Global Business

Global Corporate

1 Barclays 'considering fund sale'
Barclays Bank is considering selling part of its fund management business to raise up to £5bn, reports say. Barclays has been sounding out potential buyers of its iShares business, the Sunday Times and Sunday Telegraph reported. The money raised could help the bank avoid taking part in the government's insurance scheme on toxic assets. A spokesman for Barclays declined to comment on what he referred to as market speculation. Barclays has said it was talking to the government about whether to take part in the programme. Such a move would be a turnaround for Barclays, which has so far avoided seeking taxpayer money. Unlike Lloyds and the Royal Bank of Scotland, Barclays has stayed profitable amid the collapse of the financial markets. The bank reported profits before tax of £6.08bn ($9bn) for the full year of 2008.
15th March 2009, www.bbc.co.uk

2 Carrefour profits hit by downturn
Profits at the world's second-biggest retailer, Carrefour, fell 45% to 1.27bn euros ($1.6bn; £1.17bn) last year after it was hit by the economic slowdown. Overall, sales rose 5.9% to 87bn euros, but they rose barely 1% in France, its home market, where it was forced to cut prices amid the downturn. The company said it planned to cut costs by 500m euros and would increase the number of price promotions. Carrefour chief executive Lars Olofsson: In a trading environment that remains challenging, we will focus on boosting our sales dynamics while improving our organisation and reducing our costs. France accounts for about 40% of Carrefour's sales. The supermarket group employs about 490,000 people in more than 15,000 stores and 30 countries.
13th March 2009, www.bbc.co.uk

3 GM 'does not need March funding'
US carmaker General Motors has said it will not need the $2bn (£1.45bn) of funding it had previously requested for March from the government. GM said the development reflected the acceleration of its efforts to cut costs. It had delayed spending planned for January and February, it added. GM has already received $13.4bn in aid, and has requested another $16.6bn. In December the company warned it could run out of cash in a matter of weeks if money were not made available. GM said the $2bn requested for March would not be needed at this time. However, it did not indicate whether it would need the funds at a later date or if it planned to change its request for the $16.6bn asked for last month.
12th March 2009, www.bbc.co.uk

4 Upbeat Morrisons sees profit rise
Supermarket chain Morrisons has said it is making "good progress" after reporting a 7% increase in annual pre-tax profits to £655m ($902m). The UK's fourth-biggest grocer said like-for-like sales excluding petrol were up 7.9% on the year. The supermarket chain - which earlier this year said it had enjoyed excellent sales over Christmas - has seen strong growth in sales of its budget food ranges, with sales of its "Value" range up 50% over the year. These are challenging times for the UK economy, but whilst we are not complacent, we are confident that Morrisons' offer meets and is in tune with the demands of our customers and the economic background, Sir Ian said. The retailer said that its share of the UK grocery market, based on data from research firm TNS, had risen to 12.3% from 12.1% over the year.
12th March 2009, www.bbc.co.uk

5 General Electric debt rating cut
US conglomerate General Electric had its debt rating lowered by ratings agency Standard and Poor's. Its rating has been cut from AAA, the highest rating, to AA+. The action may make it more expensive for GE to borrow in the future. The downgrade is significant because GE is viewed as a barometer of the health of the US economy. GE last month cuts its dividend, a move it said would save it $9bn a year as it sought to shore up its finances. GE's finance unit GE Capital has been hit because it makes a wide variety of loans, including mortgages, that have since seen their value plummet. The economic downturn has also hit its industrial unit, which makes aircraft engines, home appliances, light bulbs and wind turbines. The ratings downgrade means that S&P now considers GE less likely to pay back its debts. However, the agency considers GE's outlook stable.
16th March 2009, www.bbc.co.uk

6 Hinduja group opts out of Satyam bid
The Hinduja group has decided not to participate in the bidding process of Satyam Computer. We have not put in any expression of interest for Satyam, Hinduja group CFO Prabal Banerjee said. Asked about the reason for not participating, he said, As the bidding process has started, as a responsible corporate citizen we would not like to divulge the reason for our decision.
12th March 2009, www.financialexpress.com

7 Airtel CEO sells entire holding in firm
Bharti Airtel's chief executive, Manoj Kohli, has sold his entire holding in the telecoms firm through open-market transactions, stock exchange data showed on Thursday. Kohli, who owned 1,23,000 shares, sold 53,000 shares on March 6 and 70,000 shares on March 9, exchange data showed. Bharti shares were trading 3.1 per cent down at 569.60 rupees at 10:26 a.m., while the BSE Sensex rose 1.7 per cent.
12th March 2009, www.financialexpress.com

8 Wills Lifestyle eyes tier II cities
Diversified group ITC's lifestyle retailing brand Wills Lifestyle is eyeing tier II cities as the next growth engine and plans to open 10 stores in the next fiscal in a bid to maintain its growth rate of 20 per cent. We will set up 10 stores in the next fiscal and we are looking at places like Patna, Guwahati, Raipur, Siliguri, Coimbatore and Nagpur for these stores. This is part of our plan to set up 45 more stores in the next 2-3 years, Wills Lifestyle Divisional Chief Executive Atul Chand told PTI. He, however, declined to comment on the investment adding that the company would be open to adopting the franchise model for setting up these stores.
15th March 2009, www.financialexpress.com

Global Outsourcing

9 As recession hits IT spending, HP tries variable pricing on services
In an effort to make its outsourcing and IT services more affordable in a down economy, Hewlett-Packard Co. is changing its services pricing to a model that's akin to ordering a customized laptop. The new approach may have its broadest impact on how HP prices the application support services offered by its Electronic Data Systems unit. HP, which acquired EDS last August, said that users now will be able to specify different application service levels based on the importance of individual apps. For instance, a company could set high service levels for critical applications that require a rapid support response, such as order processing, while others that aren't as central to business operations could be designated for lower levels of service -- with HP's pricing varying accordingly. The change isn't a price cut, according to HP officials. But the variable pricing could reduce overall application support costs by as much as 40% for customers, said Jeff Womack, vice president of product marketing at EDS.
11th March 2009, www.computerworld.com

10 ACS Appoints Dave Amoriell to Lead ACS Transportation Solutions Group
Affiliated Computer Services, Inc. today announced the appointment of Dave Amoriell as the company's new executive vice president and group president of the Transportation Solutions Group. In his new capacity, Amoriell will direct the Transportation Solutions Group's day-to-day operations. We are getting an exceptional and distinguished leader in Dave. His considerable experience and vision will allow him and our Transportation Solutions Group to address the complex transportation challenges facing governments around the world, said Lynn Blodgett, ACS president and chief executive officer. "We could not have a better leader to provide strategic and workable solutions for our transportation clients.
12th March 2009, www.foxbusiness.com

11 U.S. Gaining Favor as Outsourcing Location
In the midst of a tough economy, U.S. technology companies are putting the United States at the top of the list of countries they are likely to outsource operations to, according to a survey by the accounting and consulting firm BDO Seidman. When asked what one location they might consider for outsourcing in the future, participating CFOs most frequently cited the United States (22%), followed by China (16%), India (13%), Southeast Asia, including the Philippines (7%), Latin America (7%), Western Europe (6%), Canada (5%) and Eastern Europe (3%). Although sending operations offshore might offer long-term cost benefits, cash strapped firms are being deterred by the start-up costs of implementing an offshore strategy, said Don Jones, an International Tax Partner in the firm's Technology Practice.
13th March 2009, www.tutorial-reports.com

12 IBM Named a Leader for Data Center Outsourcing Services in Western Europe
IBM today announced that analyst firm, Gartner, has named IBM a leader in its February 2009 report, Magic Quadrant for Data Center Outsourcing Services, Western Europe. IBM has made strategic investments to develop a portfolio of repeatable, automated services solutions that enables the company to deliver business value rapidly and reliably to clients across a range of industries. In tandem, IBM has built a massive global delivery network which incorporates over 80 strategic centers around the world and serves thousands of clients. IBM's global delivery capabilities are a key differentiator as they allow the company to deliver services seamlessly by harnessing IBM's infrastructure, processes, tools and skilled resources. The global delivery centers are a key component of IBM's strategy as a globally integrated enterprise, allowing outsourcing clients to capitalize on a global talent pool to drive profitable growth.
14th March 2009, www.msnbc.msn.com

13 Sprint signs $2 billion outsourcing deal with Ericsson?
The expectation that thousands of additional Sprint workers could be affected by a new outsourcing contract took a new twist today. Citing a Swedish business weekly publication, Reuters is reporting that Ericsson has signed a service contract with Sprint worth more than $2 billion. Sprint declined to elaborate on the report. We don't comment on rumors or speculation, James Fisher, a Sprint spokesman told me. SprintConnection began reporting last November about the possibility of outsourcing moves that could shift thousands of workers in a so-called re-badging move. This was before Sprint announced plans to cut 8,000 jobs in actions that are expected to be completed largely in the next few weeks.
14th March 2009, www.tutorial-reports.com

14 ACS in talks to buy e-Services Group Int'l
Affiliated Computer Services Inc. is in discussions to purchase e-Services Group International, a business process outsourcing company in the Caribbean. ACS would acquire 4,000 employees based in Jamaica and St. Lucia with e-Services Group continuing under the management of its current management team, ACS said in a news release. Financial terms of the deal were not disclosed. The acquisition would provide a highly trained work force from a location and time zone convenient to North American businesses, ACS said. Dallas-based ACS is currently one of the largest business process outsourcing companies in Jamaica.
17th March 2009, www.bizjournals.com

Global Economy

15 Oil price falls on Opec decision
Oil prices have fallen by almost $2 a barrel following the decision by Opec members not to cut production further. US light crude tumbled by $1.98 to $44.27 a barrel, while Brent oil fell by $1.84 to $43.09. Opec said on Sunday it would focus on enforcing production cuts already agreed and not introduce further cuts. The cartel's secretary general on Monday also blamed the US and other industrialised nations for causing the global economic downturn. We have not seen any positive actions from the countries that have created this problem, said Abdulla el Badri. He noted the lack of improvement in the global economy despite all the stimulus packages introduced by developed economies.
16th March 2009, www.bbc.co.uk

16 G20 summit 'critical for economy'
The upcoming G20 meeting is critical if the world wishes to avoid the economic turbulence seen in the 1930s, the UK government has warned. Cabinet minister Douglas Alexander said the summit in London of the G20 group of rich and emerging nations next month "was an important moment". G20 finance ministers pledged to make a sustained effort to beat the recession after they met on Saturday. But the talks took place amid differences on the best way forward. The finance ministers also promised to continue with economic stimulus packages and low interest rates, and to increase IMF funding. Mr Alexander played down suggestion of rifts between the EU and the US and the UK on how to tackle the financial crisis. While the US and UK finance ministers have led the call for further public spending on stimulus packages to help lift economies, some of their European counterparts have urged caution.
15th March 2009, www.bbc.co.uk

17 Australia cuts migrant job intake
Australia has said it will cut the number of skilled foreign workers it accepts by 14% to safeguard local jobs. Immigration Minister Chris Evans announced the cut, the first by the country in 10 years. Mr Evans said the government did not want to admit people who would compete with Australians for limited jobs amid the global financial crisis. Unemployment is rising in Australia, after years of economic growth fuelled largely by mining exports. One of the main countries likely to be affected by the cuts is the UK. Every year many British bricklayers, carpenters, plumbers and other people with trades decide to swap life in the UK for life in Australia.
14th March 2009, www.bbc.co.uk

18 G20 make pledge to restore growth
Finance ministers from the G20 group of rich and emerging nations have pledged to make a "sustained effort" to pull the world economy out of recession. UK Chancellor Alistair Darling said they agreed the International Monetary Fund (IMF) should be given more money. The talks were held amid reports of rifts over the best way forward. BBC economics editor Stephanie Flanders said that the outline agreements represented cheap talk, and differences remain. The outline agreements will now provide the basis for more concrete pledges at next month's meeting of G20 leaders in London.
14th March 2009, www.bbc.co.uk

19 Sri Lanka plays hardball with IMF
Sri Lanka will not accept any conditions on a loan from the International Monetary Fund (IMF), the island's president has said. We will not pawn or sell our motherland to obtain any monetary aid" said Mahinda Rajapaksa. The Sri Lankan government is in talks with the IMF about a $1.9bn (£1.4bn) loan to help combat the economic downturn and pay for reconstruction. The IMF usually insists on conditions for any emergency loans. These involve taking steps such as cutting public spending or raising interest rates. But Sri Lanka has made it clear it will not be forced into taking any such measures. The country has been hit by slowing tea and textile exports that have depleted the country's foreign currency reserves. It also needs money to pay for reconstruction work in the north and east of the island after recent fighting with Tamil Tiger rebels. Sri Lanka's central bank also believes that an IMF loan would encourage other institutions to offer monetary support, as well as boosting international investors' confidence in the island.
12th March 2009, www.bbc.co.uk

20 Economic woes hit Dubai ratings
Standard & Poor's has cut the credit ratings of six Dubai government-backed entities and a leading property firm. It comes weeks after Dubai's finance ministry sold $10bn (£6.9bn) in bonds to the United Arab Emirates (UAE), to ease the emirate's liquidity problems. Dubai is one of seven members of the UAE federation. S&P said that the worsening world economy could hit sectors vital to the Dubai economy such as trade, tourism and commerce. S&P analyst Farouk Soussa said the downgrades followed a cut to the in-house sovereign rating S&P has for Dubai, a rating which remains confidential. The six bodies affected by the one-notch rating cut are DIFC Investments, port operator DP World, Jebel Ali Free Zone and JAFZ Sukuk Islamic financing package, the Dubai Multi Commodities Center Authority and Dubai Holding Commercial Operations Group.
11th March 2009, www.bbc.co.uk

Global Markets

21 Europe snubs US call for more fiscal stimulus
Top US officials on Monday urged other countries to step up spending to combat recession but Europe dismissed the call, exposing a rift before a summit of the world’s largest rich and developing economies. Finance ministers from the Group of 20 nations meet this coming weekend to lay the groundwork for a summit on 2 April, where leaders hope to present a united front in tackling the economic crisis. We’re doing more in weeks than other countries do in years, US Treasury Secretary Timothy Geithner told Reuters after briefing US lawmakers on the administration’s economic stimulus and financial stability programs.
11th March 2009, www.livemint.com

22 The liquidationist approach to recession
Global strategies to fight this recession have standardized on two policies: bailouts of troubled banks and stimulus through deficit spending—the latter advocated in recent days by Larry Summers, director of US president Barack Obama’s national economic council and a Clinton-era treasury secretary. There is an alternative approach, propounded by another former treasury boss, Andrew Mellon, in December 1929: Liquidate labour, liquidate stocks, liquidate the farmers, liquidate real estate... It will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up from less competent people.
13th March 2009, www.livemint.com

23 JP Morgan’s performance buoys Wall St for 2nd day
US stocks rose for a second day on Wednesday after JP Morgan Chase’s chief executive said his bank was profitable in January and February, echoing comments by Citigroup’s CEO a day earlier. But the Dow industrials eked out a slim gain as a 7% drop in oil prices pushed energy shares like Exxon Mobil Corp lower and limited a broad-market advance. Jamie Dimon’s comments to CNBC television, which reversed a broad decline, came after a speech where he said the bank’s bond department had just had its two busiest months ever. His comments followed similar remarks on profits from Citigroup’s Vikram Pandit that on Tuesday spurred Wall Street’s biggest rally in nearly four months. JPMorgan shares rose 4.6% to $20.40, while an index of bank stocks climbed 3.1%. Dimon “calmed the markets down. He was the voice of reason,” said Angel Mata, managing director of listed equity trading at Stifel Nicolaus Capital Markets in Baltimore.
12th March 2009, www.livemint.com

24 Wall St jumps on GE rating outlook
US stocks rose for a third day on Thursday on relief that a ratings cut by S&P in General Electric was just one notch and that no further cuts loomed, while retail sales data showed some stabilization in consumer spending. Wall Street closed out its best three-day run since the end of November after GE, the ninth-largest company in the S&P 500 and viewed as an economic bellwether, jumped nearly 13% to $9.57. Standard & Poor’s stripped it of its AAA rating, citing the expectation for poor earnings at its finance unit, and assigned a stable outlook. Investors had feared the credit rating downgrade would be deeper or the outlook negative.
14th March 2009, www.livemint.com

25 IDG, Microsoft join hands to give Indian start-ups a boost
Technology focused venture capital firm IDG Ventures India and Microsoft Corp.’s India arm announced on Friday a funding programme that could see investments of up to Rs100 crore in start-up companies. Under the programme, a start-up company gets to use a suite of Microsoft’s tools and technologies for free for three years and access funding of up to Rs25 crore from IDG Ventures India. We are their (Microsoft’s) exclusive funding partner till December 2009, said Sudhir Sethi, chairman and managing director, IDG Ventures India. Microsoft’s BizSpark programme, through which it helps start-ups with free access to tools, was launched in India in December and 275 firms have opted for it so far. As the BizSpark initiative is for companies that are less than three years old and have earn revenues of not more than Rs5 crore, Microsoft said. More than 95% of our revenues are driven by ecosystem partners...companies working with us. These start-ups will leverage our technologies and tools later, said Srikanth Karnakota, director, platform strategy, Microsoft India.
15th March 2009, www.livemint.com

26 AIG bailout benefits European banks, raises questions
Goldman Sachs Group Inc and a parade of European banks were the major beneficiaries of $93 billion in payments from AIG - more than half of the US taxpayer money spent to rescue the massive insurer. The revelation on Sunday by American International Group Inc was another potential public relations nightmare, coming on the same weekend that the Obama administration expressed outrage over AIG’s plan to pay massive bonuses to the people in the very division that destroyed the company by issuing billions of dollars in derivatives insuring risky assets. The size of the payments also illustrates how seriously a potential collapse of AIG was viewed by the regulatory authorities. US Federal Reserve chairman Ben Bernanke said in an interview with CBS news magazine “60 Minutes” that the failure of AIG would have brought down the financial system.

Compiled by:
Himanshu Gupta
BBA (MAHE) L3,S2 - 3rd Year
Skyline Business School
Hauz Khas Enclave, New Delhi 110 016
Tel: 2686 4848, 2686 6968
www.SkylineCollege.com