggest gain in more than five years. Productivity gains have boosted company earnings as payrolls are reduced. Labour costs fell at a 2.5% rate last quarter, capping the biggest 12-month drop in seven years, Labour Department figures showed earlier this month. Productivity, a measure of employee output per hour, surged at an 8.1% pace percent in the third quarter, the fastest pace in six years.

The economy has lost 7.2 million jobs since the recession began in December 2007. Payroll cuts peaked at 741,000 in January before receding to 11,000 in November. The unemployment rate last month fell to 10%, from a 26-year high of 10.2% in October. Economists surveyed by Bloomberg this month forecast the jobless rate will remain above 10% through the first half of next year. The elevated jobless rate is one reason Federal Reserve policy makers said last week they would keep their benchmark interest rate low for an “extended period.” Another reason was that prices aren’t accelerating. The Fed’s preferred inflation gauge, increased less than forecast. The measure, which is tied to consumer spending and strips out food and energy costs, rose at a 1.2% annual pace following a 2% increase in the prior quarter.

Consumer spending, which accounts for about 70% of the economy, rose at a 2.8% pace last quarter, compared with the 2.9% rate forecast by economists and a 0.9% decline the previous three months. Spending added 2 percentage points to third-quarter growth. Retailers such as Best Buy are using discounts to boost holiday sales. A report tomorrow is projected to show household purchases rose 0.7% for a second month in November.

SOURCE: THE ECONOMIC TIMES

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Your salary cheque to look slimmer after deductions on perks

22 Dec 2009, ET Bureau

NEW DELHI: As you return from your New Year vacation, employers will have a surprise for you. Your salary cheque will look slimmer after the deductions on all your perks for the entire year -- company car, fuel allowance, driver, accommodation, furnishings, concessional fees for kids, company funded travel and the like.

The government had announced in Budget 2009-10 that Fringe Benefit Tax (FBT) on perks provided by employers would be abolished but its impact is going to kick in from next month with the Central Board of Direct Taxes issuing a notification on Friday which transfers the tax burden on the employee.

SOURCE: THE ECONOMIC TIMES

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Ford plans job cuts, offers golden handshake

22 Dec 2009, ET Bureau

NEW YORK: US carmaker Ford Motor plans further cuts in its factory workforce, a company spokeswoman said. The company is to offer incentive packages to 41,000 of its workers, offering payouts of up to $75,000, for them to quit their jobs.

Ford still has an overhang of workers and the company was cooperating with the United Auto Workers union to solve the issue, Ford spokeswoman Marcey Evans said Monday. She declined to detail the full scale of the planned cuts. The offer was valid until January 22, she said. Last month, Ford staff rejected an austerity package negotiated between the carmaker's management and the union. Ford already once this year offered golden handshakes to its blue-collar workers, but only 1,000 workers took up the offer.

Ford, while better off than other US carmakers, has been hit hard by the global slump in car sales. Through November, its sales were down 19 percent compared with the same period last year. As of October, Ford had about 80,000 employees in North America, down from 89,000 at the beginning of the year.

SOURCE: THE ECONOMIC TIMES

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Tata Steel set for 30% loss in senior managers over retirement

21 Dec 2009, ET Bureau

KOLKATA: Tata Steel is bracing for a 25-30% loss in senior managers globally over the the next 2 to 3 years, due to retirement of employees. The company is also grappling with the issue of retaining top talent in the face of intense competition from other industries. "A number of our people, nearly 25-30% of our senior managers, are expected to retire from service within the next 2 to 3 years. This is a big challenge for us," H M Nerurkar, managing director, Tata Steel said. He was speaking at the CII's National Conference on Leadership on Monday.Tata Steel group has a total workforce of 82,000 globally, which includes its operations in India and Corus in Europe. "We need to see how we can take on new people in the organisation."People from different countries and from different companies may be talking to us for joining us. As a company, there has to be a culture of inclusiveness," Mr Nerurkar added. "The Indian operations have been kind to the people in the organisation. They have been in the company for 30-40 years," he went on. "At the same time, there is the problem of talent getting pinched from us. In the last few years, we have faced a problem of retaining top talent," he added.

Tata Steel had a practice of putting top talent in charge of new greenfield projects. As work got stalled and projects started getting delayed, the company was faced with the problem of how to best utilise them, Mr Nerurkar said. "Unless, we can use them, they will get frustated and won't stay. We are thus also faced with the problem of retaining our top people," Mr Nerurkar added. Sharing Tata Steel’s global experience of managing its people resources, amidst a dynamic economic situation, Mr Nerurkar said: "While the market is shrinking in Europe, we are trying to lower the breakeven point to stay in business. Whereas in India, we cannot grow fast enough. Talent managment is a problem. Each country is going through a different economic phase and unless we respect and understand global challenges, we will find it difficult to face these conflicting issues."

SOURCE: THE ECONOMIC TIMES

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GDP expands by 7.9% during Q2, beat all forecasts

1 Dec 2009, ET Bureau

NEW DELHI: India’s economy gave yet another indication of its rapidly improving health, prompting greater ambition from policymakers still wary of withdrawing the stimulus medicine responsible for the recovery. Gross domestic product (GDP) expanded by a surprisingly strong 7.9% during the July-September second quarter, its fastest pace in a year- and-a-half. The growth was driven largely by a pickup in manufacturing, increased government expenditure, robust investments and modest growth in farm output despite the drought, data released on Monday show.

“I am hopeful that if this trend continues, we will have higher GDP growth than anticipated. I hope it will be around 7%,” finance minister Pranab Mukherjee said here.

The economy had expanded 6.1% in the first quarter. The growth in the first half of the year is now a respectable 7% as against 7.8% during the same period a year ago. In the fiscal year ended March 2009, the economy grew 6.7%, its weakest in six years and way below rates of 9% or more in the previous three years.

The strong growth may put pressure on RBI to hike policy rates sooner than March 2010, as worries about inflation grow. Bond yields firmed up to 7.25%, six basis points up, as traders see a 25-basis-point hike in key policy rates by January 2010.

SOURCE: THE ECONOMIC TIMES

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Dubai debacle: Indian HNIs face margin pressure

1 Dec 2009, ET Bureau

MUMBAI: The leveraged asset purchases of Dubai-based wealthy non-resident Indians in the past few years may begin to haunt them, as the collapse of real estate prices in the emirate prompts calls for additional funds as margins which may force them to sell some Indian assets, experts say.

“Indian HNIs (high net worth individuals) made good use of easy credit lines in the past two years,” says Dubai-based JRG International Brokerage CEO PK Sajitkumar. “They even made investments using leveraged money, investing into India-focussed funds, buying freehold property and buying into Indian shares through participatory notes,” he said. “The situation is now so bad that many of these people will have to sell their leveraged assets, may be at a loss, to meet margin calls or retire debt.”

Slide of real estate and other asset prices in the Middle East has begun to accelerate after Dubai World, the government-backed conglomerate, last week sought moratorium on debts of about $59 billion. This has led to lenders seeking additional collateral for assets funded so far. Those unable to deposit more funds with the banks may be forced to sell assets, including Indian stocks, or even think of selling Indian real estate.

According to Saud Masud, a real estate analyst with UBS Dubai, the city-state’s property market could fall by up to 30%, from current levels — it’s already down 50% from the past year’s levels — and may take more than a decade to recover.

SOURCE: THE ECONOMIC TIMES

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Cash-strapped Indian students in UK scrounge for food

November 30, 2009, PTI

London: Hundreds of Indian students who come to the UK to pursue courses in colleges are unable to find part-time work to fund their stay and studies here and have been forced to eat in gurdwaras in Southall.

There has been a three-fold rise in the number of Indian students coming to the UK since the points-based immigration system was introduced in April this year. Many of them come in the hope of finding work so that they can maintain themselves here.

SOURCE: THE ECONOMIC TIMES

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Big rise in oil demand after 2010 may hit growth: IEA

30 Nov 2009, 2250 hrs IST, REUTERS

WARSAW: Demand for oil after 2010 could increase significantly and this may pose a risk to global recovery, International Energy Agency (IEA) chief economist Fatih Birol said on Monday.

"In 2010, there are signs there will be a small green sign (improvement). After 2010, with the improvement in the global economy, we may see a very strong increase in oil demand, which may pose a risk for the global recovery," Birol said in Warsaw. Birol said earlier this month that oil prices would threaten a rebound in the global economy if they rose beyond current levels.Oil is up more than 70 per cent this year, but is still roughly half its July 2008 high of more than $147 a barrel.

SOURCE: THE ECONOMIC TIMES

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No job losses, exodus due to Dubai crisis: Indian consulate

29 Nov 2009, 1631 hrs IST, PTI

DUBAI: Allaying fears of an exodus of migrant workforce and large scale job losses, India's consulate here today said the Dubai debt crisis had no direct impact on the country and there was no need to panic.

"We are confident the government of Dubai and the UAE are fully capable of handling the short-term crisis faced by Dubai World," India's Consul General Venu Rajamony told.

The UAE government-owned holding company Dubai World seeking extension of repayment of debt amounting USD 59 billion till May next year has spooked worries that it may soon lead to large scale job losses in the region and an exodus of workforce back to India.

Million of workers from India are employed in reatly and other sectors in Dubai and other Middle East cities and their families are dependent on remittances. Indians form 42.3 per cent of the population of Dubai.

"Dubai's position as a key partner of India in the region remain as it is and the world class infrastructure and the friendly business environment they have created as well as Dubai's geographical location which makes it convenient hub for India are advantages which are not going to change," said Rajamony.

SOURCE: THE ECONOMIC TIMES

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FOOD INFLATION SOARS TO 15.6%

29 Nov 2009, ET Bureau

The annual rate of inflation for food articles, as measured by the wholesale price index (WPI) rose to 15.6% for the week ended November 14 from the previous week’s 14.6%, as price of pulses and vegetables increased sharply during the week, data released on Tuesday showed. The overall wholesale price index for food articles was up 1.6% during the course of the week.

SOURCE: THE ECONOMIC TIMES

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CORE SECTOR CLOCKS 3.5% GROWTH

29 Nov 2009, ET Bureau

KEY infrastructure industries that account for over a quarter of the country’s industrial production grew a modest 3.5% in October 2009, the lowest in three months, indicating possibly a lower overall industrial growth for the month. Industrial production had grown 9.1% in September 2009 when core sector growth was somewhat better at 4.1%. In August 2009, industrial production was up 11% as the core sector had pitched in with a 7.8% growth. Despite the moderate core sector growth, economists are confident of a sustained recovery in the coming months.

SOURCE: THE ECONOMIC TIMES

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Brown vows to curb entry of doctors, professionals to UK

13 Nov 2009, PTI

LONDON: Prime Minister Gordon Brown on Thursday pledged to curb the entry of doctors and other professionals from outside Europe into the UK in a new crackdown on immigration, a move likely to adversely impact thousands of Indians.

Signalling a major shift in the Labour government's immigration policy, the Prime Minister vowed to "stem rising tide of migration". He said his government plans to restrict the points based system for determining which migrants can work in Britain.

Even as insisting that immigration had been a source of "economic, social and cultural strength" for Britain, Brown said the points-based system, introduced last year to control the entry of non-EU citizens to the UK by grading incomers on the skills they can offer the country, would be further toughened up.

In a major policy change, Brown is expected to announce that the door is being closed to non-EU hospital consultants, civil engineers, aircraft engineers and ship's officers, the report said.

The Labour government has faced controversy as local doctors have struggled to find employment.

SOURCE: THE ECONOMIC TIMES

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Premature to think of ending stimulus: Sharma

9 Nov 2009, ET Bureau

NEW DELHI: Even as Prime Minister Manmohan Singh hinted at a rollback of stimulus measures sometime next year, commerce & industry minister Anand Sharma said it was ‘premature’ to think of withdrawing sops for the exports sector.

Pointing out that the investment climate remained favourable, the minister said global CEOs, including Wal-Mart chairman S Robert Walton and Pepsico CEO Indra Nooyi, had expressed satisfaction with India’s policies oninvestment. “In fact, Mr Walton told me that Wal-Mart was planning to open 40 new stores in India,” he said.

He added that, if required, the government will not hesitate in giving support to sectors that needed it. “The support (to the exports sector) will have to continue till we are sure the contraction in the world economy is over and it has moved into positive growth territory,” Mr Sharma told a press conference on Sunday at the India Economic Summit, jointly organised by the CII and the World Economic Forum.

SOURCE: THE ECONOMIC TIMES

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Selloff boon: Govt richer by Rs 50k cr in 1 session

7 Nov 2009, TNN

MUMBAI: In just one session on Friday, Dalal Street made North Block richer by over Rs 50,000 crore, before government sold even one share in its portfolio of companies.

The stocks of government-run companies were on a roll; thanks to the government's decision that at least 10% more stake in all listed PSUs will be divested; as investors rushed in to lap up these scrips. Consequently, the total market capitalisation of 48 PSU companies went up by about Rs 62,000 crore with the government's share in this increase at about Rs 50,000 crore.

SOURCE: THE ECONOMIC TIMES

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US Jobless rate surges to 10.2 per cent

7 Nov 2009, REUTERS

WASHINGTON: The US jobless rate unexpectedly jumped to a 26-1/2-year high of 10.2 per cent last month, adding to pressure on the Obama administration to do more to tackle unemployment even as signs of recovery mount.

Speaking at the White House, President Barack Obama said the administration was considering infrastructure investments and business tax cuts to aid the economy's recovery. Mounting unemployment could pose problems for the Democrats who control Congress as they head into elections in November 2010. This week, Republicans wrested control of two state governorships away from Democrats in races where the weak economy figured prominently.

SOURCE: THE ECONOMIC TIMES

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ECONOMY GROWING, BUT LABOR MARKET LAGS

7 Nov 2009, REUTERS

The US economy grew at a 3.5 per cent annual rate in the third quarter, likely ending the most painful recession in 70 years, but the jobs reports suggested employers are wary of the prospects for a strong, sustained recovery.

There was also dismal news on the labor front in neighboring Canada, where the economy unexpectedly lost 43,200 jobs last month after two months of gains, pushing the jobless rate up to 8.6 per cent from 8.4 per cent. Wednesday, the US Federal Reserve held overnight interest rates close to zero and said it expected to keep them low for an "extended period."

SOURCE: THE ECONOMIC TIMES

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RBI policy signals end of easy money era

28 Oct 2009, ET Bureau

MUMBAI: Reserve Bank governor D Subbarao on Tuesday ended the soft monetary policy aimed at easing credit crisis last year as he began the exit by withdrawing liquidity boosting measures, becoming the third central banker in the world to do so after Australia and Israel.

This makes increase in lending rates imminent next quarter if consumer and asset prices remain high. He left key policy rates unchanged. The governor withdrew a special facility making available funds from banks to mutual funds and finance companies, made it more expensive to lend to commercial real estate, forced banks to invest more in government bonds and asked lenders to set more funds for bad loans. The special facility was introduced last year to boost liquidity for firms in the financial sector after the credit markets froze.

But the RBI surprised the market in its choice of instrument to announce the exit of an easy money policy. The statutory liquidity ratio (SLR), which prescribes the percentage of deposits that banks are required to invest in government debt, has been raised to 25% from 24%, which Mr Subbarao said was a reversal of an exceptional measure.

SOURCE: THE ECONOMIC TIMES

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Funds just got costlier for builders

28 Oct 2009, ET Bureau

The RBI’s credit policy announced on Tuesday appears intended to rein in an incipient bubble in the real estate sector. The provisioning requirement for loans to commercial real estate has been increased from 0.40% to 1%, implying costlier bank loans for the sector.

As most of the realty companies rely on bank funding, especially in times of financial crisis, this move could have an impact on the sector. It remains to be seen whether this latest measure has the desired impact of curbing any further rise in property prices. Since there is a huge latent demand to be fulfiled, some builders are confident of sales being unaffected by any increase in prices. Indeed, in some cities property prices have gone up by 5-15% in past 2-3 months.

In short, the current measures may not have significant impact on the financials of real estate companies or prices. Tuesday’s policy pronouncements show that the apex bank has become vigilant.

SOURCE: THE ECONOMIC TIMES

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Vishal Retail in biz rejig mode, to raise Rs 150 cr

28 Oct 2009, ET Bureau

NEW DELHI: Vishal Retail is in talks with two potential investors, including a retailer, in a move that may see the exit of current promoter RC Agarwal from the company and possibly mark the first distress sale in the Indian organised retail space.

Vishal Retail, which faces a debt liability of Rs 730 crore, is working on bringing in a strategic investor as part of pre-conditions laid down by lenders for corporate debt restructuring (CDR). The mass-market retailer is looking to raise around Rs 100-150 crore from a strategic investor in a last-ditch attempt to save the company, a senior executive at Vishal Retail said. “The current promoter may have to exit, as per the structures being considered in the deal.”

The fear among employees and analysts is that Vishal may meet the same fate as Subhiksha’s if a quick equity infusion didn’t happen. Early this year, Chennai-based convenience store chain Subhiksha shut its 1,600 stores across the country leading to 15,000 job losses. Its attempt at debt restructuring failed after the consortium of 13 banks didn’t agree on a CDR proposal by the July deadline.

SOURCE: THE ECONOMIC TIMES

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ADVANCE TAX COLLECTIONS GROW

27 Sep 2009, ET Bureau

Advance tax collections have registered a positive growth in the second quarter after witnessing a negative growth in the first quarter. Corporate advance tax and advance personal income tax collections were up by 14.7% and 1.7%, respectively in September. While corporate advance tax had declined by 3.7% in June, advance personal income-tax collections fell by 44%.

While sectors such as consumer durables, automobiles, software and cement showed smart recovery, realty, metals, steel, mining and hospitality continued to be badly hit. Total advance tax collections in the second quarter stood at Rs 49,501.80 crore as against Rs 38,367 crore in September, 2008.

SOURCE: THE ECONOMIC TIMES

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INFLATION INCHES UP TO 0.37%

27 Sep 2009, ET Bureau

Annual inflation rose to 0.37% even as inflation on food articles soared to 15.64% in the week ended September 12, the highest in more than a decade, fuelled largely by a 75% rise in potato prices and a 45% increase in the prices of vegetables and sugar.

With elections in three states - Maharashtra, Arunachal Pradesh and Haryana - round the corner, the United Progressive Alliance government at the Centre is expected to act on a war footing to rein in run away food prices to avoid a poll debacle. With a better mechanism in place to manage the inflationary expectations the pace of rise in food prices will cool off, he said.

SOURCE: THE ECONOMIC TIMES

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WB sanctions loan of $4.3 billion

20 Sep 2009, ET Bureau

THE World Bank on Wednesday sanctioned four loans aggregating $4.3 billion to support India’s economic recovery by strengthening its state-run banks and funding of infrastructure projects. The bank said the loans would support the country’s economic stimulus measures by channelling resources into infrastructure, power and irrigation sectors.

“This is a crucial time to support Indian economic recovery,” World Bank Country Director for India Roberto Zagha told reporters in a video conference. Of the total sanctioned amount, $2 billion will go to the Centre for enhancing the capital base of public sector banks, $1.195 billion to the India Infrastructure Finance Company (IIFCL), $1 billion to PowerGrid Corporation and $150 million to Andhra Pradesh for a rural water supply and sanitation project, the World Bank said here.

SOURCE: THE ECONOMIC TIMES

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GOVT TAKES MEASURES TO CURB HOARDING

20 Sep 2009, ET Bureau

In an attempt to prevent hoarding of food items the government has extended by one year the limits on the quantity of essential commodities — like rice , pulses, wheat and edible oils —which traders can hold. This anti-hoarding measure is expected to moderate the prices of these commodities and ensure its availability at fair prices to the general public.

The union cabinet meeting to extend the control orders under the Essential Commodities Act to enable state governments to take effective de-hoarding operations, information and broadcasting minister Ambika Soni told media after the meeting. It also extended the term of the Thirteenth Finance Commission (TFC) by three months up to 31 January 2010, and asked it to submit its report by December. The Commission, headed by former finance secretary Vijay Kelkar, was earlier required to submit its report by 31 October.

The commission had sought an extension as it could not complete its deliberations on account of the general elections to the 15th Lok Sabha and assembly polls.The government has also asked the Commission to look into the issues of fiscal consolidation, which has become necessary in view of rising public expenditure to combat the impact of global financial meltdown.

SOURCE: THE ECONOMIC TIMES

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STIMULUS MEASURES TO CONTINUE: FM

13 Sep 2009, ET Bureau

Finance minister Pranab Mukherjee on Tuesday said the fiscal stimulus measures need to be continued as the economy is “just beginning to come out of the woods” even as he ruled out any fresh tax cuts to provide relief in the wake of drought that has impacted nearly half the country. ”We are constantly reviewing the economic situation. The just-concluded G-20 meeting also reviewed the situation... it is not desirable to plan the exit strategy now,” Mr Mukherjee told reporters .

SOURCE: THE ECONOMIC TIMES

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EXPORTS DECLINED BY 19.7% IN AUGUST

13 Sep 2009, ET Bureau

INDIA’S exports have contracted for the 11th month in a row, but the government sees a ‘glimmer of hope’ as figures for August 2009 show a relatively lower decline compared to the fall in the fiscal so far. Sectors which have resulted in the improved performance include man-made yarns & fabrics, garments, iron ore, marine products and coal & other minerals. Rice, tobacco and fruits & vegetables, the only sector which registered an increase in exports in the first four months, continued to grow during the month. Exports in August 2009 declined by 19.7% to $14.3 billion compared to exports worth $17.8 billion in the comparable month last year. In April-August 2009 , exports contracted by 31.3% to $ 63.9 billion from $ 93.1 billion in the same period last year.

SOURCE: THE ECONOMIC TIMES

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DA for govt employees hiked by 5%

13 Sep 2009, ET Bureau

THE government has increased dearness allowance (DA) for government employees and dearness relief (DR) for pensioners by 5% with effect from July 1. This will put additional purchasing power of Rs 2,903.55 crore in the hands of civil servants, up to February-end, after which another instalment of DA will kick in. While an increase in DA to 27% will cost the exchequer Rs 4,355 crore in a full year and Rs 2,903.55 crore in the financial year(for eight months from July 2009 to February 2010), it will give that much more spending power in the hands of over eight million central government employees and pensioners and boost the economy. Government also announced a 1% interest subvention on home loans of up to Rs 10 lakh for houses costing up to Rs 20 lakh will not just stimulate demand in the construction sector but also give a relief of up to Rs 10,000 to borrowers.

SOURCE: THE ECONOMIC TIMES

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ECONOMY TO RECOVER IN Q4: PLAN PANEL

06 Sep 2009, ET Bureau

The country’s economic growth will start speeding up in the last quarter of this year to reach 9% levels in two years, a Planning Commission forecast said on Tuesday even as Prime Minister Manmohan Singh allayed fears over drought in large parts of the country. The economy will grow 6.3% this year and 8% next year before returning to 9% growth in 2011-12, Planning Commission deputy chairman Montek Singh Ahluwalia said after the first meeting of the panel under the new government. The prime minister, who chaired the meeting that assessed the economic situation, said the effect of the drought in more than 40% of the country is temporary on agricultural output and food price inflation.

SOURCE: THE ECONOMIC TIMES

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IMPORT FALLS BY 37%, EXPORTS BY 28%

06 Sep 2009, ET Bureau

India’s imports fell 37% in July, outpacing a 28% drop in exports and appearing to paint a flattering picture of the trade deficit, although government officials cautioned the true situation was far from celebratory. The steep fall in July imports—both oil and non-oil—to $19.62 billion resulted in the country’s trade deficit for the month halving to $6 billion from year-earlier levels, government data released on Tuesday showed. Merchandise exports fell for the 10th straight month in July, little changed from the 27.7% drop in the preceding month. Exports fell to $13.62 billion in July, but the exporters hope that the situation will improve by this year end amid expectations of an increase in orders ahead of Christmas and New Year.

SOURCE: THE ECONOMIC TIMES

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Ten US banks bite the dust every month; 81 failures in '09

23 Aug 2009, 1207 hrs IST, PTI

NEW YORK: Four more American banks went belly up last week, pushing the total failures to a staggering 81 entities so far this year, even as the country's economy is showing early signs of recovery. In one of the biggest collapses this year, Guaranty Bank, which had assets worth USD 13 billion, was shut down by the regulators on August 21. Reflecting the continuing financial turmoil, the count of failures so far in 2009 is more than three times that of just 25 bank collapses in 2008. On an average, the total failures this year translates to 10 bank collapses every month.

So far this month, 12 banks went belly up and the numbers are expected to climb as higher unemployment could result in increased defaults. A whopping 24 entities went out of business in July, the highest for any month in 2009. Seven banks went out of business on July 2 and July 24. The authorities closed down nine banks in June and seven in May.

US Federal Reserve Chairman Ben S Bernanke last Friday said that after contracting sharply over the past year, economic activity appears to be leveling out, both in the US and abroad. He also noted that the prospects for a return to growth path in the near term appear good. Moreover, the US economy shrank less than expected at one per cent in the second quarter of 2009.

SOURCE: THE ECONOMIC TIMES

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Roubini sees "big risk" of double-dip recession: Report

24 Aug 2009, 2115 hrs IST, REUTERS

NEW YORK: Nouriel Roubini, one of the few economists who accurately predicted the magnitude of the world's recent financial troubles, sees a "big risk" of a double-dip recession, according to an opinion piece posted on a website on Sunday. Roubini, a professor at New York University's Stern School of Business, said it appears the global economy will bottom out in the second half of this year, and that US and western European economies will likely experience "anemic" and "below trend" growth for at least a couple of years.

Yet he warned that policymakers face a "damned if they do and damned if they don't" conundrum in trying to unwind their massive fiscal and monetary stimuli to keep the global economy from toppling into a depression. He said that if policymakers try to fight rising budget deficits by raising taxes and cutting spending, they could undermine any recovery. On the other hand, he said if they maintain large deficits, worries about excessive inflation will grow, causing bond yields and borrowing rates to rise and perhaps choking off economic growth.

Roubini said another reason to worry is that energy, food and oil prices are rising faster than fundamentals warrant, and could be driven higher by speculation or if excessive liquidity creates artificially high demand. He said the global economy "could not withstand another contractionary shock" if speculation drives oil rapidly toward $100 per barrel. US crude oil futures traded Friday at about $73.83. Roubini said the anemic growth he expects would follow a couple of quarters of rapid growth, as inventories and production levels recover from near-depression levels.

SOURCE: THE ECONOMIC TIMES

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Wockhardt sells 10 hospitals to Fortis

30 Aug 2009, ET Bureau

HABIL Khorakiwala-promoted Wockhardt Hospitals has agreed to sell 10 of its hospitals to Fortis Healthcare for Rs 909 crore, in the biggest healthcare deal in the country. The acquisition narrows the gap between Fortis and the largest Indian healthcare player, the Apollo group, and also reduces the debt burden for Wockhardt Hospitals.

The deal includes eight functioning hospitals of Wockhardt and Rs 190 crore towards capital for two under construction. The acquisition will enable Wockhardt Hospitals to clear Rs 500 crore it had borrowed earlier to expand its business. “We will use the funds to clear our debt and the remaining will be used for the 10 hospitals that we still have under our control,” said Wockhardt chairman Habil Khorakiwala.

SOURCE: THE ECONOMIC TIMES

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HCL LOGS 110% RISE IN JUNE QUARTER

30 Aug 2009, ET Bureau

HCL Technologies held out hopes for a revival in demand for IT services by early next year while announcing a better-than-expected 110% increase in net profit for the June quarter, helped by an appreciating rupee and income from new deals. The country’s fourth largest software firm on Tuesday said it would continue to invest in new deals and acquisitions to expand its global reach.

The company’s consolidated net profit for the quarter soared to Rs 330 crore during the quarter from Rs 158 crore in the year-ago period. The company’s revenues during the quarter jumped 21% to Rs 2,914 crore.

SOURCE: THE ECONOMIC TIMES

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TATA STEEL Q1 LOSS AT RS 2,209 CR

23 Aug 2009, ET Bureau

Falling demand for steel products in the US and UK because of the global recession left Tata Steel with consolidated loss of Rs 2,209 crore in the quarter ended June 30. The near-40% fall in steel prices and high raw material costs in the first quarter hit hard the world’s sixth-largest steelmaker by capacity.

The company earns more than half its revenues from overseas units. It posted a consolidated net profit of Rs 3,901 crore in the same quarter last year. “The results reflect the impact of the global economic downturn, particularly in the developed markets,” said Managing Director B Muthuraman.

SOURCE: THE ECONOMIC TIMES

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INDIAN PC MARKET GROWS 5.2% IN Q2

23 Aug 2009, ET Bureau

The overall Indian PC market grew 5.2% during April-June quarter of Calendar Year 2009 to touch 1.765 million shipments over the previous quarter, according to IT research firm IDC India. For the same period, desktop PC shipments rose 4.4%, while notebook PC shipments grew by 7.2%, the company said. In the overall PC (Notebooks and Desktops combined) market.

HP retained the top spot with a market share of 17.8%, followed by HCL and Dell. HP retained the top position in terms of desktop PC shipments with a 12.7% market share, followed by HCL and Acer in the second and third spots in the period under consideration. In the notebook PC shipments, HP retained the top spot with 30.9% market share.

SOURCE: THE ECONOMIC TIMES

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AI to get Rs 5,000 crore equity infusion in 3 yrs

23 Aug 2009, ET Bureau

CASH-STRAPPED Air India may get a fresh lease of life with the government agreeing to infuse a performance-linked equity of Rs 5,000 crore over the next three years into the state-owned airline. Hit by the worst financial crisis in its history, Air India had earlier sought over Rs 15,000 crore from the government to tide over the crisis. Air India had an accumulated loss of over Rs 7,200 crore as on March 2009.

The high-level committee has, however, made it clear that the financial help would be linked with the money saved by the airline. Air India expects to cut its operational cost by about Rs 2,000 crore per annum besides enhancing its cash flow by 10-15%. The airline aims at saving about Rs 750 crore by rationalising productivity linked incentives of its 31,000 staff. It has targeted to reduce its cost by Rs 500 crore by rationalising its network.

SOURCE: THE ECONOMIC TIMES

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SAHARA PLANS $1 BN IPO

23 Aug 2009, ET Bureau

The Lucknow-based Sahara Group is planning to take its realty arm public and raise up to $1 billion. The offer, if successful, would make the company the second valuable player in the segment after DLF.

Investment bankers JM Financial, Kotak Mahindra Capital Company and Enam will advise the initial public offering of Sahara Prime City along with legal firms Amarchand Mangaldas Shardul Shroff & Co, Hirani & Co, Luthra & Luthra and Milbank of UK. The IPO is expected to hit the market by end of this year. The group wants to offload 10% of its stake in the wholly-owned company, valuing itself at $10 billion (Rs 49,000 crore).

SOURCE: THE ECONOMIC TIMES

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Six of world's top 10 economies out of recession

14 Aug 2009, ET Bureau

Some light showed up at the end of the recession tunnel on Wednesday as France and Germany announced unexpected returns to the growth path, which means that four of the world’s five largest economies and six of the top 10 are now not in recession. Adding to the sense of optimism, the US Federal Reserve left rates unchanged, saying that the world’s largest economy was showing signs of levelling out. Both France and Germany had been predicted by most economists to face a decline of about 0.3% in their GDPs for the second quarter (April-June) of 2009, but they surprised themselves and the rest of the world by announcing that they’ve actually recorded growth of 0.3% each.

Among the five largest economies of the world, measured in purchasing power parity (PPP) dollars — which is more of an apples to apples comparison — China and India are already growing at healthy rates, although lower than their own pace for the last few years. Japan too has climbed out of recession and so has Germany. These economies and the US account for 47% of world GDP in PPP terms. The Eurozone as a whole is also now projected to have contracted by just 0.1% compared to the 2.5% fall in GDP in the first quarter (January-March). The growth rates reported by Germany and France may seem like nothing to get excited about, but considering that German GDP shrunk by 3.5% in the first quarter and France’s by 1.3%, it is quite a smart turnaround. Among the world’s other large economies, Brazil is also now no longer in recession having grown by 1.5% in the second quarter. Among the world’s large economies, UK, which is the seventh largest and Italy, the tenth, remain in recession, like the US. The UK economy shrunk 0.8% in the second quarter, while Italy’s was down 0.5%.

SOURCE: THE ECONOMIC TIMES

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U.S. recession to end in Q3, debate over recovery

10 Aug 2009, ET Bureau

The worst U.S. recession since the Great Depression will probably end in the third quarter, but there is uncertainty over the speed and duration of the economic recovery, according to the most recent survey of private economists.The Blue Chip Economic Indicators survey of private economists released on Monday showed about 90 percent of the respondents believed the economic downturn would be declared to have ended this quarter.

This upbeat assessment followed recent government data showing gross domestic product (GDP) contracted at a shallow 1.0 percent rate in the second quarter after sinking 6.4 percent in the January-March quarter. Recent data, including housing and key labor market indicators, have suggested a bottoming in the recession and the economy close to turning the corner. "Debate now centers on the speed, strength and durability of the recovery," the survey said.

It showed nearly two-thirds of respondents believed the economy was set for a U-shaped recovery, marked by below-trend growth in gross domestic product before stronger growth took hold in the second half of 2010.

Growth in the second half was expected to be supported by a reduction in the pace of business inventory liquidation, marginal improvements in consumer spending and residential investment. The survey predicted non-residential investment would remain a drag on GDP. Despite the improved economic picture, unemployment was likely to remain a problem, with jobless rate predicted to peak at just over 10 percent late this year or early 2010, the survey showed. It was seen falling only slowly.

Government data on Friday showed the unemployed rate nudged down to 9.4 percent in July from 9.5 percent in June, but mostly because many people dropped out of the labor force.

SOURCE: THE ECONOMIC TIMES

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US job losses ease raising hopes of ending recession

7 Aug 2009, ET Bureau

Job losses in America tapered off in July while the unemployment rate surprisingly inched down to 9.4 percent for the first time in more than a year, suggesting that the recession is nearing an end.As employers cut far fewer jobs from payrolls, the Labour Department Friday reported a net loss of 247,000 jobs in July, the fewest job losses since August 2008. Economists surveyed by Briefing.com had forecast a loss of 325,000.

The job loss in June was also revised lower - to 443,000 job losses from 467,000. The unemployment rate fell to 9.4 percent from 9.5 percent in June, the first decline in that closely watched reading since April of 2008. Economists cited by CNNMoney.com expected unemployment to rise to 9.6 percent.The unemployment rate fell even as employers continued to cut jobs because the Labour Department estimated there were 237,000 fewer people it counted as unemployed.

There was also plenty of bad news as the number of people unemployed for more than six months continued to rise, reaching nearly five million, a record high.The Labour Department also said that one reason for the declining number of job losses was because cuts had been so deep leading up to July that there were fewer workers to lay off during the seasonal shutdown that happens in some factories, such as those in the auto industry.

'The dawn of an economic recovery is here,' said Sung Won Sohn, a professor of economics at Cal State University Channel Islands, as cited by CNNMoney.com 'The economy is in the process of bottoming, but the job market will lag behind. Businesses, which engaged in pre-emptive layoffs earlier, are not about to start hiring people.'

SOURCE: THE ECONOMIC TIMES

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IIP REBOUNDS TO 7.8%

16 Aug 2009, ET Bureau

Industrial output jumped by a greater than-expected 7.8% in June, its highest since February 2008, bringing cheer to an economy whose recovery after last year’s slowdown has been rudely jolted by poor monsoon rains.

Economists said the lift-off in factory output pointed to a broader recovery in capital goods and consumer durables despite shrinking exports, and would help India offset the impact of deficient rains.The benchmark Index for Industrial Production (IIP) released on Wednesday was a surefire sign of the economy turning around, said finance secretary Ashok Chawla.

SOURCE: THE ECONOMIC TIMES

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New Income Tax law from 2011

16 Aug 2009, ET Bureau

THE government on Wednesday unveiled the draft of a brand new direct tax law that would represent a radical review of the Income-Tax Act, 1961. The purpose is “...to improve the efficiency and equity of our tax system by eliminating distortions in the tax structure, introducing moderate levels of taxation and expanding the tax base”, according to FM Pranab Mukherjee, who released the draft.

The tax code makes radical changes in all areas of taxation: it lowers the incidence of tax on corporate and individual incomes but reintroduces wealth tax on all assets and tax on long-term capital gains, albeit at lower levels. It also proposes to bring a uniform pattern of taxation to bear on all long-term savings: EET, which is exempt at the stage of contribution, exempt during accumulation and taxed during withdrawal. Mr Mukherjee said if a reasonable level of discussion happens on the code, a bill could be placed in the winter session of Parliament. The government is hoping to implement the new code from 2011.

SOURCE: THE ECONOMIC TIMES

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Steel companies outperform Sensex in last seven months

26 companies have appreciated by over 50% since year beginning

16 Aug 2009, ET Bureau

THE revival of the steel sector in India is now visible on Dalal Street too. Steel companies outperformed the Sensex during the calendar year 2009 as year-to-date returns given by listed steel companies were as high as 75% against sensex appreciation of merely 51%. As many as 26 companies appreciated by more than 50% from the beginning of the year, whereas market cap of 12 others doubled during the same period, a Sunday ET analysis has revealed. Companies such as JSW Steel, Steel Authority of India (SAIL) and Tata Steel are in the bracket of offering 100% returns to investors.

SAIL, the largest steel producing company in the country, posted a good show during July’09 by producing 1.08 mn tonnes of saleable steel, a growth of 14% over the corresponding period last year. The company’s sales also registered a record growth of 25% during the month. “In spite of downturn continuing in the global steel markets, the overall demand for steel in India is encouraging,” said the official spokesperson of the company.

According to director of sales and marketing of JSW Steel Jayanta Acharya, there is a revival in the steel sector but they are only cautiously optimistic. “The bottom has been hit and the revival is largely being driven by the infrastructure sector followed by a growth in demand in rural and semi-urban areas and the automotive sector,” he said. He, however, added that threats in the form of anti-dumping are to be taken care of if a sustained growth has to be maintained. JSW’s saleable steel sales were up 62% y-o-y and 24% q-o-q for the month ending March’09 over the corresponding period last year.

Globally, the demand for steel products has declined barring China and India, which have registered a positive growth. According to the World Steel Association, from the quarter ending May ’09, demand has shrunk by around 50-55% in the US, 40-45% in the European Union (EU) and 20-30% in Japan. In contrast, for China and India the comparitive figures are 1% and 9% y-o-y growth respectively. According to advisory firm KPMG’s associate director Biswanath Bhattacharya, the revival was expected in the domestic market and not globally as demand improved from the month of March onwards. Slowly, volumes improved and pushed the steel prices up. “The revival is largely led by the infrastructure and the automotive sector working in tandem with a mix of government policies, strong domestic demand and positive consumer sentiments,” he said adding that the industry, however, may not witness a sudden boom.

Steel players remain highly optimistic about a turnaround of the steel sector. An Essar steel spokesperson predicted that the Indian steel industry will grow at 8-10%. “This would require an additional capacity of 4-5 million tonnes every year. The brown field expansions in the steel sector will barely meet the growing demand. In the absence of major greenfield investment in the steel sector, the brown-field expansion would not reduce our dependence on imports. It has to be supported by facilitating acquisition of land, allocation of raw materials like iron ore and expeditious approvals like environment and forest,” he said.

SOURCE: THE ECONOMIC TIMES

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US consumer morale sags on income worries

Consumers don’t see improvement in personal situation

16 Aug 2009, Reuters

US consumers’ gloom deepened in early August as worry about scarce jobs and falling income overshadowed positive news that industrial output in July grew for the first time in nine months. The latest data on Friday pointed to a sluggish recovery at best with little or no help to come from embattled consumers.

The Reuters / University of Michigan Surveys of Consumers said on Friday its preliminary reading of the index of confidence fell to 63.2 from 66.0 in July, well below market expectations for a reading of 68.5. Financial market participants focused on the bleak consumer outlook instead of a Federal Reserve report that seemed to imply the deep recession that started in December 2007 was close to ending.

Consumer sentiment ebbed for a second straight month as households, battered by high unemployment and falling home values, gave less favourable views on their personal finances. The erosion in confidence, coming a day after a government report showed an unexpected drop in retail sales added to fears that consumers would not drive the anticipated recovery from the worst recession since the Great Depression, leaving the economy vulnerable to a double dip.

“Even though economic output is probably increasing again, consumers certainly appear to still be in a funk. This is not entirely surprising given how many jobs are still being lost,” said Abiel Reinhart, an economist at JP Morgan in New York. Consumers fuel about 70% of US economic activity.

There were a few bright spots in the consumer survey report, including a rebound in the home buying conditions index, and households’ outlook for the labour market was less negative than in the prior month. “The survey suggests that households sense the economy is beginning to stabilise but they have not yet seen improvement in their own personal situation, and they probably won’t until the labour market begins to firm,” said Michelle Girard, an economist at RBS in Greenwich, Connecticut. Analysts worry that, with consumers keeping a low profile, a hoped-for recovery in the second half may be unsustainable.

SOURCE: THE ECONOMIC TIMES

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Upbeat India Inc lining up salary hikes: Mercer

One In Every Two Cos Has Raised Pay, Rest May Do It Before Dec

30 Jul 2009, ET Bureau

ALMOST all Indian companies have given or will give their employees a pay hike this year, a survey showed, pointing to optimism in corporate India that the economy is on the rebound. One in every two companies in India raised the salaries this year, and most of the rest plan to do so before December, human resources consulting firm Mercer’s survey found.

Covering 2,100 companies globally, including 87 in India, the survey revealed that Indian companies consider workforce reduction as the last resort and will continue to adjust employee salaries with inflation. Aditya Birla Group director for corporate HR Santrupt Misra said that apart from concerns regarding liquidity and availability of capital in the latter half of the last fiscal, Indian corporates are quite optimistic about the economic environment.

“So, it was important they continued benchmarking salaries according to the prevailing market levels. Another reason could also be that the Indian economy witnessed inflationary trends during 2008, which is why many companies might have opted for salary increases.”

ET has reported that companies such as Bharti Airtel, PepsiCo India, Dabur, Fortis Healthcare, SRF, Maruti Suzuki, LG Electronics, GE, Dabur, Siemens, Bisleri, Merck and Sharp & Dohme, Dr Reddy’s Laboratories and Ceat Tyres raised employee pay this year.

Consumer goods company Dabur India is among those which is in the process of increasing salaries.

“We have already given salary hikes of about 10% to non-managerial employees in April. We are now reviewing salaries of our managerial staff, which would be an average of 12%, while top performers will get up to 15%,” said executive vice president (HR) A Sudhakar.

He added that salary increments have been given keeping in mind increasing business confidence and what competition is doing. Dabur, a maker of juices and beauty products, is part of fast-moving consumer goods industry which has been largely unaffected by the economic slowdown.

The Indian edition of the survey, conducted with industry body CII, included firms such as Nestle India, L&T, Standard Chartered Bank, Max New York Life Insurance, Johnson & Johnson, Bajaj Electricals, Fortis Healthcare, Saint Gobain Glass, SRF, Genpact, Cisco and Oracle. Made available exclusively to ET, it revealed a rosier picture in India compared to the rest of the world.

Globally, two-thirds of companies said that their salary budgets were either cut or stagnated compared to 2008. While just one in six Indian companies resorted to wage cuts, one in every three firms internationally pruned employee salaries.

“In the short term, many organisations might have had to tackle people costs with wage freezes and retrenchment, but with recovery around the corner companies seem to be taking active steps to manage and retain their key talent. Companies are now gearing up to be ready for growth opportunities once the upturn comes about,” said Mercer India MD Padma Ravichandar.

The survey also showed a significant proportion of companies continuing with their hiring plans. More than 30% of the companies surveyed in India said they will expand their workforce and another 37% of the companies expect replacement hiring. The rest said they would fill key posts even though overall staff numbers may come down. Furthermore, companies are also changing the employee mix by hiring more temporary staff and replacing highly-paid expatriates with local talent. Indian firms are also trying to bring down the compensation of expats they have hired.

Besides hiring, companies are focusing on the health of employees this year by introducing wellness programmes. “We have organised specific healthcare and awareness programmes every quarter, associated with various lifestyle diseases like diabetes and cardiovascular diseases,” said PepsiCo India EDHR Pavan Bhatia. In India, around 40% of the companies surveyed said they are likely to add wellness programmes too, and around one in five said they are likely to provide healthrelated services in the workplace.

PARTY TIME

Mercer survey, covering 2,100 cos globally, including 87 in India, says that Indian cos consider staff reduction as the last resort While just one in six Indian companies resorted to wage cuts, one in every three firms internationally pruned employee salaries More than 30% of the companies surveyed in India said they will expand their workforce, and another 37% of the companies expect replacement hiring.

SOURCE: THE ECONOMIC TIMES

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VC investments in India dip 72% to $117 million

PTI, NEW DELHI

THE global economic downturn has cast its shadow on venture capital investments in India which have slumped 72% to $117 million in the first six months of the current year. Venture capital firms invested $117 million over 27 deals during the six months ending June 2009. This is lower compared to the first half of 2008 which had witnessed an investment of $413 million across 67 deals, according to a study by Venture Intelligence in partnership with the Global-India Venture Capital Association (GIVCA).

"While the uncertainty in global financial markets over last six months has been affecting VC investments in India as well, there are clear signs of revival over the last couple of months - especially in emerging markets like India," GIVCA director Sudhir Sethi said.

Information Technology and IT-enabled Services (IT & ITeS) companies continued to attract venture capital investors with 14 investments worth about $75 million in six months.

The investment in the IT & ITeS sector accounted for 63% in value terms and over half of the total number of deals made in the first six months of this year, the report said. "Within IT & ITeS, online services companies retained their status as the favourite sector accounting for over 57 per cent of the investments (by volume) within the industry during H1 2009," it said. Besides IT & ITeS, domestic demand led sectors like financial services (especially microfinance), healthcare and education are the other areas that continue to attract VC attention.

"Early-Stage deals (first/second round of VC investments into companies that are less than five years old) accounted for two-thirds of the VC investments (and 57% in value terms) during H1 2009," the report added.

SOURCE: THE ECONOMIC TIMES

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Return of the real economy - Aditya Puri, MD, HDFC Bank

ET Bureau

OVER the past two decades, the lead sector in major economies has moved from manufacturing to financial services. For example, the share of the financials in profits of the corporate sector in the US is almost 40%. It is amazing that a sector that does not ‘in itself produce’, but intermediates and reorganises the resources that produce so dominated capitalistic economic activity. While many believe that this increased role of the financial sector promoted efficiency, productivity and profits resulted in an accelerating growth trend of GDP cannot be dismissed, we must also remember that financial crises have been a recurrent feature of free and open capital markets. These crises normally emerge after a snowballing process of market exuberance marked by too much lending and borrowing resulting in market imbalances and asset bubbles. We periodically forget that the return on financial assets must, over the medium to long term, reflect the rate of return in the real economy. While we all know, any return to heavily-regulated, bank-dominated and insulated national markets is a pipe dream, we must also believe a fragile international financial system that has produced greater financial disparity and unimaginable wealth for some, while on a repeated basis inducing an economic crisis needs reform and repair. I do believe that the new government’s first Budget is a fine Budget: one that recognises the changing world (return to real GDP growth) order. Unfortunately, it has not received its due. We have all been talking the big reforms that have not been brought out. But, let’s see what the Budget has laid down as its objectives:

GROWTH: Clearly, this has to be our number one objective. Going back to school GDP = C + I + G. The Budget, through a combination of tax relief, government spending and investment, pushes hard on this front. This naturally leads to higher fiscal deficit (more on this later).

SUBSIDIES: The Budget, clearly, identifies these areas and has set up an action plan for oil, fertiliser and food subsidies. Can we wait a month or two having waited for 60 years?

TAX STRUCTURE: Recognises a need for simplification and plugging leakages — actually commits to introducing a dual GST by April 2010.

INFRASTRUCTURE: Large increase in the Budget support to flagship infrastructure programmes of the government — Bharat Nirman, JNURM, Indira Awas Yojana, etc.

FISCAL DEFICIT: Obviously, the new finance minister believes in conservative promises and over delivery. The Budget’s growth and tax targets (tax revenues are projected at just about 2% over the 2008-09 levels) are remarkably conservative. If the economy recovers and capital markets regain their momentum, FM is likely to get more taxes than he has estimated. And if growth does pick up, the option of raising taxes to plug the fiscal hole. Also, oil and fertiliser subsidies will be lower than budgeted. The fiscal deficit can come down sharply much faster than most of us expect

CROWDING OUT: Let’s get the facts right. First, banks are together sitting on a cash surplus of Rs 1,40,000-1,50,000 crore that they are parking with RBI for a paltry return of 3.25%. A significant portion of the government’s borrowings has already been done and the government’s cash calls on the money market are likely to be much lower than what a cursory glance at the Budget would suggest. The bottomline: there’s enough money in the system to fund both the government and the private sector’s needs even if private investments were to pick up. Fears of government borrowings crowding out the private sector are baseless. If interest rates do rise towards the end of the year, it will be due to inflation concerns, not government borrowing. Inanutshell, we are on the right path of handling the real economy and the stock market and its participants will or can follow in anticipation (cheaply) or on achievement at a higher rate. Also lets enjoy a 6.5% plus (and rising) GDP growth rate in a world that needs CHEER.

SOURCE: THE ECONOMIC TIMES

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IN WHOSE INTEREST IS IT ANYWAY

Even as banks wish for a hardening of interest rates, RBI will try to maintain status quo in light of the hefty government borrowing programme, says Sangita Mehta.

ET Bureau

AT a meeting with Reserve Bank of India (RBI) governor D Subbarao last week, OP Bhatt, chairman of State Bank of India, the country’s largest bank, pitched for a hike in the cash reserve ratio (CRR), a portion of a bank’s deposits that has to be parked with RBI. The proposal was apparently aimed at draining surplus liquidity out of the system. However, a closer look at the suggestion implies that any increase in CRR could provide banks with an excuse to raise lending rates. In fact, early this week, a number of bankers, including Mr Bhatt and IDBI Bank chairman Yogesh Agarwal, indicated that an end to a soft interest rate regime may well be in sight, if credit demand picks up by the secondhalf of the current fiscal.

However, as of now, bankers say interest rates will remain stable in the near future in light of the ample liquidity in the banking system, which is estimated at Rs 1 lakh crore a day, and poor credit demand. The latter is supplemented by RBI data that show outstanding bank loans to corporates on a sequential basis were down by Rs 7,400 crore in the June quarter. But, credit demand notwithstanding, factors such as increased government borrowing and fears of rising inflation could put pressure on interest rates. In the current fiscal, the government is slated to borrow Rs 4.5 lakh crore, twice as much as it borrowed last year to step up public expenditure in light of the economic downturn. However, some bankers feel that the government could manage its borrowing in a way that would not burden the financial system and thereby reduce pressure on interest rates.

“So long as the RBI manages government borrowing in a non-disruptive way, there is no reason for interest rates to go up in the next three-six months,” says MV Nair, chairman of Indian Banks’ Association, and CMD of Union Bank of India.” That said, in the days to come, the movement of government bond prices will have a significant impact on the interest rate structure — deposit and lending rates. This is because all loans to corporates are pegged over the yields on government paper. This means the g-sec rate is like a virtual reference rate for banks to price their loans for borrowers.

To ease pressure on rates for corporate borrowers, who usually pick up loans in the second-half of a fiscal, the government plans to complete most of its fund raising in the firsthalf. Further, to ensure easy liquidity conditions, RBI has been buying back government bonds. But, these may be artificial ways of curtailing rates from rising.

But, inflation may also have a say. Economist have forecast inflation (in negative territory now) to touch 5% by the end of the current fiscal. As in the past, higher inflation has prompted RBI to raise interest rates. But, in light of the economic conditions, concerns over liquidity could override those of price stability.

“India is a saver’s economy, and thus, we have to give decent returns to depositors to retain them. Small savings rate and retail level inflation are very relevant indicators in deciding interest rates,” feels KR Kamath, CMD of Allahabad Bank. “Banks have to keep in mind various costs while fixing interest rates. Liquidity is not the sole determining factor in the system that decides rates. If credit demand improves in the second-half, rates may harden. But, the million dollar question is whether this (demand in credit) will happen,” says M Narandran, executive director of Bank of India.

If the economy does not revive in the second-half, chances of a pick-up in bank credit are equally dim. In such a scenario, banks will fiercely compete with each other — by offering lower interest rates —to give loans.

Alternatively, a revival in the economy will bode well for a pick-up in credit demand. If RBI remains committed to ‘providing adequate liquidity’ to system, chances are that rates may remain stable. Even if RBI does not tinker with policy rates, banks will have enough scope to maintain lending at current rates if credit demand revives. A substantial portion of high-cost bank borrowing undertaken between September 2008 and January 2009 will mature in the second-half of FY10. This will bring down banks’ average cost of borrowing and improve their net interest margin — the difference between the cost of borrowing and yield on advances. Given a choice between a lower and high interest rate scenario, banks have always preferred a high interest rate scenario since it gives them an opportunity to improve their margins. When rates move northward, it is called a lenders’ market since borrowers will pay any price to secure loans. Conversely, when rates are soft, corporates arm-twist banks to get the best possible bargain, which narrows bank margins.

Rising rates will be good news for depositors, but not necessary so for the government. Any rise in interest rate would mean the government would have to borrower at a higher rate, thereby widening the fiscal deficit. Even if the central bank is not comfortable with such huge borrowing, it may choose to put a lid on rates in the interest of the economy.

SOURCE: THE ECONOMIC TIMES

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Cut-throat rivalry bleeds non-life cos

ET Bureau

PRIVATE non-life insurers are losing money hand over fist as cut-throat competition and losses in motor third-party insurance wipe out all margins.

Underwriting losses—the excess of claims over premium—doubled for private companies from Rs 416 crore in FY08 to Rs 815 crore in FY09. The dozen private insurers, which made a combined pre-tax profit of Rs 114 crore in FY08, stared at a collective loss of Rs 114 crore in FY09. This, despite a 12% growth in premium income to Rs 12,479 crore.

The losses of non-life or general insurance companies are quite distinct from those in the life insurance business. Life companies lose money because of accounting norms that do not allow them to amortise expenses over the term of the policy. The policies issued by non-life companies are annual contracts and they lose money when claims exceed premium and investment income.

The only two companies in the private sector that improved their bottom lines were Royal Sundaram and Reliance General Insurance.

Losses in motor insurance take toll

ROYAL Sundaram doubled its net profit to Rs 10 crore in FY09 while Reliance reduced net losses to Rs 50 crore from Rs 163 crore in the previous fiscal. Despite reporting an 18% drop in net profit at Rs 150 crore in the previous fiscal, Bajaj Allianz General Insurance has the highest profitability among private players. The largest private company, ICICI Lombard, which made profit of Rs 130 crore in FY08, recorded a marginal gain of Rs 28 lakh in FY09.

One contributor to underwriting losses is motor third-party insurance, the compulsory cover vehicle owners need to buy to ensure accident victims are compensated. In the past, private insurers simply avoided underwriting this traditionally loss-making business. This prompted the regulator to ensure that losses get shared by the industry in proportion to their overall business through the creation of a motor third-party pool.

The private industry’s share of losses under the motor third-party pool has risen to Rs 244 crore in FY09 from Rs 172 crore in the previous fiscal, an increase of 42%. But its overall underwriting losses have increased by over Rs 400 crore. This means margins in hitherto profitable businesses have started becoming unprofitable. The rate war following de-tariffication has resulted in flat growth in premium from property insurance (fire), despite an increase in the sum insured. The four state-owned companies have seen their collective net profit plunge 62% from Rs 1,720 crore to Rs 648 crore. The motor pool losses of public sector insurers has grown from Rs 344 crore to Rs 400 crore and their overall underwriting losses have grown to Rs 3,566 crore in FY09 from Rs 3,299 crore in FY08.

SOURCE: THE ECONOMIC TIMES

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Budget housing to leave little room for profit margins

ET Bureau

THE real estate sector, which has been languishing for some time, appears to have found its feet with focus on affordable housing and this may reflect in the June quarter results of the companies. The move has led to higher sales for many companies, but on the flip side, it has also impacted the margins negatively. The reason being that the mid-segment housing is a high volume, low margin business.

The June quarter results, therefore, may be a tad better on a quarter-on-quarter basis. But much lower than those reported in the corresponding period of the previous year. The average of estimates of ET Intelligence Group and eight brokerage houses shows that the overall industry sales are expected to decline 30% on a year-onyear (YoY) basis. On a quarter-on-quarter (QoQ) basis, industry sales would grow at an average 30%.

It may also be understood that only the residential market has seen a recovery, while the commercial and retail segments are still under stress.

Among all the listed companies, Orbit and Indiabulls Real Estate (IBREL) are expected to show a marginal improvement in sales. With a huge fall in property prices in the luxury segment, Orbit has shown 5% increase in sales. With a 70% YoY decline in revenue, Parsvnath is expected to see the highest fall. DLF and Unitech may follow with 60% and 54% decline, respectively. As a move to generate cash for business activities, both these companies have exited from unviable projects and also sold noncore assets. This would help in completing under-construction projects. Even some large SEZ projects have been shelved.

Many companies have launched new residential projects in affordable housing segment. Though construction costs would be low, EBIDTA margins would decline by 5-10% average due to sharper decrease in prices. However, companies like Unitech, DLF, HDIL, and Sobha that have raised funds have improved their balance sheet positions and thus lowered their overall finance cost. Average EBIDTA margin for June’09 would be 39% as against 43% for March’09. Peninsula Land is expected to show positive margin, as the number of projects was very limited, hence leverage was also low.

Despite all the gloom, realty sector is seen to show some improvement in margins. The overall PAT margins for the June quarter will be at 26%. Though real estate sector is one of the major contributors to the over all profit growth for India Inc, yet it is low as compared to the past PAT margins of 35-40%. However as alternate sources of funds have become available, builders have managed to improve their cash position. Loans have been restructured and thus interest liability has been reduced. Developers like Mahindra Lifespaces, IBREL and Peninsula Land are expected to report PAT margins upward of 30%.

SOURCE: THE ECONOMIC TIMES

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Brokers may return your idle money every quarter

Sebi To Mandate ‘Zero Balance’ Account To Prevent Misuse Of Client Funds By Brokers

THE Securities and Exchange Board of India (Sebi) is considering a rule whereby brokers must ensure a ‘zero balance’ in their client’s trading account at the end of every quarter, a person familiar with the development told ET. This is being done to prevent misuse of client funds by brokers.

Any balance funds lying in the client’s account at the end of three months will have to be returned to by the broker by way of a cheque. There would be a grace period of one week at the end of the quarter. This will also ensure that financial disputes between the broker and the client do not go back to more than three months.

The broker will also require a balance confirmation from the client with signature at the end of every financial year, the person said. The running-account issue was recently taken up at the Secondary Market Advisory Committee (SMAC), where it was debated whether the accounts should be made ‘zero balance’ on a monthly,quarterly or half-yearly basis. Some members had proposed a monthly ‘zero balance’ system. But most members felt this could lead to administrative problems for brokerages, especially those with large number of clients.

However, the committee was unanimous in its view that clients should get a statement of their portfolio on a monthly basis, instead of on a quarterly basis, as is the practice right now.

“It came into light that brokers sold off shares of investors without their knowledge. Investors were surprised to know this only several months later, when they asked their relationship managers to sell the shares,” said a person familiar with the development.

When the market had crashed in January last year, many clients alleged misuse of their accounts by brokers without their knowledge. This had prompted Sebi to set up an informal committee in June last year to suggest changes to the brokerclient agreement to prevent recurrence of such incidents. A client-broker pact lists various terms and conditions relating to order and trade confirmation, contract notes, brokerage, settlement schedules, margin payments and dispute resolution between both parties.

The panel has recommended that brokerages should separately mention mandatory requirements by Sebi and optional conditions stipulated by the broker. Once the recommendations are accepted and notified, the account-opening form, known as ‘Individual Client Registration Form’, would contain different colour pages for trading in different segments of the market — cash, derivatives or debt markets.

SOURCE: THE ECONOMIC TIMES

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Budget set to boost aam aadmi's consumption

13 Jul 2009, 0347 hrs IST, ET Bureau

By the time you read this article, the Union Budget 2009-10 would have been older by a week. A week is a long time to reflect on a policy document that has raised more questions than it has answered. This is especially true of the investor community and India Inc that had high hopes from Pranab Mukherjee in run-up to the budget day.

The hopes were not entirely misplaced. The country is facing one of the worst economic turmoil in nearly a generation and the United Progressive Alliance (UPA) has been voted back with a strong mandate. This is bound to raise expectation to high level. But if the stock market reaction is any indicator then Mr Mukherjee and his team at North Block seems to have grossly disappointed their exalted audience. Really? Or is it is a case of grapes going sour? After a detailed reading of the budget proposals, it is difficult to rule out the possibility of the latter situation being true.

An analysis of the various budget proposals by ET Intelligence Group suggests that the government aims to put more money in the hands of the consumers. The move will boost consumption in the country, which will in turn drive-up the economic growth. While in the last five years economic growth was driven by investment demand, next few years may favour companies in the consumption space.

This may dull the prospects of investment driven, high-beta stocks and pull down the benchmark indices, which are full of them. However, this should not bother retail investors who invest in stocks rather than indices. All one has to do is to rebalance your portfolio by increasing exposure to the sectors driven by consumption demand. To fully appreciate this policy move, we need to get to the genesis of it. This new fiscal instance at the central level has evolved in the backdrop of stagnating consumption demand in the country and rising economic gap between rural and urban areas and that between the top performing states and the laggards.

For instance, the share of private financial consumption expenditure (PFCE) in India’s gross domestic product has been on a decline since the last five years. The decline has exacerbated in recent times due to the recent economic crisis. In FY03, private consumption accounted for well over two-third of the country’s GDP at market price. This ratio declined to little over 51% in the March ’09 quarter. PFCE covers all kinds of consumer goods and services including food, beverages & tobacco (F&B), expenses on fuel, power & rent, transport services, healthcare, education and recreation among others.

According to figures released by Central Statistical Organisation (CSO), total expenditure on F&B goods grew at compounded annual growth rate of 3.1% (at constant prices) during FY2000 and FY08. This was much lower than GDP growth of 7.2% per annum during the period. The government cannot afford to ignore the situation; especially one elected on the plank of helping aam aadmi (the common man).

National Sample Survey Organisation’s (NSSO) report on household consumer expenditure in India during 2005-06 brings out the consumption deficit at the household level. According to the report, there is a huge disparity between the monthly per capita expenditure (MPCE) of urban and rural India (Look at the adjoining chart). The total MPCE on food for rural India stood at Rs 333, against Rs 468 in case of urban India. The inequality is more glaring in case of the non-food expenditure. The findings reveal a massive gap between rural and urban expenditures in case of various items ranging from staple food items like milk & milk products, vegetables, fruits, beverages and processed foods to items of basic necessity like clothing & footwear, medical care and education.

The report also shows that nearly half the households in the country reside in either katcha or semi-pucca houses. This means a large portion of the population is still to develop a taste for goods and services that help build a modern home such as running water, electrical fixtures, tiles and a modern bathroom among others. If the various government programmes manage to close the gap by even 20% in next five years, a huge consumer market will open up for India Inc.

The beginning of this stance was made by nationwide implementation of National Rural Employment Guarantee Act (NREGA), which guarantees 100 days of employment to every unemployed rural adult. It was followed by Sixth Pay Commission Awards. This significantly raised salary levels of employees in the government and public sector undertakings. The latest budget is another step in this direction. The minimum wages paid under NRGEA programmes has been raised to Rs 100 per day. The amount is higher than the World Bank defined global poverty line of around $1.5 dollar per day of income per person and may become a floor wage rate across the country in due course. Besides, the allocation for NREGA is raised by 144% to nearly Rs 40,000 crore.

Simultaneously the budget has significantly stepped up allocation for infrastructure sector including urban infrastructure, rural electrification, housing and highways among others. Further, allocation for education and healthcare has also been increased. The government intent is clear –spread the fruits of economic growth and raise the potential number of consuming household in the country.

Companies from sectors like FMCG, consumer durables, telecom services, automobiles, agri-inputs, healthcare, cement, metals, power, capital goods and construction are going to benefit from the government’s thrust to reduce consumption gap.

While large players in these sectors are bound to benefit, smaller and regional players with their local focus are better placed to profit from the increased purchasing power. Do read our detailed coverage on various sectors to know how investing in the new theme of Bharat Nirman can benefit you.

SOURCE: THE ECONOMIC TIMES

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US revival key to emerging market recovery: Morgan Stanley

13 Jul 2009

China’s role in the global economy is currently similar to that of the little Dutch boy who stuck his finger in the dyke to avert disaster. It is the only country where growth has returned to its underlying trend rate of 8% following last year’s economic meltdown. The demand impulse from China is now buoying exports and sentiment in several other economies.

However, the boy could only stem the tide up to a point and fortunately other men soon arrived on the scene to fix the problem. As was the case in the Dutch legend, the global economy too needs the developed world to start contributing to world growth again for a broad-based recovery to materialise. And that in turn requires the US consumer to spend at least a small part of the stimulus funds pronto.

Even China is betting on the US consumer making some sort of a comeback. While Chinese policymakers are indeed attempting to reorient the economy by encouraging more domestic consumption, such structural changes take a long time to pan out. Boosting infrastructure spending is the quickest way to shore up demand in the short-term and that’s what China has done over the past few months. A large part of the Chinese stimulus has gone towards increasing fixed asset investment even though investment as a share of GDP is already at abnormally high levels of more than 40%.

China essentially remains the world’s main manufacturing base. And herein lies the problem with the global economic recovery story. It will be very difficult for China to maintain its 8% expansion pace if its export growth does not pick up by the end of the year as there’s a limit as to how much investment it can add to its already large and increasingly idle manufacturing base.

The rise in economic optimism since March this year has largely been due to a turnaround in the manufacturing sectors in many countries, starting with China. Manufacturing activity that declined across the world by more than 15% in the year to March 2009 began to stabilise in the first quarter of 2009 with Asian countries taking the lead. Expectations rose that the snapback in industrial activity could be quite sharp as firms had aggressively cut production and their workforce late last year following the credit crisis.

Some developing countries are indeed on track to post eye-popping growth numbers for the second quarter. Many Asian emerging markets probably recorded economic growth in excess of 10% on an annualised basis in the April-June 2009 quarter. For the developed world as well economists are projecting positive growth in the July-September quarter with the rate of inventory liquidation having peaked in the first half of 2009.

Global equity markets were on a tear since March, tracking the sharp improvement in economic sentiment. But after pricing in all the positive developments on the global manufacturing front, the stock market rally stalled in June and is now showing signs of fading as the realisation dawns that any rebound in manufacturing activity may just be a short-term phenomenon if final demand does not resurface.

Unfortunately, the news on the consumption front has been discouraging of late. It appears that the US consumer has used all the additional income from the stimulus packages to just rebuild the savings pool. The household savings ratio has risen from virtually zero in late 2007 to 6% currently. That’s a huge swing in a short span of time although it is still below the historical norm of 8%. No meaningful global economic recovery can shape up as long as the US consumer stays completely focused on increasing the savings ratio. After all, consumption drives growth, not manufacturing activity as the latter is undertaken only in anticipation of final demand.

The most important data then to track in the weeks and months ahead are US retail sales numbers. While the US consumer is unlikely to return to the spendthrift ways of the past two decades for a long time to come, a modest increase in retail sales is now required to create some sort of a virtuous economic cycle. Over time, the US consumer needs to work off the excessive leverage and gradually increase the savings rate while the rest of the world makes the necessary structural adjustments to the growth model. In the long-run, final demand trends of the developed world will play a less significant role and the growth leadership has to be provided by the emerging market consumer. But decoupling is an incremental process and given the trade and capital flow linkages, developing countries cannot pull away from the developed world too far, too quickly.

The decoupling theme staged some sort of a comeback this year after being derailed by the economic crisis in 2008. This is reflected in the relative performance of emerging markets versus developed markets: the gap between the indices of the two blocs is back at the levels last seen at the peak of the decoupling mania in late 2007.

Equity market performance merely tracks economic sentiment on a real time basis and the large performance gap between the emerging and developed market indices indicates the differential in sentiment is stretched from a historical perspective. To be sure, there’s nothing to suggest that the differential can’t get wider. The valuations ofstocks in developing countries are currently similar to those in the developed world after long trading at a discount and a case can be made that emerging market equities should trade at a premium as their future growth prospects are brighter. In the near-term however, it’s hard to justify much of a premium as the export dependency and the reliance on external capital to fund some of their growth is still high among many developing economies.

Ironically, both the performance and valuation gap between the developing and the industrialised world could further widen in the coming months if risk appetite in the US and other developed countries rises. That in turn will lead to an even greater inflow of capital into emerging markets. For that to happen though economic optimism in the US must improve.

It’s then all down to the US consumer to determine whether a global economic recovery gains traction by moving beyond the inventory rebuilding stage. If the US consumer remains in a funk and keeps on saving any additional income the world economy will at best follow an L-shaped economic path, implying that the cyclical bullmarket in equities is over. But even a modest revival in US consumer activity will be enough to create a positive feedback loop between production and consumption and extend the cyclical bull market in stocks till at least early 2010 when fresh challenges will emerge as the stimulus effects fade and excessive leverage in the system remains a drag.

The bears argue that the consumer will keep on retrenching this year as the economic wounds of the past year are still raw and the debt overload high. They do have history on their side: it has typically taken around three years for the US economy to find its footing after suffering a major crisis. The first phase of the Great Depression lasted three years from 1929 to 1932. In a disturbing parallel, the stock market rallied by 30% in early 1931 as industrial activity seemed to be stabilising following a market crash of nearly 50% in the previous year. But the consumer deleveraging process continued unabated that subsequently took the economy and the markets for a deeper dive. Even during a mild recession in 2001 following the tech boom-bust cycle, it took till mid-2003 for consumer spending to accelerate despite industrial activity having bottomed in late 2001 and showing a rebound in early 2002.

Of course, the difference this time around is that the world has never seen so muchmoney thrown at a problem. The bulls are banking on that cash infusion to launch a sustained global recovery. China’s policymakers have already succeeded in stimulating their economy but beyond a point, it too needs the largest buyer of its goods — the US consumer — to start spending again. If that doesn’t happen soon enough, then the global economy faces the prospect a relapse.

SOURCE: THE ECONOMIC TIMES

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Budget 2009 brings not much respite for the retail sector

13 Jul 2009, 1328 hrs IST

Before July 06, 2009, there was long drawn wish-list for budget 2009 from all corners of the economy. The announcements made in budget 2009 were able to meet the expectations of some of these forums. However, as expected, the budget could not bring relief to all the sectors of the economy, including the retail sector. Retail is the second largest sector in India after agriculture and has its own sets of demands to achieve its true potentials and have global best practices.

There were many expectations of the retail sector form the budget. However, Budget 2009 leaves the retailers wanting for more as Finance Minister Pranab Mukherjee made no mention of reforms in the retail sector which could have contributed significantly to the retail arena.

In his budget speech, Finance Minister emphasized the importance of foreigninvestment for the growth of our economy. Even the economic survey for 2009-10 recommended introduction of FDI in multi brand retail by making a start with food retailing. However, no policy announcements or references were made towards the long standing demand of reforms in the retail sector for liberalization of foreign directinvestment (FDI) in single brand retail and opening of multi brand retail. Further, no clarifications have been brought out on the applicability of recently introduced Press notes 2, 3 and 4 of 2009 on prohibited sectors, including multi brand retailing, leaving the same ambiguous.

Also, there was an expectation for granting Industry status to the Indian retail sector which would help in development, granting fiscal incentives, availability of organized financing and establishment of insurance norms. Also, among the wish list of the retailers was the opening up of the external commercial borrowings (ECB) route for meeting the constant funding needs of the retail players. However, no policy announcement on this has been made by the FM. Though, there are no direct policy announcements for retail sector in the budget, however, the other measures announced in the budget towards inclusive growth, given the global economic slowdown, would certainly have an indirect positive impact on retail sector too. Some of the key announcements in the budget, which could help retail sector to grow, would be:

* Retail industry, being a highly competitive industry, was struggling with the issue of higher cost and low margins. Abolishing FBT will go a long way in improving the cash flows of the retail sector.

* Focus on rural sector will further fuel demand and contribute to the momentum.

* Hike in ceiling of personal income tax, increase in exemption limit for wealth tax purposes upto INR 3 million and removal of surcharge for individual tax payers will increase their purchasing power, thereby boosting consumption.

* Provision of 100 percent deduction in respect of capital expenditure (except expenditure on acquisition of land, goodwill or financial instrument) on the setting up and operating cold chain facilities for specified products and warehousing facilities for storage of agricultural produce. Setting up of cold chain facilities will help in reduction of wastages which will in turn bring pricing efficiency for the retailers.

* On the indirect tax front, no roll backs on the earlier tax cuts and the reaffirmation to introduce GST by April 1, 2010 are reassuring and will help in reducing inefficiencies in the indirect tax structure.

* The announcements on reduction in customs duties on LCD panels and reduction of excise duty on branded jewellery to quote a few will reduce the cost of the products which will hopefully be passed on to the consumers and help in boosting the demand of these products.

However, there are certain announcements in this budget, which may impact the growth, especially of the evolving retail sector:

* Increase in the rates for Minimum Alternate Tax from 10 to 15 per cent would have an adverse impact on increasing the cost of retailers paying taxes under MAT.

* No announcement for providing relief from the levy of service tax on renting of immovable property for which no credit or offset is available constitutes a significant component of tax cost in the retail sector.

* Tax cost has been increased on account of proposed levy of service tax on transport of goods by rail and service tax on legal services.

* The withdrawal of earlier beneficial presumptive tax rate of 5% and introduction of new higher presumptive tax rate of 8% would have a negative impact on small retailers.

In view of the employment generation capacity and the criticality of retail sector for Indian economy, Government could have considered providing retail sector much awaited stimulus package to ensure the sector’s full participation in the growth path of the Indian economy.

SOURCE: THE ECONOMIC TIMES

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Economic crisis far from over, WTO chief says

13 Jul 2009, 2104 hrs IST, REUTERS

GENEVA: The global economic downturn is far from over, and few countries have dismantled the dangerous protectionist barriers they imposed in response to it, World Trade Organisation Director-General Pascal Lamy said on Monday. In remarks to the WTO's 153 members, Lamy said that import penalties and other border restrictions are closing off markets and causing more difficulty in a time of depressed demand.

"There is no indication yet of governments more generally unwinding or removing trade-restricting or distorting measures that they imposed early on in the crisis," he said. While saying there was no "outbreak of high-intesnsity protectionism" to date, Lamy raised the possibility of an amplification of trade disputes, retaliatory restrictions, and sanctions if unfair barriers are kept in place.

The WTO is analysing economic stimulus measures to prop up banks, insurers, carmakers and other key sectors in developed markets, where the credit crisis began. So far, Lamy said, it has not been possible to tell whether the subsidies and bailouts have violated international law by crowding out competition.

"This continues to be a particularly challenging part of the exercise because of the difficulties of collecting hard data in these areas," he said of WTO efforts to assess the stimulus moves. "Without that data, it is not possible to asses the impact they are having on trade flows."

Lamy, who attended the G8 summit in Italy last week where world leaders promised to work to conclude a new global free trade pact in 2010, told WTO members on Monday that it was too early to count on an economic recovery.

"I would caution against excessive optimism," he said. "Although financial markets are showing signs of stabilizing, the crisis is far from over, in particular in many developing countries that are only now starting to feel its full force on their trade and economic growth."

Trade diplomats are due to meet on Monday afternoon at the WTO's headquarters, on the shores of Lake Geneva, for the first Doha Round negotiating session since the G8 plus major emerging countries set the 2010 target.

PACKED SCHEDULE

Negotiators are expected to set a packed meeting schedule for the coming months in line with the Italy agreement to speed up the talks, which have been going on since 2001, and arrange meetings between trade ministers to settle tricky issues.

The communique from the Group of Eight wealthy nations plus China, India, Brazil, South Africa and Mexico raised hopes that countries who had previously squared off in Geneva would be willing to yield enough to make consensus possible.

Two signatories -- India and the United States -- caused the last major WTO push to fail last July when they locked horns about how poor-country farmers would be treated in a Doha deal, which would open up global food, goods and services markets.

Both countries have had a change of government since then, but neither have spelled out any changed negotiating stances. Lamy has said a global trade deal would give the world economy a $130 billion annual boost.

As in former WTO accords like the Uruguay Round, the Doha Round requires full consensus in all areas for the accord to be clinched.

SOURCE: THE ECONOMIC TIMES

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About 1.5 lakh Indians return from UAE due to slowdown

8 Jul 2009, 1636 hrs IST, PTI

NEW DELHI: An estimated 1.5 lakh Indian workers have come back home from the United Arab Emirates due to economic crisis and recession, the Lok Sabha was told today. Replying to a question, Overseas Indian Affairs Minister Vayalar Ravi informed the House that an estimated 50,000 to 1,50,000 workers have returned to India as result of the delay in execution of projects due to economic slowdown and recession in the UAE.

He said most of the workers have returned to India on leave without pay with the expectation that they would be able to go back to the Gulf country once the situation improves.

Ravi said while Indian Missions in Saudi Arabia, Oman, Kuwait, Bahrain and Qatar have informed that there has been some job losses in these countries, some Indians have also returned from Malaysia due to economic slowdown.

"Information received from Indian Missions in Afghanistan, Syria, Sudan, Brunei, Libya, Jordan and Lebanon indicate that there is no report of Indians affected by the recession," the Minister said.

Noting that slowdown has affected almost all sections of people in the US, Ravi said, "Indians working in the US are mostly professionals and the extent of job losses by Indians is, therefore, slightly mitigated by their indispensability to their organisation."

SOURCE: THE ECONOMIC TIMES

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H1B petitions: Over 20,000 vacancies still left

1 Jul 2009, 1404 hrs IST, PTI

WASHINGTON: Nearly three months after the US immigration agency started accepting petitions for the H-1B visas for highly-skilled foreign professionals, it is still looking for more than 20,000 applications to fill the Congressionally-mandated cap of 65,000.

Amid the economic downturn and protectionist provisions in the US stimulus package, the demand for the visas, which is mostly availed by Indian professionals, has slowed down. The latest figures released by the US Citizenship and Immigration Services (USCIS) reveal that approximately 44,800 H-1B petitions have been received by it so far.

In the last few years, there was huge demand of H-1B visas, with the USCIS receiving several times the quota of 65,000 in the first few days itself. It had to resort to computerised lottery to determine the successful applicants.

But with current economic downturn and certain provisions in the economic stimulus package, the H-1B petitions to the USCIS centres are now coming in ones and twos. This is in contrast to the last few years, when the US Postal Services had been making special arrangements for delivery of bundles of H-1B petitions. The economic stimulus package prevents hiring of foreign workers by companies receiving federal aid money. However, officials at the USCIS said it is work back to normal. "This is what it used to be couple of years ago, before it turned out to be a great rush in the last few years," a USCIS official said.

The USCIS also said it would continue to receive applications for the advanced degree category, in which the cap is 20,000. The USCIS had received about 20,000 H-1B petitions in the first few days itself, but it is still continuing to accept such applications, it said.

"USCIS will continue to accept both cap-subject petitions and advanced degree petitions until a sufficient number of H-1B petitions have been received to reach the statutory limits, taking into account the fact that some of these petitions may be denied, revoked, or withdrawn," it said.

SOURCE: THE ECONOMIC TIMES

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Japan unemployment at 6-yr high,British Economy Contracts 2.4% In Q1, Biggest Decline In 50 Years; Eurozone Lending Stalls

01 July 2009, Reuters

BERLIN / TOKYO: JAPANESE unemployment hit its highest level for six years on Tuesday and euro zone bank lending stalled, adding to fears that a substantial recovery from global recession is some way off.

Unemployment in Germany, Europe’s biggest economy, rose by less than economists had forecast in June, but Japan’s jobless rate in May hit 5.2%, its highest since September 2003, as a plunge in demand for exports hits the world’s No. 2 economy.

Western governments have tried to tackle the root cause of the global crisis, a credit crunch, by spending billions of dollars to recapitalise banks and get them lending again. But loans to euro zone businesses and households grew at the slowest pace on record in May, according to the European Central Bank’s underscoring the need for a quick impact from the ECB’s recent liquidity injection and planned bond purchases.

“The jobs data can be volatile but the most important thing is the big picture — that jobs are being shed everywhere and that it’s not going to end any time soon,” said Philippe Gijsels, strategist at Fortis in Brussels. “The unemployment rate usually peaks 6-7 months after the trough in the economy — even if we have a bottom in the economy now, which I’m not certain is the case, unemployment will not peak before the end of the year,” he said.

Even as business confidence recovers, inventories fall and companies boost production, jobless queues are set to lengthen and cast a shadow on consumer demand. Macroeconomic data has been mixed in the past few weeks, clouding hopes of a rapid global recovery. The German jobless figures, helped by the widespread use of shorter working hours, pointed to some economic resilience.

Carsten Brzeski, an economist at ING Financial Markets, said with a number of leading indicators suggesting the worst recession in Germany’s postwar history was easing, the labour market was one of “the bright spots of the recovery.” But revised figures showed that the British economy contracted 2.4% in the first quarter — its biggest decline in more than 50 years, and much faster than initially reported.

Policymakers from Tokyo to London and Washington face the same challenge: how to ensure that trillions of dollars committed to pulling their economies out of the deepest slump since the Great Depression will have a lasting impact.

Oil spiked to an eight-month high above $73 a barrel, lifted in part by fresh attacks on oil facilities in Nigeria but primarily by heavy Brent buying. A rise in the oil price is often an indicator of an economic recovery, but raises worries if it is due to other reasons such as supply constraints, because this lifts costs for a variety of sectors when demand for their products is still tepid.

So far, financial markets have largely brushed aside rising jobless numbers as a normal phenomenon at the early stages of a recovery cycle, betting that an economic upturn, albeit subdued, is around the corner.

SOURCE: THE ECONOMIC TIMES

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Steel companies mull 2 - 5% price hike on demand recovery

01 July 2009

STEEL prices could go up by 2-5% in July, with some of the country’s largest steel producers such as SAIL, Ispat and Jindal contemplating price hikes. Prices are likely to go up in the range of Rs 500-1,000 per tonne for various products. Some steelmakers had raised prices by Rs 500-1,000 a tonne in May and June. Steel prices had fallen sharply last year due to the effects of the global economic downturn. There has also been a rise in raw material prices.

The country’s largest steelmaker, SAIL, is likely to increase prices of certain grades by Rs 500-750 per tonne. Ispat Industries is also looking at increasing the price of hot rolled coil (HRC) by Rs 700-1,000 per tonne, while JSW, Essar and Tata Steel are reviewing the situation and would take a call in the first week of July.

“I don’t think there is any possibility of a substantial increase in prices, but small adjustments can always be made. For spot customers, we will look at prices afresh in the first week of July,” SAIL chairman SK Roongta said. “It (price increase) is an ongoing process. Some small adjustments to the tune of Rs 500-750 per tonne, that’s about 1-2%, keep on happening,” he added. SAIL had made minor changes in prices and withdrew discounts in May and June.

“We take a call in the beginning of month on price rise. In any case, price variations is only for spot customers, who constitute 20-25% of our customer base,” said a Tata Steel spokesman. An executive with Ispat Industries said the company may raise prices by Rs 700-800 per tonne or more in July as the company had not increased prices either in May or June. “We are reviewing the situation and nothing has been finalised as of now,” said a spokesman for Essar Steel.

The benchmark HRC prices are hovering around Rs 27,000-30,000 a tonne. This is still slightly higher than international prices. The gap has, however, now narrowed as steel prices have moved up marginally in some other countries too.

Domestic companies want to take advantage of a pickup in demand in the domestic market, which is mainly coming from increased steel consumption in sectors such as infrastructure, rural housing and automobiles.

“While the domestic demand has maintained its pace, increasing steel price may be difficult as prices have fallen by $50 a tonne in China,” said an executive with a private sector steel company.

India is the only major economy expected to show a growth in steel consumption (2%) in 2009, according to the latest forecast of World Steel Association (Worldsteel).

SOURCE: THE ECONOMIC TIMES

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IT biggies take 40% hit in billing rates

30 Jun 2009

BANGALORE: THE race to woo recession-hit clients across the world is forcing IT biggies to reduce their client billing rates, sometimes as high as 35-40%, though most are still managing to control any sharp declines in their topline.

In certain projects the billing rates are down to $16 an hour, which, analysts say are the lowest ever rates. And such rates will continue at least till Q1 next year, they add. “We have seen such sustained decreases in pricing in most projects. I expect this to last until the year end at least,” says Siddhartha Pai, Partner and MD, at the India offices of TPI Inc, a global outsourcing advisory firm.

“The last month or so has seen unprecedented cut in billing rates even for existing customers,” said Avinash Vashisth, chairman and CEO, Tholons, an offshore advisory firm. He said that for large testing services, and of services of similar value, $16-20 is the prevalent rate. This is almost 30-35% lower than the rates being charged earlier this year and steeper than the 20% cut that British Telecom had demanded from Infosys and Tech Mahindra earlier this year on some old and new projects. Also higher-end projects like SAP have faced pricing cuts of around 25%, which is again more than what it was earlier this year.

Top IT firms are offering such rates in the form of introductory discounts for new clients, and for a year or two for existing clients.”Pricing has been reduced substantially for some clients, including higher end projects, specially for long terms strategic clients or those that have been hit quite badly during the recession,” said a senior executive in Infosys who declined to be named as the company is currently in the silent period. A Wipro spokesperson said the company will not comment on speculation.

Another worrying factor for the IT firms is that despite the rate cuts, there has not been a corresponding rise in the volume of deal flow, in either highervalue or the lower end services, says Pai. “The deal flow is still low,” says Pai. Diptarup Chakraborti, Principal Analyst at Gartner, says that he does not see the situation improving before Q1 or Q2 next year.

“Good old days are not coming this year for sure,” he said. A Gartner study says prices of IT services in outsourcing are anticipated to shrink well up to 2010 due to an uncertain economic climate, IT budget constraints and general market consciousness. These rates are even lesser than what the facilities personnel make per hour in their client’s offices even in eastern European countries, where it varies between $16-$22 per hour, according to Vashisth who has offices in Europe. “There is cut throat competition now between the top five IT companies to retain and snap up new clients,” he says. The rate cut has been in stages. In November, clients demanded flat rates, by the first quarter of this year they wanted 20% cuts, and now most are demanding 30-35% cuts for not just new, but also existing contracts.

Research analysts with Merrill Lynch and Co, had said in a research note in December that more companies are re-negotiating.

SOURCE: THE ECONOMIC TIMES

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UK’s Lloyds banks on Wipro,TCS staff

30 Jun 2009

MUMBAI : EVEN as protectionism gains ground among political hardliners in the UK and US, UK-based Lloyds Bank has initiated the process of replacing most its British IT workers with Indian nationals. Many of the Indian recruits will be from top-rung Indian IT majors like Wipro and TCS, who are also the bank’s vendors, said two industry officials familiar with the development.

The bank, which has over 400 employees in its IT department, is learnt to be considering replacing over 80% of its IT workforce with those from India. “We continue to outsource areas of IT work to companies based overseas. At any one time, some of the staff from these companies will be based in the UK to deliver aspects of our IT projects which is standard industry practice, “ said a Lloyds spokeswoman over email. She added that the number of staff from overseas companies working with Lloyds in the UK varied depending on the projects underway and the skills required. TCS declined to comment since it was in the midst of its silent period while Wipro refrained from commenting on “market speculation.”

Globally, the economic crisis has resulted in serious costcutting measures which includes wage cuts. For example, an Indian IT specialist with over four years of experience, will be paid almost 30% lesser than his British counterpart. “The costs pressures for companies in Europe and US are forcing companies to lay off workers and replace them with more inexpensive labour mostly from India and China,” said a UK-based consultant who advises European banks on outsourcing strategies. Last week, the Lloyds Banking Group’s employee union protested on a move to replace skilled IT workers of British origin with those fom India. “Workers from India, who would otherwise have no legal right to work in the UK, are being given work visas and flown into the country to take on jobs that could otherwise be given to the existing UK-based staff. The UK government should be using its 43% ownership in Lloyds to force the bank’s board to act in the best interest of UK jobs and its economy,” the union’s assistant general secretary Steve Tatlow had said last week.

SOURCE: THE ECONOMIC TIMES

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White House sees 10 pct unemployment within months

23 Jun 2009, 0227 hrs IST, AGENCIES

WASHINGTON: The US unemployment rate is likely rise from already high levels to 10 percent in the next couple of months, a White House spokesman said on Monday.

"I think the president has said this, and I would certainly say this, I think you're likely to see unemployment at 10 percent within the next couple of months," White House spokesman Robert Gibbs told reporters.

The U.S. unemployment rate already stands at 9.4 percent, the highest level in about 25 years, and many analysts believe it could continue to climb despite the $787 billion economic stimulus package passed early this year by Congress.

Earlier this year, the Obama administration had predicted the unemployment rate would peak at 8 percent before beginning to fall toward the end of 2009.

President Barack Obama is expected to address the outlook for the economy at a White House press conference on Tuesday.

SOURCE: THE ECONOMIC TIMES

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SAIL's workforce likely to decline by up to 7,000 in FY'10

28 May 2009, 1803 hrs IST, PTI

NEW DELHI: Domestic steel giant SAIL sees its workforce shrinking by up to 7,000 this fiscal as it continues with the rationalisation of manpower aimed at reducing employee cost by Rs 3,50,000 crore per annum. "We tend to continue our corrections and we will rationalise our manpower further by around 6,000 to 7,000 in the current financial year," Steel Authority of India Limited (SAIL) Chairman SK Roongta told reporters after announcing the company's fourth quarter results here.

The steel giant had seen a net reduction of 7,500 employees by way of superannuation and voluntary retirements in 2008-09. SAIL's present workforce stands at about 1,20,000 employees across the country.

However, Roongta clarified that the company is not going for any temporary job cuts and the rationalisation is "natural separation" and would help in checking the impact of high wages. "The rationalisation would help in fending off the impact of wage revision. Our accounts for the year 2007-08 and 2008-09 have made full provisions for higher wage cost. This became due on account of wage revision on 1.1.2007," he said.

SOURCE: THE ECONOMIC TIMES

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AI must cut staff, perks for bailout

22 Jun 2009, 1105 hrs IST, ET Bureau

NEW DELHI: The government wants Air India (AI) to scrap its performance-linked incentive (PLI) scheme and cut the number of staff per aircraft as pre-conditions for bailing out the national carrier reeling under a mounting debt burden, according to a senior official.

AI should downsize or increase the number of planes in operation, said the official who didn’t want either himself or his department to be named given the sensitivity of the issue.

“When we ask them to freeze the PLI, they say there is an agreement with employee unions which stops them from doing so. These agreements cannot be honoured if the company turns sick,” he said citing the example of Singapore Airlines staff, which took a voluntary salary cut during the recent SARS outbreak.

The domestic airline industry is estimated to have lost Rs 10,000 crore in 2008-09, mainly on account of high fuel prices, excess capacity, poor load factor and irrational pricing.

SOURCE: THE ECONOMIC TIMES

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Multibillion dollar opportunity for IT cos

26 Jun 2009, 0152 hrs IST, TNN

BANGALORE: A billion smart cards for a billion population. It throws up a multi-billion dollar business opportunity for domestic technology players. The eco-system required to support the citizen ID card programme, proposed by the Unique Identification Number Authority of India (UIDAI), is expected to be vast comprising of data collectors/managers, delivery channels, chip designers, smart card manufacturers, application and software providers, system integrators, networking analysts and print companies.

Some estimate it will create at least a 100,000 additional jobs in the country in the next three years. An ancillary industry will also come up around this eco-system. The entire ID card project is estimated to be in the range of around Rs 10,000 crore, with the first phase which will cover ultra urban, urban, and semi-urban populations offering a Rs 6,500 crore business opportunity.

SOURCE: THE ECONOMIC TIMES

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India not threatened by deflation: Moody's

25 Jun 2009, 1847 hrs IST, IANS

NEW DELHI: India is not threatened by a deflation spiral that could derail economic development, the economic intelligence arm of global rating agency Moody's said on Thursday.

"Deflation is generally unwelcome by policymakers as it encourages consumers to delay purchases and businesses to postpone investment, which would eventually hurt GDP growth," Sherman Chan, an economist with Moody's Economy.com said. "Lower prices may in fact boost consumption volumes, especially in poor regions. Meanwhile, cheaper input costs may also present a good opportunity to speed up construction of much needed infrastructure," Chan addded.

For the first time since the new wholesale price index (WPI) series started in 1995, India's annual rate of inflation has turned negative, falling to minus 1.61 percent for the week ended June 6. This has led to fears that this would lead to hoarding of food articles and a consequent rise in prices.

SOURCE: THE ECONOMIC TIMES

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'India fared better than others during economic crisis'

26 Jun 2009, 1115 hrs IST, PTI

WASHINGTON: Though affected by the current global economic meltdown, India has fared much better than other countries of the world, minister of state for external affairs Preneet Kaur said on Friday. "We have fared much better than others though we are also affected and our growth rates have come down from the nearly nine per cent average of the past four years to 6.7 per cent in 2008-09," Kaur said in her address to the UN Conference on World Financial and Economic Crisis being held at the UN headquarters in New York.

In response to the crisis, Kaur said India has made aggressive use of fiscal and monetary policy, with particular focus on fiscal stimulus in infrastructure investment. "Our primary challenge is to get rid of chronic poverty, ignorance and disease, which still afflict millions and millions of our citizens. For this, we need a high rate of growth coupled with measures to make it inclusive," she said.

"We have endeavored to achieve this through huge investments in the rural and farm sector, a massive rural employment guarantee scheme, infrastructure development projects, major national food security and rural health missions, and an urban renewal mission," Kaur said.

India, Kaur said, has actively engaged in the G-20 framework aimed at redressing the current global economic situation so as to bring the global economy back to the trajectory of sustained growth. Leaders of some of the largest economies, the G-20, have met twice in the past months and declared their determination to instill confidence and restore stability to the world economy, she said, adding they have also pledged to strengthen regulation, reform international financial institutions, reject protectionism and build recovery.

The package of $1.1 trillion to restore credit and growth together with national measures constitutes a global plan for recovery on an unprecedented scale, Kaur said. Noting that India has a vested interest in the world economy doing well as that is a key enabler for India's growth too, the minister said: "But as we strive for global solutions to this global crisis, we must remember that development or economic growth cannot be slowed, halted or sacrificed in the search for solutions to the crisis.

SOURCE: THE ECONOMIC TIMES

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'Indian investments way out for Britain from recession'

25 Jun 2009, 1345 hrs IST, IANS

LONDON: Indian investments need not cause fears of an Indian Raj over Britain, the House of Lords has been told by an Indian-born member, but instead would "surely show" Britain a way out of the current recession.

"In the 17th century, Britain entered into trade with India in the name of the British East India Company," Lord Navneet Dholakia of the Liberal Democrat Party told the British upper house of parliament. "That was 250 years ago and it provided us with 250 years of British rule." "I promise one thing: Indians are not here to establish Indian rule or an Indian Raj, but they can surely show a way out of the dire economic predicament in which we find ourselves," he said during a debate Monday on Indian investments in Britain.

Dholakia's light-hearted comments came after figures released by the British government last week showed India has emerged as the second largest investor in Britain. Business projects created or brought in by Indian investments number 108 - behind top-ranking US's 621 and just ahead of France's 101. Indian investments have led to 4,139 new jobs since last year, contributing to a total pool of nearly 8,000 British jobs that the Indians have created even amid the unemployment brought on by the global recession. These investments include Indian mergers and acquisitions, the most high profile of which was Tata Motors' acquisition of the iconic British marques Jaguar and Land Rover last year.

However, Dholakia said: "The UK's reception of Indian business teams is the weakest in Europe."

"France, for example, hosted bilateral trade talks with Indian and French businesses, with over 200 French corporations represented. The UK is also under-utilising its small and medium enterprises in its trade relations with India," he added.

SOURCE: THE ECONOMIC TIMES

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Tata Steel FY09 net drops 60 pc; 2,045 jobs at risk

26 Jun 2009, 0957 hrs IST, REUTERS

MUMBAI: Tata Steel Ltd, the world's No 6 steel maker, on Thursday missed forecasts with a 60 percent drop in consolidated net profit for the fiscal year ended March and said 2,045 jobs in Europe units were at risk. It said its Anglo-Dutch Corus Unit was starting consultations on job cuts due to the continued deterioration in market conditions and falling demand. "The recession in world demand looks deeper than what we thought six months ago," Managing Director, B. Muthuraman told a news conference.

Global steel production has tumbled this year, as demand in key steel consuming sectors such as construction and automotive shrank, forcing steelmakers such as Arcelor Mittal to sharply reduce capacity. In April, the World Steel Association forecast steel demand would tumble 15 percent in 2009, its steepest fall since World War II.

Tata Steel reported a net profit after minority interest and share of profit of associates of 49.5 billion rupees ($1.02 billion) in 2008/09, compared to a consolidated net profit of 123.5 billion rupees reported a year ago. Consolidated net sales for the year rose to 1.46 trillion rupees from 1.31 trillion rupees reported a year earlier. That compared with a forecast for net profit of 84.23 billion rupees, on net sales of 1.5 trillion in a Reuters poll of six brokerages. Tata Steel did not release quarterly figures. A Reuters calculation showed it suffered a consolidated loss of about 45.4 billion rupees in the January-March quarter. Nine month consolidated profit stood at 94.86 billion rupees, on net sales of 1.2 trillion.

Tata Steel it took a restructuring and impairment charge of $805 million in the year for its Europe operations. It said profits would have been lower by 54.97 billion rupees had it charged changes in its actuarial valuations on its European employee pension plan to the profit and loss account instead of the reserves and surplus account.

Tata Steel, which last month won approval from banks to ease conditions on 3.7 billion pounds of loan it took to buy Corus, said it had strong liquidity and no material repayment obligations or refinancing for the next 12 months. It said it had cash and equivalents of $2.1 billion on June 20 and an undrawn bank facility of $1.3 billion.

Shares in Tata Steel ended down 2.1 percent at 397.95 rupees, ahead of the results, in a Mumbai market that fell 0.5 percent. The shares are up 85 percent so far in 2009 after tumbling 77 percent in 2008.

SOURCE: THE ECONOMIC TIMES

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Best places to work

Business relationships must work beyond the boundaries of achievement to distinguish a good workplace from a great one.

In its latest edition of "India's Best Companies To Work For-2009", The Economic Times in partnership with the Great Places To Work Institute, attempts to do just that.

Here's a list of India's top 25 workplaces across industry verticals:

• Professional Services - Ernst & Young Global Shared Services, Makemytrip (India) Pvt Ltd., The Smart Cube, Global Innovosource Solutions Pvt. Ltd.

• Manufacturing and Production - NTPC Ltd., Classic Stripes Ltd., Hilti India Pvt Ltd., Silver Spark Apparels, Mando India Ltd.,Visakhapatnam Steel Plant, Rashtriya Ispat Nigam Ltd.

• ITeS - Agilent Technologies, Corbus India Ltd., Intelenet Global Services, Acclaris Business Solutions,Tata Consultancy Services- BPO

• Hospitality - Marriott Hotels India Pvt Ltd., ITC Ltd- Hotels Division

• Electronics - LG Electronics India Pvt. Ltd.

• Healthcare - Johnson & Johnson Ltd.

• Construction & Real Estate - Godrej Properties Ltd., Lodha Group

• Public Sector Enterprises - NTPC Ltd., Visakhapatnam Steel Plant, Rashtriya Ispat Nigam Ltd.

• Retail - Titan Industries Ltd.

• FMCG - Godrej Consumer Products, Marico Ltd.

• Telecom - Qualcomm India Pvt Ltd., Bharti Airtel Ltd.

• Microfinance - Ujjivan Financial Services Pvt. Ltd.

• Banking/ Credit Services - American Express, Kotak Mahindra Bank Ltd., HDFC Ltd., The Saraswat Co-operative Bank Ltd.

• Insurance - Aviva Life Insurance Co India, Max New York Life Insurance

• Investments - Bajaj Capital Ltd.

• Information Technology - RMSI Pvt Ltd., Intel Technology India Pvt. Ltd., NetApp India Pvt. Ltd., Tavant Technologies

SOURCE: THE ECONOMIC TIMES

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Banks, funds, insurers cut 3,84,661 jobs in crisis

25 Jun 2009, 1917 hrs IST, Courtesy Reuters

Banks, insurers and asset managers worldwide have announced 384,661 job cuts since August 2007 when the credit crisis began to intensify.

Following are the major companies with deepest job cuts:

• Citigroup cuts 75,000 jobs.

• Bank of America cuts 45,500 jobs. (Includes 30,000-35,000 jobs to be slashed over three years after the purchase of Merrill Lynch and 7,500 jobs to be cut over the next two years after the acquisition of Countrywide Financial Corp)

• JP Morgan cuts 23,700 jobs. (Includes 7,600 cuts announced after the purchase of Bear Stearns and up to 14,000 layoffs announced in 2009)

• UBS cuts 19,700 jobs.

• HSBC cuts 16,350 jobs.

• RBS cuts 15,250 jobs.

• Lehman Brothers cuts 12,570 jobs. (Number made up of about 6,000 job cuts made before the bank collapsed in September and an estimated 10,500 left jobless after the bank collapsed -- about 8,000 others were transferred to Nomura and 10,000 to Barclays)

SOURCE: THE ECONOMIC TIMES

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No conflict of interest between new job & Infosys: Nilekani

25 Jun 2009, 2121 hrs IST, PTI

NEW DELHI: Nandan Nilekani, who has been appointed as head of the Unique Identification Authority today, said he would ensure there is no conflict between his present role and the interests of Infosys Technologies, of which he was co-founder.

"There is not going to be any conflict of interest because I have not taken up this job to create conflict of interest. ...I will make sure that we have the highest standards of integrity, openness, transparency and process in all procurement. A slightest issue (and) I will recuse myself from the decision," Nilekani said in an interview to a TV channel.

The new agency for providing biometric-ID to over one billion citizens will involve multi-crore procurement from IT vendors, which may include Infosys Technologies, TCS, Wipro, and Mahindra Satyam as well.

Nilekani has just resigned as Co-Chairman of the country's second-largest software exporting firm.

However, the Infosys spokesperson did not comment on whether the company would participate in the UID bids expected in the near future.

On the project, Nilekani said, "For six to nine months we would focus on getting some of the technological issues resolved ... we have to do a lot of technological work ... then we have to start partnering agencies to issue this ID card.

"In 12-18 months from now the first set of people are going to get the card under this model."

On resigning from the Board of Infosys he said, "I had excellent association with Infosys and was sad to let go of the great intimate association...It was very difficult...I went through a lot of introspection...I discussed with my colleagues. The company felt that it was in the larger interests of India that I do this."

SOURCE: THE ECONOMIC TIMES

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Indian outsourcing giants to benefit from downturn: Premji

21 Jun 2009, 1557 hrs IST, PTI

LONDON: The turmoil in the financial market is likely to spell good news for the Indian outsourcing companies, as the downturn will compel multinationals to seek further economies for sustenance in these tough times, Wipro Technologies founder Azim Premji has said.

In an interview to the Sunday Times, Premji insisted that "the Indian outsourcing giants will benefit from this downturn, as all multinationals seek further economies."

Premji's statement comes at a time when the United States President Barack Obama has proposed changes in tax laws to curb outsourcing. Obama proposing change in tax laws of that country had reportedly said, it's a tax code that says you should pay lower taxes if you create a job in Bangalore, India, than if you create one in Buffalo, New York.

Premji also voiced its concern about the "creeping tide of protectionism" in the West and said that "If we get into protectionism, then the West is going to get a wave of protectionism in response, and that is going to turn back the clock 20 years". Premji further warned that it will be America and Europe that will suffer, because they will be excluded from the only growth markets left, in Asia, Africa and China.

SOURCE: THE ECONOMIC TIMES

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MetLife International to hike stake in Indian venture to 49%

24 Jun 2009, 1701 hrs IST, PTI

NEW DELHI: American insurer MetLife is keen on raising stake in its Indian venture to up to 49 per cent as and when the government revises the cap on foreign holding in the sector. "If the Indian government decides to raise the cap on foreign investment in insurance companies, MetLife International would definitely invest more in India. India is a growth engine for MetLife in the future," said MetLife India Insurance Company Managing Director Rajesh Relan.

Under the present regulation, a foreign firm is allowed to have 26 per cent stake in an insurance venture. MetLife India Insurance Company incorporated in 2001 is a joint venture between MetLife Inc, Jammu and Kashmir Bank, M. Pallonji and Co. Pvt Ltd and other private investors.

A bill to amend Insurance Laws to raise the FDI limit to 49 per cent from existing 26 per cent is pending in Rajya Sabha and the issue would be taken up by the Upper House after receipt of the report of the Standing Committee.

"We would expect the new government at the Centre to continue with the financial reforms to further liberalise the insurance sector. The government should push forward the Insurance Amendment Bill as it will provide the much needed impetus to the sector," he said.

SOURCE: THE ECONOMIC TIMES

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Aegon Religare Life to invest Rs 230 cr

26 Jun 2009, 0206 hrs IST, ET Now

Aegon Religare Life Insurance, one of the newest entrants in the life insurance market, plans to invest Rs 230 crore into the company this year. The company had started operations in July last year, with an initial investment of Rs 350 crore. According to Aegon Religare CEO Rajiv Jamkhedkar, the company aims at breaking even in its seventh year of business. The company will not be averse to pumping in more capital this year, if the opportunity arises, said Mr Jamkhedkar. The money will be invested by the company’s shareholders, Religare, Aegon and Bennet, Coleman and Co (BCCL). “The contributions will be in accordance with our share-holding pattern,” he added.

Religare owns 44% in the company, while BCCL owns 30% and Aegon owns rest 26%. In its first year of business, the company has sold 23,000 policies and collected Rs 46.3 crore in premium. Going forward, Aegon Religare plans to focus on building its distribution channels and adds another 10,000 agents and up to 300 sales staff, added Mr Jamkhedkar.

The company is one of the few life insurers that don’t have a tie-up with any banks, but relies on Religare’s branch network of over 1,800 for its distribution. “At present, we don’t miss the bancassurance model, but during the course, we will be scouting for banks to tie up with,” said Mr Jamkhedkar. However, this might be a tough task because most banks either have their own insurance joint ventures or already have tie-ups in place.

The company is also looking at adding health insurance and annuities products over the course of the year. “We have two or three innovative product applications awaiting approval from IRDA,” he added. Mr Jamkhedkar also added that they are looking at raising their premium collections this year to Rs 240 crore. “With the stock markets picking up, we are seeing more interest in Ulips also,” he added.

SOURCE: THE ECONOMIC TIMES

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Realty business on road to recovery

22 Jun 2009, 1239 hrs IST, ET Bureau

Spurred by price corrections, new launches, lowering of interest rates, increase in sales inquiries and, more importantly, the newfound mantra of 'affordable housing', the real estate industry has started showing signs of recovery. Industry body Assocham has gone to the extent of saying that the real estate recovery is possible in the coming three months. A recent Assocham Business Barometer (ABB) survey has found that anticipating strong policy measures for the real estate in the forthcoming Budget, embattled realty majors see positive signs of recovery taking place within the next three months as affordable housing projects rev up demand and improved cash flows address their liquidity concerns.

As per the survey, a whopping 92% of the respondent developers considered affordable housing as the most dominating segment to shore up the demand in real estate sector. And the policy actions supplementing the robust demand in the housing sector are likely to hold the key for a speedy recovery phase in the sector.

Although the findings of this survey may seem to be too optimistic, particularly in view of the prolonged slowdown in the industry, but taking the current positive signs in the property market into account, both industry majors as well as experts feel the real estate recovery is not a distant dream. And they have ample reasons to believe this. Firstly, after a gap of more than a year, some real 'actions' are being witnessed in the realty market, including the high-profile launches of some major projects coupled with increased sales inquiries. Along with that, some realty majors are also said to have recorded an overwhelming response for their upcoming projects.

For instance, the Jaypee group claims to have booked all the 3300 apartments of Jaypee Greens Aman, its new residential project in Noida, within 24 hours of their launch, while Capital Greens, DLF's first residential project in Delhi, is claimed to have showed bookings of 1,400 flats on the first day itself. Such instances only prove that buyers and strategic investors are once again warming up to the sector, though in a restricted manner. Secondly, the Indian economy recorded a better than-expected growth rate of 6.7% in 2008-09. "The GDP growth rate, clocked in tumultuous times of global financial crisis, lends credibility to the presence of real domestic demand and consumption continuing to fuel the economy, though albeit at a reduced growth rate," says Neeraj Bansal, associate director - advisory services, KPMG. Thirdly, sensing a near term economic recovery and, resultantly, expecting the realty sector to outperform other sectors in the months to come, fund managers are reposing their faith in real estate. This explains why in the month of April, mutual fund houses increased their exposure in the realty sector to Rs 308.16 crore as against Rs 98.76 crore in March, translating into a whopping 212.03% rise in the exposure.

Fourthly, there is a renewed faith of overseas investors also, stemming from the series of steps taken by developers to improve their financial position." Unitech has, for instance, cut debt by Rs 2,000 crore while DLF has repaid Rs 1,700 crore of loans in the past year. And similar is the case with lots of other large and medium sized developers," says Bansal. Fifthly, home loan disbursements by the country's top lenders, which signal the actual demand for homes, is also improving. HDFC saw its fourth quarter disbursals going up by 17.5% at Rs 12,400 crore, while LIC Housing saw an increase of 42% and 22% in March and in Q4, respectively.

Moreover, a general softening of interest rates has also helped developers cut their borrowing costs by as much as 300 basis points. However, more than anything else, 'affordable housing' is believed to have currently taken the industry by storm. "Affordable housing will play a significant role in the real estate recovery over the next few months as developers are now connecting with 'real buyers' for the 'real prices' and are pricing projects more competitively," says Bansal.

Brotin Banerjee, MD & CEO, Tata Housing, agrees. "The demand for new homes has picked up in the second quarter of 2009 from the previous one. Increasing interest in affordable and lowcost housing is widely expected to help India's real estate market make a recovery in 2009 to 2010," he says.

Another important thing is that the government intends to focus on the construction of affordable housing for the poor and middle class people across the country by involving the private sector, and has assured that emphasis will be placed to facilitate the flow of institutional funds for affordable housing.

However, apart from a combination of all these factors, the industry needs further stimulus to move ahead on the road to recovery. "The pace of introduction and implementation of favourable government measures, 'better pricing' and 'innovative product & schemes' by developers supported by 'lowered interest rates' by banks will chart the course towards recovery in its true sense. An overall improvement in investment climate is essential for recovery," says Bansal.

SOURCE: THE ECONOMIC TIMES

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LIC will invest Rs 50k crore in equities

25 Jun 2009, 0109 hrs IST, TNN

NEW DELHI: LIC will invest Rs 50,000 crore in the equity market in the current financial year. The company has already invested around Rs 8,000 crore in the equity so far in 2009-10.

LIC is likely to generate Rs 1,75,000 crore investible fund in 2008-09. LIC MD Thomas Mathew T said that the company would earn Rs 52,000 crore as new premium, first year renewal premium and group premium in 2008-09 as against Rs 35,000 crore in the last year. The rest of the amount, the company will earn from the renewal premium of the old policies.

Besides investing Rs 50,000 crore in equity, the company will invest Rs 65,000 crore in government securities, and Rs 10,000 crore would go towards term loans, mutual funds, venture capital etc. The rest of the amount, it will park in the corporate debt papers.

On the debt side, he said, the company invested around Rs 6,000 crore to Rs 7,000 crore in the past two and a half months of the current fiscal. The company had invested Rs 40,800 crore in equities and Rs 40,000 crore in debt instruments in 2008-09.

Asked about the investment preference, Mathew said, "This year particularly with the government focus on infrastructure, infrastructure-related sectors should be doing well. New premium plus first year renewal plus group business would all add up to nearly Rs 65,000-70,000 crore in 2009-10 as against Rs 52,000 crore last year, which was 10% less than that in the previous year," he said.

Last year growth in new premium took a hit due to economic slowdown, he added. He noted that for the last few years, life insurance saw a boom in the ULIPs sales, but during the last year because of the downturn in the market that ULIP portfolio has come down. "In our case last year ULIP was 60% of the total portfolio. We have a conscious effort to increase our premiums in traditional, conventional policies. We want to maintain this mix of 60:40, which we had last year, which we feel in a very healthy mix,'' he said.

Insurance sector is the biggest investor in the equity market in 2008-09, when the stock market was badly hit because of the turmoil. During the period, when FIIs sold shares worth rs 47,345 crore, insurance companies as a whole invested Rs 58,000 crore in the equities. During the same period, domestic mutual funds had invested only Rs 7,000 crore in the stock market.

SOURCE: THE ECONOMIC TIMES

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Interest rates a pointer to investment climate

25 Jun 2009, 0142 hrs IST, TNN

MUMBAI: It is almost a weekly ritual now. Inflation plunging to historical lows; finance minister asking bank chiefs to examine whether there is room for further cut in interest rates, and a few days later a clutch of banks announcing lower rates. Have you ever wondered what is it all about? Sure, you don’t need a math wizard to tell you that you would earn less on your bank fixed deposits. But did it ever cross your mind that a lower (or a rising) interest rate can be useful pointer towards your investments, especially in mutual funds?

“Inflation and interest rate for most people have an immediate impact on their shopping and fixed deposits, but that is not the case. An interest rate environment also tells you a lot about the investment climate,’’ says a wealth manager with a bank. “In fact, it is a useful tool for investors to gauge and predict both equity and debt investments,’’ he adds.

For example, every investment expert worth his tie would tell you that a lower interest rate regime is great news for equity market. Why? Because companies can borrow cheaply, build capacity and make money. That means their stock prices would be on fire on Dalal Street. (The current scenario is bogged down by issues like global recession and crisis of confidence and so on.)

“It is generally considered that lower interest is good for the equity market because traditional investments like bank deposit would earn less money. This means there will be a tendency among investors to transfer money into equity mutual funds,’’ says Hemant Rustagi, CEO, Wiseinvest Advisors. “It doesn’t mean that it is a strategy that always works or investors who get into the market this way becomes equity investors. It is a trend that you can observe when there is easy interest rates.’’

Debt investors don’t have to lose heart. Lower interest rates don’t mean doom for debt mutual funds at all. In fact, they also tend to do extremely well in a falling interest rate regime. Surprised? Well, this is because of the inverse relationship between bond yields (debt schemes invests in various kinds of bonds) and bond prices. When falling interest rates, bond yields also fall in tandem with them and that would push up the prices of bonds. When the prices of bonds go up it will be reflected in the net asset value (NAV) of debt schemes.

“Debt schemes have always done well during a falling interest rate environment. In fact, investors tend to get carried away because of the extraordinary returns these schemes offer during a temporary phase,’’ says an investment consultant.

That brings us to the reversal. Sure, a modest interest rate regime is always preferable in an economy like ours, but due to various factors the interest rates can rise. This also has a bearing on the investment scenario. For example, the stock market is likely to become cautious as there is always a fear that capex plans may be scaled down, hitting profitability. Which means those stocks would be hit on bourses.

“In fact, more than equity it is debt investment which is more susceptible to interest rates,’’ says Rustagi. “If you stay invested in a debt scheme for a long period when rates are falling, you would lose money. In a rising interest rate environment, investors should consider parking money in fixed maturity plans or floating rate schemes,’’ he says.

SOURCE: THE ECONOMIC TIMES

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Denotified SEZs to refund sops

25 Jun 2009, 0057 hrs IST, ET Bureau

NEW DELHI: Developers of denotified special economic zones (SEZs) will have to refund tax sops given by the government, according to new rules on the anvil, a government official said. The government has found it necessary to draw up rules for denotification of SEZs after some developers recently sought permission to close projects due to the economic slowdown and contraction in demand. The new rules are likely to disallow denotification if a considerable amount of construction has happened in the zone or if units have come up there. Denotification would be voluntary.

A SEZ developer gets a number of tax sops, including exemption from customs duties and excise on goods used in the project and from payment of income tax. “All the sops enjoyed by the developer have to be necessarily paid back with interest before the denotification is allowed. This will be a prominent part of the rules,” the official said.

The rules will be kept flexible to deal with fresh issues raised by new cases, the official said, on the condition of anonymity. “Once the rules are framed by the government, they would act as a guide for the board of approval (BoA) for SEZs to deal with denotification applications. As and when the board feels the need, appropriate changes or additions could be made to the rules,” he added.

The BoA for SEZs, which is chaired by the commerce secretary and includes members from finance, revenue, home and agriculture departments, decides on all applications related to SEZs, including approval, notification as well as denotification.

There would also be no denotification if the developer does not want it. “There would be no coercion. If developers are law-abiding and have not broken any rules, then the government cannot denotify their zones,” the official added.

Earlier this month, real estate major DLF got in-principal approval to denotify four of its IT / ITES SEZs. The government will formally denotify the zones once DLF pays back all the tax saved, pegged at Rs 6-7 crore, through exemption from customs, excise, service tax and income tax. The amount is being verified by the commerce department.

Raheja Universal has also applied for denotifying its IT/ITES SEZ in Navi Mumbai, and reducing by half the size of its second SEZ in the region. “Once we have the denotification rules in place, it will be easier for the BoA to decide on cases of denotification as they will have set rules to follow.

We would also be adhering to the law ministry’s view that if something can be legally notified, there should also be provisions for its denotification,” the official added. As of March 31 2009, the government has formally approved 568 SEZs in the country, of which 311 have been notified and ready to start operations, with 90 already operative.

SOURCE: THE ECONOMIC TIMES

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Not laid off any employee: ICICI Bank

21 Jun 2009, 2123 hrs IST, PTI

MUMBAI: Distancing itself from the issue related to the alleged job loss-triggered suicide attempt of an employee of one of its service providers, ICICI Bank on Sunday said it has not laid off any employee and said it has also apprised the police over forced entry by some "unruly people" into its office.

One Suyog Deshmukh, who was working for Delta Services Ltd, an outsourced service provider for ICICI Bank's credit card processing department, is said to have allegedly attempted suicide after his job was terminated. He is also said to have named two managerial level employees of the bank in his suicide note.

Reacting to the media reports, which also said that the company was forced to reinstate all the employees sacked along with Deshmukh after a demonstration by them subsequent to the suicide attempt, ICICI Bank said in a statement that it "has had no discussions or agreement with any one on the issue of reinstatement of any employee."

"No employee of ICICI bank has been retrenched or laid off. The matter which has been reported is purely an internal issue of Delta Services Ltd, who are service providers to the bank on certain pre-contracted work.

"The job they were executing for the bank was completed and hence they were to move on. If in the course of the same they had asked some employees to disengage, it is purely a matter which they are required to handle," the bank added.

ICICI Bank further said that "the fact of the matter is that Delta Services Ltd were coerced and under duress forced to name ICICI Bank's official in their letter to the group they were forced to talk to.

"ICICI bank has lodged police complaints against a set of unruly people who forced their entry into our lobby of the Chandivilli office and also assaulted 2 of our employees. It is reiterated that the bank has not laid off any employee."

However, police official said that no formal complaint has been filed as yet but it has been appraised of the issue by ICICI bank.

Senior police inspector B Rathod said, "The ICICI bank has given a letter mentioning the incident. It clarified that the person named Suyog Deshmukh, who attempted suicide, is not associated with ICICI bank. He is working with Delta services Ltd, an outsourced service provider for ICICI Bank's credit card processing department."

"It has also said that besides a delegation which held discussions with their officials following alleged suicide attempt, some more people have also gathered outside his office," the police official added.

SOURCE: THE ECONOMIC TIMES

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SBI cuts PLR by 50 bps; over 62% borrowers to gain

25 Jun 2009, 0119 hrs IST, ET Bureau

MUMBAI: State Bank of India, which accounts for close to a fifth of all bank lending in the country, has reduced its prime lending rates (PLR) by half a percentage point. Following this reduction, the bank’s PLR will come down to 11.75% effective June 29.

The PLR is the reference rate to which banks link their floating rate loans. It reflects the prevailing cost of funds and interest on floating rate loan is expressed as a percentage spread above or below the PLR.

SBI’s rate cut will bring down the borrowing cost on 62% of loans extended by it. The cut will not apply to borrowing under special schemes. These include home loans, education loans, auto loans, produce market loans, and loans against warehouse receipts and loans to small and medium enterprises. Under certain special schemes, loans are available at discounted fixed rate for the initial year.

According to chief financial officer SS Ranjan, the bank has brought down its PLR to 11.75% from its peak level of 13.75% last year to improve credit offtake and stimulate economic growth. “There has been a general demand for lower interest rates and today we have been able to do it because we have been able to bring about certain efficiencies in operations which we would like to pass on to customers,” he said.

SOURCE: THE ECONOMIC TIMES

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30 HUL managers face layoff or redeployment

24 Jun 2009, 1301 hrs IST, ET Now

Hindustan Unilever Ltd (HUL) has shed or reassigned 30 managers as part of a plan to link revenue and profits to headcount, which, a retired top executive of the company said was “unprecedented” in the history of India’s largest consumer goods company.

Two people familiar with the matter told ET NOW that some of these staff — including managers with 5 to 10 years of experience in the company — have been redeployed to functions such as research and development, while the rest have been given a severance package and laid off.

“HUL has eased out one or two employees on the basis of non-performance in the past, but this is unprecedented ,” said the former executive who worked in HUL for more than a decade.

These 30 jobs were mostly in supply chain management, a function where the company has undertaken a massive restructuring to identify redundancies. HUL employs more than 1,000 managers across its operations . An HUL spokesman said the company, the maker of Lux soaps and Surf detergents, was going through a reorganisation that will lead to some 30 managerial roles being “greenfielded.” “It will not have any significant impact on people as the released resources will be expatriated to existing and new roles within the wider Unilever organisation, and very few who will be affected are being managed through a generous package,” he said.

HUL’s parent company Anglo-Dutch Unilever Plc announced a salary freeze for all managers including CEO Paul Polman as part of its cost management strategy for 2009, citing uncertain trading conditions in the US and Latin America. While the move has been implemented in developed markets, which contribute 44% of the company’s revenue, it has not been implemented in India.

Delhi-based executive search firm Executive Access’ partner Charul Madan said his firm has seen an influx of job applications from various HUL senior managers, especially in allied businesses. “I’m not surprised if employees have decided to take the severance package and move on, because after a certain level of seniority they are entitled to a pension plan, which can be monetarily lucrative if they have to leave the company,” he said.

An official at another executive search firm, who asked not to be identified, said several executives from HUL’s middle management ranks have been enquiring about job opportunities.

SOURCE: THE ECONOMIC TIMES

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Worst may not be over for Asia, says Citi's Rosgen

25 Jun 2009, 0145 hrs IST, ET Bureau

MUMBAI: Next year will be the beginning of a U-shaped global economic recovery, with growth rates for all major countries starting to look up again. One area which will continue to be a drag on growth is the global consumer, said Markus Rosgen, MD and Regional Strategist, Asia-Pacific Equity Research of Citigroup. Mr Rosgen feels that the worst may not be over for Asia, yet.

"Export growth in Asia is falling anywhere between 20% and 40% today. India is an exception, elsewhere you have PPI (producer price index) in the negative. So, the risk analysis and expectations are a little ahead of the ability of the stock market and the corporate sector to deliver," he said.

On Wednesday, BSE's 30-share Sensex ended at 14422.73, up 98.72 points, or 0.69%. NSE’s 50-share Nifty closed at 4292.95, up 45.95 points, or 1.1%. These indices have risen nearly 70% in the last three months, making India one of the best performers in Asia.

Over the next 5-10 years, Mr Rosgen predicts that there will be a lot more M&A activity from Asia to the US and Asia to Europe. He expects Asia, and within it India, to leverage its efficient banking system to position itself successfully through acquisition of more distribution networks, brands and R&D.

"By and large, when you look at India and the region, there is a complete lack of brands. Global brands or even Pan-Asian brands. If you look at the top 100 brands worldwide, only three are from Asia and all three are Korean companies. To my mind, over the next 5-10 years, Asia will use the fact that its banking system is fully functioning, the corporate sector is very underleveraged(so corporate balance sheets can take on debt), the banking system can provide capital to corporates, and Asian corporates are going to begin to venture overseas," he reasoned.

SOURCE: THE ECONOMIC TIMES

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Street signs: I-banks go on hiring mode

16 Jun 2009, 0108 hrs IST, ET Bureau

MUMBAI: After a year of turmoil and uncertainty in the form of freeze on recruitment and job losses, it looks like the clouds are lifting for investment bankers (I-banks). With the stock market showing signs of life and the government talking disinvestment, bankers are seeing more opportunities after the Budget.

Firms that froze recruitment following the Lehman Brothers collapse in October 2008 are slowly getting into hiring mode. In most cases, the recruitments are taking place for their capital market divisions, as a spate of qualified institutional placements (QIPs) has brought in fresh assignments for investment bankers.

“With the equity market recovering, and the credit market in a thaw, hiring activity is slowly resuming in financial services. At Morgan Stanley India, we are hiring very selectively in highly-specialised fields. The securities side of the house was the first into the downturn and is likely to be the first out. It’s a trickle, not a flood,” points out Narayan Ramachandran, MD and country head, Morgan Stanley (India). The firm has around 400 people in the country.

Some firms had downsized, as the falling market shrank business opportunities. In the case of multinationals, the downsizing was also a fallout of headoffice decision to cut costs globally. Most of the job losses were in investment banking, capital market, structured products, and in proprietary trading. Global investment banks that had recently set up shop in India and some of the existing ones had cut staff strength.

Goldman Sachs is one of the firms, which had seen a sharp headcount reduction. From an employee strength of around 100, it’s now down to 75. “We are 75 people on the ground in India. We reduced the local headcount in proportion to changes globally — no more, no less. If anything, importantly we are now in the market to hire in certain senior positions. That’s across several businesses. We are always on the lookout for talented people who can contribute,” says Brooks Entwistle, CEO Goldman Sachs (India). The firm is said to be looking at 8-10 senior officials.

Merrill Lynch, which has merged with Bank of America globally, is also said to be looking at a selective hiring in its private client and capital market business. RBS is also looking at two senior level hires and a few mid-level hires in its corporate investment banking business and in treasury. “India has been identified as a core market for RBS, and we continue to invest in hiring top talent at competitive rates to support our businesses, which are based here,” said an official.

Nomura is said to have taken back a couple of its people in the capital market division whom it had earlier asked to quit. Barclays Wealth is also looking to increase its headcount by 20% every year for the next five years. “India was one of the few places, where the cuts were minimal. Asia was not as affected as the West. And in Asia, India was better off than some of the other countries,” said the country head of one of the international firms. Bankers pointed out that the hirings have just started off in the past couple of weeks.

SOURCE: THE ECONOMIC TIMES

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India Inc created 3,00,000 jobs in US: Study

18 Jun 2009, 1932 hrs IST, PTI

WASHINGTON: When the Indian outsourcing industry is being blamed for taking away American jobs, a study has found that corporate India has created employment for 3,00,000 people in the US between 2004 and 2007.

An India Brand Equity Foundation study released here yesterday by Commerce and Industry Minister Anand Sharma mentioned $105 billion contribution by the Indian industry to the US economy during 2004-07.

"This revealed a story of commitment to optimise and to invest in the future of the relationship," Sharma said.

The $50-billion Indian outsourcing industry has come in for a major attack in the US, bolstered by President Barack Obama's calls to the US companies to move from Bangalore to Buffalo.

SOURCE: THE ECONOMIC TIMES

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India to ink pact with Denmark on job opportunities for youth

21 Jun 2009, 2106 hrs IST, PTI

KOCHI: India would shortly sign an agreement with Denmark on social security and labour that would open up employment opportunities for skilled and semi-skilled youths, Minister for Overseas Indian Affairs Vayalar Ravi on Sunday said.

Negotiations with Denmark had been completed and once the agreement was signed, it would help young Indians aspiring for jobs, he said inaugurating a 'skill upgradation and pre-departure Orientation Programme for potential emigrants from Kerala' here.

Ravi regretted that while the government was taking several measures for the benefit of people going abroad, there were complaints of misuse of "visit visas".

He said the government had initiated steps to prevent women being taken overseas for domestic work using visit visas. The Centre along with the state governments would take stringent action against those misusing visit visa, the minister warned.

Ravi urged job seekers to be careful not to fall prey to fake advertisements. Job aspirants should get in touch with 'helpline' at his ministry or NORKA office in Kerala to know the genuineness of such advertisements, he said.

The ministry was taking steps with Russian authorities for repatriation of 60 Indian students, who were victims of such a scam and were held up in that country, Ravi said.

The orientation programme, aimed at upgrading skills of 1,000 workers in Kerala, is organised by a consortium of organisations including KITCO, NORKA-ROOTS and ASSOCHAM.

SOURCE: THE ECONOMIC TIMES

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Hire & fire policy not acceptable in India: Sunil Mittal

22 Jun 2009, 0845 hrs IST, PTI

Supporting the idea of labour reforms in the country, telecom czar Sunil Bharti Mittal said "hire and fire policy" is not going to be acceptable in the country and asked India Inc to be much more benevolent.

"I think labour reforms again are something desirable but having a hire and fire policy in a country like India is not going to be an acceptable task, neither should that be the requirement from the industry," Mittal, who's the Chairman of diversified conglomerate Bharti Group told a private news broadcaster.

"We have to be much more benevolent much more care taking of our labour force and our people and that at least the philosophy that I hold very dear to myself and I think all industry players must (follow the same).

However, he maintained that there will be times of distress for corporate houses, when they may take such steps. He thus voiced for a "platform" where the government and industry can hold discussions on such a subject.

"...there will be industries in distress ... and they need to have some flexibility from time to time so it will be desirable for the industry and government to come together create a platform on which they can have a discussion when in trouble, how should industry behave," he added.

SOURCE: THE ECONOMIC TIMES

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Indian companies still investing in UK in droves

23 Jun 2009, 2123 hrs IST, ET Bureau

Indian companies are still investing in the UK in droves, though the action seems to have moved to the medium and small sector. India retains its position as the second highest foreign employer in the UK, after the US, according to the 2009 UK inward FDI official data. This year, Indian inward investors created 4,149 new jobs, with 108 new projects, up of 44% in the absolute number of projects.

Indians totally account for 11% of new jobs created by foreigners in 2008-09, out of a total of around 35,000 new jobs. Including jobs ‘safeguarded’ as in jobs protected by the entry of foreign employers, Indians have been responsible for 7,966 British jobs in 2008-09, at a time when UK jobless figures peaked at over 2 million for May.

Last year, however, India, thanks to the mega Tata deals, created over 19,000 British jobs, with just 75 new projects. While the number of projects has risen, the sizes have dropped. The US, still the largest inward investor in the UK, this year set up 621 new projects, but employed only 12,888 new people, while it created over 29,000 jobs last year with only 478 new projects.

Indian investment into the UK, which measures FDI in number of jobs created and protected and not absolute value, has exponentially gone up in the recent past, rising from an almost non-existent base of 892 jobs in 2003- 2004, to a current total of about 37,664 over the past few years.

India also replaced Japan as the largest Asian supplier of FDI projects this year with significant nvestments in IT, life sciences, and advanced engineering. Biocon established its European HQ in the UK and Dr. Reddy’s acquired a clinical trials unit. In the communications sector, GTL Europe opened four new offices, while engineering company Dynamatic Technologies continued to expand its operations in the UK, says the UK Trade and Investment report. UKTI is the UK government’s main inbound and outbound investment department.

Despite the recession, UK has managed to retain its position as the world’s second favourite destination for setting up new projects, second only to the United States. New projects, including establishing offices and headquarters has gone up – 251 HQ and European head offices were set up -- but this year’s results show a marked decrease in M&A and joint venture activities, down 6%.

SOURCE: THE ECONOMIC TIMES

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Global recession nearing bottom, OECD says

24 Jun 2009, 1817 hrs IST, AGENCIES

PARIS: The deepest global recession in over 60 years is close to bottoming out, but recovery will be weak unless governments do more to remove uncertainty over banks' balance sheets, the Organization for Economic Cooperation and Development (OECD) said on Wednesday.

In its half-yearly economic outlook, the Paris-based organization said it expects its member countries' economies to shrink by 4.1 percent this year, with only government rescue measures heading off an even worse decline.

That is a slight improvement from the OECD's last forecast in March of a 4.3 percent decline this year and is the group's first upward revision to its forecasts in two years, Secretary General Angel Gurria said at a news conference in Paris.

``A really disastrous outcome has become more of a remote risk,'' said OECD acting economics department head Jorgen Elmeskov.

But the recovery ``is likely to be both weak and fragile for some time,'' Gurria said.

The OECD now expects the US economy to shrink by 2.8 percent this year after 1.1 percent growth in 2008. Japanese output is likely to contract by 6.8 percent this year and the 16 nation euro-zone will likely shrink by 4.8 percent.

The OECD forecast a return to growth in all three regions next year, with overall growth across its membership expected to average 0.7 percent in 2010, according to the report.

That also represents an improvement from the OECD's last forecast of a 0.1 percent contraction next year.

World economic growth, which the OECD defines as its members plus Brazil, Russia, India and China, will rebound to 2.3 percent next year from a decline of 2.2 percent in 2009, according to the latest OECD forecast.

The speed of an economic rebound will vary across the globe. China already seems to be recovering, but in the U.S. the end of fiscal stimulus measures and the continued need to repair banks' balance sheets means recovery there ``could be uncharacteristically weak and insufficient'' to offset unemployment of around 10 percent, the OECD said.

SOURCE: THE ECONOMIC TIMES

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ICICI Prudential Life set to hire 3,000 in next two months

The country's largest private sector life insurer, ICICI Prudential Life, today said it will hire 3,000 people in the next two months, debunking reports of any reduction in workforce.

"We are a growing organisation, and we have already started hiring the next round of 3,000 people over the next two months, the process for which is in full swing," insurance company's Senior Vice President and Head-Marketing Sujit Ganguli told reporters.

The employee strength of the insurer stood at 25,000 at the end of March 2009.

The insurance company, which has a network of over 2,000 branches, has already rationalised its branch network for optimal utilisation of resources, he added.

"We have combined some of our branches. We have not vacated from any location (cities, towns and tehsils / taluqas) where we were present and have ensured to remain in close proximity to all our customers," he said.

The company added 40 branches to its network in the second half of 2008-09 notwithstanding branch rationalisation exercise, he said, adding that the number of branches have gone up to 2,009 as on March 31, 2009.

Net of opening new branches and rationalising, the number of branches has actually increased from 2,055 in September 30, 2008 to 2,099 as on March 31, 2009, he said.

SOURCE: HINDUSTAN TIMES

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Aditya Birla Group sees 2,200 stores ahead

For Kumar Mangalam Birla, ‘More’ means more even in a downturn that has made many a retail venture stop on its tracks.

His Aditya Vikram Birla Group, which runs ‘More’ chain of supermarkets and ‘More Mega’ hypermarkets in the Indian retail market is in the process of relaunching its 640 stores, starting this month. The plan is to take it to 2,200 by 2015.

“The exercise will involve revamping of the stores based on a best practices study that the company has carried out”, said Thomas Varghese, CEO, Aditya Birla Retail Limited.

“We will have 720 supermarket stores by end of 2010. The hypermarket count will go up to 8 to 10 by end of March 2010 and 70 to 80 by end of 2015”, said Varghese.

After acquiring the 167 stores from Trinethra in 2006 and aggressively expanding to about 710 stores, the group had shut down 70 stores across the country after carrying out an evaluation exercise based on scorecards that saw poor performers out.

Its private label brands are present across 350 stock keeping units in processed foods (Feasters, Kitchen’s Promise and Best of India) and home and personal care products (110 %, Enriche, A U 79, Fresh-o-dent, Prarthana, Paradise, Pestex, Germex). “Our private label business contributes to about 4 to 5 per cent of the total turnover”, said Varghese.

Private labels are a good bet for retailers as it offers them good margins without having to spend a lot on mass advertising.

Varghese said that the retail business of the Aditya Birla Group will turn profitable at the end of five to six years.

Varghese has been with the Aditya Birla Group for the past 10 years and was given the mandate to turn around the group’s pulp and fibre business before taking charge of the retail operations.

SOURCE: HINDUSTAN TIMES

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Mid-cap oriented MFs riding the market wave

Last week was definitely an exceptionally good one for the markets. It was probably one of those rare weeks where the indices delivered about 8% - 10% returns in just about 7 days. While the market is rife with speculation about the sustainability of this rally, those trading actively in the markets had their handfuls, especially in the mid-cap segment.

The biggest beneficiaries of the last week's rally have undoubtedly been the mid-cap oriented mutual funds. These funds, which had lost the most in the market downfall last year, are also the ones to have gained the most in the momentum seen last week. Most of the top 10 gainers in the equity diversified category cater to the mid- and small-cap segments of the market and have delivered returns ranging from 8% - 10% for the period Apr 29 '09 - May 7 '09. Various mid-cap indices have returned about 6% - 11% during this period.

However, interestingly, while the large-cap indices have also returned over 9% for the period, not many large-cap oriented funds have been able to beat their benchmark indices. Almost all the funds rated 'Platinum' in the last issue of the ET Quarterly MF Tracker (for the quarter ended March '09) are large cap oriented. But they only managed to deliver returns ranging from 3.5% - 6.5% last week. This may seem disappointing for the investors as the returns are far lower than the performance of their benchmark indices. Both Nifty and Sensex gave returns of about 9.2%, while the BSE 100 and BSE 200 returned 8.5% and 8.6% respectively during the week.

Reduced exposure in equities can be cited as one of the reasons for this very short-term loss suffered by these Platinum stars. Most of these funds had tilted their portfolios in favour of debt and money market instruments over the last one year and limited their equity exposure to protect the portfolios from further erosion. The MF industry preferred to sit on cash rather to see the valuations get hit in the downturn. Cash levels of equity funds alone were nearly Rs 13,000 crore as on March 31 '09.

However, fund managers are not perturbed. Having burnt their fingers last time, most fund managers are now playing safe and do not seem too keen on taking momentum calls. Infact, the net equity purchases by the MF industry during this week were just about Rs 400 crore. Citing the improvement in the overall global economic scenario as one of the major reasons for the current market boom, fund managers are skeptical of the current rally. Most of them are infact awaiting the results of the general elections, which may turn the course of the markets.

SOURCE: THE ECONOMIC TIMES

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Result season springs surprise: Many cos beat expectations

Even in these trying times, there is a flicker. While many top-notch companies that recently declared their results almost shrouded the Indian growth story with a fall in sales and profit in the March 2009 quarter, there are others which have kept the flame burning steadily. Not only have these star performers across auto, cement, petroleum and pharmaceutical industries beaten analyst estimates, they have also bettered their own performance.

In the automobile sector, for instance, Hero Honda has raced past its peers, who have had flat tyres from sluggish demand and bankers' reluctance to extend auto loans on rising risk perception. Hero Honda took analysts equally by surprise, with a 22.2% year-on-year growth in sales in the March quarter. Net profit growth was at 34.6% on improved realisations. The secret of the company's success: a diverse product profile and relatively lesser dependence on the availability of finance. More than 60% of sales comes from rural areas, where financing is not easily available. The company is expected to retain its edge in performance due to a softening of commodity prices, which will help improve margins.

The cement sector, once at the forefront of India's growth story, was stuck with slowing demand and rising input prices last year. ACC reflected this downturn, with profits dropping by 15.7% in the year ended December 2008. However, in the March 2009 quarter, the company saw a reversal in fortunes, with a 23.1% growth in net profit. This was on account of a 490 basis point improvement in operating profit, helped by a healthy 7.3% y-o-y rise in sales realization. The company has now set an example for the industry.

The economic slowdown and under recoveries were also a worry for many players in the petroleum sector. Petronet LNG was expected to post dismal numbers in the March 2009 quarter, the way it did in the nine months ended December 2008. However, the company surprised Dalal Street with a 70% jump in net profit fuelled by a 51.5% rise in sales. An improvement in margins following a revision in its regassification charges too aided profit growth. The company's natural gas volumes grew 3.3% to 82.46 trillion British thermal units. Regassification charges were revised 5% higher to Rs 30 per million metric British thermal unit.

The pharmaceutical industry is relatively insulated from a slowdown, as the demand for medicines is driven by necessity. While the sector has been performing better than the others since the start of the slowdown last year, one company stands out for the way it turned itself around. Till the December 2008 quarter, Cipla was a laggard. Net profit dropped 1.2% in the nine months ended December 2008. However, in the March 2009 quarter, profits rose by 41% on the back of an Rs 91-crore growth in other operating income from technical know-how fees and milestone payments. The operating margin improved by 720 bps as it stood at 28.3%, on account of a favourable exchange rate and changes in the product mix.

Like pharma, demand in the FMCG sector too is relatively less contingent on economic cycles. And here too, there is a story of spectacular growth. Dabur notched up a 30.9% growth in net profit in the March 2009 quarter, more than double the growth it recorded in the previous quarter. Double-digit growth in its consumer care and health businesses fueled the growth. Moreover, the company's international business has performed exceptionally well - again, against the trend of companies taking a hit on international operations due to the slowdown.

All these companies have reported robust growth and outperformed their peers at a time when India Inc is facing strong headwinds. They no doubt qualify for a place in the portfolio of any savvy investor.

SOURCE: THE ECONOMIC TIMES

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Perform or perish for ITC Foods

ITC Foods is gradually moving out of low-margin food products and will focus on building a more profitable portfolio, under pressure from an ultimatum set by its parent to turn profitable, several persons familiar with the matter said.
 
Cigarettes-to-hotels conglomerate ITC has warned its foods division that it will withdraw financial support unless it turns profitable within a specified period, they said. ITC’s foods division, which owns top-selling brands such as Aashirvaad Atta, Sunfeast biscuits, Bingo snacks and confectionery items such as Mint-O and Candyman, has revenues of Rs 800-1,000 crore, but is yet to report operating profits.
 
The ITC management is running out of patience with businesses that are incapable of funding themselves after several years of operations, said a company official, requesting anonymity. But a spokesman for ITC denied that there was any pressure on ITC Foods to break even within a specified time. “Our record of achieving rapid growth in market shares in our newer FMCG businesses has been outstanding. The so-called losses are investments in brand building and product development, the vital foundations of any long-term business strategy,” he said.
 
BUT several persons familiar with ITC Foods’ operations said the business has been put on notice, and added that the unit would focus on the premium and more profitable end of the biscuits market while sidelining the basic glucose biscuits and other mass market products.
Trade officials also expressed surprise that ITC, widely viewed as a player with deep pockets, has suddenly turned jittery about the foods business.
 
“We understand from senior officials that there is some turmoil in the company. Some of the initial aggression has been toned down,” said a Mumbai based FMCG distributor, who asked not to be named for fear of antagonising the company.
 
The group is also undertaking personnel changes to drive its new strategy for foods. Long-time CEO, Ravi Naware is retiring in December, and officials said Chittaranjan Dhar, who worked in its Wills Lifestyle clothing and fashion accessories business, has been moved to the foods division.

ITC’s cigarette business now accounts for around 66% of its gross revenues and a bulk of its profits. The company has been under pressure in recent times due from a tough retail environment, fall in hotel occupancies, and massive investments needed to build its personal care portfolio and foods business.
 
The company has over the years invested heavily in building its food brands and has managed to turn the heat on its well-established rivals in the sector. In 2005, it roped in Shah Rukh Khan as brand ambassador for Sunfeast. It also got tennis player Sania Mirza on board and launched a tennis tournament.

ITC made an entry into the packaged foods business in August 2001 with the Kitchens of India brand. The following year, it broad based its focus with launches in the confectionery, staples and snack foods segments. ITC’s offerings challenged established brands from players such as Britannia, PepsiCo and HUL in several categories.

But some of its rivals have struck back, saddling ITC with huge inventory, especially in Bingo, several people in the trade said, requesting anonymity. Bingo took on Frito-Lay when it was launched in 2007 and gained 16% market share by the end of 2008. In biscuits, it competed with established players such as Britannia and Parle and cornered a more than 10% market share while its Aashirvaad brand is the leader in the branded flour segment.

SOURCE: THE ECONOMIC TIMES

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Lazard to set up Rs 500-cr India fund

NEW York-based investment banking and asset management firm Lazard is forming a Rs 500-crore($100 million) India-focused fund to acquire significant minority stakes in mid-sized Indian firms, a person with knowledge of the fund said.

This is the first significant expansion move by a US investment bank in the country after the bankruptcy of Lehman Brothers last September, which signalled the collapse of independent investment banking business.

Lazard is already operating its merchant banking business in India through Lazard India , in which it holds 74.64% stake. Lazard India managing director K Balakrishnan holds 25.07% and the remaining equity is with some other minority investors.

Now, it is setting up Lazard India Growth Fund Trust which will be registered with securities market regulator Sebi as a venture capital fund. The US-based financial services firm will invest in the units of this trust through a Mauritius based arm to avail tax benefits. Lazard will also form Lazard India Advisors which will be the investment manager of the fund.

The onshore fund has targeted corpus of Rs 500 crore which is to be sourced from both overseas and domestic institutional investors including Indian public sector banks. Lazard is bringing in Rs 125 crore as sponsor’s contribution to the fund and will appoint IL&FS as the trustee to the fund. The fund will seek investment targets in various sectors such as consumer services & organised retail, hospitality & travel, education, food processing, engineering & capital goods, power, logistics, telecom, IT-BPO, healthcare, life sciences & pharma besides other manufacturing firms. It would not get into the real estate sector.

For Lazard, the fund will mark further expansion of activities in India. Its existing subsidiary Lazard India is engaged in non-fund based advisory activities for corporate mergers & acquisitions, initial public offers, rights issues etc.

NYSE-listed Lazard reported revenues of $1.68 billion in 2008 with assets under management of $91.1 billion as of December 2008. It closed 2008 with employee strength of 2,434 spread across 39 cities in 24 countries.

SOURCE: THE ECONOMIC TIMES

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INEPTNESS OF BANKRUPTCY HANDLING IN INDIA IS LEGION; HAVE AT LEAST SOME WORKABLE MEASURES

SIX YEARS AGO, WHEN THE COUNTRY’S economic output expanded at the rate of 4.4%, 559 industrial companies failed and sought legal protection from recovery and attachment action from their lenders. The number fell sharply to 78 two years ago when the economy was racing at 9% and it fell further to 57 last year. The improvement in corporate health was dramatic as the country went through a period of high growth. The number of companies filing for bankruptcy protection (stay from lender action of asset take over) fell by 89% between 2002 and 2008.

That impressive statistics now looks set to see a reversal with the sharp decline in the country’s industrial output and exports in the last quarter of 2008-09, causing a sudden reversal of fortunes for many sectors, particularly, export-oriented ones such as textiles, gems and jewellery.
Experts involved in corporate rescue and turnaround give different views about corporate health as companies sail through a period of low demand. Some say there could be a wave of bankruptcy protection filings before BIFR as losses equal or exceed the networth of many companies in the sectors affected by economic slowdown. BIFR oversees rescue as well as liquidation of troubled companies. Experts believe that a large number of bankruptcy filings could take place this year. “We have not yet started seeing a rush of bankruptcies. But it certainly can happen when companies finalise their accounts in about two months”, said a senior BIFR official.

Some experts are more optimistic. “Defaults in payments by companies will lead to non-performing (unrecoverable) loans in the books of banks, which can be restructured. RBI’s extension of time for loan restructure till June end will give some relief to banks and companies. As on date, there is stress in the system, not distress. However, if economic slowdown persists for about one to two years, then there will be a distress in the system”, said Siby Antony, executive vice president and head of distress asset investment in Edelweiss Capital Ltd. Mr Antony said that banks should do a proper restructure of loans, and should not merely postpone the problem. Companies such as Edelweiss are entering the risky business of buying distressed assets and turning them around, hoping that it might fetch a profit later on. Distressed asset funds do not enjoy many of the rights that banks get under the law and hence, their risk in business is more. Therefore, they ask for heavy discounts for the assets on sale.

Despite the difference of opinion on the magnitude of troubles at hand and when the stress in the economy may turn out to be a distress, experts agree on the need for some urgent action by the government to equip the institutions that deal with corporate insolvency. Now it takes years and sometimes decades to find a resolution for a sick company, at the end of which the value of assets would have entirely eroded. That makes the possibility of re-routing capital to more productive purposes impossible. Now the government’s effort to reform the insolvency regime by setting up a National Company Law Tribunal is stuck in the Supreme Court due to some constitutional issues. In such a scenario, the system is unlikely to measure up to the immediate challenges.

“The government can easily take two quick steps that would go a long way in helping companies, banks and other stake holders in dealing with the situation. Firstly, special benches of BIFR should be set up with bankers, chartered accountants, lawyers and corporate turnaround experts. These need not be permanent benches, but could be of one year tenure. Secondly, officials of BIFR, debt recovery tribunals and other institutions handling insolvency matters should be given training by agencies having expertise in the field. Cross-border insolvency matters are complex and it requires highly skilled manpower”, said Sumant Batra, managing partner of law firm Kesar Dass B & Associates. Professionals from the private sector would be able to do a good job as they are well aware of the dynamics in this specialised area. A large number of companies have subsidiaries in many other countries and have many foreign investors. Dealing with a cross-border insolvency case requires knowledge of the legal systems in other countries too. Association of worldwide bankruptcy professionals such as Insol International could be roped in for training.

While reforming the law would take its own sweet time, such workable measures need to be taken to help troubled companies cope with the economic downturn. The sophisticated insolvency regime in the West has helped Japan’s Nomura to purchase Lehman Brothers’ Asia-Pacific business in less than 72 hours of the troubled investment giant filing for bankruptcy protection in the US. Such quick response helps get better value for assets and rescue the company before it loses its clients and staff to rivals.

SOURCE: THE ECONOMIC TIMES

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Economy to grow by 6 per cent, inflation to rise too: RBI

India's economy will grow by six per cent this fiscal while inflation would rise to around four per cent, the central bank said in Mumbai Tuesday while announcing a 25 basis points cut in key rates in its annual economic policy review.

"With the assumption of normal monsoon, real GDP growth for 2009-10 is placed at around 6.0 per cent," said Reserve Bank of India Governor D. Subbarao. GDP growth for 2008-09 was 7.1 percent.

The India Meteorological Department in its forecast of south-west monsoon had said last week it expects a normal rainfall at 96 percent of its long period average for the current year.

The central bank also expects the annual rate of inflation to rise to four percent from the April 4 figure of 0.18 percent. It also said inflation would turn negative before it rises again. "Keeping in view the global trend in commodity prices and domestic demand-supply balance, WPI (wholesale price index) inflation is projected at around 4.0 per cent by end-March 2010," the policy review added.

"WPI inflation, however, is expected to be in the negative territory in the early part of 2009-10," said RBI.

"This transitory WPI inflation in negative zone may not persist beyond the middle of 2009-10," the statement added.

Consumer price inflation is expected to fall from its present high levels.

Deposits with commercial banks is set to grow by 18 percent this fiscal, while liquidity is set to increase by 17 percent.

RBI cut key rates Tuesday by 25 basis points in a move to infuse more liquidity into the system and stimulate lending growth.

The RBI cut the repo rate by 25 basis points from the current 5 percent to 4.75 percent, while the reverse repo rate has been brought down to 3.25 percent from 3.5 percent earlier.

The repo rate is the rate at which the RBI borrows from the banks, while the reverse repo rate is the interest rate paid to banks for RBI's borrowings from them.

However, RBI kept the cash reserve ratio (CRR) unchanged at 5 percent. CRR is the minimum cash reserve balance banks must maintain against customer deposits. RBI had last cut key rates March 4.

SOURCE: HINDUSTAN TIMES

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VP - RETAIL SALES (BROKING INDUSTRY)

BUSINESS HEAD - COAL WASHERY

AVP - BD (SPOT EXCHANGE)

FINANCIAL PLANNING MANAGER

REGIONAL HEAD - EAST (BROKING INDUSTRY)

TECHNICIAN - (CARRIER REEFER CONTAINER)

TECHNICIAN - GENERATOR
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