The country's largest lender, State Bank of India, today reported a consolidated net profit of 3,133 core for the second quarter ended September 30.
The bank had a net profit of Rs 2,458 crore in the same period previous fiscal, State Bank of India (SBI) said in a filing to the Bombay Stock Exchange.
"The figures are not comparable pursuant to the merger of State Bank of Saurashtra with the bank last year," the bank said.
Total income stood at Rs 33,101.65 crore in the July-September quarter, while it had a total income of Rs 27,083.47 crore in the same period previous fiscal.
On standalone basis, the bank posted a net profit of Rs 2,490.04 crore in the second quarter, however it had a net profit of Rs 2,259.72 crore in the same period last year.
Total income stood at Rs 21,301.04 crore in the quarter ended September 30, while it had a total income of Rs 17,909.64 crore in the same period corresponding fiscal.
Saturday, October 31, 2009
Singh to reform labour laws
The Prime Minister, Dr Manmohan Singh, said on Friday that the government will move ahead with reforms in the labour and the financial sector but needs to increase investment in rural education, health and infrastructure to raise the GDP to over nine per cent.
“We need to push forward the reforms process. This has many dimensions. Increased investment in rural infrastructure, more emphasis on health and education is probably of the greatest importance,” said Dr Singh.
He said the fact that India’s savings rate is as high as 35 per cent of GDP suggests that “what I am saying, is a realisable goal.” The Prime Minister said that the primary challenge in the next decade will be to sustain high rates of economic growth and to ensure that the growth process remains equitable.
Dr Singh said that India cannot be built from Delhi alone. “No doubt, the Union government has an important developmental role, apart from its central role in providing national security. But with the growth of the market economy and with individual talent and enterprise being unleashed, no agenda for building a new India can any longer be imposed from Delhi. India lives in the States,” said Dr Singh.
India is one of first few countries in the world to tighten the accommodative monetary policy adopted to stimulate the economy.
The finance minister, Mr Pranab Mukherjee, however, said he would take a call on exiting from fiscal stimulus after reviewing the economic growth in the second and third quarters of this financial year.
“So far as we are concerned, I think I shall have to watch situation for the economic progress in the second quarter and third quarter,” Mr Mukherjee said. “I am going to share my perception on what should be the exit policy in G-20 Finance Ministers meeting, next Saturday.”
US varisities 'extremely interested' to come to India
Some of the best American universities and educational institutes are "extremely interested" in coming to India and are eagerly waiting for the relevant law to be put in place so that they can move forward, said the human resource development minister, Mr Kapil Sibal.
"They are not only extremely interested, but they are also proactive in expressing their hope that the law (in India) would be put in place very soon so that actually they can come forward and come to India as foreign education providers," said Mr Sibal, winding up his week-long visit to the US on Friday evening.
During his visit to New York and Washington, Mr Sibal met presidents of a number of best US universities, including those of the Harvard University, Boston University, Yale University and MIT.
He also met the US Secretary for education, Mr Arny Duncan, and the two leaders agreed to establish a US-India Education Council, which would comprise top American academicians, university officials and representatives from other educational institutions so as to promote public-private partnership in India's higher education sector.
Mr Sibal on Friday had a roundtable with representatives of other top US universities from various parts of the country; besides meeting eminent Indian-American academicians and a delegation of PANIIT.
Describing his visit as "exceptionally satisfying", the minister said that during his meetings he explained that "we are reforming our education system and setting up a number of educational institutions.”
"We also indicated to them we are hopefully going to introduce the Foreign Education Providers' bill as and when it gets cleared from the Cabinet. This will allow them flexibility to have any kind of arrangements with partners in India or for that matter they would be entitled to set up institutions there," said Mr Sibal.
The visit to America, he said, was to explore the possibilities of tying up with high quality globally recognised education providers.
"If we could actually tie up with some of these world class American universities and persuade them to enter into arrangements with the existing institutions or setting up new innovation universities in India, we thought that then we would set an example of the level of excellence we aspire for so that other institutions in the higher education which will come up should be able to match that benchmark," he noted.
"We have told them that they would be like private unaided institutions in India. Whatever law is applicable to private unaided institutions, I guess the same law would apply to foreign education providers who are unaided," he said in response to a question.
"All that they want is a level-playing field, which we will give them,"
Rapid fire with UK far-right party chief
The BBC invited Nick Griffin, the leader of the British National Party (BNP), to participate in a TV debate as a panelist on their prestigious current affairs show Question Time. The format, chaired by veteran broadcaster David Dimbleby, features each week a politician from the main parties and one or perhaps two people from wider political persuasions who have some track record of holding opinions of interest. They answer questions from a studio audience. The debate can sometimes get heated but is, in the British way, always contained.
Following the dictates of its Charter, which requires the BBC to give proportional air time on radio and TV to elected representatives of the population, invited the far-right BNP to participate. The party, hitherto restricted to representing patches of communities on local councils, won two seats in the last election to the European Parliament and as such was a candidate for air-time.
The BBC must also have known that the controversy would boost viewing figures. For weeks before the programme, after Griffin accepted their invitation, there were protests against his appearance on a “respectable” platform. The party was denounced as racist, fascist, homophobic and misogynist — all with plenty of justification.
The Labour, Conservative and Liberal politicians who accepted the invitation to share a platform with Griffin argued that challenging his views publicly would expose the BNP’s policies for what they are. Their contention was that the people who voted for them had done so out of an ignorance of their origins and the true nature of their intentions. A TV debate would act as an X-ray and expose, if one can tolerate the metaphor, the skeletons in their cupboard, their Nazi past and persuasions.
There is no doubt that the BNP is the successor organisation to the British Union of Fascists founded by Oswald Mosley, a dissident semi-aristocratic former scion of Britain’s Labour Party. It is a bastard great-grandchild of Mosley and espouses the causes that he first put forward and came, in these fair and fecund isles, inevitably to grief. In his heyday, extolling Hitler, marching with a small army of black-shirted thugs, preaching against the supposed influence of universal Jewry and marching to terrorise and victimise the poor and toiling minority of Jewish immigrants of East London, he won the support of a few thousand mentally or rationally damaged people. When Britain went to war against the Nazis, Mosley was jailed.
After the war, Britain was in no mood to tolerate a “Nazi party”. The nutters who longed for their black shirts and square moustaches only returned to the political stage with the advent of immigration from the ex-colonies in the 50s and 60s.
These Fascists regrouped under the banner of The National Front. Through the 60s and 70s it was the nasty party whose only platform was the repatriation of black and brown people to India, Pakistan and the West Indies. They demanded an immediate halt to all immigration into the UK. They were vociferously opposed by the Left and a trifle haughtily by the Labour, Conservative and Liberal party establishments.
The National Front, a rump of a party with no electoral success of any sort, split and gave rise to several nastier formations. The latest progeny of this fascist movement is the BNP even though its leader Nick Griffin, a Cambridge graduate, has attempted to rid it of its criminal image and has induced its members to wear suits and get rid of their skinhead haircuts. He can’t, of course, erase the criminal records that very many of those in the leadership of the BNP hold.
The Question Time on which Griffin appeared became a national affair. There were demonstrations and a police presence outside the BBC’s studios. Griffin arrived with six bodyguards. The format was certainly loaded against him. The studio audience was uniformly hostile with a more than fair representation of black and Asian people. The programme, which normally covers four or five topics of the day, was distorted entirely into denunciations of Griffin and the BNP’s attitudes. The fellow defended himself and tried to appear “moderate”. Panelists quoted from Griffin’s own pronouncements against immigration, against black people, against Islam. Griffin tried to make the racial point about an “indigenous” population of Britain being displaced and challenged by the arrival of immigrants and was faced with the argument that Britain had always been, from Celtic and Roman times, invaded or settled by different nations.
The argument may be academically sound, but television is not the forum for the persuasion of reason. Though the programme did expose Griffin as an undesirable racist, his appearance and arguments on it have, according to neutral polls taken after the transmission, not detracted from but mildly boosted the BNP’s support.
Griffin and his party are no doubt aware of the psyphological research done by Manchester University into the popular appeal of the BNP. The research demonstrates that the BNP has, in the last decade, acquired a new “votebank” as we would call it in India. This is centred around Yorkshire and the Northwest, communities which used to be solidly working class and voted Labour. Support for the party is highest in areas with high Pakistani or Bangladeshi concentration, the mill-and-mosque towns of what used to be manufacturing England. There is very little or no support for the BNP in areas where Indians, mostly Sikhs and Hindus, are concentrated or in areas where people of Afro-Caribbean origin form a proportion of the community.
The BNP’s support arises then from an anti-Muslim stance. The party has succeeded in channelling the anti-terrorist, anti-Islamist sentiment of the working class into an anti-Muslim political base. The main political parties, whose MPs are elected from several of these constituencies with significant Muslim populations, have taken very little heed of this particular development.
Apart from these MPs, the British Muslim population ought to take serious note of it. The counter argument to the BNP’s poison has to encompass an absolute distinction between the positions and plans of Islamists and those of the Muslim communities of Britain. Such a distinction can only emerge dynamically from within the Muslim community itself and is long overdue.
Friday, October 30, 2009
China may buy distressed US real estate assets
The Chinese are swooping in to save the day…well decades. Top countries, the U.S., UK and the Middle East have all been witnessing crises or near crises in their real estate assets market. The U.S., especially is having a financial meltdown due to multiple reasons -- bad choices, high interest rates, no jobs, etc. The UK is also up there with real estate problems. More and more homeowners are being faced with foreclosures and a lot have already lost their homes. It is a devastating situation, not just for the country, but for the world as a whole.
China is looking to invest in the distressed real estate assets in the U.S., UK and Middle East. So far, the China Investment Corp, or CIC, is planning to use $2 billion of their $200 billion sovereign-wealth fund to fund the PPIP (Public-Private Investment Plan), a U.S. government program that was created to get rid of toxic mortgage-backed securities from banks’ balance sheets. The U.S. Treasury and Federal Reserve is supposed to give subsidies to the investors for the purchase of the assets, which will allow the banks to be free of capital; they will then be able to make loans.
With the CIC investing in distressed real estate assets in the three leading countries, it will create a reverse domino effect. At first, when everything was falling to pieces, the U.S. began to suffer from a financial crisis and it slowly began to affect the rest of the world. Of course, it is not all completely on the shoulders of the U.S., the markets have not been doing well, so lots of people lost a lot of money. By helping the major countries, U.S., UK and Middle East, it will trickle down on the smaller countries as well.
The Chinese are perfect investors because they have the funding to help out with the real estate issues. China sees a lot of benefit in investing in the U.S. because when the economy reestablishes itself, they will make loads of money. They are buying real estate at bargain prices and will be able to resell them when the market is back up, for at least two to three times the amount it was bought, possibly more. The Chinese predict that the U.S. economy will be back up during the 2nd quarter of 2010.
Trade sitting at the comfort of home. Start with a mere 50$
CIC will also set aside $4 to $10 billion for other global property investments within the next year and a half. According to experts by 2014, CIC will have over $20 billion in U.S. property investments. The financing that’s offered through the PPIP program is very appealing to the CIC, making it an even better bargain.
The Chinese have been eyeing U.S. properties and see them as major investments and in order to get financing for the properties, they are relying on their old partner, the U.S. government. It seems like not burning bridges behind them is working out for the Chinese after all.
China is looking to invest in the distressed real estate assets in the U.S., UK and Middle East. So far, the China Investment Corp, or CIC, is planning to use $2 billion of their $200 billion sovereign-wealth fund to fund the PPIP (Public-Private Investment Plan), a U.S. government program that was created to get rid of toxic mortgage-backed securities from banks’ balance sheets. The U.S. Treasury and Federal Reserve is supposed to give subsidies to the investors for the purchase of the assets, which will allow the banks to be free of capital; they will then be able to make loans.
With the CIC investing in distressed real estate assets in the three leading countries, it will create a reverse domino effect. At first, when everything was falling to pieces, the U.S. began to suffer from a financial crisis and it slowly began to affect the rest of the world. Of course, it is not all completely on the shoulders of the U.S., the markets have not been doing well, so lots of people lost a lot of money. By helping the major countries, U.S., UK and Middle East, it will trickle down on the smaller countries as well.
The Chinese are perfect investors because they have the funding to help out with the real estate issues. China sees a lot of benefit in investing in the U.S. because when the economy reestablishes itself, they will make loads of money. They are buying real estate at bargain prices and will be able to resell them when the market is back up, for at least two to three times the amount it was bought, possibly more. The Chinese predict that the U.S. economy will be back up during the 2nd quarter of 2010.
Trade sitting at the comfort of home. Start with a mere 50$
CIC will also set aside $4 to $10 billion for other global property investments within the next year and a half. According to experts by 2014, CIC will have over $20 billion in U.S. property investments. The financing that’s offered through the PPIP program is very appealing to the CIC, making it an even better bargain.
The Chinese have been eyeing U.S. properties and see them as major investments and in order to get financing for the properties, they are relying on their old partner, the U.S. government. It seems like not burning bridges behind them is working out for the Chinese after all.
We are working on operating system: Google
To tap the fast growing web and personal computers market, internet giant Google is working on an operating system, a move that is likely to pose a stiff challenge to Microsoft’s dominance.
“We are working on an operating system... we feel, when other operating systems became part of the Web, the world was not connected the way it is today,” Google Global Sales Operations and Business Development President Nikesh Arora said.
“Whether our operating system replaces the existing ones, I don’t know. Customers will choose that,” he said, while speaking at the HT Leadership Summit here.
In July, Google announced plans to launch its own operating system for personal computers. The planned open source ‘Google Chrome Operating System’ is expected to be available in the second half of 2010.
Microsoft has about 90 per cent share in the global market for operating systems.
“Google Chrome Operating System is an open source, lightweight operating system that will initially aim at netbooks... Later this year, we will open-source its code, and netbooks running Google Chrome Operating System will be available for consumers in the second half of 2010,” Google had said in a blog.
The blog, which was written by Vice-President (Product Management) Sundar Pichai and Engineering Director ELinus Upson, said the operating systems that browsers run on were designed in an era where there was no web.
Bullion: Can gold, silver prices go up further?
Friday's market sessions in precious metals started off on a tamer note, following the best gains in gold in three weeks. Explanations follow. The recapture of the $1045 area is noteworthy, although analysts we polled during the wee hours overseas are trying to define the move as everything from a 'one-hit wonder' to the 're-ignition of what we saw during most of October.'
The Bloomberg weekly survey foresees weaker gold prices come next week - not by a large margin (57% bearish)- but still focusing on a potential comeback by the US currency, the early signs of which became visible this past Monday. Demand for the yellow metal once again slipped away in India, following signs of life during the earlier part of the week when values came close to $1025 per ounce. The country recorded its sixth straight month of declining gold imports, despite a decent gain during September - in anticipation of festival-related sales.
New York spot dealings opened with a $2.60 loss in gold bullion, which was quoted at $1043.20 bid, as against a euro-dollar seen at $1.4798 and the USD index steady-to-higher, at 76.05, with little in the way of fresh news thus far this morning. Oil prices gave back about 50 cents of their whopper-sized Thursday gains, slipping to $79.32 per barrel. Risk traders took a latte break this morning, and this gave the dollar a moment to try to re-group.
Hawkish statements from Japan and a drop in German retail sales which undermined the euro gave them a couple of reasons to reevaluate the 'appetite thing' this morning. We will see what US consumer spending data ushers in for the day, later on. The FOMC meets next week. You can bet that the most minute details of that meeting's language will come under a bunch of market analysts' microscopes.
Silver dropped 14 cents on the open, quoted at $16.53 while platinum turned quite lower, losing $21 an ounce, to start the day at $1321. Palladium eased by $2 to $324 per troy ounce. Rhodium was flat at $1800 an ounce. The noble metals complex may still receive some support from sunnier news by automakers (at least over in Europe for now) and by potential hikes in energy costs down in South Africa.
South African state-owned utility Eskom has asked for tariff increases on electricity to help fund its expansion. A decision on the three 45 percent tariff increases that Eskom has asked for will be taken early next year. Mines had shut down for five days in January of last year after Eskom suffered a near-collapse of the power grid owing to a sharp shortfall in supply, denting the production of various commodities, including platinum, palladium, and rhodium.
The GDP data offered a Great Day to Play for speculative funds that had been blindsided by Monday's turn in the dollar and other markets. Oil rose a whopping 3.3% and more during the day, gold spiked as high as $1049.10 and the dollar fell 0.50 on the index to just under the 76-mark. The correlation that is once again building between equities and gold is unmistakable, albeit worrisome as well, from a historical and portfolio strategy perspective.
Once again, the aggressiveness with which momentum funds threw large wads of cash at these markets was impressive, but it also showed how fickle the temperament out there really is, and how dime-tight-radius turns can buffet the markets with the release of each and every individual economic news item. More signs that bubbles are still in formation, and that the gambling addiction is hard to break.
On the face of it, the GDP data was dollar-bullish. Every argument can be made that given such notable economic growth rates, the time is fast-approaching for interest rate hikes by the Fed. The spec funds, however, were probably looking at something in the data. Possibly the fact that if one removes stimuli and other artifices from the GDP number, growth was -at best-flat. That the US economy is becoming addicted to the stimulus bottle, is a clear and present danger.
On that note, they said in fundland, let the dollar-carry stock and commodity party roll on. At least for another day, or perhaps another week. Regardless of the oil or gold markets' fundamentals, regardless of currency intervention warnings from worried central bankers, and so on. Or, at least until the stock market senses that the statistical mirrors are bouncing around flat economic smoke that is coloured a neutral shade of gray. At which point, asset liquidations begin anew, and the Roubini scenario cited in yesterday's comment (and the Morgan Stanley take that follows) unfolds.
Marketwatch's Laura Mandaro captured the essence of this week's gyrations in many a market and neatly bottled it in the following piece on risk. Appetite or aversion, it is all about Evel Knievel and Chicken Little out there, writes Laura:
"The boomerang effect that hit markets this week, driving deep sell-offs in stocks and commodities followed by swift rebounds, showed broad shifts in sentiment about fear and risk still dominate a year after the financial crisis peaked.
Confirmation that the U.S. economy returned to growth in the third quarter "provided investors with a reason to breathe easier, after several sessions in which they fretted about weaker growth," wrote Andrew Wilkinson, a senior market analyst at Interactive Brokers Group, in emailed comments.
"The data caused the risk pendulum to reach its maximum extent," he said. Stocks on Thursday came close to clawing their way back to closing levels touched the previous Friday, with the Dow Jones Industrial Average adding 200 points for its best day in about three months.
Oil futures topped $80 a barrel during the session for the first time since Friday, while gold futures broke a five-session losing streak to end above $1,047 an ounce, the contract's highest close since Friday. The U.S. dollar, one of the few bright spots over the last week, made its first drop in six sessions as measured by the U.S. dollar index.
The U.S. government's estimate that the economy expanded at a 3.5% annual pace in the third quarter pulled investors into what analysts are now calling the "risk-on trade," propelling stocks and commodities to double-digit gains this year. The 'risk-on trade' is also referred to as the 'reflation trade,' reflecting the resurgence in 'risk appetite.'
Also referred to as the "reflation trade" or a resurgence in "risk appetite," this trend refers to frequently in-sync purchases of commodities, stocks and currencies from nations that sell directly to China, such as Brazil or Australia. As the Federal Reserve has kept interest rates near 0%, driving down yields on the U.S. dollar, investors have been borrowing the greenback to buy these other assets.
"We had caution breaking out in the markets over the last few days," said David Watt, senior currency strategist at RBC Capital Markets in Toronto. "People had made a lot of money out of these risk-long profits," and nervousness ahead of Thursday's report on gross domestic product gave them a reason to cash out. When it came roughly in line with expectations, "it was enough to suggest the global economic rally is still in place," added Watt.
In the sessions leading up to Thursday, investors had fled, oil, copper and emerging-markets assets, which had been on a tear since March. The few winners had been the U.S. dollar and Treasurys, also among the isolated bright spots last year. Few analysts, except the most ardent gold bugs, were talking about a return of crisis conditions that roiled the global economy in 2008.
Most instead cited a variety of factors -- from talk of major central banks inching toward rate hikes to some disappointing economic reports that put Thursday's GDP report in question -- as catalysts for investors to take some profits. On Monday, the U.S. dollar fell to a fresh 14-month low against the euro, which rose to $1.5062, or higher than the key $1.50 level. Also Monday, the S&P 500 Index topped 1,091, or 64% off March lows and near the closely watched 1,100. The benchmark closed well off that level.The Netherlands' ING financial group, again on Monday, announced a sweeping plan to break itself apart. The move, which ING said stemmed from pressure from the European Commission's antitrust enforcers, brought into sharp relief the possibility that financial institutions in the United States and Europe face a significant shake-up to their structure. In the subsequent days, disappointing readings on consumer sentiment and durable goods, as well as trimmed forecasts for Thursday's GDP report, continued to pull investors into safe-haven assets. The dollar benefited from and magnified that trend, seeing some strength after months of declines.
As investors took hope from massive stimulus packages in the United States, China and elsewhere, the dollar suffered. It's fallen about 15% from early March. Those declines have accelerated since early September. That dollar decline has helped drive up the value of hard assets like metals and beef up export earnings for U.S. companies, a boon for their stocks. Then, for the first part of this week, the dollar gained, sending stocks and other so-called risk assets reeling.
"A lot of this rally had been short dollar and long commodities," said Bart Melek, global commodities strategist at BMO Capital Markets in Toronto. Earlier this week, he said, "people unwound some of their riskier trades and went into the dollar."
It is all in the timing and in the pushing of the envelope. Thursday was a classic example of both. There is probably more of that to come. Desperate times (engendered by last year's bloodletting in fund performance) call for... aggressive speculation. The world is awash in cash and liquidity. It has to go somewhere, regardless of conditions in the particular market being targeted. That such a casino-like environment is not sustainable, goes without saying. Keep a timer on it, nothing more required.
What fundamental conditions do you know of - for example in oil- that have changed dramatically since last December, when oil fell to $30 a barrel, from its $147 pinnacle? We can, still, only call all of this fund-related activity as, remature...speculation. But, let's see what Morgan Stanley has to say about the matter of bubbles and appetites, and such:
"The global stock market rally, which resembles the bull run between 2003 and 2007, will end as government spending slows after so-called easy money boosted asset prices, according to Morgan Stanley.
“Such echo rallies are never as big as the original one and we will see it fading away” Ruchir Sharma, 35, who oversees $25 billion in emerging-market stocks at Morgan Stanley, said in an interview in Mumbai. “The rally will end as the effects of the stimulus begin to fade and the credit bubble caused by easy money disappears.”
The MSCI Emerging Market Index, which tracks shares in developing markets, has surged 59 percent this year, set for its biggest annual advance since 1993, as governments poured in $2 trillion and central banks cut interest rates to near zero to kick-start their economies. Last year, the measure dropped 54 percent, its worst run in the gauge’s 20-year history. A new rally globally needs to be driven by new industry groups, he added, while the current advance is led by the same sectors, such as commodities, as the ones in the bull market that ended in 2007. That’s not a good sign, he said.
The emerging-market index fell 1.3 percent to 904.64 as of 5:10 p.m. in Mumbai, a four-week low, after the Standard & Poor’s 500 Index lost 2 percent to 1,042.63 yesterday, the steepest drop since Oct. 1. Sharma, the New York-based head of emerging markets, said he expects the S&P 500 to trade in a “long-term” range of 800 to 1,200 in the next couple of years. Markets globally dropped last year following the biggest financial crisis since the 1930s as the bankruptcy of Lehman Brothers Holdings Inc. and writedowns from subprime debt caused a seizure in lending.
Only 31 percent of respondents to a poll of investors and analysts who are Bloomberg subscribers in the U.S., Europe and Asia see investment opportunities, down from 35 percent in the previous survey in July. Almost 40 percent in the latest quarterly survey, the Bloomberg Global Poll, say they are still hunkering down. U.S. investors are even more cautious, with more than 50 percent saying they are in a defensive crouch.
“The doubt and the pessimism just won’t go away,” said James Paulsen, who helps oversee $375 billion as chief investment strategist at Wells Capital Management in Minneapolis. “They’re still so shell-shocked by what they went through despite the improvement in the market and the economy.” Sharma predicted in May 2006 that emerging markets will post further gains. The index for developing nations has risen 20 percent since then, compared with a 16 percent drop in the MSCI World Index.
The commodity-producing nations will be the hardest hit when the current rally ends, Sharma said. The Latin American markets of Brazil and Chile are the most expensive, he said, and Morgan Stanley is also “underweight” on Taiwan, Malaysia, Israel and Russia. Commodity prices are rising even as economic fundamentals are deteriorating, he added, a sign that the rally may be fizzling.
“Commodities are at the centre of this echo bubble,” he said, adding that they are “in substantially overvalued territory, way above fundamentals.” Inventories of oil, copper, aluminum have risen over the past few months even though demand hasn’t picked up, Sharma said, adding that the price of oil is inversely correlated to the U.S. dollar. Increasing buying of commodities as a hedge against the decline in the U.S. dollar has resulted in the commodity rally, he said.
“The greatest degree of irrationality is in commodities,” Sharma said. Morgan Stanley owns a lower percentage of commodity stocks, including metals, materials, energy and industrials, compared with the benchmark index. It holds a higher percentage of financial and consumer stocks including automobiles, retailers and beer companies. Some brokerages are predicting further gains in equities. The emerging markets benchmark stock index may retest its “life high” by next year, helped by economic growth and gains in credit markets, according to JPMorgan Chase & Co.
Some markets may be hurt by the diversion of government stimulus away from the economy and into stocks and other investments. Central banks globally were hoping the funds would result in an increase in credit growth, driving the economy. That remains weak in most countries, Sharma said.
“Liquidity has found its way to the wrong assets,” he said. “You can take a horse to the water but can’t force it to drink.”
A pleasant weekend to everyone. Let's see if spec funds trick or treat next week. They certainly had quite a dress-rehearsal during this one. It will also be interesting to see if FOMC members wear hawk or dove costumes to their own party. For now, that kind of costuming is what makes for other masks also being worn on The Street - the bear or bull kind.
The Bloomberg weekly survey foresees weaker gold prices come next week - not by a large margin (57% bearish)- but still focusing on a potential comeback by the US currency, the early signs of which became visible this past Monday. Demand for the yellow metal once again slipped away in India, following signs of life during the earlier part of the week when values came close to $1025 per ounce. The country recorded its sixth straight month of declining gold imports, despite a decent gain during September - in anticipation of festival-related sales.
New York spot dealings opened with a $2.60 loss in gold bullion, which was quoted at $1043.20 bid, as against a euro-dollar seen at $1.4798 and the USD index steady-to-higher, at 76.05, with little in the way of fresh news thus far this morning. Oil prices gave back about 50 cents of their whopper-sized Thursday gains, slipping to $79.32 per barrel. Risk traders took a latte break this morning, and this gave the dollar a moment to try to re-group.
Hawkish statements from Japan and a drop in German retail sales which undermined the euro gave them a couple of reasons to reevaluate the 'appetite thing' this morning. We will see what US consumer spending data ushers in for the day, later on. The FOMC meets next week. You can bet that the most minute details of that meeting's language will come under a bunch of market analysts' microscopes.
Silver dropped 14 cents on the open, quoted at $16.53 while platinum turned quite lower, losing $21 an ounce, to start the day at $1321. Palladium eased by $2 to $324 per troy ounce. Rhodium was flat at $1800 an ounce. The noble metals complex may still receive some support from sunnier news by automakers (at least over in Europe for now) and by potential hikes in energy costs down in South Africa.
South African state-owned utility Eskom has asked for tariff increases on electricity to help fund its expansion. A decision on the three 45 percent tariff increases that Eskom has asked for will be taken early next year. Mines had shut down for five days in January of last year after Eskom suffered a near-collapse of the power grid owing to a sharp shortfall in supply, denting the production of various commodities, including platinum, palladium, and rhodium.
The GDP data offered a Great Day to Play for speculative funds that had been blindsided by Monday's turn in the dollar and other markets. Oil rose a whopping 3.3% and more during the day, gold spiked as high as $1049.10 and the dollar fell 0.50 on the index to just under the 76-mark. The correlation that is once again building between equities and gold is unmistakable, albeit worrisome as well, from a historical and portfolio strategy perspective.
Once again, the aggressiveness with which momentum funds threw large wads of cash at these markets was impressive, but it also showed how fickle the temperament out there really is, and how dime-tight-radius turns can buffet the markets with the release of each and every individual economic news item. More signs that bubbles are still in formation, and that the gambling addiction is hard to break.
On the face of it, the GDP data was dollar-bullish. Every argument can be made that given such notable economic growth rates, the time is fast-approaching for interest rate hikes by the Fed. The spec funds, however, were probably looking at something in the data. Possibly the fact that if one removes stimuli and other artifices from the GDP number, growth was -at best-flat. That the US economy is becoming addicted to the stimulus bottle, is a clear and present danger.
On that note, they said in fundland, let the dollar-carry stock and commodity party roll on. At least for another day, or perhaps another week. Regardless of the oil or gold markets' fundamentals, regardless of currency intervention warnings from worried central bankers, and so on. Or, at least until the stock market senses that the statistical mirrors are bouncing around flat economic smoke that is coloured a neutral shade of gray. At which point, asset liquidations begin anew, and the Roubini scenario cited in yesterday's comment (and the Morgan Stanley take that follows) unfolds.
Marketwatch's Laura Mandaro captured the essence of this week's gyrations in many a market and neatly bottled it in the following piece on risk. Appetite or aversion, it is all about Evel Knievel and Chicken Little out there, writes Laura:
"The boomerang effect that hit markets this week, driving deep sell-offs in stocks and commodities followed by swift rebounds, showed broad shifts in sentiment about fear and risk still dominate a year after the financial crisis peaked.
Confirmation that the U.S. economy returned to growth in the third quarter "provided investors with a reason to breathe easier, after several sessions in which they fretted about weaker growth," wrote Andrew Wilkinson, a senior market analyst at Interactive Brokers Group, in emailed comments.
"The data caused the risk pendulum to reach its maximum extent," he said. Stocks on Thursday came close to clawing their way back to closing levels touched the previous Friday, with the Dow Jones Industrial Average adding 200 points for its best day in about three months.
Oil futures topped $80 a barrel during the session for the first time since Friday, while gold futures broke a five-session losing streak to end above $1,047 an ounce, the contract's highest close since Friday. The U.S. dollar, one of the few bright spots over the last week, made its first drop in six sessions as measured by the U.S. dollar index.
The U.S. government's estimate that the economy expanded at a 3.5% annual pace in the third quarter pulled investors into what analysts are now calling the "risk-on trade," propelling stocks and commodities to double-digit gains this year. The 'risk-on trade' is also referred to as the 'reflation trade,' reflecting the resurgence in 'risk appetite.'
Also referred to as the "reflation trade" or a resurgence in "risk appetite," this trend refers to frequently in-sync purchases of commodities, stocks and currencies from nations that sell directly to China, such as Brazil or Australia. As the Federal Reserve has kept interest rates near 0%, driving down yields on the U.S. dollar, investors have been borrowing the greenback to buy these other assets.
"We had caution breaking out in the markets over the last few days," said David Watt, senior currency strategist at RBC Capital Markets in Toronto. "People had made a lot of money out of these risk-long profits," and nervousness ahead of Thursday's report on gross domestic product gave them a reason to cash out. When it came roughly in line with expectations, "it was enough to suggest the global economic rally is still in place," added Watt.
In the sessions leading up to Thursday, investors had fled, oil, copper and emerging-markets assets, which had been on a tear since March. The few winners had been the U.S. dollar and Treasurys, also among the isolated bright spots last year. Few analysts, except the most ardent gold bugs, were talking about a return of crisis conditions that roiled the global economy in 2008.
Most instead cited a variety of factors -- from talk of major central banks inching toward rate hikes to some disappointing economic reports that put Thursday's GDP report in question -- as catalysts for investors to take some profits. On Monday, the U.S. dollar fell to a fresh 14-month low against the euro, which rose to $1.5062, or higher than the key $1.50 level. Also Monday, the S&P 500 Index topped 1,091, or 64% off March lows and near the closely watched 1,100. The benchmark closed well off that level.The Netherlands' ING financial group, again on Monday, announced a sweeping plan to break itself apart. The move, which ING said stemmed from pressure from the European Commission's antitrust enforcers, brought into sharp relief the possibility that financial institutions in the United States and Europe face a significant shake-up to their structure. In the subsequent days, disappointing readings on consumer sentiment and durable goods, as well as trimmed forecasts for Thursday's GDP report, continued to pull investors into safe-haven assets. The dollar benefited from and magnified that trend, seeing some strength after months of declines.
As investors took hope from massive stimulus packages in the United States, China and elsewhere, the dollar suffered. It's fallen about 15% from early March. Those declines have accelerated since early September. That dollar decline has helped drive up the value of hard assets like metals and beef up export earnings for U.S. companies, a boon for their stocks. Then, for the first part of this week, the dollar gained, sending stocks and other so-called risk assets reeling.
"A lot of this rally had been short dollar and long commodities," said Bart Melek, global commodities strategist at BMO Capital Markets in Toronto. Earlier this week, he said, "people unwound some of their riskier trades and went into the dollar."
It is all in the timing and in the pushing of the envelope. Thursday was a classic example of both. There is probably more of that to come. Desperate times (engendered by last year's bloodletting in fund performance) call for... aggressive speculation. The world is awash in cash and liquidity. It has to go somewhere, regardless of conditions in the particular market being targeted. That such a casino-like environment is not sustainable, goes without saying. Keep a timer on it, nothing more required.
What fundamental conditions do you know of - for example in oil- that have changed dramatically since last December, when oil fell to $30 a barrel, from its $147 pinnacle? We can, still, only call all of this fund-related activity as, remature...speculation. But, let's see what Morgan Stanley has to say about the matter of bubbles and appetites, and such:
"The global stock market rally, which resembles the bull run between 2003 and 2007, will end as government spending slows after so-called easy money boosted asset prices, according to Morgan Stanley.
“Such echo rallies are never as big as the original one and we will see it fading away” Ruchir Sharma, 35, who oversees $25 billion in emerging-market stocks at Morgan Stanley, said in an interview in Mumbai. “The rally will end as the effects of the stimulus begin to fade and the credit bubble caused by easy money disappears.”
The MSCI Emerging Market Index, which tracks shares in developing markets, has surged 59 percent this year, set for its biggest annual advance since 1993, as governments poured in $2 trillion and central banks cut interest rates to near zero to kick-start their economies. Last year, the measure dropped 54 percent, its worst run in the gauge’s 20-year history. A new rally globally needs to be driven by new industry groups, he added, while the current advance is led by the same sectors, such as commodities, as the ones in the bull market that ended in 2007. That’s not a good sign, he said.
The emerging-market index fell 1.3 percent to 904.64 as of 5:10 p.m. in Mumbai, a four-week low, after the Standard & Poor’s 500 Index lost 2 percent to 1,042.63 yesterday, the steepest drop since Oct. 1. Sharma, the New York-based head of emerging markets, said he expects the S&P 500 to trade in a “long-term” range of 800 to 1,200 in the next couple of years. Markets globally dropped last year following the biggest financial crisis since the 1930s as the bankruptcy of Lehman Brothers Holdings Inc. and writedowns from subprime debt caused a seizure in lending.
Only 31 percent of respondents to a poll of investors and analysts who are Bloomberg subscribers in the U.S., Europe and Asia see investment opportunities, down from 35 percent in the previous survey in July. Almost 40 percent in the latest quarterly survey, the Bloomberg Global Poll, say they are still hunkering down. U.S. investors are even more cautious, with more than 50 percent saying they are in a defensive crouch.
“The doubt and the pessimism just won’t go away,” said James Paulsen, who helps oversee $375 billion as chief investment strategist at Wells Capital Management in Minneapolis. “They’re still so shell-shocked by what they went through despite the improvement in the market and the economy.” Sharma predicted in May 2006 that emerging markets will post further gains. The index for developing nations has risen 20 percent since then, compared with a 16 percent drop in the MSCI World Index.
The commodity-producing nations will be the hardest hit when the current rally ends, Sharma said. The Latin American markets of Brazil and Chile are the most expensive, he said, and Morgan Stanley is also “underweight” on Taiwan, Malaysia, Israel and Russia. Commodity prices are rising even as economic fundamentals are deteriorating, he added, a sign that the rally may be fizzling.
“Commodities are at the centre of this echo bubble,” he said, adding that they are “in substantially overvalued territory, way above fundamentals.” Inventories of oil, copper, aluminum have risen over the past few months even though demand hasn’t picked up, Sharma said, adding that the price of oil is inversely correlated to the U.S. dollar. Increasing buying of commodities as a hedge against the decline in the U.S. dollar has resulted in the commodity rally, he said.
“The greatest degree of irrationality is in commodities,” Sharma said. Morgan Stanley owns a lower percentage of commodity stocks, including metals, materials, energy and industrials, compared with the benchmark index. It holds a higher percentage of financial and consumer stocks including automobiles, retailers and beer companies. Some brokerages are predicting further gains in equities. The emerging markets benchmark stock index may retest its “life high” by next year, helped by economic growth and gains in credit markets, according to JPMorgan Chase & Co.
Some markets may be hurt by the diversion of government stimulus away from the economy and into stocks and other investments. Central banks globally were hoping the funds would result in an increase in credit growth, driving the economy. That remains weak in most countries, Sharma said.
“Liquidity has found its way to the wrong assets,” he said. “You can take a horse to the water but can’t force it to drink.”
A pleasant weekend to everyone. Let's see if spec funds trick or treat next week. They certainly had quite a dress-rehearsal during this one. It will also be interesting to see if FOMC members wear hawk or dove costumes to their own party. For now, that kind of costuming is what makes for other masks also being worn on The Street - the bear or bull kind.
Russia hopes nuclear ship will fly humans to Mars
Russia should build a new nuclear-powered spaceship for prospective manned missions to Mars and other planets, the nation's space chief said on Thursday.
Anatoly Perminov first proposed building the ship at a government meeting on Wednesday but didn't explain its purpose. The Russain President, Mr Dmitry Medvedev, backed the project and urged the government to find the money.
In remarks posted on Thursday on his agency's website, Mr Perminov said the nuclear spaceship should be used for human flights to Mars and other planets. He said the project is challenging technologically, but could capitalize on the Soviet and Russian experience in the field.
Mr Perminov said the preliminary design could be ready by 2012, and then it would take nine more years and cost 17 billion rubles (about $600 million) to build the ship.
"The project is aimed at implementing large-scale space exploration programs, including a manned mission to Mars, interplanetary travel, the creation and operation of planetary outposts," said Mr Perminov's web statement.
The ambitious plans contrast with Russia's slow progress on building a replacement to its mainstay spacecraft — the Soyuz.
Russia is using Soyuz booster rockets and capsules, developed 40 years ago, to send crews to the International Space Station (ISS). The development of a replacement rocket and a prospective spaceship with a conventional propellant has dragged on with no end in sight.
Despite its continuing reliance on the old technology, Russia stands to take a greater role in space exploration in the coming years.
Nasa's plan to retire its shuttle fleet next year will force the US and other nations to rely on the Russian spacecraft to ferry their astronauts to and from the ISS until Nasa's new manned ship becomes available.
Mr Perminov said the new nuclear-powered ship should have a megawatt-class nuclear reactor, as opposed to small nuclear reactors that powered some Soviet military satellites. The Cold War-era Soviet spy satellites had reactors that produced just a few kilowatts of power and had a life span of about a year.
SAIL may cut steel prices by over Rs 500 a tn next month
The country's largest state-run steel maker, SAIL, on Friday said it may cut prices of its products by more than Rs 500 per tonne in November on weakening international trends.
"There is a need to reduce the prices of flat steel products in line with softening international prices. Long steel prices in India are also under pressure, the reduction could be higher than Rs 500 per tonne," said SAIL Chairman R K Roongta
Thursday, October 29, 2009
FTSE slips as bank gains offset by weaker energy
Weakness in energy stocks, pulled lower by downbeat results from Royal Dutch Shell (RDSa.L: Quote, Profile, Research), offset gains from banks and miners leaving Britain's FTSE 100 .FTSE off 0.3 percent by midsession on Thursday.
Investors were cautious ahead of U.S. GDP data, which will be closely eyed for clues on the timing and pace of a recovery in the global economy.
At 1139 GMT, the FTSE 100 .FTSE index was 13.26 points lower at 5,067.16, having closed down 120.55 points, or 2.3 percent, at 5,080.42 on Wednesday, its biggest one-day percentage fall since July 2 "There's been a bit of a pullback as there's been a pause in positive corporate and economic newsflow," said Graham Secker, UK equity strategist at Morgan Stanley.
"But that's not necessarily a bad thing, as it means that authorities won't be too hasty in retreating from their stimulus policies."
Oil giant Royal Dutch Shell (RDSa.L: Quote, Profile, Research) was the biggest blue chip faller, down 4.4 percent after it said third-quarter net profits fell 73 percent, hit by falling oil and gas prices and refining margins, and Chief Executive Peter Voser warned of a slow recovery. [ID:nLS686511]
Shell's numbers ended a mixed batch of third-quarter results for the energy majors, with BP (BP.L: Quote, Profile, Research) beating forecasts on Tuesday but BG Group (BG.L: Quote, Profile, Research) missing output forecasts on Wednesday.
BG Group shares shed 2.2 percent, while BP fell 0.2 percent, and oil explorer Cairn Energy (CNE.L: Quote, Profile, Research) lost 0.6 percent with its latest interim management statement failing to excite.
U.S. third-quarter GDP numbers, due at 1230 GMT, will give investors a further idea as to the durability of the perceived recovery after a shock fall in UK Q3 GDP on Friday.
According to a Reuters poll of 77 economists, the U.S. economy is expected to have grown 3.3 percent at an annualised rate in the third quarter, after shrinking 0.7 percent in the second.
FACTBOX-New Swiss bank rules and proposals discussed
Swiss regulators are set to keep the lead on stricter bank regulation despite growing competition concerns among bankers, thanks to strong political support for tighter reins on UBS(UBSN.VX) and Credit Suisse(CSGN.VX). Switzerland has led the global campaign for tougher rules, starting to draw up stricter capital requirements as early as spring 2008, even before it had to bail out its flagship bank UBS in the wake of the Lehman Brothers collapse in autumn 2008. Following are some key facts about new Swiss rules, proposals discussed and issues going forward:
CAPITAL REQUIREMENTS
Swiss regulator FINMA requires UBS and Credit Suisse to have a capital ratio in good times of 16 percent of risk weighted assets -- a 100 percent top-up to international minimum standards set by the current Basel II agreement.
The capital ratio may fall to 12 percent capital in tough times before FINMA will call on the banks to take action.
Both banks have until 2013 to comply though both are already above the minimum and especially Credit Suisse is one of the best capitalised banks in the world.
FINMA also introduced a leverage ratio, curbing banks' ability to grow through incurring debt. The banks must meet a minimum of 3 percent on a group level and 4 percent on a bank level. The leverage ratio has to be higher in good times.
European shares turn positive after U.S. GDP data
European shares turned positive on Thursday after data showed the U.S. economy grew in the third quarter for the first time in a year as consumer spending and investment in new home-building rebounded.
The Commerce Department, in its first estimate of third-quarter gross domestic product, said the economy grew at a 3.5 percent annual rate, the fastest pace since the third quarter of 2007, unofficially ending the worst recession in 70 years. It contracted 0.7 percent in the April-June period.
At 1237 GMT, the FTSEurofirst 300 index of top European shares was up 0.7 percent at 987.06 points after hovering in negative territory before the data.
Financial stocks were among the top gainers, with Standard Chartered (STAN.L:Quote, Profile, Research), HSBC (HSBA.L: Quote, Profile, Research), Barclays (BARC.L: Quote, Profile, Research), Lloyds (LLOY.L: Quote, Profile, Research), Royal Bank of Scotland (RBS.L: Quote, Profile, Research), BNP Paribas (BNPP.PA:Quote, Profile, Research) and Societe Generale (SOGN.PA: Quote, Profile,Research) rising 0.8 to 10.4 percent.
Economy finally back in gear
Government says GDP grew 3.5% in third quarter, ending a year-long string of declines and coming in better than forecasts.
The U.S. economy grew at a 3.5% annual rate in the third quarter, ending a string of declines over four quarters that resulted in the most severe slide since the Great Depression. But some economists raised doubts about how long such strong growth can last.
The increase in GDP, reported by the government Thursday morning, was slightly better than expectations. Economists surveyed by Briefing.com had forecast 3.2% growth in gross domestic product, the broadest measure of the nation's economic activity. The economy shrank at a 0.7% rate in the second quarter.
The positive GDP report is one more sign that the economy has likely pulled out of the deep recession that started in December 2007.
The reading by itself doesn't mark an end to the recession; the economy actually grew in the second quarter of 2008. (The National Bureau of Economic Research, which officially dates the beginning and end of recessions, is not expected to declare that the current recession has ended until sometime in 2010.)
But the stronger-than-expected growth is likely to lead more economists to declare that the economy hit bottom earlier this year and turned higher at some point in the summer.
Businesses continued to reduce inventories, but by a much slower pace than in the past. That helped to lift the overall GDP growth rate by nearly a full percentage point.
The slashing of production in jobs in the face of weak demand has been one of the strongest drags on the economy during the past four quarters.
Robert Brusca, an economist with FAO Economics said that the fact that businesses are still cutting inventories "tells us that the economy has not yet turned any corner very sharply."
But Bill Hampel, chief economist of the Credit Union National Association, said it's encouraging that the economy was able to grow at all without businesses actually rebuilding inventory. He said that is a positive sign of growth yet to come.
"The inventories still need to be replenished, and when they are, it will give us an even bigger lift," he said. "I don't think this report is a sign of a booming economy, but it does seem to be setting down roots that will be sustainable."
Is the growth sustainable?
A rebound in auto sales, which were helped by the government's Cash for Clunkers program, also provided a boost to GDP. The economic stimulus package, with public works projects and aid to state and federal governments, boosted growth as well.
Christina Romer, chair of the White House's Council of Economic Advisors, said in a statement that stimulus added between 3 and 4 percentage points to growth this quarter, suggesting that the economy would have shown little or no growth without the bump from government spending.
Romer also noted that the swing from a 6.4% rate of decline in GDP during the first quarter to the third quarter's 3.5% rise is the biggest six-month turnaround in the economy since 1980.
However, this welcome milestone is just another step, and we still have a long road to travel until the economy is fully recovered," she said.
The fact that much of the gain was from these short-term programs raises some concerns about whether the economy can keep growing over the next few quarters.
There were other signs of growth that were more encouraging, however. Consumer spending rose at a 3.4% rate, the biggest increase in nearly three years. Spending by consumers accounts for more than two-thirds of the nation's economic activity.
"Final sales continue to improve and this provides the underlying demand for growth," said John Silvia, chief economist for Wells Fargo Securities. "Our expectations are for moderate growth, not a boom."
But David Rosenberg, chief economist and strategist for investment bank Gluskin Sheff, said that the recent weak readings on consumer confidence show that only economists think the recession is over.
"The man on the street sees it a little differently," he said. And consumer concerns about continued economic hard times are likely to put a crimp on the spending needed to get the economy moving again.
"There is going to be some very tough slogging ahead," he said.
Sung Won Sohn, an economics professor at California State University Channel Islands, added that it is unreasonable to expect more big increases in consumer spending going forward -- especially if job losses continue to mount.
"Consumers are in no position to go on another spending spree," he said. "Potential employers want to make sure that the economic recovery will be sustained before hiring people. Without jobs, consumers are unlikely to open their wallets."
Housing, which has been a drag on the economy since the popping of the real estate bubble in early 2006, contributed to the economy's growth as well. Investments in residential real estate surged 23% in the quarter.
Other reports in recent weeks have shown that housing sales, home prices and new home construction rose during the quarter. But the housing market also got a lift from the $8,000 tax credit for first time home buyers that is due to expire next month.
Hampel said that the gains in housing go far beyond the impact of the tax credit, however.
"The first time buyer credit is icing on the cake, but the fundamentals of housing have turned positive," he said.
zeroemissionenergy
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National Wind Solutions
There are several advantages to fuel cell technology over current systems:
- Fuel cells run very clean omitting only water as a waste product;
- Hydrogen is abundant and cheap eliminating the need to import more oil;
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- NWND's Fuel Cell technology is economic – the technology will pay for itself through energy savings.
The Zero Emissions fuel cell incorporates low cost production designs to reduce initial investment. This will allow the Zero Emissions fuel cell to compete in the current energy environment.
Fuel Cells in President-Elect Obama's Energy Initiative
The President-Elect proposes to stimulate markets for advanced energy systems by promoting e ciency in federal buildings and by establishing a 25 percent Federal Renewable Portfolio Standard (RPS) for all electricity consumed in the U.S, and nances clean, US-made power generation via a carbon cap-andtrade auction. Fuel cells can make a huge contribution to these national programs.
Congress can dramatically accelerate deployment of a clean, home-grown, US manufactured green energy technology, create an estimated 24,000 jobsi and ght back against global climate change, simply by taking advantage of federal laws already on the books. Fully funding programs of the Energy Policy Act of 2005 (EPACT) at levels Congress has already approved for FY2010, and use of other authorized funds, will invest $1.2 billion in fuel cells, hydrogen and infrastructure. This investment will put hundreds of fuel cell vehicles and up to 100 megawatts of fuel cell power into customers' hands, reap e ciency, environmental and security bene ts and create green jobs and high-tech manufacturicapacity for the American economy.
India asks UK to open doors to its IT professionals
Britain has promised to look into suggestions to allow more Indian IT professionals into UK to build up a strategic partnership in the
information technologyfield.
The suggestion was made by President Pratibha Patil to British Prime Minister Gordon Brown during a meeting here at the 10, Downing Street last night.
Patil stressed on the need for greater participation of Indian IT professionals in UK, which Brown assured to look into, Foreign Ministry Officials accompanying the President told reporters.
The US and other major EU nations have allowed greater flow of Indian IT professionals, which has led to a boom in the sector in these countries and apparently Patil's suggestion was to ensure that Britain did not lag behind.
Brown said India-UK cooperation in IT was a very important area for the growing bilateral strategic partnership, officials said.
The 30-minute long meeting between the two leaders also focused on issues of bilateral cooperation in economy and education.
Brown told the President that business ties between the two countries were flourishing with a large number of Indian companies now listed on London Stock Exchange.
Britian is also one of the largest foreign direct investors in India.
During the meeting, Brown also expressed keenness in further boosting India-UK cooperation in the field of education, the officials said.
The suggestion was made by President Pratibha Patil to British Prime Minister Gordon Brown during a meeting here at the 10, Downing Street last night.
Patil stressed on the need for greater participation of Indian IT professionals in UK, which Brown assured to look into, Foreign Ministry Officials accompanying the President told reporters.
The US and other major EU nations have allowed greater flow of Indian IT professionals, which has led to a boom in the sector in these countries and apparently Patil's suggestion was to ensure that Britain did not lag behind.
Brown said India-UK cooperation in IT was a very important area for the growing bilateral strategic partnership, officials said.
The 30-minute long meeting between the two leaders also focused on issues of bilateral cooperation in economy and education.
Brown told the President that business ties between the two countries were flourishing with a large number of Indian companies now listed on London Stock Exchange.
Britian is also one of the largest foreign direct investors in India.
During the meeting, Brown also expressed keenness in further boosting India-UK cooperation in the field of education, the officials said.
L&T Infotech in talks with Patni for stake sale
You heard it first on NDTV profit that the promoters of Patni Computer Systems have finally made up their mind to sell their stakes but the big question is who will buy the stake.
It seems like L&T Infotech, a global IT services and solutions provider, who lost out on Satyam, may emerge as a strong contender.
NDTV learnt from sources that the talks are on between L&T Infotech and Patni Computer Systems for a possible buyout.
"We'll not mention specific names but last year has been difficult for all IT companies. If one wants to grow become significant we are looking at all kinds of opportunities," said Y M Deosthali, CFO of L&T.
While L&T may not have acquired Satyam, they have managed to acquire one of their top talents. Keshab Panda, part of Satyam's leadership council, has come into the L&T fold as chief executive of IT enabled services. Panda will be of great help to Naik pursue his mergers and acquisitions plans in the IT space.
Why just L&T Infotech there are host of suitors who may still be interested in an asset like Patni which has similar offerings as Satyam.
Also as we reported earlier, global companies like Dell and IBM are front runners in race for Patni. Analysts insist it is the likes of L&T Infotech which have a bigger strategic interest and may stretch their bid to win over Patni.
"The valuation of an IT company is not dependent on the PAT but what kind of revenue or scale it can get in the future. Indian companies like L&T Infotech and Mahindra Satyam may want to look at Patni," said Sudin Apte, principal analyst at Forrester Research.
The stage is set and the year 2010 clearly will see some serious M&A action in the Indian IT space.
It seems like L&T Infotech, a global IT services and solutions provider, who lost out on Satyam, may emerge as a strong contender.
NDTV learnt from sources that the talks are on between L&T Infotech and Patni Computer Systems for a possible buyout.
"We'll not mention specific names but last year has been difficult for all IT companies. If one wants to grow become significant we are looking at all kinds of opportunities," said Y M Deosthali, CFO of L&T.
While L&T may not have acquired Satyam, they have managed to acquire one of their top talents. Keshab Panda, part of Satyam's leadership council, has come into the L&T fold as chief executive of IT enabled services. Panda will be of great help to Naik pursue his mergers and acquisitions plans in the IT space.
Why just L&T Infotech there are host of suitors who may still be interested in an asset like Patni which has similar offerings as Satyam.
Also as we reported earlier, global companies like Dell and IBM are front runners in race for Patni. Analysts insist it is the likes of L&T Infotech which have a bigger strategic interest and may stretch their bid to win over Patni.
"The valuation of an IT company is not dependent on the PAT but what kind of revenue or scale it can get in the future. Indian companies like L&T Infotech and Mahindra Satyam may want to look at Patni," said Sudin Apte, principal analyst at Forrester Research.
The stage is set and the year 2010 clearly will see some serious M&A action in the Indian IT space.
Wednesday, October 28, 2009
11th concept
11. Start your own "working capital" fund
With unemployment on the verge of hitting double digits for the first time since the early 1980s, investing in yourself is really another form of an emergency fund. So start a capital fund for your career.
Put in enough money to cover travel and other job-hunting expenses for at least six months, the average length of unemployment for baby boomers who are currently out of work. And over time, use the fund to save money for career education and training - either to move up in your current field or to switch professions altogether.
"Pretend your career is a rental property," says Wisconsin financial adviser Michael Haubrich. "If you don't rehab it every so often, it goes down in value. And the rents you collect on it are going to go down too."
Of course, the same is true for almost every other aspect of your financial life. What's more, the investments you make now may pay off a lot sooner than you think.
Put in enough money to cover travel and other job-hunting expenses for at least six months, the average length of unemployment for baby boomers who are currently out of work. And over time, use the fund to save money for career education and training - either to move up in your current field or to switch professions altogether.
"Pretend your career is a rental property," says Wisconsin financial adviser Michael Haubrich. "If you don't rehab it every so often, it goes down in value. And the rents you collect on it are going to go down too."
Of course, the same is true for almost every other aspect of your financial life. What's more, the investments you make now may pay off a lot sooner than you think.
10th concept
10. Be part of society's safety net
Even Adam Smith knew that taking an interest in the "fortunes of others," as capitalism's leading thinker put it, can bring you a glow you can't get from merely accumulating your own fortune. Studies have shown Smith was right.
Volunteer work on behalf of those less well-off than you costs nothing, connects you with others, burnishes your résumé, and reminds you just how lucky you are to have whatever it is you have - even if it is worth 40% less than before the bear market. And, oh yeah, helping others is the right thing to do.
Before you choose a charity, think about your passions, where help is most needed in your community, and what type of work might polish your job-related skills. To find inspiration for charities that need you but also fit your needs,
Volunteer work on behalf of those less well-off than you costs nothing, connects you with others, burnishes your résumé, and reminds you just how lucky you are to have whatever it is you have - even if it is worth 40% less than before the bear market. And, oh yeah, helping others is the right thing to do.
Before you choose a charity, think about your passions, where help is most needed in your community, and what type of work might polish your job-related skills. To find inspiration for charities that need you but also fit your needs,
That said, skip those big charity balls. It turns out that how happy you are with what you have depends a lot on just who you're comparing yourself to. These sorts of invidious comparisons can cost you actual money without your even realizing it.
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