Saturday, November 29, 2008
In a conference call, Dell’s Asia-Pacific and Japan head Steve Felice said there is an opportunity to shift more work to Asia and Dell will do it. In its third-quarter results announced, the US-based PC manufacturer’s tight rein on costs helped it post better earnings despite a sales slump.
Dell has invested heavily in its India and China factories. From Bangalore, it has built systems management capability and software for enterprise activity. While in China, it does design work and R&D. In addition, in Malaysia’s Cyberjaya, it does software development. “Our intention is to grow these,” said Felice. Elsewhere, Dell has announced job cuts.
“We don’t just service Asia out of these locations. They have worked well globally to the extent that there are opportunities to shift more work to Asia arise, we will do it... We are happy with the performance of these facilities to serve global needs and will continue to invest them depending on market conditions,” Felice said.
However, he said the growth in Asia was not necessarily linked to the cost-cutting in the US and was in response to the growth in other parts of the world.
Felice said there was decline in overall IT spending in Asia-Pacific and Japan. Dell had weathered it and grown. Terming India’s growth as outstanding, he said the country had witnessed 77% growth in unit terms and 48% growth in revenues for Dell in the third quarter.
For China, growth was up 44% in unit terms and 18% in revenue terms. “We are extremely committed to India,” he added. The surge in growth has primarily come from consumers and the small.
Source: Times News Network
According to a study by research firm Venture Intelligence, venture capital investment in India grew 36 per cent at 290 million dollars for the third quarter ended September 30.
Meanwhile in Mainland China, VC investments grew 22 per cent to 964 million dollars at the end of the third quarter, as per the data by Dow Jones VentureSource.
"It's clear that venture capital investors are still eager to put money into the emerging marketplace and, in many areas, they're actually accelerating the pace of their investments," Dow Jones VentureSource Global Research Director Jessica Canning said.
The increased investment by existing players and the entry of new funds contributed to the growth this quarter, the Venture Intelligence study stated.
"The pace of VC investments in India seems to be accelerating despite the turmoil in global financial markets," Venture Intelligence Founder and CEO Arun Natarajan said.
Meanwhile, as the number of VC deals nearly doubled in India to 49, China witnessed a saw the number dipping to 59 from 73 in the same period last fiscal.
"Larger deals drove investment in the third quarter as the median size of a venture deal in China remained at USD 10 million, which is the highest on record and the most out of any region we track, including the US," Canning said.
However, the venture capitalists shied away from investing in the Information Technology and IT-enabled Services (IT & ITeS) industry in China, the sector remained favourite among the VC firms invested in India.
large global firm runs its trading desk out of Mumbai. Bookings for a leading airline are happening out of another office in a neighbouring city, while the telecom infrastructure of an overseas operator is being remotely monitored from another location in the country.
A terror attack on any of these sites can have significant implications for corporations in the US and other parts of the developed world as India emerges as the world’s back-office.
For instance, if a trade is not squared off on time, the firm will have to carry higher liabilities. Wednesday’s attack raises questions about the vulnerability of these locations to terror threats and the preparedness of firms and authorities to tackle them.
The issue assumes importance as nearly seven out of every 10 outsourced processes come to India, according to industry estimates. While 6-7 years ago, business process outsourcing (BPO) mostly involved basic data entry, a number of mission critical processes such as airline bookings and investment research are now taking place out of offices in Mumbai, Pune and Bangalore.
In its strategic review, Nasscom, the apex industry body, notes, “Indian BPO has undergone significant transformation since its inception over a decade ago... The past few years have seen the scope of these services expand progressively to include more complex processes involving rule-based decision making and research requiring informed judgment and domain knowledge,” the apex industry body notes.
Indian firms also manage infrastructure worth over $3-4 billion remotely for clients. Damage to these locations can bring down desktops and servers, besides crippling entire sections of organisations outside India. “After 9/11, there is a greater appreciation of the risk arising from a terror attack,” admits KPMG executive director Akhilesh Tuteja.
“But the level of preparedness even for mission critical operations is below average,” he adds. The redundancy plan usually involves a backup and mutiple service providers to ensure connectivity. But process capability and an ability to swiftly execute the process at another centre are not a reality in most cases.
“Disaster recovery plans are like an insurance you may never use. There is now an awareness about the need to have them, but the decisions are usually postponed because this is not an investment that will result in growth. Firms usually make investments for growth,” says PriceWaterhouseCoopers managing consultant Nikhil Donde.
Companies are saving costs amid the slowdown, as every bit can eat into margins. Multinational parents are managing a majority of the mission critical operations by way of captives. Ideally, 70% of the process should be offshored and 30% retained at the onsite location to minimise the risks, according to Mr Tuteja. But again there is a trade-off on costs, with real benefits kicking in only when the process is completly offshored.
In client contracts with third-party firms, it is not uncommon to find clauses related to business process continuity (BCP). However, these clauses rarely go into specifics and are usually interpreted in terms of having a multi-locational presence, back-up capability and multiple connectivity providers. Rarely do they consider whether the alternate locations will have people with the necessary skills. And this is really the biggest threat in a terror attack, when people at one location can be killed, say the experts.
Source: Economic Times
NSG commandos, who believed that a lone terrorist was holding out since yesterday, launched a final assault in the early hours of this morning and killed three terrorists to secure the old heritage area of the hotel opposite the Gateway of India.
"Three terrorists have been killed but the operations are still on. Until we search the entire hotel room by room and satisfy ourselves that there are no more terrorists I will not declare the operations are over.
"I don't know whether all of them have been killed. I can say only after completing the operations," Director General of NSG, J K Dutt, told reporters outside the hotel.
During the night, terrorists holed out in the hotel engaged in a fierce gun battle with security forces as some places in the first and the ground floors of the 565-room building set afire by terrorists amid explosions in the over 100-year-old heritage complex in the Colaba area.
Dutt said that the terrorists set on fire some rooms whenever they felt they were being cornered as a diversionary tactics.
An intense gun battle raged overnight at the Taj as commandos closed in on terrorists holed up in the heritage structure. Five huge explosions were also heard in the building in a span of 30 minutes.
The Marine commandos (Marcos) had surrounded the Taj where NSG personnel were carrying out the operation to flush out the terrorists. Multiple rounds of automatic gunfire and blasts from inside the building shattered several hours of relative calm.
The western metropolis witnessed unprecedented terror attacks, including on another luxury Trident-Oberoi hotel and a Jewish centre, on Wednesday night when heavily-armed terrorists struck killing over 160 people and injuring hundreds.
The might of the Indian security forces had to be brought in to rid these landmark in the country's financial capital of the heavily-armed suspected Pakistani terrorists, but the costs were heavy on both sides.
When the Oberoi was cleared of the terrorists yesterday, as many as 30 hostages were found dead.
Although Mumbai is no stranger to such outrages - the Taj itself experienced a car bomb attack in 2003 - the latest tragedy stands out from the rest for the simple reason that it was an evidently commando-style raid by suicide bombers with the express purpose of inflicting as much damage as possible on some of the city's landmarks and targets of its prosperity and progress.
While in the earlier attacks, the terrorists planted bombs in market places or trains and then left the scene, this time they stayed on to battle the security forces and die or be captured in the process. Since they were all heavily armed and were able to take hostages, they could carry on the confrontation with the police for prolonged periods, which could not but have a hugely demoralising effect on the city and the country. Since India had not seen such war-like scenes before, the impact was devastating and it would take some time before its political fallout could be measured.
It is possible that the terror groups had realised the diminishing effect of their earlier tactics of planting bombs in crowded places and vehicles. In spite of the initial shock and revulsion in those instances, the effect tended to wear off, leaving only the victims to mourn their losses. But gunbattles lasting for hours and the wheeling out of bodies covered in white sheets from five-star hotels can have a numbing effect.
Friday, November 28, 2008
Social networking sites, such as Twitter and Facebook, were instantly updated with on-the-scene information by people. Minute-by-minute updates on social networking and micro-blogging sites not just satiated the writers’ hunger for expressing themselves, but also gave people more diverse news.
In fact, instead of switching on the television, many followed the action live on microblogging Twitter by searching the site for Bombay and Mumbai. In certain cases, Twitter updates reportedly appeared hours before the first TV stories.
The minute the news of the terrorist attacks broke out, sites like Twitter were inundated with a huge volume of messages. Twitter seemed to be the most popular choice among other social media sites. Just minutes after the first shots were fired; Tweeters (Twitter users) in Mumbai gave instant eyewitness accounts of the unfolding drama.
Messages, known as `tweets', were being posted to the site at a rate of around 80 tweets every five seconds when the news of the tragedy first broke, according to some estimates. Some bloggers provided running descriptions and commentaries from near the action, while others gave vent to their emotions.
"I've been tweeting almost all night from Mumbai. Upset and angry and bereft," said businesswoman Dina Mehta on her blog, http://www.dinamehta.com/blog.
Images of the attacks also surfaced on photo-sharing website Flickr. The site proved a useful source of haunting images chronicling the aftermath of the attacks.
Photographer Vinukumar Ranganathan has attracted hundreds of thousands of visits to his Flickr photo page where he has published a chilling slideshow depicting the aftermath of the attacks.
Twitter came in for some criticism as well in the blogosphere for divulging too many details that could prove helpful to the gunmen holed up in the hotels with their hostages and who may have been monitoring blog sites.
"It's a terrorist strike. Not entertainment. So tweeters, please be responsible with your tweets," said one blogger identified as primaveron@mumbai.
Unfortunately, the site also contained misleading threads, some of it purporting to be from intelligence services. In fact, many of the posts on Twitter amounted to unsubstantiated rumours and wild inaccuracies.
According to CNN, a rumour that the Indian government was asking Tweeters to stop live updates to avoid compromising its security efforts was published and republished on the site.
This was reportedly fueled by certain news websites, which posted the Tweet on their live update. It read: "Indian government asks for live Twitter updates from Mumbai to cease immediately. ALL LIVE UPDATES - PLEASE STOP TWEETING."
Several local Indian news channels were reported to have carried a live feed of the Twitter updates on the Mumbai attacks.
Twitter's contributors also questioned the veracity of certain TV news reports, pointing out contradictions and errors. When Indian reporters announced an end to Taj hotel siege time and again, Tweeters contended that gunfights were continuing. "Locals say gunfire still happening at Taj," said one feed, hours after fighting was said to have finished.
Many social network users also sent pleas for blood donors to make their way to specific hospitals in Mumbai where doctors were faced with blood shortage and rising casualties. Throughout the night, bloggers were active compiling news reports and contact information and information on blogging sites like mumbaihelp.blogspot.com.
Tweeters were also mobilised to help with transcribing a list of the dead and injured from hospitals, which were quickly posted online. mumbaihelp.blogspot.com also offered advice to those with friends and family in the city. "Suggest you avoid calling. Lines are bound to be jammed."
Other websites also quickly filled up with information: Wikipedia had a page up on the attacks by early Thursday morning. A Google map was created just hours after the explosions to mark the locations that had been hit.
Dozens of videos of the attacks have flooded the YouTube too. Gauravanomics has an exhaustive list of online coverage of the attacks. Slained Anti-Terrosism Squad (ATS) chief, Hemant Karkare, was reportedly the most searched topic on Google for nearly an hour after his death was declared.
Even Prime Minister Manmohan Singh’s address to the nation on Thursday was highly viewed, followed by angry comments.
Source: Indiatimes Infotech
Industry officials said prospective overseas clients were likely to put off planned visits to India because of the attacks, even though most software and back-office services firms were operating normally.
"This will surely introduce some sort of concern among clients," said Krishnakumar Natarajan, CEO of mid-sized software and R&D services provider MindTree Ltd.
"There was some expectation clients would start visiting India from January after the end of the annual holiday season. That will now get pushed away for some more time."
The software and back-office services sector, which earns billions of dollars from exports, is reeling from a global slowdown and turmoil in the financial sector, one of its major markets.
The chief financial officer at Wipro Ltd, India's No.3 software services exporter, told a Reuters India Investment Summit this week he expected a pickup in growth in the first quarter as companies firm up outsourcing plans, though many businesses will likely delay decisions and tighten costs.
India's large pool of English-speaking engineering workers and cheaper wages have helped attract outsourcing from western firms ranging from Citigroup and Goldman Sachs to Cisco Systems Inc and Nortel.
India's outsourcers compete against larger IT services firms such as IBM and Accenture.
"We have to wait for things to settle. This is a temporary aberration," said T V Mohandas Pai, a board member at Infosys Technologies, India's No.2 software services exporter.
"If countries issue advisories, it means some travel will be deferred. I think people will use technology or we'll go and visit our clients. Business will go on," he said.
"We have seen terrorist attacks happen in different parts of the world. It's unfortunate it has happened in Mumbai and I think business is confident the government and authorities will get to the bottom of it," he added. Bruce McIndoe, a travel security expert and president of iJET Intelligent Risk Systems, a private intelligence firm, said he had already advised his Mumbai terror attack corporate clients to postpone travel to Mumbai, and warned there would be "ripple effects".
Som Mittal, president of the National Association of Software and Service Companies, India's premier software industry lobby group, said companies were likely to be more cautious, but business would continue.
"We will not let the show stop as a result of the attacks," he said.
In July, eight small bombs hit the city of Bangalore, which is home to more than 1,500 Indian and multinational software and back-office firms. They increased security as a result.
"I think now more and more customers will be looking at what the Indian companies are doing to manage risk. They will ask what their disaster recovery and business continuity plans are," said Avinash Vashistha, chief executive of consultancy Tholons Inc.
"In the short-term, companies will see an impact as their clients stay away from travelling to India."
Mumbai, the commercial capital of India, comes under attack from terrorists yet again, at a time when the world's second-fastest growing economy is seen by many analysts to be a critical part of the solution in fighting a global recession.
Mumbai is one of the world's top 10 centres of commerce and contributes to about 5 percent of India 's GDP and accounts for 25 percent of the industrial output, 40 percent of maritime trade, and 70 percent of capital transactions to the economy. Mumbai's per-capita income is Rs. 48,954 ($990) which is almost three times the national average.
"Mumbai is a very resilient city," says Bundeep Singh Rangar, Chairman, IndusView Advisors Ltd., the India-focused cross-border advisory firm. "Each time it's been the target of a terrorist attack, it rebounds stronger and more resolute."
Post the July 11, 2006, Mumbai train bombings, for example, as a show of investor confidence, the Bombay Stock Exchange (BSE) had rebounded, starting the day with the BSE Sensex Index up by nearly 1 percent in morning trade. Foreign investors also retained confidence, with the Sensex up almost 3 percent at 10,930.09 at the end of the day's trade.
However, both the Bombay Stock Exchange and National Stock Exchange were closed today as the security personnel continue with their efforts to nab the terrorists.
India is set to register a strong growth of about 7.5 percent this financial year, a marginal drop from 9 percent that the country achieved last year when compared to emerging markets peer China that will drop to similar level from about 12 percent last year, its lowest since 1990, according to estimates.
This firm footing that the Indian economy finds itself in, has a lot to do with the contribution from Mumbai, its financial capital that brings 40 percent of foreign trade, 60 percent of customs duty collections, 40 percent of income tax collections, 20 percent of central excise tax collections, and Rs. 40,000 crore ($10 billion) in corporate taxes to the Indian economy.
This apart, the city hosts headquarters of a number of Indian financial institutions such as the Bombay Stock Exchange, Reserve Bank of India , National Stock Exchange, the Mint, as well as the corporate headquarters of many large Indian companies, including the three largest private sector companies: Reliance Industries, Tata Group and Aditya Birla Group, and numerous multinational corporations. Most of these offices are located in downtown South Mumbai which is the nerve centre of the Indian economy.
Mumbai is home to Bollywood, the largest film making industry in the world; the Bhabha Atomic Research Center (BARC), which will see its role gaining significance once the Indo-US civil nuclear deal comes in to force.
Other prominent industry sectors in the city include aerospace, optical engineering, medical research, information technology, computers and electronic equipment, shipbuilding and salvaging, renewable energy and power.
Thursday, November 27, 2008
In 2005 in Jordan, Al Qaeda conducted a series of coordinated bombing on three hotels in the capital city Amman on November 9. The blasts at at the Grand Hyatt Hotel, the Radisson SAS Hotel, and the Days Inn killed 60 people and injured 115 others.
Oen of the hotels was hosting a wedding with hundreds of guests. In October 2004, bombings at three sites on the east coast of the Sinai peninsula killed 34 people.
The Egyptian government said the mastermind was Palestinian and the targets appeared to be Israeli tourists. On August 5, 2003, a suicide bomber detonated a car bomb outside the lobby of the JW Marriott Hotel in Indonesian capital Jakarta killing 12 people, including one Danish, one Dutch and two Chinese and injuring 150.
The hotel was viewed as a symbol of Western power and thus been the prime focus of terrorists. Another reason why hotels are being targeted is because of the kind of clientele, experts say.
Mumbai being the financial capital of the country at the centre of economic decision making there are numerous important delegates checking into one of the seven or five star hotels in the city.
Rather than hijacking planes as in September 11, or smuggling delicately wired car bombs into a city, the Mumbai gunmen chose a frontal style of armed assault, killing more than 100 people, wounding around 250 and causing immense panic in a thriving city of 13 million.
Security specialists say the attack was probably months in the planning and appears to have been finely tuned in its execution, but it ultimately relied on only an estimated 25 gunmen lightly armed with assault rifles and hand-grenades.
Their ability to roam around and sustain the attack, while all the while being willing to die in the onslaught, made it all the more difficult to combat and far more drawn out than an instantaneous suicide bomb attack might have been.
"It's virtually impossible to stop 20 guys with guns from attacking anywhere in the world if they are prepared to die," said Sajjan Gohel, an analyst with the Asia-Pacific Foundation, an independent security and intelligence group based in London.
"That is the thing about the fedayeen strategy," he said, using an Arabic term used to describe self-sacrificial gunmen who have operated in Iraq, Kashmir and across the Muslim world.
"It's even more effective than a suicide mission. With a suicide mission, you blow up your explosives and you're gone. With a fedayeen attack, you try to last out as long as possible, killing as many people as possible," he told Reuters.
Nearly 20 hours after the attack began late on Wednesday night, Indian soldiers and the militants were still exchanging gunfire and more than 100 people were trapped inside the Taj Mahal hotel, one of two five-star hotels popular with Western tourists and businessmen that were targeted in the assault.
Indian authorities closed stock, bond and foreign exchange markets, schools were shuttered and panicked foreigners on holiday or on business were desperate to flee, reducing India's business powerhouse to a tense, semi-warzone.
"Men armed with automatic weapons are able to run amok and keep the situation going for much, much longer," Henry Wilkinson, a senior analyst with Janusian Security Risk Management, a London-based consultancy, told Reuters.
"Whether it's intended or not, that creates an extended drama which is all the more terrifying."
Given the boldness of the assault, its high-level of planning and the fact that foreigners were specifically targeted, security specialists believe there is likely to have been a degree of inspiration from or link to external groups allied to Al Qaeda, such as the Pakistan-based Lashkar-e-Taiba.
They say the tactics are different from the more common, post-9/11 attacks seen in Iraq and Afghanistan, but still bear similar hallmarks.
"It's very interesting that they didn't go in using car bombs, it was more of a direct armed assault on a city," said Wilkinson. "It's very reminiscent of the attacks in Saudi Arabia in 2003, when the gunmen were going around trying to find Westerners and kill them."
Wilkinson highlighted the fact the Mumbai gunmen appeared to have used only assault rifles and hand-grenades, giving them much more mobility and freeing them up to take hostages.
"I would suggest that using guns and hand-grenades was a deliberate choice... The amount of planning and training they must have done to carry out such an attack is impressive."
Such an assault might be mounted virtually anywhere in the world, he said, making cities in Europe and the United States vulnerable, even if such an outcome remains unlikely.
In London in 2005 four suicide bombers killed 52 people on public transport and brought the city to a standstill.
Both attacks underline just how hard it is for democratic states to protect themselves against such attacks without draconian security measures and powerful intelligence.
"I can't see any reason -- if there is a terrorist group that has the capability... attacks like this in Europe or the United States can't be discounted," he said.
One advantage for Indian authorities and any intelligence services called in to help investigate the Mumbai attacks is that at least nine gunmen are reported to have been seized.
In a suicide bombing, forensics can help investigators establish only so much. In this case, those detained are likely to reveal much more intelligence about who plotted the attack.
"The fact that a few of them have been seized is highly significant," said Wilkinson. "I think a lot more information about these attacks and who was behind them is going to come to light."
Who is behind the attacks?
Witnesses say the attackers were young South Asian men speaking Hindi or Urdu, suggesting they are probably members of an Indian militant group rather than foreigners.
The attacks were claimed by a previously unknown group calling itself the Deccan Mujahideen in an e-mail to news organisations. Deccan is an area of southern India. Analysts say that while it is not clear whether the claim is genuine, the attacks were most likely carried out by a group called the Indian Mujahideen. The name used in the claim of responsibility suggests the attackers could be members of a south Indian offshoot or cell of the Indian Mujahideen.
Who are the Indian Mujahideen?
Indian police say the Indian Mujahideen is an offshoot of the banned Students' Islamic Movement of India (SIMI), but that local Muslims appear to have been given training and backing from militant groups in neighbouring Pakistan and Bangladesh.
SIMI has been blamed by police for almost every major bomb attack in India, including explosions on commuter trains in Mumbai two years ago that killed 187 people.
Police said the Indian Mujahideen may also include former members of th Bangladeshi militant group Harkat-ul-Jihad al Islami.
In an e-mail to various media in September, the group denounced Mumbai's police anti-terrorist squad, accusing them of harassing Muslims.
"If this is the degree your arrogance has reached, and if you think that by these stunts you can scare us, then let the Indian Mujahideen warn all the people of Mumbai that whatever deadly attacks Mumbaikars will face in future, their responsibility would lie with the Mumbai ATS and their guardians," it said.
The Indian Mujahideen have made credible claims of responsibility for most of the recent major attacks on civilian targets in India over the past two years.
The Mumbai attacks appear to have been carefully co-ordinated, well-planned and involved a large number of attackers. A high level of sophistication has also been a hallmark of previous attacks by the Indian Mujahideen.
The Mumbai attacks also focused clearly on tourist targets, including two luxury hotels and a famous cafe.
In May, the Indian Mujahideen made a specific threat to attack tourist sites in India unless the government stopped supporting the United States in the international arena.
The threat was made in an e-mail claiming responsibility for bomb attacks that killed 63 people in the tourist city of Jaipur. The e-mail, signed by "Guru Al-Hindi", declared "open war against India" and included the serial number of one of the bicycles on which the bombs were left.
Witnesses in Mumbai say the attackers in Mumbai singled out Americans and Britons in their attacks.
The group first emerged during a wave of bombings in the northern state of Uttar Pradesh in November 2007, sending an e-mail to media outlets just before some of the bombs exploded. Their next attacks were the Jaipur blasts.
On July 25, eight small bomb attacks in the IT city of Bangalore on July 25 that killed at least one person and wounded 15. There was no known claim of responsibility.
But a day later, at least 16 bombs exploded in Ahmedabad in the state of Gujarat, killing 45 and wounding 161. Shortly before the blasts, an e-mail in the name of the Indian Mujahideen was sent to local media warning that people would soon "feel the terror of death" in the name of Allah.
It said the attacks were revenge for the Gujarat riots of 2002, when around 2,500 people, most of them Muslims, were killed by Hindu mobs. A later e-mail accused several state governments of harassing, imprisoning and torturing Muslims and threatened consequences if they did not stop.
In September, at least five bombs exploded in crowded markets and streets in New Delhi, killing at least 18 people. The Indian Mujahideen sent out an e-mail moments after the first blast in New Delhi, saying the explosions were to prove its capability to strike in the most secure of Indian cities.
All previous incidents in which the Indian Mujahideen are suspected of involvement involved co-ordinated serial bombs. The Mumbai attacks also show clear signs of co-ordination but were carried out by gunmen, some carrying grenades.
The tactics, a military-style assault on soft targets, singling out foreigners, and taking hostages, are rare and do not fit the usual methods of militant attacks on civilian areas.
However, similar attacks have been carried out before, notably the May 2004 attacks in the eastern Saudi city of Khobar.
Gunmen attacked two oil industry installations and a foreign workers' housing complex in the city, taking more than 50 hostages and killing 22 of them. The attackers asked hostages whether they were Christian or Muslim before deciding whom to kill.
Some, including a blogger named Vinu, were furiously uploading photos of damage from the attacks that killed at least 101 people and injured 287, with scores of foreigners, including Westerners trapped in luxury hotels.
Images of the attacks also surfaced on photo-sharing website Flickr.Some bloggers provided running descriptions and commentaries from near the action, while others vented emotions."I've been tweeting almost all night, too, from Mumbai. Upset and angry and bereft," said businesswoman Dina Mehta on her blog, www.dinamehta.com/blog.Twitter, the wildly popular "micro-blogging" site where users communicate with short "tweets" of 140 characters or less, saw intense activity on Thursday.
Within five seconds at 0748 GMT, 80 messages were posted. Posts included offers of help for the media and updates on the situation."One terrorist has jumped from Nariman house building to Chabad house - group of police commandos have arrived on scene," one tweeter wrote.
Twitter came in for some criticism as well in the blogosphere for divulging too many details that could prove helpful to the gunmen holed up in the hotels with their hostages and who may have been been monitoring blog sites.
"It's a terrorist strike. Not entertainment. So tweeters, please be responsible with your tweets," said one blogger identified as primaveron@mumbai.Several local Indian news channels were reported to have carried a live feed of the twitter updates on the Mumbai attacks.
As the hubs of activities in the city are still under the gun-wielding terrorists, the impact of these heinous crimes against humanity is evidently being reflected in the city's business affairs and the IT sector is no exception.
As a reflection of the terror siege, many IT companies have closed their shutters for the day and some have reportedly asked their employees to work from home.
Netcore Slutions Pvt Ltd, an IT product and service company based in Mumbai, decided to down the shutter for the day considering the situation in the city.
"Whatever has happened is unfortunate. And we have decided not to work today considering the security of the employees," said Abhijit Saxena, CEO, Netcore.
However, he hoped that things would normalize soon and people would be back to work. "After all, terror attack is not something exclusive to India and hence I don't think it would have any major impact on the industry or the economic scenario of the country as such," said Saxena.
TCS House near CST, the main office of Tata Consultancy Services in Mumbai has also downed the shutters today considering the extremely panicking situation. However, the TCS offices in north Mumbai are working.
"TCS employees that work out of our offices in South Mumbai can operate out of any of the offices in North Mumbai until further advise," Pradipta Bagchi, senior general manager, Corporate Communications, TCS said a in a statement.
"A team of TCS experts continue to monitor the situation continuously and the company has very well established business continuity plans in place should the need arise to implement them," he added.
Meanwhile, Maharashtra Government has declared a general holiday for today. The terror strike has also resulted in the cancellation of many IT events in the city. Sun Microsystems, which had planned to announce its new initiative targeted at emerging markets sales region in India, has been called off the event for the time being.
Another such event of Sony Ericsson slated for today, which was set at ITC Grand Central in Parel, Mumbai's central suburb has also been cancelled.
It appears that the IT businesses are under the 'wait and watch' mood till the tense situation in the financial capital improves and the business is back to normalcy.
At least 101 people were killed by gunmen in the attacks on some of Mumbai's top hotels, a popular cafe, a busy railway station and other locations. Hostages were taken in two of the hotels.
"This does not have an economic component. It's an unfortunate event. These type of things have happened in New York and other major cities," Nath told Reuters by telephone.
"(There will be) no slowdown in investment flows."
The global downturn has already rattled Indian financial markets and a credit squeeze has prompted the government and central bank to take a series of measures to lift sagging growth.
The Reserve Bank expects the economy to expand by 7.5-8 percent in the 2008-09 fiscal year, slowing from 9 percent posted in the last three years.
India's capital market regulator said the country's two major stock exchanges would remain closed on Thursday.
This is the view of Wipro CFO Suresh Senapaty during a television interview at the Reuters India Investment summit in Bangalore.
To check out the video interview...click on the video below:
IBM's India BPO continues to hire and has not yet seen any impact of a slowdown.
That is the view of Sandip Patel, managing partner of IBM's global business services in India and South Asia, during a television interview at the Reuters India Investment Summit in Bangalore.
To check out the video interview...click on the link below:
In addition, the troubled insurance company said its next 50 highest-ranked executives would not receive salary increases through 2009.
AIG’s cutbacks on executive pay came after Cuomo questioned last week whether the company actually planned to give out raises and bonuses to top executives, especially in light of the federal government’s $150 billion bailout of the company.
The company said it was taking steps to ensure that no government money would be used for bonuses and cash awards to its 60 top executives.
Source: NYT News Service
Marcel Ospel, the former chairman of the board at the Swiss bank, and Stephan Haeringer and Marco Suter, two former directors, said they would give up pay promised them after the bank reported nearly $50 billion in losses and received even more than that in financial support from the Swiss government.
“With the involvement of the Swiss government, I realized that decisive action was required on my part,” Ospel said in a statement. “I hope that my action will help to resolve a situation that was inconceivable to me until a short time ago,” he said.
Ospel will contribute more than twothirds of the total; the balance will be paid by Haeringer and Suter.
In response, UBS issued a very brief statement: “We welcome the decision.” As indeed UBS might. The former UBS executives had been the focus of intense public criticism after the bank reported stunning losses on devastating subprimerelated investments.
This month, the bank announced that its chairman, Peter Kurer; its chief executive, Marcel Rohner; and members of its executive board would also have a bonus-free 2008.
Source: NYT News Service
Wednesday, November 26, 2008
Guruji.com, Indian’s Internet search engine, focused on providing better search results to the Indian consumers is eyeing to emerge among the ‘Top 3’ search engines by 2011. The search engine major is presently growing at 20-30 percent per month and is eyeing one million searches in the future.
According to Internet and Mobile Association of India (IMAI), the search engine market in India is presently worth $50 million in 2007 and is expected to grow to $100-$200 in the next 5-6 years time. However, China is far ahead of India and has already touched the $100 million mark.
Anurag Dod, founder and CEO of Guruji says, “we want to emerge as a dominant player in the search engine space and for this we are leveraging on proprietary algorithms and content for the Indian consumers.”
Guruji.com was founded by Anurag Dod and Gaurav Mishra, two Indian Institute of Technology, Delhi graduates in 2006 by the backing of venture capitalists Sequoia Capital. “It is the first time that India is seeing a "desi" search engine,” he said.
As per the latest Commscope report, the English search engine market is dominated by basically by six players namely – Google, Yahoo, ASK, MSN, and Guruji among others. In fact, Aaidu.com, a search engine in Chinese and Daum and Naver are the dominant search players (Korea) and are more prominant than Yahoo, Google in these countries. So is Yandex in Russia. “We are now focusing on the Indian consumers and so have extensive searches on cricket, music, images, city focussed seaches like movie tickets,” says Dod.
Even though, we are catering to the English speaking market, still 80 percent of the traffic comes from India while the rest 20 percent is spread across US, Middle East, UK etc.Dod says Yahoo was initially a portal site and in December 2003, that bought Inktom followed by three more companies Overture, which has bought Alta vista followed by Fast. So Yahoo’s search engine is a combination of these three companies. MSN is mainly a portal site player and less of search engine, ASK acquired Teoma, while Google that has a 80 percent market share in the search engine space is the only pure search engine player.
We initially started with web search, city search in 2006 and moved to local laungages –Hindi, Tamil, Telugu, Malayalam in 2007. Later on we added cricket and music that has a large customer base in India. So will be offering live match scores updates and historic cricket database that is good for data mining, says Dod.
. “We are looking at raising funds but are presently adequately funded and will sail through this global recession.” Guruji secured an investment of $7 million from Sequoia Capital that is the same venture capitalist firm that initially funded Google as well.
The company claims that they remain unaffected by this global recession. “Our organization the attrition level is 0 percent for the past two years and will grow from the present employee strenght of 63 to 100 over the next 1.5 years. Besides we have also opened an office in Mumbai.”
The salaries we offer is very competitive to any product design company like Yahoo, Microsoft, Google, Sun, Cisco and much above service companies like TCS, Wipro and Infosys, Dod claims.
Earlier search engine companies like khoj.com focused on subscription based unlike Guruji that is focused on news, features, e-commerce, education, music, cricket, technology that are free.
Over the next few years, the company shall focus on entertainment, which is a big category besides music, images tickets by enhancing the capabilities. The company has invested majorly in the web crawlers software that was locally developed,” Dod adds.
Now you can get answers to all of this and more through a simple SMS at the price of your regular SMS* across India.
Cricket scores and Astro updates on SMS brought a smile to a lot of us, only until we saw the bill at the end of the month. And this was after we were also trying to remember multiple input methods. After speaking to many users about their 'sms' information woes ,we at Google ,have come up with a newer version of Google SMS Search.
The product has been reincarnated, with a new number and tons of new features. Now you can SMS your query to 9773300000 at the cost of a regular SMS and get instant answers. Launched nationally, this service is available across all operators on both GSM and CDMA mobile phones.
The list of features available on Google SMS search is given below. What we do want to add is that searching on SMS will be MUCH easier NOW. No longer do you need to remember complicated strings to put before your query, you can search as if you are searching on Google web search – we will do all the hard work to understand your query and give you the best results on SMS. Hope you will enjoy the change!
SMS Search features-
1.Cricket Scores:Simply SMS "cri" or "cricket" or "cricket India" to receive latest cricket scores.
2.Indian Railways:Send your PNR number to get latest status of your PNR (confirmed/RAC/current waitlist status). Or send "trains between mumbai to delhi" to know trains and get further details of train schedule.
3.Stock Quotes:SMS "Company name quote" to receive stock quotes from BSE. e.g. "reliance stock".
4.Horoscope:Simply send your sunsign (e.g. Virgo) to receive your day's horoscope
5.Local Business Search:Do local search on SMS (e.g. categories such as "restaurants indira nagar bangalore" or businesses such as "pizza hut koramangala"). This is available across 34 cities - Ahmedabad, Bangalore, Kolkatta, Chennai, Delhi, Mumbai, Hyderabad, Pune, Noida,Gurgaon, Faridabad, Vadodara, Surat, Kanpur, Jaipur, Chandigarh, Nagpur, Rajkot, Ernakulam, Cochin, Gaziabad, Bhuwneshwar, Aurangabad, Lucknow, Nashik, Indore, Panaji, Bhopal, Agra, Guntur, Visakhapatnam, Jalandhar, Amritsar, Coimbatore.
6.News:Send "news" or "business news" to receive latest news.
7.Movie Showtimes:Send "movies delhi" or "golmaal returns delhi" and get movie rating and movie showtimes.
8. Flight status: Flight status for Jet, Kingfisher, Indigo & Spicejet. Simply send "9w502", "It 302".
9.Definitions:Send "define " e.g. "define zenith", "define inflation".
10.Weather:e.g. "weather Delhi".
11.Calculator:"1 kilo in pound".
12.Currency Conversion: "5000 inr in usd".
13.Facts:e.g. "GDP of india" or "population of bangalore".
*Normal SMS rates apply and are determined by the service package provided by the mobile operator.
"Given the state of the economy, I recently decided to jump on board," Landon told Reuters. "Professional networking is a 'must do' during unstable economic times."
The economic crisis slamming firms across the globe has sparked a spike in usage of professional networks -- Xing and LinkedIn are key sites -- as people hedge against losing work and laid-off employees seek jobs.
U.S. unemployment hit a new 14-year high in October and according to online job advertising firm Monster, recruitment activity on the Web plunged to its lowest level in nearly three years. Jobless rates are also rising in Europe.
Traffic on the world's top professional Web networks has surged since the financial crisis started to make headlines, with top player, privately held LinkedIn, notching 25 percent more registrations in September than forecast.
"Nobody has ever seen anything like this before," said Kevin Eyres, head of LinkedIn's operations in Europe. "Now we are growing by almost one new user each second."
Membership on LinkedIn has jumped to more than 31 million from 18 million at the start of the year, growing fastest in the financial services, media, education and technology fields, Eyres said. The firm has not disclosed any financial details.
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A Citigroup spokesperson, Stephen Cohen, said on Monday that details of the pay plan were being worked out, and that no deadline for its submission has yet been announced. He declined to comment on which executives from the bank, which is getting $20 billion in new capital and an agreement from the government to shoulder the bulk of potential losses from $306 billion of toxic assets, would be subject to the pay rules.
Government officials have said more details on the compensation arrangement would be available next week. Citigroup’s chief financial officer, Gary Crittenden, said on CNBC television on Monday that the pay plan would affect 2008 compensation for some executives but offered few other details besides saying, “I know it will be done the right way.”
The Charlotte, North Carolina-based bank further heightened its exposure to home loans by acquiring Countrywide Financial, the largest US independent mortgage lender and agreeing to buy Merrill Lynch, which owns the world’s largest retail brokerage.
If losses on mortgages and other debt securities mount significantly, the bank may see the ratio of equity to risk-weighted assets, known as Tier-1 capital, dwindle to alarmingly low levels.
“I would expect there are more banks who are in dire straits and more who can expect to be helped,” said Michael Farr, president of investment management company Farr, Miller & Washington in Washington, DC. “The share price makes it look like Bank of America might be next in line,” he said.
Before Monday’s stock market rally, Bank of America shares had lost 52% in November alone, making them the second biggest decliner for the month in the KBW Banks index after Citigroup. Analysts at independent research company CreditSights forecast that in a scenario where the commercial and residential real estate markets really tank beyond banks’ expectations, Bank of America would have a Tier-1 capital ratio of 7.15%.
The minimum that regulators seek to consider a bank “well capitalized” is 6%, but any ratio near or below 7% tends to spook investors. Bank of America declined comment. CreditSights also expressed concern about Wells Fargo, which it said would have a Tier-1 capital ratio of 6.98% under its worst case scenario. Wells Fargo recently agreed to buy Wachovia.
Under the same assumptions, and before the government’s latest investment, Citigroup would have a Tier-1 capital ratio of 8.64%.
American Express CEO for Citi Bank?
Vikram pandit may thank the TINA (there is no alternative) factor for still being in job as Citigroup CEO, as the US government reportedly did not push for his ouster in its rescue package. A day after the mega rescue plan, it has now come out that the authorities discussed whether to replace Pandit as Citi CEO, but there was an disagreement over the issue. A report from a US business daily has said that the name of American Express CEO Kenneth Chenault had emerged as a possible replacement.
Gartner said that its clients were making these savings from reduced application expense and lower implementation costs.
Much of the savings that organisations are making is a result of a lesser dependence on large external service providers (ESPs), which typically help businesses improve customer processes as part of the CRM engagement but which play less of a role when SaaS is involved.
Among the top 100 SaaS deployments in 2007 and 2008, fewer than 10 per cent involved a large system integrator or an external enterprise business consulting team. This would indicate that the role of ESPs in designing, measuring and driving CRM process improvements will diminish at enterprises deploying SaaS solutions for CRM through 2012.
"Due to the increasing use of SaaS for CRM, ESPs -- which include business consulting and system integration services -- will have less influence on CRM processes as SaaS accelerates," said Michael Maoz, vice president and distinguished analyst at Gartner. "This could result in an erosion of customer satisfaction among large enterprises that invest in SaaS solutions unless they invest their own resources to measure and manage long-term CRM process improvements."
Gartner expects a similar drop in customer experience scores from midsize businesses. They're a stronger target for SaaS offerings, and they rarely use ESPs for business consulting skills.
Maoz said that many projects that involve complex customer service contact centers are reported to be "on hold" until better references are available from the large enterprise application vendors that are in the process of releasing a new generation of their products.
However, he said that SaaS is the deployment model of choice for an increasing number of projects. Gartner predicts that all forms of SaaS-delivered customer service applications in the call center will grow by more than 20 per cent per year through 2012, and this will deliver significant savings. By 2012, 30 per cent of new customer service and support application investments will be through the SaaS model.
Because SaaS applications lack sophistication in BPM and process design, and due to the absence of ESPs offering business process advice, the growing spread of SaaS CRM applications threatens CRM efforts.
"There will be significant savings in infrastructure and resource costs in migrating to SaaS, but to put that money to work in customer process improvements, careful performance measurement of 'before' and 'after' project spending will need to be performed," Maoz said. "If this does not happen, then the savings will be shortsighted, as they will not improve the relationship with the end customer."
In a difficult economic climate, it stands to reason that many businesses will make similar choices and choose not to measure the benefits of the SaaS model. Gartner's advice to organisations deploying SaaS for CRM is to ask the software solution provider for its CRM process credentials and those of its ESP partners.
Tuesday, November 25, 2008
Among 12 to 14 year olds, 100 percent of British youth use the Internet, followed by Israel at 98 percent, the Czech Republic and Macao and 96 percent and Canada at 95 percent, according to the World Internet report by the Center for the Digital Future.
By contrast, only 88 percent of Americans of the same age had access, trailed by Hungary and Singapore, where more than seven in 10 young people use the Internet.
Separately, a bulletin by a software company showed mobile phone access to the Internet burgeoning outside the United States, especially in Southeast Asia.
For the report by the Center for the Digital Future, headed by Jeff Cole at the University of Southern California, researchers in 13 countries talked to more than 25,000 people in Asia, Australia, North and South America and Europe in late 2007 and early 2008.
UNIVERSAL SERVICE LACKING
The Center report showed the United States trails other countries in older groups, too. U.S. Internet usage by those over 18 runs behind Sweden, New Zealand and Canada. Recently, U.S. Federal Communications Commission Chairman Kevin Martin unsuccessfully proposed a universal service fund to promote high-speed Internet access, similar to the one for telephone service.
Martin also advocates new spectrum for wireless in the United States to facilitate Internet access and held a joint news conference with Larry Page, a founder of Google Inc, to promote the idea.
The Center report, issued annually in the United States and for the first time worldwide, said mobile phones are used for Internet access "by a very small percentage of users, with the exception of the United Kingdom."
But that may be out of date. A monthly bulletin issued by Norwegian software maker Opera Software shows mobile phone Internet access exploding.
Opera said that, during 2008, use of its Mini browser on mobile phones more than tripled, reaching 5 billion page views in October. The increase is especially marked in Southeast Asia and also showed spikes in Africa and the Middle East.
In Indonesia, user growth tripled. Page views there increased eight-fold and in the Philippines by 10-fold.
"In many of these Southeast Asian countries the mobile Web exists not because it complements existing means of access, but rather because it replaces them," Opera added.
'A recession is defined as two successive quarters of contraction of GDP (gross domestic product). I wish to emphasise that India is nowhere near a recession,' Chidambaram told the annual Economic Editor's Conference.
He said the financial crisis that has enveloped the world since 2007 had become worse with many rich nations like Germany, Japan, Britain and the Netherlands officially in recession, and many more, including the US and France, expected to join them soon.
'In our view, we may expect a moderation in growth rate in the current year to a level between 7 and 8 percent. But India would still be the second fastest growing, large economy in the world,' Chidambaram added.
India still faces a difficult situation, he said but promised every possible fiscal and monetary measure to contain the impact of the global crisis on the domestic economy.
According to the finance minister, sectors like manufacturing, communications, trade, agriculture and construction that have been the major drivers of the Indian economy in the past, were likely to see a moderation of growth.
As a result, India needed more investment and quicker implementation of projects covering roads, ports, airports, power, education, health and skill development to spur growth, he said.
'Increasing expenditure in the infrastructure sector is an important part of the counter cyclical measures that are being contemplated to address the impact of the global slowdown,' he said.
'On the whole, the general outlook continues to be one of cautious optimism.'
Chidambaram also said that while the previous National Democratic Alliance (NDA) government was claiming high economic growth rate during its regime, the reality was far removed.
'At best, the growth rate during that period was modest. In particular, 2002-03 recorded the lowest growth rate after the beginning of the reforms in 1991-92,' he said, while listing the growth rates since 1997-98.
'As a consequence, the growth rate in 2003-04 appears impressive. But what is important is the average for that period. The average was only 5.7 percent.'
The finance minister said India's external sector, too, continued to be robust and reflected the strengths of the economy in 2007-08. 'In the current fiscal, merchandise trade data is available for April-September 2008. Exports and imports have registered an impressive growth of 30.9 percent and 38.6 percent, respectively,' he said.
He said there was a deceleration, but that was being addressed by diversifying exports to other markets. 'For example, during the first quarter of this financial year there has been an increase in the share of India's exports to China, Singapore, the Netherlands and Saudi Arabia.'
“Amazing how much damage the lame ducks can do in the time remaining.” — Paul Krugman, Noble Prize Winner in Economics, on the bailout of Citigroup by the incumbent US government
America’s cup of woes is spilling over, rather messily, with its long-venerated financial institutions suddenly faced with obliteration and forced to seek a bailout.
Citigroup, the latest in a list getting longer, has just been promised a $20 billion cash injection, besides a whopping government guarantee for its troubled assets and mortgages.
As its stock price fell 60% over last week, the world’s largest financial services firm with revenues of around $159 billion last year, kept repeating over and over that it had “very strong capital.”
US govt agrees to $306-b rescue plan for Citigroup
It took just one weekend for it to go from very strong to very weak, necessitating a bailout of this order.
On Friday, the stock tumbled by over 60% to $3.77, down from a peak of $56 in 2006.
Predictably, the bailout news did it some good on Monday. At the time of writing this piece, the stock had gained around 61% to $6.08 on the New York Stock Exchange.
Barclays gets $10 b as Citi rescue resounds
DNA Money attempts an overview of the situation, the intervention and its implications near and far.
What’s the rescue all about?
The US government has decided to guarantee $306 billion of troubled mortgages and other assets of Citigroup. The Treasury department will also inject $20 billion of cash into the firm.
This will be over and above the $25 billion Citigroup got under the Troubled Asset Relief Programme (TARP, as the $700 billion bailout package is officially named).
On its part, the firm will issue preferred shares worth $27 billion to the government and pay a dividend of 8% a year.
Analysts following the firm have been expecting this move. “While the conventional wisdom says Citi is too big to fail, the reality is it’s too big to manage,” wrote Vernon Hill, founder and former chairman, president, and chief executive officer of Commerce Bancorp on www. seekingalpha.com a couple of days back.
“As a result, the company has become a publicly traded incarnation of Murphy’s Law: anything that can go wrong almost certainly will — and probably sooner rather than later. And $25 billion in TARP money isn’t going to do much to turn things around.”
What will be the cost of the bailout?
Citibank will have to pay a dividend of $2.16 billion per year to the government on the preferred shares. It will also have to pay $1.25 billion @5% on the $25 billion it received through TARP. This means the bank will have to make a profit of more than $3.41 billion before the shareholders can take home anything.
Citigroup shareholders will be diluted in the “near term by the cost of the incremental preferred stock,” Morgan Stanley analysts Betsy Graseck and Cheryl Pate wrote in a report on Monday.
Who will absorb the losses?
Citigroup will have to absorb the losses to the extent of $29 billion, including the reserves. Beyond that, any losses will be shared between the government and Citi. The government, through its three agencies — the Treasury Department, the Federal Reserve and the Federal Deposit Insurance Corp — will take on 90% of the losses, leaving 10% for Citi to bear.
What are the conditions associated with the bailout?
Under the terms of the deal, the institution has been prohibited from paying common stock dividends of more than $.01 per share per quarter, for the next three years, without the approval of the US government. Further, any executive compensation plan including bonuses to employees must get the approval of the US government.
But experts aren’t happy with this move. Robert Reich, a former labour secretary of the US government under Bill Clinton wrote on his blog : “This is not a particularly good deal for American taxpayers, but it is a marvellous deal for Citi… The senior executives of Citi, including those who have served at the highest levels in the US government, have done their jobs exceedingly well.”
Ironically, the same executives who got Citi into the mess in the first place, continue.
Who was responsible for the mess?
Like other banks and financial institutions in the US, Citigroup also got carried away while investing in sub-prime mortgages. Also, its risk management system had stopped working.
New York Times said in a report said that Charles O Prince III, Citigroup’s chief executive before Vikram Pandit took over, learnt for the first time in September 2007 that the bank owed $43 billion in mortgage related assets. At that point, Prince asked Thomas G Maheras who oversaw trading at the bank if things were okay.
Maheras replied in the positive, then and every time the question cropped up. By the time the risk management team of the bank got around to assessing the risk related to these mortgages, it was too late. The bank had to announce billions of dollars in losses.
Analysts are even questioning the business model of Citigroup. They feel the company had spread itself too thin. “The whole idea behind Citigroup was flawed from the start. Unbeatable scale in financial services? Forget it. We now see the good Citi’s size has done for investors: the company has an incoherent, unworkable business model. It is run by a senior management team that’s largely unproven, with scant experience, operating a large financial institution,” wrote Hill.
Will the bailout and the guarantee be enough?
This is a tricky question. Citigroup has assets worth nearly $2 trillion on its books. It also has nearly $1.23 trillion in off-balance sheet assets.
“The roughly $300 billion pool of assets that are included in the rescue plan represent only a sliver of the company’s more than $3 trillion in assets, including its holdings in off-balance-sheet entities. Jitters about such “hidden” assets helped trigger the nose-dive in Citigroup’s stock last week. Among the off-balance-sheet assets are $667 billion in mortgage-related securities,” the Wall Street Journal reported.
Also, the troubled assets are not being taken off Citigroup’s balance sheet, and this has not gone down well with analysts.
Analysts are sceptical of the bailout.
“No one knows who’s going to lead it, over the medium term; hell, nobody knows who’s going to own it, over the medium term. The US government might have guaranteed a chunk of Citi’s assets, but it’s done nothing about Citi’s liabilities, including hundreds of billions of dollars in unguaranteed deposits,” Felix Salmon, a widely followed analyst in the US wrote on www.seekingalpha.com.
“Nothing in today’s announcement makes Citi immune to a bank run, which means there’s a very good chance the stock will remain under significant pressure. Given that it was the tumbling stock price which was responsible for this deal in the first place, one wonders if there was any point to this exercise at all,” Salmon wrote.
Analysts also feel that after the Citi bailout, it will be very difficult for the US government not to bail out the likes of General Motors, where so much more is at stake.
Source: DNA Money
Monday, November 24, 2008
BT announced that the launch of its “Sustainable Development Index – an assessment of business performance in India”. The SD index has been developed in partnership with GlobeScan, an independent public opinion and stakeholder research company. Through a survey of senior opinion leaders across India the index is a means to measure the performance of business in India in the progression towards sustainable development over time.
The initiative was officially launched by Dr. R. K. Pachauri, Director General, TERI and Allen Ma, President, BT Asia Pacific at a news conference in New Delhi, India.
The SD index report reveals that although Indian companies are taking positive steps towards sustainable development, the overall performance of the corporate sector is disappointing. 46 per cent of India's opinion leaders surveyed blame a lack of awareness around sustainable development issues as the main cause of inaction. Some 40 per cent of opinion leaders also cited a lack of political will as a major obstacle to making significant progress in this area.
According to the report, this lack of action means India lags behind China, Japan and the European Union when it comes to addressing key issues, such as tackling climate change, corporate governance practices and water resource management.
Interestingly, the country's largest cities were seen as making the strongest moves to improve sustainable development practices. Whilst there are negative views around India's progress, a majority of opinion leaders (57 per cent) feel that companies in India are now more active with regard to sustainable development compared to one year ago.
In fact, the corporate sector is considered to have made significantly stronger progress than either government or the general public. Allen Ma, President, BT Asia Pacific said: “At BT, we absolutely view sustainability as an international issue and businesses cannot succeed in societies that fail. India is rapidly becoming a global centre for information and communications technology development, and boasts a high economic growth rate. It is vital that this commercial success is matched by a commitment to, and leadership in, corporate responsibility. We are constantly looking at the impact of our core business activities across the spectrum of social, environmental and economic issues. Through the launch of the BT Sustainable Development Index we hope that other organisations in India will do the same.”
The most frequently mentioned corporate leaders in sustainable development in India are: TATA Group (named by 31 per cent of respondents), Reliance (13 per cent) and Infosys (10 per cent).
Nitin Desai, Former United Nations Under-Secretary-General for Economic and Social Affairs and Advisor to BT’s SD Index, said: “There are significant social, environmental and economic challenges facing the world’s second most populous country and India’s transition to sustainable development is in the world’s interest. Given the importance of the issues at stake, there is a clear need for initiatives such as BT’s to help channel corporate sustainability efforts to where they can have the most beneficial impact. We need to be able to carefully monitor where corporate successes are occurring and to learn from them. We also need to reliably know which aspects of sustainable development most urgently require corporate action"
The internet is proving as appealing a shopping destination as the likes of shopping centres in Tsim Sha Tsui in Hong Kong or Orchard Road in Singapore. According to a Visa e-Commerce Tracking Survey, nearly 80 percent of internet users surveyed in Asia Pacific say they made an online transaction and spent an average of over US$3,000 each in the past 12 months.
The top three draws for shopping online were being able to shop at any time (88 percent), at the best prices (83 percent), and being able to shop easily (82 percent). According to the respondents, their most commonly made online purchases were digital entertainment (59 percent), travel (51 percent) and fashion (49 percent).
Among the wide range of products and services available on the internet, Asia Pacific online shoppers surveyed reported that they spent the most on travel services with an average spending of $812 in the last 12 months. Travel items included airline and rail tickets, hotel accommodation and travel packages.
Mohamad Hafidz, regional head, e-Commerce, Asia Pacific, Visa, said: “Nearly a quarter of the world's population – roughly 1.4 billion people – used the internet on a regular basis in 2008 and in Asia Pacific, on average, a person spent about 20.2 hours a month online. Our own survey has revealed online consumers in Asia Pacific recognize the convenience of online shopping as reflected in the high percentage of internet users who buy a wide range of products, from that for everyday use to the occasional high-value item online.”
In the region, Japanese and Koreans surveyed emerged as the most frequent shoppers, with 99 percent and 93 percent respectively having made an online purchase over the last 12 months. However, Australians were the biggest online spenders with an average 12-month tab of $4,160 – $680 more than Singaporeans, who are the next biggest online spenders.
In India, purchasing digital downloads was the most popular form of consumer e-commerce. Seventy-six percent of respondents from India, the highest among Asia Pacific, have bought a form of digital entertainment over the internet in the last 12 months. Music downloads (63 percent) emerged as the most popular digital entertainment purchase.
The internet has also brought about an increase in the number of cross-border transactions with 75 percent of internet users surveyed in Hong Kong having bought an item from an overseas website in the preceding 12 months. Visa (both credit and debit cards) was their most popular payment method with nearly 60 percent of online shoppers surveyed choosing to pay with Visa. Mohamad added: “With almost four in five internet users buying online, people in Asia Pacific are taking full advantage of the global shopping experience that the internet provides.”
Past 12 months online shopping spending by website category – Top 10 in Asia Pacific
1 Airlines / airline tickets
2 Online travel agents
3 Travel accommodation
4 Clothes / shoes
5 Car / motorcycle
6 Computer hardware (PC)
7 Food and groceries
8 Electrical appliances (TV, stereo, etc)
9 White goods (refrigerator, dishwasher, etc)
10 Other types of transportation for traveling
Average online spending in the past 12 months
1 Australia - US$4,160
2 Singapore - US$3,480
3 Japan - US$3,175
4 South Korea -US$3,027
5 India - US$2,147
6 Hong Kong -US$1,698
Source: Visa e-Commerce Tracking Survey
The bank's focus on technology and superior margins with support from low-cost deposits will ensure profitable growth in the future. The merger of retail focused-Centurion Bank of Punjab (CBOP) with HDFC Bank effective May 23, 2008, will shore up revenues in the medium-term.
However, the synergies from the merger with start reflecting over 12-24 months, and boost profitability. Put together, the gains from organic and inorganic initiatives will help the bank sustain growth rates in excess of its historical average of 29-30 per cent, and in a profitable manner.
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The 16 Indian firms in the New York Stock Exchange and Nasdaq collectively lost 5.74 billion dollar in their market capitalisation for the week ended November 21, even as two companies gained valuation.
In recent weeks, the American markets went into a tailspin primarily due to heightened concerns of a protracted economic slowdown and declining consumer spending in the world's largest economy.
Among the 16 Indian stocks listed as American Depository Receipts, apart from HDFC Bank, another private sector lender ICICI Bank too lost more than one billion dollars of valuation.
While the market value of HDFC Bank tumbled 1.37 billion dollars, that of ICICI Bank dropped 1.12 billion dollars.
However, pharma major Dr Reddy's Laboratories and outsourcing firm Genpact added to their market capitalisation. Dr Reddy's Laboratories witnessed a rise of 37 million dollar in valuation, whereas Genpact's value increased by 4.3 million dollars.
IT bellwether Infosys' market valuation eroded by one billion dollars, while that of IT major Wipro decreased by 863 million dollars. In addition, Satyam Computer Services saw a value erosion of 457 million dollars.
Further, leading auto maker Tata Motors lost 77 million dollars and telecom entity Tata Communications saw a decline in value to the tune of 677.17 million dollars.
Other entities whose market capitalisation declined are internet firms -- Sify Technologies and Rediff.com, outsourcing entities -- WNS and EXLService Holdings, leading copper producer Sterlite Industries, telecom company Mahanagar Telephone Nigam Ltd and IT firm Patni Computer Systems.
On Friday, the major American indices -- Dow Jones Industrial Average, S&P 500 and Nasdaq Composite -- snapped its four-day losing streak to close in the positive territory.
Dow jumped 494 points to end the day at 8,046.42 points, while S&P 500 rose over six per cent to 800 points. Nasdaq Composite jumped more than five per cent to close at 1,384.35 points.
The surge in stocks was mainly due to media reports that President-elect Barack Obama would appoint Timothy Geithner as the new Treasury Secretary. Geithner is presently the President of the Federal Reserve Bank of New York.
"The US government on Sunday entered into an agreement with Citigroup to provide a package of guarantees, liquidity access, and capital," the Federal Reserve said in a statement.
As per the rescue plan, the treasury would invest $ 20 billion in Citigroup from the Troubled Asset Relief Programme in exchange for preferred stock.
Besides, the Treasury and the Federal Deposit Insurance Corporation (FDIC) would provide protection against $ 306 billion of toxic loans and securities backed by residential and commercial real estate and other such assets, which will remain on Citigroup's balance sheet, the statement added.
"As a fee for this arrangement, Citigroup will issue preferred shares to the Treasury and FDIC. In addition and if necessary, the Federal Reserve stands ready to backstop residual risk in the asset pool through a non-recourse loan," the release said.
The move comes close on the heels of the sliding 60 per cent fall in the share price of Citigroup last week.
"Citigroup will comply with enhanced executive compensation restrictions and implement the FDIC's mortgage modification program," the Federal Reserve added.
The Federal Reserve asserted that "we will continue to use all of our resources to preserve the strength of our banking institutions and promote the process of repair and recovery and to manage risks."
Once the world's most valued bank Citigroup, headed by NRI banker Vikram Pandit whose own job is reportedly under attack, had over 3,75,000 employees at the end of last year and it aims to trim it down to below three lakh, as part of efforts to cut costs and help the crisis-ridden bank return to normalcy.
Close to 25,000 jobs have already been axed so far this year.
The financial crisis, that began 15 months ago, is now taking toll and recent months have seen government taking over quasi-public mortgage firms Fannie Mae and Freddie Mae, bankruptcy of Lehman Brothers, sale of Merrill Lynch, rescue of American International Group among others.
There have been tremors on the Web that Microsoft was considering a new brand name for Live Search, and now LiveSide.Net is reporting that Microsoft has taken control of the domain name Kumo.com from its registrar and directing internal traffic to it as a test site.
The rebranded site is expected to launch early next year, according to a TechCrunch report that cited a source within the company. According to that report, very few people in the company are privy to the chosen name of the new brand and it could still change.
And while this doesn't mean that Microsoft is definitely going to adopt Kumo as its new search brand, taken together it's pretty clear evidence that Microsoft has decided to focus on revitalizing its own search effort over its former ambitions for Yahoo's search business.
Microsoft's recent move to acquire Yahoo search talent is another sign that it is beefing up its own search muscle. Microsoft confirmed that it had hired Yahoo search executive Sean Suchter to be general manager of Microsoft's Silicon Valley Search Technology Center "working on Live Search."
Kumo--a Japanese word that means "cloud" or "spider"--is certainly sexier than Windows Live Search, but is it enough to jump start Microsoft's search effort?
Sunday, November 23, 2008
The central government earlier this month announced a 4 trillion yuan stimulus package, including rail and infrastructure projects as well as increased social spending, as China strives to offset a sharp drop in demand for the exports which fuel its economy.
The People's Bank of China will need to pay more attention to the structural adjustment of the economy, as it combats the impact of the global financial crisis, governor Zhou Xiaochuan said in remarks published on the central bank's website Sunday.
He called for "more understanding of the financial requirements of the restructuring" and reiterated that small and medium enterprises, the service sector, energy-efficient projects and rural projects were priorities for financial support.
Despite strong talk of boosting China's domestic consumption, details of specific new projects and areas of spending are only slowly emerging.
The once-booming real estate sector of the emirate is showing signs of collapsing due to the global credit crisis, as prices fall sharply and buyers struggle to get mortgage loans.
"There is a sizeable increase in the number of property owners in an urgent state to sell," Robert Macnair, sales director of Dubai-based Elysian Real Estate, told the media.
"It could be they have a large payment coming up or they've seen the market dropping over the last month ... there is a real sense of urgency."
Property prices on Dubai's Palm Jumeirah island, a man-made peninsula developed by government-owned Nakheel, have fallen as much as 40 percent since September, real estate brokers said on Thursday.
Elysian this week sent out a text message to up to 40,000 mobile phones advertising distressed property sales offering a luxury six bedroom, six bathroom villa in Dubailand, a multi-billion-dollar luxury theme park.
The villa advertised costs 21 million UAE dirhams ($5.72 million) - half its original price - and will be completed in 2009, the text read.
Global Property Guide cut its long-term investment rating on Dubai residential property on Wednesday from neutral to negative due to the drop in gross rental yields from last year.
"Gross yields are now an average of 5.5 percent, significantly down from an average of 7.5 percent a year ago ... At these levels, Dubai is less attractive than it was previously as an investment property," it said in a research note.
Global Property Guide said Dubai has "an enormous" amount of new supply and expects prices to fall over the next 2-3 years.
To compound matters, Dubai Islamic mortgage lender Amlak AMLK.DU said it suspended new loans. This follows moves by several banks to tighten lending conditions in August and September.
"It is very hard to get loans now. Customers are suffering," Rehab Gouda, senior sales agent at Al Jabal Real Estate said.
"Either they have pre-approval from before the crisis, or they are cash buyers."
According to estimates of the textile ministry, there will be job losses of about five lakh in the next five months. This was disclosed by commerce secretary GK Pillai on the sidelines of a government-industry interaction organised by Ficci.
In a presentation made before the commerce secretary, Shishir Jaipuria, deputy chairman, Confederation of Indian Textiles Industry, said the growth of the textile sector fell from 5.2% in April-September 2007 to a minuscule 0.3% in the same period this fiscal.
He said the textiles and clothing industry employs 35 million workers directly, adding that already 7 lakh jobs are estimated to have been lost and another 5 lakh would lose jobs by March 2009.
Financial results of 50 major textile companies listed in the Bombay Stock Exchange shows that though turnover increased, profits became negative in the second quarter this year. In the remaining last two quarters, even turnover will decline, he warned. Smaller units are already suffering significant production loss, Jaipuria added.
For instance, the profitability of renowned companies like Bombay Dyeing fell from (-)370% in the first quarter over the same quarter last year, to (-)828% in the second quarter as against last year’s Q2.
Over 50% of textile products manufactured in the country is being exported. US, EU and Japan constitute over 60% of our textiles exports. All the three countries are in a recession mode.
US’s import of textile products from India during January-August 2008 declined by 1.56% in value terms, compared to the same period of 2007. For garments, the decline was higher at 4.8%. The imports demand of Indian textiles in EU and Japan is declining on similar trend, though data is not available yet.
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