Anticipating a decline in its business performance in 2009, India Inc is likely to cut back on the planned salary increase in the coming year, while most firms want to avoid huge job cuts, a latest survey says.
Majority of companies in the country are trying to be selective in planning the workforce, compensation and benefit cuts for 2009, while they anticipate a decline in their company's business performance next year, according to global HR consultancy Mercer.
The survey revealed that as much as 83 per cent of companies expect salary increases in the coming year to be lower than originally planned by them. The responses indicate that the companies are planning to look closely at holding down the level of compensation increases in 2009.
However, only 19 per cent of survey respondents are considering the more drastic step of freezing 2009 salaries at 2008 figures.
The results for companies in India generally match survey findings from other parts of the world. In China, Australia, the United Kingdom and the United States as well between 20 and 30 per cent respondents believe that the 2009 bonus payout would be reduced from those originally planned.
"India grew on the back of her knowledge and people -centric industries such as financial services, information technology and retail, among others. However, primarily due to employee costs having risen in India at double-digit rates since 2003, cost structures have been coming under severe strain," Mercer Consulting (India) country leader Padma Ravichandar said.
Most companies in India plan to avoid significant workforce reductions, but they do not plan significant hiring either, the survey revealed.
Nearly two-thirds (63 per cent) of companies surveyed revealed that a significant reduction in workforce was unlikely even as only one in four firms expect to continue their hiring activities at or above replacement levels.
This current situation should be perceived as a cooling-down period in terms of talent costs. This is a levelling act which may help India remain cost competitive in the long run. In the near term, the adverse impact of business sentiment seems all pervasive, Ravichandar added.
Over 80 per cent of respondents expect their company's business performance to decline in 2009, the Mercer survey noticed.
Further, corporate India expects mergers and acquisitions to be severely affected in the next year, with fewer than seven per cent of survey respondents expecting increased M&A activity.
Mercer's survey, conducted in early November, collected responses from over 100 human resource and finance professionals in India, as part of more than 1,000 responses from around the world.
Source: Agencies
Thursday, December 18, 2008
TCS to tie up with Ferrari for Formula One
Tata Consultancy Services announced on Thursday that it has entered into a partnership with Ferrari F1 car for the 2009 Formula One season.
The clarification from TCS came following reports that Tata branding would appear for the first time on the scarlet Ferraris of Felippe Massa and Kimi Raikkonen fighting for world championship honours in 2009.
"Building on our existing long-term relationship of over 3 years, Tata Consultancy Services has entered into a historic agreement with Ferrari for an enhanced technology and marketing partnership. As part of the deal, the Tata logo will be displayed on Ferrari FI car for the 2009 Formula One season," a TCS spokesperson said in a statement.
Tata Consultancy Services was the first Indian company to enter the Formula One arena in 2005 when it became the technology partner of Ferrari, the spokesperson added.
Ferrari head honcho Luca di Montezemolo, who had declared brand the Tata will appear on the Ferrari for the first time, had not mentioned which of the Tata brand would appear - the Tata group, or the Tata Motors.
It is in the backdrop this report that TCS has made the official announcement regarding its Formula One Tie up. TCS has supplied many major programmes and solution in the design, manufacture and operation of many sports cars including F1.
The clarification from TCS came following reports that Tata branding would appear for the first time on the scarlet Ferraris of Felippe Massa and Kimi Raikkonen fighting for world championship honours in 2009.
"Building on our existing long-term relationship of over 3 years, Tata Consultancy Services has entered into a historic agreement with Ferrari for an enhanced technology and marketing partnership. As part of the deal, the Tata logo will be displayed on Ferrari FI car for the 2009 Formula One season," a TCS spokesperson said in a statement.
Tata Consultancy Services was the first Indian company to enter the Formula One arena in 2005 when it became the technology partner of Ferrari, the spokesperson added.
Ferrari head honcho Luca di Montezemolo, who had declared brand the Tata will appear on the Ferrari for the first time, had not mentioned which of the Tata brand would appear - the Tata group, or the Tata Motors.
It is in the backdrop this report that TCS has made the official announcement regarding its Formula One Tie up. TCS has supplied many major programmes and solution in the design, manufacture and operation of many sports cars including F1.
Fiscal year 2010 to be more challenging, says RBI chief
Next year will be a more challenging year than this has been but the Reserve Bank of India (RBI) will continue to do everything possible to lessen the domestic effects of the global financial crisis, its chief said.
In speech released on Thursday, RBI Governor Duvvuri Subbarao said the outlook for India and the world remained uncertain and the path of the global crisis and its resolution remained unclear.
While the central bank had a roadmap, it was not possible to deploy it all in one go.
"It would be our endeavour to adapt this roadmap to the evolving global developments and implement it flexibly and pragmatically," he said.
"Our approach, as indeed of every prudent central banker around the world, has been to 'cross the river by feeling the stones'."
Subbarao said India's economic fundamentals remained strong, but developments in the real economy, financial markets and global commodity prices pointed to a period of moderating growth and declining inflation.
"The year 2009-10 will be more challenging than the current one," he said.
"The RBI will continue to be on vigil and do everything possible within its mandate to mitigate the impact of the crisis on the Indian economy."
Since mid-October, the central bank has lowered its key lending rate by 250 basis points to 6.5 percent to shield the economy from the spillover of the global credit crisis.
It has also aggressively slashed banks' reserve requirements to shore up growth, which many expect to slow to 7 percent in the fiscal year which ends in March from 9 percent in 2007/08.
The government bond market is widely expecting interest rates to fall again soon, with the benchmark 10-year bond yield dropping 30 basis points on Thursday to 5.50 percent.
Subbarao noted inflation had been declining for the four weeks before he spoke, pointing to a faster-than-expected reduction in the pace of rising prices, while a recent cut in state-set fuel prices should further ease inflation pressures.
Data on Thursday showed India's wholesale price index, its most widely watched inflation measure, rose 6.84 percent in the 12 months to Dec. 6, sharply below the previous week's 8 percent and lower than a Reuters estimate of 7.49 percent.
Source: Agencies
In speech released on Thursday, RBI Governor Duvvuri Subbarao said the outlook for India and the world remained uncertain and the path of the global crisis and its resolution remained unclear.
While the central bank had a roadmap, it was not possible to deploy it all in one go.
"It would be our endeavour to adapt this roadmap to the evolving global developments and implement it flexibly and pragmatically," he said.
"Our approach, as indeed of every prudent central banker around the world, has been to 'cross the river by feeling the stones'."
Subbarao said India's economic fundamentals remained strong, but developments in the real economy, financial markets and global commodity prices pointed to a period of moderating growth and declining inflation.
"The year 2009-10 will be more challenging than the current one," he said.
"The RBI will continue to be on vigil and do everything possible within its mandate to mitigate the impact of the crisis on the Indian economy."
Since mid-October, the central bank has lowered its key lending rate by 250 basis points to 6.5 percent to shield the economy from the spillover of the global credit crisis.
It has also aggressively slashed banks' reserve requirements to shore up growth, which many expect to slow to 7 percent in the fiscal year which ends in March from 9 percent in 2007/08.
The government bond market is widely expecting interest rates to fall again soon, with the benchmark 10-year bond yield dropping 30 basis points on Thursday to 5.50 percent.
Subbarao noted inflation had been declining for the four weeks before he spoke, pointing to a faster-than-expected reduction in the pace of rising prices, while a recent cut in state-set fuel prices should further ease inflation pressures.
Data on Thursday showed India's wholesale price index, its most widely watched inflation measure, rose 6.84 percent in the 12 months to Dec. 6, sharply below the previous week's 8 percent and lower than a Reuters estimate of 7.49 percent.
Source: Agencies
Wednesday, December 17, 2008
Madoff crambles out to find friends following scam
Bernard Madoff, the longtime Wall Street executive accused of cheating investors around the world out of $50 billion, scrambled to find friends or relatives to guarantee his bond on Tuesday and keep him out of jail.
In Massachusetts, where the disgraced investor long cultivated a loyal group of wealthy individuals, the state's chief securities regulator subpoenaed Bernard L. Madoff Investment Securities and Cohmad Securities Corp, a firm that marketed Madoff investment products.
The two firms must hand over the names and addresses of all local residents who let Madoff invest their money by December 29. They must also deliver notes, emails, meeting agendas related to investments made since 2000, William Galvin, the state's Secretary of the Commonwealth, said on Tuesday.
In New York, Madoff, who was arrested last week, has not yet fully met the conditions of his $10 million bond, according to court papers. He must find three co-signers to guarantee the bond.
If he fails to meet all the conditions, prosecutors could seek to have the 70-year-old Madoff jailed, pending trial. A court hearing was set for Wednesday on bail matters after a Tuesday hearing was postponed.
Madoff, a former chairman of the Nasdaq Stock Market, faces up to 20 years in prison and a maximum fine of $5 million if convicted.
The U.S. Securities and Exchange Commission, which has been accused of missing red flags about Madoff's investment business, is asking its internal watchdog to probe the agency's conduct in the case.
SEC Chairman Christopher Cox said he was "gravely concerned" by the agency's "apparent multiple failures over at least a decade" to thoroughly investigate allegations or seek formal authority to pursue them.
As more banks, hedge funds and wealthy investors around the world realize they fell victim to a man long respected on Wall Street for the steady returns that his funds produced year after year, their outrage has grown.
LAW SCHOOL LAWSUIT
"The names and sizes of those exposed to Bernard Madoff keep growing and most remarkable of all is the concentration of investments made by funds of hedge funds which promise their clients a diversified portfolio," said Philippe Bonnefoy, chairman of the asset allocation committee at Cedar Partners, an investment adviser.
A fund of hedge funds is a basket of funds selected by the manager to spread around risk.
New York Law School sued Ascot Partners LP, an investment firm, general partner J. Ezra Merkin and auditor BDO Seidman LLP on Tuesday over investments with Madoff.
Massachusetts Mutual Life Insurance Co acknowledged its exposure to Madoff after a hedge fund unit invested heavily with him. Tremont Holdings Inc's Rye Investment Management unit lost roughly $3 billion, nearly all of the money the unit managed, people familiar with the matter said.
Madoff is also closely tied to Carl Shapiro, a 95-year-old Boston philanthropist who gave much of his fortune to the city's Beth Israel Deaconess Medical Center and the city's Museum of Fine Arts.
Austria's Bank Medici, a closely held bank serving wealthy clients, also said it was affected by Madoff's scheme, but declined to give a total for its losses.
At the same time, prosecutors and regulators asked people who suspect they lost money to Madoff to come forward.
The U.S. Attorney's Office in New York, which is prosecuting the Madoff case, set up a website for investors who may have been victimized. It also posted an FBI hotline number, 212-384-2359, for investors to call.
SIFTING THROUGH THE PAPERS
Investors were asked to gather any documents related to their Madoff investments and to check the website and others set up by the SEC, the trustee of Madoff's brokerage business and the court-appointed receiver in the case.
Lawyers worried that many of the financial statements that Madoff's firm mailed to clients were not accurate, and that it will take months to sift through the papers.
"This is a mess and it will take much longer than normal," said Douglas Hirsch, a partner at law firm Sadis & Goldberg, describing the work facing the trustee appointed to oversee the liquidation of Madoff's firm.
The Securities Investor Protection Corp, a nonprofit organization that provides limited insurance on investors' accounts, was named as trustee on Monday.
Madoff, who was well-known on the charity ball circuit and supported cancer and diabetes research, also gave about $238,200 to political candidates, parties and committees, mostly Democratic, since 1991, according to the Center for Responsive Politics, which tracks political giving.
U.S. Senator Charles Schumer, a New York Democrat, received $12,000, while U.S. Rep. Edward Markey, a Massachusetts Democrat, received $10,000 over the years, the Center found.
The impact of Madoff's alleged fraud may be felt most severely among hedge funds. For example, the Credit Suisse/Tremont Hedge Fund Index fell 4.15 percent in November, far more than the preliminary 0.7 percent decline reported last week.
Standard & Poor's said it will review public sector entities, such as universities, that invested with Madoff, to see whether their ratings should be cut as a result of their likely investment losses.
Source: Agencies
In Massachusetts, where the disgraced investor long cultivated a loyal group of wealthy individuals, the state's chief securities regulator subpoenaed Bernard L. Madoff Investment Securities and Cohmad Securities Corp, a firm that marketed Madoff investment products.
The two firms must hand over the names and addresses of all local residents who let Madoff invest their money by December 29. They must also deliver notes, emails, meeting agendas related to investments made since 2000, William Galvin, the state's Secretary of the Commonwealth, said on Tuesday.
In New York, Madoff, who was arrested last week, has not yet fully met the conditions of his $10 million bond, according to court papers. He must find three co-signers to guarantee the bond.
If he fails to meet all the conditions, prosecutors could seek to have the 70-year-old Madoff jailed, pending trial. A court hearing was set for Wednesday on bail matters after a Tuesday hearing was postponed.
Madoff, a former chairman of the Nasdaq Stock Market, faces up to 20 years in prison and a maximum fine of $5 million if convicted.
The U.S. Securities and Exchange Commission, which has been accused of missing red flags about Madoff's investment business, is asking its internal watchdog to probe the agency's conduct in the case.
SEC Chairman Christopher Cox said he was "gravely concerned" by the agency's "apparent multiple failures over at least a decade" to thoroughly investigate allegations or seek formal authority to pursue them.
As more banks, hedge funds and wealthy investors around the world realize they fell victim to a man long respected on Wall Street for the steady returns that his funds produced year after year, their outrage has grown.
LAW SCHOOL LAWSUIT
"The names and sizes of those exposed to Bernard Madoff keep growing and most remarkable of all is the concentration of investments made by funds of hedge funds which promise their clients a diversified portfolio," said Philippe Bonnefoy, chairman of the asset allocation committee at Cedar Partners, an investment adviser.
A fund of hedge funds is a basket of funds selected by the manager to spread around risk.
New York Law School sued Ascot Partners LP, an investment firm, general partner J. Ezra Merkin and auditor BDO Seidman LLP on Tuesday over investments with Madoff.
Massachusetts Mutual Life Insurance Co acknowledged its exposure to Madoff after a hedge fund unit invested heavily with him. Tremont Holdings Inc's Rye Investment Management unit lost roughly $3 billion, nearly all of the money the unit managed, people familiar with the matter said.
Madoff is also closely tied to Carl Shapiro, a 95-year-old Boston philanthropist who gave much of his fortune to the city's Beth Israel Deaconess Medical Center and the city's Museum of Fine Arts.
Austria's Bank Medici, a closely held bank serving wealthy clients, also said it was affected by Madoff's scheme, but declined to give a total for its losses.
At the same time, prosecutors and regulators asked people who suspect they lost money to Madoff to come forward.
The U.S. Attorney's Office in New York, which is prosecuting the Madoff case, set up a website for investors who may have been victimized. It also posted an FBI hotline number, 212-384-2359, for investors to call.
SIFTING THROUGH THE PAPERS
Investors were asked to gather any documents related to their Madoff investments and to check the website and others set up by the SEC, the trustee of Madoff's brokerage business and the court-appointed receiver in the case.
Lawyers worried that many of the financial statements that Madoff's firm mailed to clients were not accurate, and that it will take months to sift through the papers.
"This is a mess and it will take much longer than normal," said Douglas Hirsch, a partner at law firm Sadis & Goldberg, describing the work facing the trustee appointed to oversee the liquidation of Madoff's firm.
The Securities Investor Protection Corp, a nonprofit organization that provides limited insurance on investors' accounts, was named as trustee on Monday.
Madoff, who was well-known on the charity ball circuit and supported cancer and diabetes research, also gave about $238,200 to political candidates, parties and committees, mostly Democratic, since 1991, according to the Center for Responsive Politics, which tracks political giving.
U.S. Senator Charles Schumer, a New York Democrat, received $12,000, while U.S. Rep. Edward Markey, a Massachusetts Democrat, received $10,000 over the years, the Center found.
The impact of Madoff's alleged fraud may be felt most severely among hedge funds. For example, the Credit Suisse/Tremont Hedge Fund Index fell 4.15 percent in November, far more than the preliminary 0.7 percent decline reported last week.
Standard & Poor's said it will review public sector entities, such as universities, that invested with Madoff, to see whether their ratings should be cut as a result of their likely investment losses.
Source: Agencies
Indian unorganized retail sector to grow to $496 bn in four years
The unorganized retail sector is expected to grow at about 10 percent per annum to reach $496 billion in 2011-12 despite the steady expansion of organized retailers, a study released Wednesday said.
The report on the impact of organized retail on small shop owners, released in parliament by the Delhi-based think tank Indian Council for Research on International Economic Relations (Icrier), said the retail business in the country would grow at 13 percent annually from $322 billion in 2006-07 to $590 billion in 2011-12.
The unorganized retail industry was valued at $309 billion in 2006-07.
However, given the relatively weak financial state of the unorganized retailers and the space constraints on their expansion prospects, this sector alone will not be able to meet the growing demand, the report said.
Hence, the organized retail that now constitutes a small four percent of the total industry is likely to grow at a much faster pace of 45-50 percent per annum and quadruple its share in total retail trade to 16 percent by 2011-12, the Icrier said.
However, the Icrier added that small shop owners in the vicinity of organized retailers have experienced a decline in their volume of business and profit after the entry of bigger players.
According to the report, consumers have gained with the entry of organised retailers and their overall spending has also gone up.
While all income groups saved through organized retail purchases, the report revealed that lower income consumers saved more.
Moreover, the report said farmers benefit significantly from the option of direct sales to organized retailers.
Profit realisation for farmers selling directly to organized retailers is about 60 percent higher than that received from selling in local markets.
The study made certain recommendations like facilitation of cash-and-carry outlets, like Metro, for selling farmers' produce to unorganized retailers.
It also urged for encouraging cooperatives and associations of unorganized retailers for direct procurement from suppliers and farmers.
Also, simplification of the licensing and permit regime for organized retail and a move towards a nationwide uniform licensing regime in the states to facilitate modern retail have been recommended.
Source: Agencies
I
The report on the impact of organized retail on small shop owners, released in parliament by the Delhi-based think tank Indian Council for Research on International Economic Relations (Icrier), said the retail business in the country would grow at 13 percent annually from $322 billion in 2006-07 to $590 billion in 2011-12.
The unorganized retail industry was valued at $309 billion in 2006-07.
However, given the relatively weak financial state of the unorganized retailers and the space constraints on their expansion prospects, this sector alone will not be able to meet the growing demand, the report said.
Hence, the organized retail that now constitutes a small four percent of the total industry is likely to grow at a much faster pace of 45-50 percent per annum and quadruple its share in total retail trade to 16 percent by 2011-12, the Icrier said.
However, the Icrier added that small shop owners in the vicinity of organized retailers have experienced a decline in their volume of business and profit after the entry of bigger players.
According to the report, consumers have gained with the entry of organised retailers and their overall spending has also gone up.
While all income groups saved through organized retail purchases, the report revealed that lower income consumers saved more.
Moreover, the report said farmers benefit significantly from the option of direct sales to organized retailers.
Profit realisation for farmers selling directly to organized retailers is about 60 percent higher than that received from selling in local markets.
The study made certain recommendations like facilitation of cash-and-carry outlets, like Metro, for selling farmers' produce to unorganized retailers.
It also urged for encouraging cooperatives and associations of unorganized retailers for direct procurement from suppliers and farmers.
Also, simplification of the licensing and permit regime for organized retail and a move towards a nationwide uniform licensing regime in the states to facilitate modern retail have been recommended.
Source: Agencies
I
Tuesday, December 16, 2008
Has Arun Sarin declined Yahoo CEO job?
Former Vodafone Group Plc Chief Executive Arun Sarin has decided not to pursue the CEO job at Yahoo Inc, the Financial Times reported, citing people close to him.
Yahoo had been interested in having Sarin succeed Jerry Yang, according to those people, the Financial Times wrote on Monday, but Sarin is expected to say he does not want the job.
Sarin is looking at alternative roles at other US public companies as well as at a private equity firm, the Financial Times wrote, citing those people as saying.
Yang said in November that he would step down as chief executive as soon as Yahoo's board finds a replacement.
The Financial Times quoted Yahoo as saying the company does not comment on rumors or speculation.
Source: Agencies
Yahoo had been interested in having Sarin succeed Jerry Yang, according to those people, the Financial Times wrote on Monday, but Sarin is expected to say he does not want the job.
Sarin is looking at alternative roles at other US public companies as well as at a private equity firm, the Financial Times wrote, citing those people as saying.
Yang said in November that he would step down as chief executive as soon as Yahoo's board finds a replacement.
The Financial Times quoted Yahoo as saying the company does not comment on rumors or speculation.
Source: Agencies
Will the IT slowdown last 1.5 yrs?
Uncertainty in India's export-focused software sector will continue for the next four to six quarters due to deepening global economic turmoil, the sector's lobby group said.
"At this point in time, we're getting mixed signals," Som Mittal, president of the National Association of Software and Service Companies (Nasscom), told reporters on the sidelines of a technology conference.
"Very clearly, the decision-making is slow at this time."
In September, Nasscom said it would revise its growth projection for the sector, which was forecast to expand 21-24 per cent to about $50 billion in the year to March 2009
Source: Agencies
"At this point in time, we're getting mixed signals," Som Mittal, president of the National Association of Software and Service Companies (Nasscom), told reporters on the sidelines of a technology conference.
"Very clearly, the decision-making is slow at this time."
In September, Nasscom said it would revise its growth projection for the sector, which was forecast to expand 21-24 per cent to about $50 billion in the year to March 2009
Source: Agencies
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