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Global Business |Update|
(A weekly update on Global Business )
Skyline Business School
Hauz Khas Enclave, New Delhi 110 016
Tel: 2686 4848, 2686 6968

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Issue 120

 

Global Business Update
(8th July’09----14th July’09)

Contents

Global Corporate

1 Bentley prepares parts sell-off
2 Intel results beat expectations
3 Goldman Sachs sees bumper profit
4 Vauxhall convoy aims to save jobs
5 Indra Nooyi named CEO of the Year
6 Tech Mahindra to hike Satyam stake to 42.7 pct

Global Outsourcing

7 American Express Outsources To HP-EDS
8 Carillion H1 earnings to rise, outsourcing grows
9 Aegis Acquires CCN Group
10 Ericsson breaking network outsourcing barrier with Sprint deal
11 IBM signs 10-year IT outsourcing agreement with Innovation Auto Risk
12 India's Outsourcing Industry Heads to Single-digit Growth

Global Economy

13 UK inflation dips to 1.8% in June
14 US retail sales up again in June
15 Singapore's economy bounces back
16 US budget deficit at $1 trillion
17 Obama applauds health 'milestone'
18 European car sales 'recovering'

Global Markets

19 Asia stocks struggle after yen surge
20 Europe shares fall as oil stocks weigh
21 Emerging markets regain footing, manage to dig out of a deep hole
22 Singapore roars out of recession, economy grows 20.4%
23 Asian markets jump to one-month high on strong earnings
24 FTSE up 0.6% by mid-day; miners, banks rise

Global Corporate

1 Bentley prepares parts sell-off
Bentley Motors is to make its entire back catalogue of parts and accessories available for sale. The luxury car maker keeps some 7 million Rolls-Royce and Bentley parts in a warehouse near its Crewe factory. The sale should clear space for parts for current models, Bentley's Richard Durbin told the BBC. Bentley has halted production in recent months in response to falling sales, but Mr Durbin said the parts sale was not related to any commercial problems. The parts will be offered for sale to enthusiasts, owners and professional traders at a one-off event on 26 and 27 September.
14th July 2009, www.bbc.co.uk

2 Intel results beat expectations
US chipmaker Intel has reported a better-than-expected net profit of $1bn (£610m) for April to June, excluding a massive European Commission fine. Including the fine, levied for anti-competitive practices in May, the company made a loss of $398m. Revenue for the three months stood at $8bn, a 15% fall compared with $9.4bn for the same period last year. Earlier on Tuesday, banking giant Goldman Sachs also reported strong second-quarter results. Analysts were also upbeat about the second quarter results. Ashok Kumar at Collins Stewart described the numbers as "extremely strong given the economic backdrop", while Doug Freedman at Broadpoint Amtech said more good news was to come.
12th July 2009, www.bbc.co.uk

3 Goldman Sachs sees bumper profit
US bank Goldman Sachs reported a net profit of $3.44bn (£2.1bn) for April to June, beating analysts' forecasts. Less volatility in stock markets, rises in global share prices and involvement in many firms' rights issues and takeovers had boosted profits, it said. The bank said it had set aside $6.65bn for pay and bonuses in the quarter - an average of $226,000 per employee. Goldman has recently paid off $10bn of government loans it had taken as part of a government bail-out programme. Its results include a one-off charge of $426m related to the repayment of its government loan under the Troubled Asset Relief Programme (Tarp).
11th July 2009, www.bbc.co.uk

4 Vauxhall convoy aims to save jobs
A convoy of Vauxhall cars driven by the company's workers has driven around Westminster in London as part of a campaign to safeguard their jobs. The union Unite said it wanted to remind MPs about the uncertain future for the firm's factories in Ellesmere Port in Merseyside and Luton. Negotiations continue over the sale of GM Europe's European arm Opel, which includes Vauxhall UK. Potential buyer RHJ International said it would retain the group's UK plants. The Brussels-based outfit is now one of three potential buyers alongside preferred bidder Magna International, the Canadian car parts group, and Beijing Automotive Industry Holding, another late entrant.
9th July 2009, www.bbc.co.uk

5 Indra Nooyi named CEO of the Year
Beverages major Pepsico's India-origin Chief Executive Officer Indra Nooyi has been named as 2009 CEO of the Year by Global Supply Chain Leaders Group (GSCLG) for promoting socially responsible business practices. The CEO of the Year award recognises industry leaders who have made extraordinary contributions in responsible corporate citizenship, the combat against global warming, involvement in social causes and creating jobs in America in a globalised economy. Nooyi's key contributions include promoting and supporting socially responsible business practices, including climate change, the GSCLG said in a statement.
14th July 2009, www.financialexpress.com

6 Tech Mahindra to hike Satyam stake to 42.7 pct
The Board of Mahindra Satyam cleared a proposal of Venturebay, a unit of Tech Mahindra, to hike its stake in the company (Mahindra Satyam) through a second round of preferential share allotment to 42.7 per cent. Satyam has stabilised. It was a normal board meeting. The main issue was allocation of shares, which is being done," Kiran Karnik, Chairman, Board of Satyam, said in New Delhi. Later Mahindra Satyam in a statement said its board of directors has allotted 19.86 crore additional shares to Venturebay, which would take Tech Mahindra's stake to approximately 43 per cent of the outstanding share capital. A Tech Mahindra spokesperson said after the preferential allotment Venturebay's stake in Mahindra Satyam would be 42.7 per cent.
10th July 2009, www.financialexpress.com

Global Outsourcing

7 American Express Outsources To HP-EDS
Hewlett-Packard said its EDS outsourcing unit has secured a five-year deal to provide a range of technology services to financial services giant American Express. An HP spokesperson on Tuesday declined to provide information about the agreement's financial terms. The deal calls for EDS to provide a number of IT services to American Express, including management of desktop, voice, and data networks. EDS also will provide on-site tech support for about 60,000 American Express employees in more than 130 countries. American Express officials said they're hopeful that the arrangement will allow the company to increase IT innovation and flexibility while reducing costs. Our goal is to drive American Express' growth, innovation, and customer service using secure technology that enables a more productive, efficient, and collaborative workplace, Matthew Robinson, American Express' CTO, said in a statement.
9th July 2009, www.informationweek.com

8 Carillion H1 earnings to rise, outsourcing grows
British building and outsourcing group Carillion said it expected improved half-year earnings, driven by growth in support services and public sector projects, though the UK construction market was still slow. Carillion, which generates much of its revenue from government work and Public Private Partnership (PPP) projects, said on Wednesday its support services unit continued to benefit from long-term public sector contracts and that the economic downturn was creating a range of opportunities for the division. Carillion posted a pretax profit of 53.6 million pounds ($87 million) for the six months to the end of June 2008 and analysts expect the group to report a profit of 179 million pounds for 2009, according to Reuters Estimates.
10th July 2009, www.tutorial-reports.com

9 Aegis Acquires CCN Group
India's Aegis Ltd., the business process outsourcing arm of the diversified Essar Group, said Thursday it has acquired a 100% stake in South Africa's CCN Group Pty. Ltd. Privately-owned Aegis didn't disclose in its statement how much it paid for the acquisition, but said that the amount was part of its plan to invest $60 million in South Africa over the next three years. CCN, also an unlisted business process outsourcing services provider, had revenue of more than $19 million in the year ended March 31. It has two facilities with a capacity of 700 seats and has more than 1,000 employees, Aegis said.
11th July 2009, www.tutorial-reports.com

10 Ericsson breaking network outsourcing barrier with Sprint deal
Nokia Siemens Networks may have found the first outsourcing toehold in the US telecom market, but the Ericsson surmounted the summit. Its $4.5 billion to $5.5 billion network management deal with Sprint opens the door for US operators to follow the lead of Europe, Asia and the emerging markets in handing over the day-to-day operations of its network to an outsider, while they focus on service. Now that the door is open, the question is will others walk through it. In a conference call today, Sprint executives took pains to point out that they were not ceding control to Ericsson. Sprint’s 6000 employees overseeing the CDMA, iDEN and wireline network would move to Ericsson where they would continue their former duties of maintaining and running the network, but any major technology, strategy, service and product decisions would remain firmly in Sprint’s hands, said Steve Elfman, Sprint president of network operations and wholesale.
12th July 2009, www.tutorial-reports.com

11 IBM signs 10-year IT outsourcing agreement with Innovation Auto Risk
IBM on Monday signed a 10-year information technology (IT) outsourcing agreement with Innovation Auto Risk, an established leader in the Indian market providing claims management services and other related solutions to insurers & fleet management companies. As part of the agreement, IBM will deploy server, storage, networking and security IT infrastructure to be hosted at a data center in Delhi. IBM will provide 24x7 onsite infrastructure monitoring services from an onsite command centre. In addition, IBM will provide managed services and ongoing project management for infrastructure procurement, commissioning and configuration, as well as hardware refreshes after five years.
11th July 2009, www.economictimes.com

12 India's Outsourcing Industry Heads to Single-digit Growth
India's revenue from offshore outsourcing will likely have single-digit growth in the fiscal year to March 31, 2010, the president of the country's top outsourcing trade body said. The forecasted growth will be less than an estimated 14 percent to 16 percent growth in outsourcing exports in the year to March 31, 2009, and far lower than in the year to March 31, 2008, when growth in exports was 29 percent. Exports include services performed for customers abroad, billed in their currency, with the money brought back to India. India's outsourcing industry has been affected by customers' delay in finalizing outsourcing budgets, and the overall slower growth of business in key markets like the U.S., said Som Mittal, president of the National Association of Software and Service Companies (Nasscom) on Tuesday.
14th July 2009, www.tutorial-reports.com

Global Economy

13 UK inflation dips to 1.8% in June
A key measure of inflation has fallen below the Bank of England's target rate of 2% for the first time since 2007. Lower food prices caused the Consumer Prices Index (CPI) to drop to an annual rate of 1.8% in June from 2.2% in May, official statistics showed. The Retail Prices Index (RPI) inflation measure, which includes mortgage interest payments and housing costs, fell to -1.6% from -1.1%. The RPI is now at its lowest since ONS records started in 1948. The Bank of England aims to keep inflation at 2% to maintain price stability and more broadly, economic stability.
14th July 2009, www.bbc.co.uk

14 US retail sales up again in June
US retail sales rose in June for the second consecutive month, increasing 0.6%, the Commerce Department said. The increase followed May's 0.5% gain, and was better than analyst expectations of a 0.4% rise. The increase in retail sales was led by petrol, cars and auto parts. When these were excluded, sales dropped 0.2%, their fourth straight decline. Separate figures from the Labor Department showed that US wholesale prices increased in June. Its Producer Price Index rose by 1.8%. Excluding food and energy bills, core wholesale prices were 0.5% higher. Petrol sales rose 5% last month, while car and auto parts sales added 2.3%.
13th July 2009, www.bbc.co.uk

15 Singapore's economy bounces back
Singapore appears to be emerging from its worst recession on record after the economy expanded at an annualised rate of 20.4% between April and June. The rapid expansion compares with a revised contraction of 12.7% in the first quarter from January to March. It was the first quarterly expansion in a year, lifted by increased drug sales and construction activity, said the Ministry of Trade and Industry. However, the government still expects the economy to contract for the year. The government now predicts the economy will decline between 4% and 6% for 2009 as a whole, less than its earlier estimate of a contraction of between 6% and 9%.
10th July 2009, www.bbc.co.uk

16 US budget deficit at $1 trillion
The US budget deficit has moved above $1 trillion (£616bn) for the first time - with three months of the financial year remaining, official data show. The government stepped up spending to counter the recession, and the bailout of financial institutions has taken a huge chunk out of government finances. Falling tax revenues and unemployment benefit spending have also contributed. The figure compares with $455bn for the whole 2007/8 financial year, but the 2008/9 deficit was expected to soar. A budget deficit can impede spending on programmes such as health and education.
11th July 2009, www.bbc.co.uk

17 Obama applauds health 'milestone'
US President Barack Obama has described the Senate health committee's vote to approve a healthcare reform bill as a "major milestone". And he urged Congress to pass a health reform bill by the beginning of August. The committee's bill would expand coverage to 97% of Americans, at a cost of some $600bn. With its vote on Wednesday, the panel became the first congressional committee to pass a bill. Four other panels are also working on bills. Speaking alongside members of the American Nurses Association, Mr Obama praised the House committee's joint proposal, and the bill approved by the Senate Health, Education, Labour and Pensions Committee.
8th July 2009, www.bbc.co.uk

18 European car sales 'recovering'
Sales of new cars across Europe rose for the first time in 14 months in June, buoyed by a number of national scrappage schemes, figures have shown. New registrations across 28 European nations rose by 2.4% last month from a year ago, the European Automotive Manufacturers' Association said. Germany, one of the first countries to pay drivers to trade in old cars, led the gains, with registrations up 41%. In the UK, the rate of decline in new car registrations had slowed. New registrations in the UK were down 15.7% in June from a year ago, a figure that had already been released by UK trade group the Society of Motor Manufacturers and Traders (SMMT). This compared with May's 25% fall.
9th July 2009, www.bbc.co.uk
 

Compiled By
Himanshu Gupta,
BBA Alumni (2005-08), Marketing
Skyline Business School
Hauz Khas Enclave, New Delhi 110 016
Tel: 2686 4848, 2652 4399
http://www.skylinecollege.com