Some big Dubai retailers, accustomed to giddy spending in the Gulf Arab tax-free haven, are grappling with a drop in sales as consumers worry about the impact of the global financial crisis on their wallets.
The Gulf has not been as heavily hit by the credit crisis as Europe and the US, but the contagion has led to stock market routs, tight lending conditions and a range of government and central bank attempts to mitigate its impact.
In the United Arab Emirates, home to the glitzy financial hub of Dubai where shopping is virtually a national sport, a frisson of fear has seeped into consumers' minds.
"Business is 20 per cent down in the last week in retail," Mohi-din Bin Hendi, president of Bin Hendi Enterprises, told Reuters.
"In the beginning, people did not take it seriously. When they start to get their ATM cards refused from the bank, that's when sense come back ... that this is serious."
Bin Hendi, whose retail-based conglomerate operates in the Gulf Arab region and India and offers everything from jewelry to sofas, said the firm would take steps to ready for a further decline in consumer spending and would "cut the desirables, go to the essentials."
Asked whether he would cut jobs, he said: "Absolutely. We have not come to a figure as yet."
"People with wise moves won't suffer as much as those who think this is only a cloudy day and it'll clear up tomorrow. It won't clear up tomorrow that easily.
"We have to sit tight, cut down our costs and be smart."
Dubai consumers have begun to see uncomfortable signs on the crisis' toll on the city, long known for spending excesses.
Companies are quietly shedding jobs or not hiring, according to recruiters, while the Arab world's biggest listed developer, Emaar Properties EMAR.DU recently gave buyers more time to pay for new homes given difficulties in obtaining mortgages.
The UAE's biggest bank has stopped lending to foreigners who work for top Dubai property firms on fears a slowdown could jeopardize their jobs and income and an Islamic mortgage lender, Amlak AMLK.DU, has suspended new loans altogether for now.
Less spending per person
"There is less footfall in the stores, people are tightening their belts," said a retail manager who declined to be identified. "It's never been like this before."
The global financial meltdown came just as the world's biggest mall opened in Dubai and nearly each week has seen the announcement of one lavish retail exercise after another.
This week, British luxury retailer Burberry said it had created a new firm with its UAE franchisee, Jashanmal, that would manage all its retail and wholesale operations in the Gulf Arab region.
Jashanmal Group President Gangu Batra said forming the joint venture made business sense given its long ties to the British firm but the timing could have been better.
"Now all we can say is I hope it doesn't affect us too much. There will be some effect and we will see that effect in the course of time," he told Reuters.
Batra said same-store sales on a yearly basis were steady at the retailer, which operates department stores, booksellers and franchises for brands like Calvin Klein, but the firm was bracing for a slowdown in the wider economy in coming months.
"People are still there but spending per person has gone down," he said. "I don't think our country will be immune to these problems.
"I can see some slowdown when I go to restaurants and hotels. The view is, so far, there's no reduction in the tourists but then when they do the booking, they do so months in advance."
According to a 2007 annual country report, visitors to Dubai represent 69 per cent of all luxury retail and leisure spending.
Batra said spending levels were likely to decline even further once the current wave of vacationers head home.
Caution has seeped into every aspect of consumer spending. One Dubai-based dentist said business had fallen about 40 percent this year. "People see it as cosmetic rather than essential," she said.
Source: Reuters
Tuesday, December 2, 2008
India ranked fourth with 81 mn Net users
India has been ranked fourth among the top 10 nations in the world with 81 million Internet users. United States leads the chart with 220 million Internet users followed by China (210 million) and Japan (88.1 m).
Brazil comes next to India with 53.1 million users, UK 40.2 million, Germany 39.1 million, Republic of Korea 35.5 million, Italy 32 million and France 31.5 million.
The Internet Governance Forum has released these statistics on the eve of its third four-day global conference that begins at the Hyderabad International Convention Centre on December 3.
From about 70 million people (1.7% of the world population) who had access to the Internet at the end of 2007, the figure crossed 134.8 crore by 2007. Asia has the highest number of Internet users with an estimated 568.7 million people followed by the Americas with 377.9 million.
Europe ranks third in this list with 335.9 million users and Africa and Oceania close the rank with 51.8 million and 14 million users respectively, according to the IGF. India, however, does not find place among the top ten nations in terms of broadband connections where too the US stands first with 73.2 million connections.
China has 66.4 million, Japan 28.28 million, Germany 19.6 million, UK 15.6 million, France 15.5 million, Republic of Korea 14. 7 million, Italy 10.8 million, Canada 9 million and Spain 8 million broadband connections. While there were a total of 13.5 million Internet subscribers in India, representing 1.15 per 100 people, broadband subscribers accounted for five million among them.
However, the number of users, who have online access but do not themselves subscribe, is a whopping 81 million or 6.93 users per people.
Source: PTI
Brazil comes next to India with 53.1 million users, UK 40.2 million, Germany 39.1 million, Republic of Korea 35.5 million, Italy 32 million and France 31.5 million.
The Internet Governance Forum has released these statistics on the eve of its third four-day global conference that begins at the Hyderabad International Convention Centre on December 3.
From about 70 million people (1.7% of the world population) who had access to the Internet at the end of 2007, the figure crossed 134.8 crore by 2007. Asia has the highest number of Internet users with an estimated 568.7 million people followed by the Americas with 377.9 million.
Europe ranks third in this list with 335.9 million users and Africa and Oceania close the rank with 51.8 million and 14 million users respectively, according to the IGF. India, however, does not find place among the top ten nations in terms of broadband connections where too the US stands first with 73.2 million connections.
China has 66.4 million, Japan 28.28 million, Germany 19.6 million, UK 15.6 million, France 15.5 million, Republic of Korea 14. 7 million, Italy 10.8 million, Canada 9 million and Spain 8 million broadband connections. While there were a total of 13.5 million Internet subscribers in India, representing 1.15 per 100 people, broadband subscribers accounted for five million among them.
However, the number of users, who have online access but do not themselves subscribe, is a whopping 81 million or 6.93 users per people.
Source: PTI
Monday, December 1, 2008
Is Google a threat to telcos?
Google's influence and market power with key telecommunications industry stakeholders is having a significant impact on the industry, says research firm Gartner.
According to Alex Winogradoff, research vice president, Gartner, Google will continue to be a market disruptor and disintermediator, especially in the communications market. "Carriers should selectively partner with Google rather than trying to compete, especially in areas where they don't have differentiated and core assets," he said. "However, carriers should also find common ground with Google (for example, on network neutrality) and, if necessary, look for creative ways to oppose Google on issues critical to their survival."
Gartner said that coming late to the operating-system and mobile markets has not been a problem for Google and that its Android and Open Handset Alliance (OHA) activities have already had a profound effect on the mobile industry. In addition to disrupting the traditional telecom ecosystem, Google's actions are diluting the market potential and the service providers' ability to profitably monetise their investments in new markets (such as entertainment and software as a service (SaaS) applications).
The research firm highlighted six critical actions by Google that have already had, or will have, the greatest impact on the telecom industry. Google pressured the Federal Communications Commission (FCC) to set aside the "C" Block (22MHz to 11MHz in the uplink and 11MHz in the downlink within the US 700MHz spectrum auctions) as an open-access spectrum. All winning "C" Block bidders would be required to provide open access to applications (which cannot be blocked) and devices (which cannot be locked).
Google's primary motivation was to encourage the development of open broadband network platforms to ensure they will be able to deliver bandwidth-intense over-the-air services and applications.
On November 5 2007, several technology and wireless companies jointly announced the formation of the OHA and the development of Android, a new software platform for mobile devices that includes an operating system (OS), middleware and key applications based on the Linux OS and open-source principles.
This was quickly followed on November 12 2007, with a preliminary release of the Android SDK, as part of Google's $10 million developer challenge. This will help ensure that application and access openness is maintained on the mobile Internet as effectively as on the wired network to enable Google's ad model to spread as successfully as it has on the wired Internet; to open up the "closed" mobile industry ecosystem to Google's applications; and to enable Google to exert a strong influence over the development of the next-generation mobile OS.
Since the US regulator (FCC) adopted four network neutrality principles designed "to encourage broadband deployment and preserve and promote the open and interconnected nature of the public Internet," Google and other Web-centric companies have been lobbying the US Congress to codify these rules in favour of something called non-discrimination in network design between the public and private Internet.
In short, Google wants regulation to ensure that the public Internet remains free from potential discrimination and content blocking but also wants equality between the public and private Internet at no cost to customers or Web companies (in essence, no quality of service).
Google has been investing heavily to develop the world's most complete storehouse of geographic and mapping data supported by innovative applications that can detect mobile devices.
Google wants to be "the most-trusted source" and the best at matching up unique geographic location-based data so it can take advantage of just-in-time advertising opportunities derived from location-aware applications and bypass device manufacturers and carriers as the gatekeepers of location data.
Known as "white space" in the US and "interleaved spectrum" in the UK, this is the underutilised 800MHz spectrum that can be used to broadcast TV through the airwaves but also has highly favourable propagation characteristics for wireless broadband.
A powerful industry lobby backed by Google, Microsoft, Philips, Dell, HP, Skype and others (known as the Wireless Innovation Alliance) has been urging the FCC to develop rules to unlock the potential of TV white spaces.
Google's interest in white spaces is another effort to ensure that there are viable broadband options available for their services. The spectrum, which will likely be released as an open spectrum in 2010, would become another means for bypassing the carrier access network. Google is looking to engage enterprises by getting them hooked on using its applications and cloud computing infrastructure. Making it easy for users to download Google applications and giving them free space on Google's cloud infrastructure.
This will give Google great marketing insight to help it develop a presence within the SMB market. With eventual migration to larger enterprises where enterprises will come to Google for all their back-office SaaS needs.
The impact on carriers looking to generate revenue from the SaaS business model within the SMB market will require carriers to clearly differentiate their applications from Google or partner with it.
Source: Indiatimes
No global impact; ACS to hire 1,000 in India
Amid gloomy scenario in the global job markets, hiring in India is continuing at a strong pace with world's largest business process ou tsourcing firm Affiliated Computer Services planning to recruit 1,000 people in the next 6-8 months in the country.
"We are looking to increase our headcount by 1,000 employees in India in the next 6-8 months, out of which about 500 would be employed in our new facility at Noida, which is in the process of being set up," ACS India Country Head and Vice President Aman Mustafa said.
The company is in the process of setting up a new facility in Noida, while it already has offices in Bangalore, Kochi and Chennai and the total employee strength of the company is around 5,000 in the country. Bangalore operation has a capacity of about 2,800 people and around 1,800 people are stationed in Kochi.
"Despite the global economic crisis our business has not been affected and our existing and new clients have been approaching us for services to reduce their costs," Mustafa said.
Mustafa further said that ACS Inc's balance sheet is stable with strong cash flows amid the economic downturn, even as its shares have taken a beating at the New York Stock Exchange. The global firm has a market capitalisation of over 3.86 billion dollar.
Recently, a host of firms, including Metlife India, Deloitte Touche Tohmatsu, State Bank of India, Larsen and Toubro are planning to recruit over 70,000 people in the country.
"We are looking to increase our headcount by 1,000 employees in India in the next 6-8 months, out of which about 500 would be employed in our new facility at Noida, which is in the process of being set up," ACS India Country Head and Vice President Aman Mustafa said.
The company is in the process of setting up a new facility in Noida, while it already has offices in Bangalore, Kochi and Chennai and the total employee strength of the company is around 5,000 in the country. Bangalore operation has a capacity of about 2,800 people and around 1,800 people are stationed in Kochi.
"Despite the global economic crisis our business has not been affected and our existing and new clients have been approaching us for services to reduce their costs," Mustafa said.
Mustafa further said that ACS Inc's balance sheet is stable with strong cash flows amid the economic downturn, even as its shares have taken a beating at the New York Stock Exchange. The global firm has a market capitalisation of over 3.86 billion dollar.
Recently, a host of firms, including Metlife India, Deloitte Touche Tohmatsu, State Bank of India, Larsen and Toubro are planning to recruit over 70,000 people in the country.
Mumbai attack: A mixed bag for insurers
The bottomlines of insurance companies that have insured the terrorist-attacked hotels in Mumbai will not be affected by property damage claims as the loss will be met from a terrorism risk pool, managed by the state-run General Insurance Corp of India (GIC), say industry officials.
The claims for property damage as well as loss of profit will be met from the Rs.7.5-billion ($153 million) terrorism risk pool, they said.
However, insurers who have issued public liability policies to the Taj Mahal Palace and Tower Hotel and the Trident-Oberoi hotel, the targets of terrorists, and personal accident policies to employees with the risk of terrorism extension may have to face sizeable claims from the kin of the dead and the injured.
Though major portion of that could be reinsured, some part of the loss might have to be borne by the primary insures.
'Our liability policy covering the Trident-Oberoi hotel covers damage owing to acts of terrorism,' United India Insurance general manager A. Asthana told the media.
He said all these are reinsured with GIC.
The overall liability is around Rs.100 million ($2 million) and the risk is reinsured. The maximum net impact on the company will be around Rs.50 million, Asthana said.
Sitting comfortably among the insurers of the terrorist attacked hotels is the Mumbai-based New India Assurance that has insured only the properties of the Trident-Oberoi hotel.
Since the property damages will be met from the terrorism pool, New India would remain unscathed.
A long time insurer of Taj Mahal hotel property and employees, New India this year escaped as the account was bagged by three private insurers - Tata AIG General Insurance (65 percent share), ICICI Lombard General Insurance (30 percent) and IFFCO Tokio General Insurance (five percent).
According to industry officials, it will take at least two weeks for the insurance surveyors to assess the actual financial damage as the police and other investigating authorities have first to complete their job.
What will be tricky for the insurers are the liability claims that might be filed by the kin of the dead and injured guests at the hotels.
According to sources, the companies that will be in a spot are United India and Tata AIG, which have issued public liability policies covering terrorism risk respectively for Trident-Oberoi and Taj Mahal hotels.
The two insurers will have to deal with sizeable claims under this policy as hundreds of hotel guests and visitors were killed and injured.
While United India is the sole seller of the Hoteliers Liability Policy to Trident-Oberoi, it is unclear whether Tata AIG has a co-insurance arrangement with other non-life insurers for this risk. Tata AIG officials could not be reached.
Source: Agencies
The claims for property damage as well as loss of profit will be met from the Rs.7.5-billion ($153 million) terrorism risk pool, they said.
However, insurers who have issued public liability policies to the Taj Mahal Palace and Tower Hotel and the Trident-Oberoi hotel, the targets of terrorists, and personal accident policies to employees with the risk of terrorism extension may have to face sizeable claims from the kin of the dead and the injured.
Though major portion of that could be reinsured, some part of the loss might have to be borne by the primary insures.
'Our liability policy covering the Trident-Oberoi hotel covers damage owing to acts of terrorism,' United India Insurance general manager A. Asthana told the media.
He said all these are reinsured with GIC.
The overall liability is around Rs.100 million ($2 million) and the risk is reinsured. The maximum net impact on the company will be around Rs.50 million, Asthana said.
Sitting comfortably among the insurers of the terrorist attacked hotels is the Mumbai-based New India Assurance that has insured only the properties of the Trident-Oberoi hotel.
Since the property damages will be met from the terrorism pool, New India would remain unscathed.
A long time insurer of Taj Mahal hotel property and employees, New India this year escaped as the account was bagged by three private insurers - Tata AIG General Insurance (65 percent share), ICICI Lombard General Insurance (30 percent) and IFFCO Tokio General Insurance (five percent).
According to industry officials, it will take at least two weeks for the insurance surveyors to assess the actual financial damage as the police and other investigating authorities have first to complete their job.
What will be tricky for the insurers are the liability claims that might be filed by the kin of the dead and injured guests at the hotels.
According to sources, the companies that will be in a spot are United India and Tata AIG, which have issued public liability policies covering terrorism risk respectively for Trident-Oberoi and Taj Mahal hotels.
The two insurers will have to deal with sizeable claims under this policy as hundreds of hotel guests and visitors were killed and injured.
While United India is the sole seller of the Hoteliers Liability Policy to Trident-Oberoi, it is unclear whether Tata AIG has a co-insurance arrangement with other non-life insurers for this risk. Tata AIG officials could not be reached.
Source: Agencies
Sunday, November 30, 2008
Industry welcomes Manmohan Singh taking FM charge
Industry on Sunday welcomed Prime Minister Manmohan Singh taking charge of the Finance Ministry after P Chidambaram was appointed Home Minister, saying Singh as Finance Minister is known as architect of reforms that transformed the Indian economy.
Prime Minister directly involved himself in tackling the impact of the global credit crisis on the Indian economy. Amidst pressure on the exchange rate and crash in the stock market in the wake of the developments in Wall Street, Singh had appointed a committee under his charge to find a way out of the economic challenges.
"At the recent HT Leadership Summit, the Prime Minister had listed several initiatives under consideration of the government. These include fiscal measures like expenditure on infrastructure and monetary steps such as interest rates. All these relate to the Finance Ministry, which has come under his charge directly," Federation of Indian Chambers of Commerce and Industry Secretary General Amit Mitra said.
Mitra said Singh is the only one in the government who has served as Finance Minister, RBI Governor and Chief Economic Adviser.
Singh was also Secretary (Economic Affairs) and Deputy Chairman of the Planning Commission.
Assocham Secretary General D S Rawat said the "industrial confidence would get a boost" with the Prime Minister retaining the charge of the Finance Ministry.
Singh had gone to Washington to attend the G-20 meeting called by US President George W Bush, where he sought increased role of the developing countries in the new financial architecture after the global downturn.
Source:PTI
Prime Minister directly involved himself in tackling the impact of the global credit crisis on the Indian economy. Amidst pressure on the exchange rate and crash in the stock market in the wake of the developments in Wall Street, Singh had appointed a committee under his charge to find a way out of the economic challenges.
"At the recent HT Leadership Summit, the Prime Minister had listed several initiatives under consideration of the government. These include fiscal measures like expenditure on infrastructure and monetary steps such as interest rates. All these relate to the Finance Ministry, which has come under his charge directly," Federation of Indian Chambers of Commerce and Industry Secretary General Amit Mitra said.
Mitra said Singh is the only one in the government who has served as Finance Minister, RBI Governor and Chief Economic Adviser.
Singh was also Secretary (Economic Affairs) and Deputy Chairman of the Planning Commission.
Assocham Secretary General D S Rawat said the "industrial confidence would get a boost" with the Prime Minister retaining the charge of the Finance Ministry.
Singh had gone to Washington to attend the G-20 meeting called by US President George W Bush, where he sought increased role of the developing countries in the new financial architecture after the global downturn.
Source:PTI
India's markets seen relieved; PM to caretake finance
India's markets will likely react positively on Monday when a cabinet reshuffle sees the prime minister take on the finance portfolio, just days after the nation was rattled by the deadly attacks on Mumbai.
India's economy showed its slowest pace of growth in nearly four years in the September quarter, and its rupee and stock markets have been pummelled by the global financial crisis.
Now, after three days of attacks by gunmen in the heart of its financial capital, Mumbai, in which nearly 200 people died, analysts say security and confidence will be the top priority.
With Finance Minister Palaniappan Chidambaram moving to the Home Ministry following the resignation of the home minister, analysts say Prime Minister Manmohan Singh, architect of early 1990s economic reforms, is probably the man for the job.
"There are serious concerns on the economy and the big challenge is going to be rebuilding confidence of investors," said Mahesh Rangarajan, political analyst in New Delhi.
"And there is a greater confidence in Singh because of his midas touch."
India's financial markets stayed shut on Thursday as security forces battled gunmen holed up in three locations in Mumbai's financial district.
The benchmark share index .BSESN gained 0.7 percent to 9,092.72 points when trading resumed on Friday, with expiry of options contracts leading investors to buy back shares.
BIG PICTURE
The index has plunged 55 percent this year, with foreign investors withdrawing a net $13.7 billion as the global market turmoil widened, and equity analysts criticised Chidambaram, saying he had not managed to keep the economy stable.
"But probably markets should open in the positive," said Deven Choksey, chief executive of brokerage KR Choksey.
Bond yields fell on Friday, as dealers anticipated interest rate cuts to shore up confidence and bolster the economy.
The central bank has slashed its key lending rate by 150 basis points to 7.5 percent since the global crisis swept through India's markets in October and the benchmark 10-year bond yield closed down 2 basis points at 7.07 percent.
"The market continues to anticipate rate changes," said Arvind Sampath, head of bond trading at Standard Chartered in Mumbai. "We are expecting the 10-year bond yield to trade in a 7.07-7.12 range."
Only the rupee came under pressure, shedding 1.2 percent to 50.09/12 per dollar, not far off a record low of 50.60 set earlier in November.
"Whatever has happened over the last few days is pretty serious. The first priority has to be that," A. Prasanna, analyst at ICICI Securities, said.
"I think the market will take a more big picture view and it is a positive development only. Nobody needs to second guess the PM's credentials, in his ability to run the ministry."
With only a few months likely to go before national elections, analysts were sceptical whether much could be done to shore up growth, which slowed to an annual 7.6 percent in the September quarter, a far cry from the 9 percent seen in the whole of the 2007/08 fiscal year.
Some expressed concern with the security issue and whether the prime minister's focus would be distracted, but others said Singh has already been more involved in running the economy as the financial crisis deepened.
Source: Reuters
India's economy showed its slowest pace of growth in nearly four years in the September quarter, and its rupee and stock markets have been pummelled by the global financial crisis.
Now, after three days of attacks by gunmen in the heart of its financial capital, Mumbai, in which nearly 200 people died, analysts say security and confidence will be the top priority.
With Finance Minister Palaniappan Chidambaram moving to the Home Ministry following the resignation of the home minister, analysts say Prime Minister Manmohan Singh, architect of early 1990s economic reforms, is probably the man for the job.
"There are serious concerns on the economy and the big challenge is going to be rebuilding confidence of investors," said Mahesh Rangarajan, political analyst in New Delhi.
"And there is a greater confidence in Singh because of his midas touch."
India's financial markets stayed shut on Thursday as security forces battled gunmen holed up in three locations in Mumbai's financial district.
The benchmark share index .BSESN gained 0.7 percent to 9,092.72 points when trading resumed on Friday, with expiry of options contracts leading investors to buy back shares.
BIG PICTURE
The index has plunged 55 percent this year, with foreign investors withdrawing a net $13.7 billion as the global market turmoil widened, and equity analysts criticised Chidambaram, saying he had not managed to keep the economy stable.
"But probably markets should open in the positive," said Deven Choksey, chief executive of brokerage KR Choksey.
Bond yields fell on Friday, as dealers anticipated interest rate cuts to shore up confidence and bolster the economy.
The central bank has slashed its key lending rate by 150 basis points to 7.5 percent since the global crisis swept through India's markets in October and the benchmark 10-year bond yield
"The market continues to anticipate rate changes," said Arvind Sampath, head of bond trading at Standard Chartered in Mumbai. "We are expecting the 10-year bond yield to trade in a 7.07-7.12 range."
Only the rupee
"Whatever has happened over the last few days is pretty serious. The first priority has to be that," A. Prasanna, analyst at ICICI Securities, said.
"I think the market will take a more big picture view and it is a positive development only. Nobody needs to second guess the PM's credentials, in his ability to run the ministry."
With only a few months likely to go before national elections, analysts were sceptical whether much could be done to shore up growth, which slowed to an annual 7.6 percent in the September quarter, a far cry from the 9 percent seen in the whole of the 2007/08 fiscal year.
Some expressed concern with the security issue and whether the prime minister's focus would be distracted, but others said Singh has already been more involved in running the economy as the financial crisis deepened.
Source: Reuters
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