HDFC Bank's ability to grow at over 30 per cent annually in the last nine years, along with superior credit risk management practices, which have helped it maintain asset quality, would ensure that it will be among the least affected in a slowdown.
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.
To read more...click on the link below:
http://www.rediff.com/money/2008/nov/24bcrisis-why-hdfc-bank-will-not-be-hit.htm
Monday, November 24, 2008
US-listed Indian cos on a losing spree
Indian companies listed on the American bourses lost nearly six billion dollars in just one week, with the market value of HDFC Bank eroding as much as 1.38 billion dollars, amid worsening financial turmoil and scour corporate news battering world markets.
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.
Source: PTI
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.
Source: PTI
Troubled banking giant Citigroup gets bail out
The US government will inject $20 billion into troubled banking giant Citigroup and will provide a guarantee of $306 billion to the financial firm.
"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.
"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.
Windows Live Search to be rebranded Kumo?
Microsoft is expected to rebrand and relaunch its Windows Live Search, according to various reports on the Web.
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?
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
$1.5 trillion package for China's economy
Projects planned by provincial governments will add an additional 10 trillion yuan ($1.464 trillion) to the value of China's economic stimulus package, state television said on Sunday, even as the country's premier called on businesses to keep up their confidence.
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.
Source: Agencies
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.
Source: Agencies
Dubai real estate suffers major setback
Dubai's property sector suffered a series of blows this week after brokers confirmed a rise in distressed sales, a real estate guide downgraded its rating on residential property and an Islamic lender suspended new loans.
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.
Dubai downgrade
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."
Source: Agencies
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.
Dubai downgrade
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."
Source: Agencies
Textile cos to axe five lakh employees
Even as the Indian government is getting ready to undertake a nationwide survey of over 800 companies to find out the exact job losses in India due to the global financial crisis, the first report of pink slips is out.
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.
To read on...click on the link below:
http://www.financialexpress.com/news/Textile-cos-to-axe-five-lakh-employees-in-next-five-months/389024/
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.
To read on...click on the link below:
http://www.financialexpress.com/news/Textile-cos-to-axe-five-lakh-employees-in-next-five-months/389024/
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