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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
Issue 121
Global Business Update
(15th July’09---21st July’09)
Contents
Global Corporate
1 Boeing eyes Dreamliner solution
2 Ryanair reduces Stansted flights
3 Yahoo posts fall in revenue
4 Starbucks buoyed by cost cutting
5 iPhone sales boost Apple results
6 Mallya's Kingfisher has most cases
of drunk pilots
7 Essar Oil ties up $920 mn to fund refinery expansion
Global Outsourcing
8 IBM signs 10-yr outsourcing deal
9 Henry Ford Re-Ups Outsourcing with CSC
10 Citi, First Data Ink Outsourcing Deal
11 ACS inks $10M contract with hospital
12 Microdyne closing Groveport center, cutting 78
13 Michigan's Delphi Steering workers may get aid
Global Economy
14 Ukraine's economy 'to shrink 15%'
15 China grows faster amid worries
16 Ghana secures $600m loan from IMF
17 Economic recovery in UK 'on hold'
18 India to borrow Rs 150 bn
a week till Sept
19 Inflation rises to -1.21 per cent on July 4
20 Indo-US eco ties to hinge on 5 pillars: Clinton
Global Market
21 NAB to raise up to $2.25bn in share sale
22 Citi posts $4.28 billion profit for Q2
23 Gold imports halved to 12 tonnes in June
24 US stocks extend rally as Caterpillar lifts forecast
25 Profit booking takes Sensex below 15K
Global Corporate
1 Boeing eyes Dreamliner solution
Planemaker Boeing says it has found a technical solution to a problem which
had delayed the appearance of its new 787 Dreamliner aircraft. However, Boeing
did not say when the plane would fly. Last month, Boeing said it had delayed
the maiden flight of the Dreamliner once again. Boeing also reported a 17%
rise in second-quarter profits to $998m (£417m), helped by its defence unit.
Overall sales rose 1% to $17.15bn, with defence sales up 9% to $8.7bn. Last
month's delay of the Dreamliner was the fifth time the launch date had been
put back. The long-range, medium-sized plane is already more than two years
behind schedule. Releasing its second-quarter results, Boeing said it would
reveal a new delivery schedule for the 787 in the current financial quarter.
21st June 2009,
www.bbc.co.uk
2 Ryanair reduces Stansted flights
Budget airline Ryanair has announced a reduction in its services
at Stansted Airport, blaming higher charges. Ryanair will reduce the number of
aircraft it runs at the airport by 40% in its winter schedule, and will cut
the number of flights by 30%, it said. But it will operate only four fewer
planes than it did last winter. The company said that Stansted was one of its
most expensive bases, and added that an increase in air passenger duty tax was
also a factor in its decision. The airline operated 40 aircraft from Stansted
in the summer, but said this would fall to 24 this winter. Last winter,
Ryanair also cut its Stansted fleet to 28 planes from 36 in the summer.
Stansted Airport's managing director, Stewart Wingate, said: "It is common
practice for [Ryanair] to reduce frequency to various destinations during the
winter season as they have done in previous years.
20th June 2009,
www.bbc.co.uk
3 Yahoo posts fall in revenue
Internet search engine Yahoo has seen revenues in the quarter to
30 June fall 13%, citing the challenging economic environment. Revenues for
the three-month period dropped to $1.57bn (£953m) from $1.79bn in the same
period a year earlier. Meanwhile profit for the quarter edged up to $141m from
$131. Yahoo shares fell 4% in after-hours trade after saying income this
quarter would range between $55m to $65m, from $76m in the second quarter.
Ross Sandler, an analyst with RBC Markets said: "Everybody expected
conservative guidance. It's more conservative than even most people had
expected. There aren't great estimates out there. Yahoo chief executive Carol
Bartz said "We established a clear, simple vision to be the centre of people's
lives online, and we're backing that vision with important initiatives to
create wow' experiences for our users.
20th June 2009,
www.bbc.co.uk
4 Starbucks buoyed by cost cutting
Coffee chain Starbucks has seen its quarterly results beat
expectations after cutting costs. The firm earned $151.5m (£92.1m) in the
fiscal third quarter to 28 June, or 20 cents per share, up from a $6.7m loss -
or 1 cent per share - a year earlier. The increase in profit stemmed largely
from lower costs, as same store sales fell 6% in the US and 5% in Europe. The
firm has been hit as consumers cut spending in the recession, prompting plans
to close hundreds of stores. The upmarket chain has faced increasingly stiff
competition from other outlets which offers cheaper coffee - such as
McDonalds. The firm has reduced the workforce, as well as targeted more than
1,000 stores worldwide for closure. In addition it has reduced prices to lure
customers.
18th June 2009,
www.bbc.co.uk
5 iPhone sales boost Apple results
Apple's quarterly results were better than forecast, thanks to
strong iPhone sales, including its new 3GS model. Net profits hit $1.23bn
(£953m), or $1.35 a share, in the fiscal third quarter to 27 June, from
$1.07bn, or $1.19 a share, a year earlier. The US technology giant sold more
than 5.2 million iPhones in the quarter, seven times more than a year earlier.
Analysts reacted positively to the profits news and shares rose in after-hours
trade. Shares in Apple ended at $151.60 before rising to $157.02 in
after-hours trade.
16th June 2009,
www.bbc.co.uk
6 Mallya's Kingfisher has most cases of drunk pilots
Vijay Mallya-promoted Kingfisher Airlines has the dubious
distinction of having the maximum cases of pilots found under the influence of
alcohol before take-off. A number of airlines including Naresh Goyal's Jet
were cited where pilots were reported to be under the influence of alcohol in
the past one year, the government informed the Rajya Sabha. Incidentally,
Mallya had named his airline after the most popular beer brand in his brewery
business. Eight pilots of Kingfisher Airlines, six each of Indigo and SpiceJet
and three each of Jetlite, Jet Airways and Paramount were detected alco-positive
during pre-flight medical examination, Civil Aviation Minister Praful Patel
said in a written reply.
17th July 2009,
www.bbc.co.uk
7 Essar Oil ties up $920 mn to fund refinery expansion
Ruias-owned Essar Oil has tied up USD 920 million to fund the expansion of its
Vadinar refinery in Gujarat to 16 million tonnes, CEO Naresh Nayyar said. We
have received approval for the debt from ICICI Bank, IDBI and SBI and we hope
to sign loan agreements sometime next month, he said from Mumbai. The Vadinar
refinery, situated five kilometres away from Reliance Industries' twin
refineries in Jamnagar district, currently operates at 133 per cent of its
nameplate capacity of 10.5 million tonnes a year. The expansion will cost us
USD 1.6 billion or Rs 7,810 crore. Of this Rs 4,600 crore is debt and the rest
equity, he said, adding that the expansion would be completed by December
2010.
21st July 2009,
www.bbc.co.uk
Global Outsourcing
8 IBM signs 10-yr outsourcing deal
IBM has announced that it has signed a 10-year-information
technology outsourcing agreement with Innovation Auto Risk, providers of
claims management services and other related solutions to insurers and fleet
management firms, to support firm's expansion and growth plans. As part of the
agreement IBM will deploy server, storage networking and security IT
infrastructure to be hosted at a data centre in Delhi. IBM will provide 24 X 7
onsite infrastructure monitoring services and ongoing project management for
infrastructure procurement, commission and configuration, as well as hardware
refreshes for five years. This agreement aims at reducing Innovation Auto Risk
capital infrastructure expenditure on IT by 25 per cent, a release said.
16th July 2009,
www.timesofindia.com
9 Henry Ford Re-Ups Outsourcing with CSC
Detroit-based Henry Ford Health System will continue to
outsource some information technology operations to Computer Sciences Corp.,
Falls Church, Va. The renewal contract for five years and three months,
running through March 2014, is valued at $115 million. CSC will continue to
provide all applications development and support for more than 200
applications. The vendor also will develop an enhanced electronic medical
record and oversee remediation of more than 50 applications for the new
300-bed West Bloomfield Hospital. Henry Ford Health System includes seven
hospitals, an 1,100-member group practice, 27 primary care centers, additional
other provider facilities and 500,000-member Health Alliance Plan.
17th July 2009,
www.tutorial-reports.com
10 Citi, First Data Ink Outsourcing Deal
Citigroup will outsource the core processing elements of its U.S. receivables
management business to First Data, a global technology and payments processing
provider, Reuters reports. The deal, terms of which were not disclosed, will
and cut spending on technology and payroll. The firm will employ the existing
Citi ‘lockbox’ staff and will sublease facilities and take over equipment at
Citi’s lockbox processing facilities. First Data will provide lockbox, image
capture, posting and reporting of receivables for corporate billers.
18th July 2009,
www.reuters.com
11 ACS inks $10M contract with hospital
Outsourcing company Affiliated Computer Services Inc. has
renewed a contract with Rehabilitation Hospital of the Pacific, a health care
facility that has agreed to a $10 million contract with ACS to provide the
company with information technology support and services. A spokeswoman for
Dallas-based ACS said the contract is part of the company’s momentum within
the IT outsourcing business, but there will be no direct impact on the
Dallas-Fort Worth area in terms of job creation from the new contract. ACS has
been providing Honolulu-based Rehabilitation Hospital of the Pacific with
information technology support since 2002. As part of the new agreement, ACS
teams will provide server management, network management, service desk support
and desktop management for the company. ACS also will be partaking in the
hospital’s installation of a new electronic medical record system.
20th July 2009,
www.tutorial-reports.com
12 Microdyne closing Groveport center, cutting 78
The outsourcing division of a defense contractor has notified
Ohio officials that it plans to close a Groveport repair center this autumn,
eliminating 78 jobs. Torrance, Calif.-based Microdyne Outsourcing Inc. said in
a filing with the state Department of Job and Family Services that its
computer and printer refurbishing center at 2450 Speigel Drive will close Oct.
30. The reduction is scheduled to begin Sept. 15. David Spear, vice president
of operations at the facility, said the closure is another casualty of the
recession.
19th July 2009,
www.tutorial-reports.com
13 Michigan's Delphi Steering workers may get aid
The federal government says more than 900 former workers at the Delphi
Steering facility in Saginaw are eligible to apply for job retraining and
other assistance. The U.S. Department of Labor said Tuesday that the
assistance for the laid-off auto supply workers will come through the federal
Trade Adjustment Assistance program. Workers are eligible for the program when
they lose jobs because of outsourcing or international trade.
21st July 2009,
www.tutorial-reports.com
Global Economy
14 Ukraine's economy 'to shrink 15%'
The World Bank has downgraded its economic forecast for Ukraine again,
predicting that the country's economy will contract by 15% this year. In
April, the bank had predicted the economy would shrink by 9% in 2009, which
was also a downgrade from its original forecast of a 4% contraction. The
economic downturn has hit the price of metals worldwide, and Ukraine relies
heavily on this sector for exports. The World Bank now predicts a gradual
recovery starting in 2010.
21st July 2009,
www.bbc.co.uk
15 China grows faster amid worries
China's economy grew at an annual rate of 7.9% between April and June, up from
6.1% in the first quarter, thanks to the government's big stimulus package.
The country's quickening economic expansion comes as most nations in the West
continue to experience recession. Beijing now expects China to achieve 8%
growth for 2009 as a whole, which compares with a predicted contraction of
between 1% and 1.5% in the US.
However, the
Chinese government warned that some economic challenges remain.
16th July 2009,
www.bbc.co.uk
16 Ghana secures $600m loan from IMF
Ghana is to get a $600m three-year loan from the International Monetary Fund (IMF),
amid concerns about the impact of the recession on poorer countries. It will
also be able to draw up to $450m from the IMF through a special facility -
expanded after the G20 summit - to help poor countries. Ghana needs funds to
reduce its budget deficit and support its currency. It has been hit by high
food and fuel prices, an energy crisis and heavy spending before last year's
elections. But the Ghanaian economy has proved "relatively resilient," the IMF
said, supported by the high prices of cocoa and gold. The extra $450m will
come from the money that Ghana and others have deposited in the fund. These
are held as special drawing rights, a basket of currencies composed of the
dollar, euro, yen and pound.
18th July 2009,
www.bbc.co.uk
17 Economic recovery in UK 'on hold'
The UK economy is set to shrink by 4.5% in this year, the
biggest fall in a single year since 1945, according to an influential think
tank. The downbeat forecast is more pessimistic than the consensus view, and
considerably worse than the 3.5% fall predicted by the government. The Ernst &
Young Item Club also warned that hopes of economic recovery are running ahead
of reality. The Item Club also warned of the threat posed to the economy from
swine flu. If doomsday predictions about the extent of the flu outbreak
materialise, it forecast a further 3% contraction in GDP this year, on top of
the 4.5%. The flu could also wipe out any growth next year, with a worst case
scenario of a further 1.2% contraction.
19th July 2009,
www.bbc.co.uk
18 India to borrow Rs 150 bn a week till Sept
The current trend of borrowing Rs 150 billion is likely to
continue at least till end-September, a senior finance ministry official said
on Wednesday. The weekly borrowing in the second half would depend on the
Reserve Bank of India's assessment of liquidity. Liquidity is comfortable now,
the official, who did not wish to be identified, said.
15th July 2009,
www.financialexpress.com
19 Inflation rises to -1.21 per cent on July 4
India's wholesale price index fell 1.21 per cent in the 12
months to July 4, compared with the previous week's annual decline of 1.55 per
cent, government data showed on Thursday. The fall was smaller than a median
forecast of 1.38 per cent fall in a Reuters poll. The annual inflation rate
was 12.19 per cent during the corresponding week of 2008. The wholesale price
index is more closely watched than the consumer price index, which is
published monthly, because it covers a higher number of products and is
released weekly.
18th July 2009,
www.reuters.com
20 Indo-US eco ties to hinge on 5 pillars: Clinton
India and the United States plan to take their strategic and
economic cooperation to a new high by launching an important dialogue on what
is called 'five pillars" during the five-day visit of US Secretary of State
Hillary Clinton. We see the dialogue that we are embarking upon as extremely
important and is based on the five pillars which are areas of strategic
importance, agriculture, healthcare, science and technology and education,
Clinton told reporters after meeting top Indian businessmen, including Ratan
Tata and Mukesh Ambani.
18th July 2009,
www.financialexpress.com
Global Market
21 NAB to raise up to $2.25bn in share sale
National Australia Bank on Wednesday launched its second large equity raising
in eight months with a surprise move to secure up to A$2.75bn ($2.25bn) from
investors to fund growth and bolster its capital position. Although analysts
said the move appeared defensive, the capital raising comes as Australia’s
banking sector faces a surge in bad debt charges. Australia’s largest lender
said the funds were needed to maintain balance sheet strength and to provide
firepower for possible acquisitions. NAB last month agreed to spend up to
A$925m to buy the Australian life and wealth management businesses owned by
Aviva, the UK insurer.
21st July 2009, www.ft.com
22 Citi posts $4.28 billion profit for Q2
From near bankruptcy late last year, banking behemoth Citigroup
has posted swung into profit of $4.28 billion for the second quarter riding on
stake sale in group company Smith Barney brokerage. In the year-ago period,
the company had a loss of $2.49 billion, Citigroup said in a statement.
Revenues for the second quarter surged 71 per cent to $30 billion from $17.5
billion in the same period last year. India-born Vikram Pandit-led Citi has
already received three lifelines, including USD 45 billion in fresh capital
from the US Federal government to tide over the financial turmoil.
18th July 2009,
www.profit.ndtv.com
23 Gold imports halved to 12 tonnes in June
Gold imports fell by 50 per cent in June compared to the same
period last year due to slowing demand amids a rise in prices. The demand for
the precious metal declined as the prices ruled high hovering between Rs
14,500 to Rs 15,000 per 10 grams level in the domestic markets, Bombay Bullion
Association President Suresh Hundia said from Mumbai. Gold imports in June
were less by about six tonnes from May's imports of 17.8 tonnes. Gold prices
today ruled over Rs 15,000 per 10 grams in the spot markets across the
country. The MCX August gold today was trading at Rs 14,866 per 10 grams while
in global markets it was at 951 dollar an ounce 28.34 grams.
20th July 2009,
www.financialexpress.com
24 US stocks extend rally as Caterpillar lifts forecast
The stock market managed to extend its weeklong rally even as it
struggled with more worries about the banking industry. Major market indexes
seesawed through much of Tuesday's trading and ended with gains of less than 1
per cent. Better-than-expected results from companies including Caterpillar
Inc. spurred shares generally higher, although financial stocks slid on
reports of losses at several regional banks. Investors also digested a mixed
report from Federal Reserve Chairman Ben Bernanke, who restated the Fed's view
that the economy is still on track to recover this year, but slowly. He also
predicted rising unemployment. Analysts said the market's more subdued tone
was natural after stocks surged more than 8 percent since the start of last
week. Caterpillar joined other major companies in issuing an improved 2009
profit forecast. Second-quarter profits fell 66 percent but still came in
ahead of expectations. Shares in the heavy equipment maker, considered a
bellwether of the global economy, rose 7.7 percent.
21st July 2009,
www.economictimes.com
25 Profit booking takes Sensex below 15K
Profit booking in metal, auto, cap goods and IT shares saw markets reverse
early gains and end lower on Wednesday. The Sensex fell 219 points to end at
14,843, after gaining as much as 2 per cent in early trade. The Nifty dropped
1.5 per cent to close at 4,398. During today’s session, the Sensex had hit its
day’s high of 15,369 on the back of higher Asian markets and Wall Street but
weak European markets reversed the investor sentiment, pushing investors to
book profits after strong gains in the past few sessions. All sectoral indices
on the BSE ended lower today. The BSE capital goods index fell 1.8 per cent on
selling in BEL and Thermax. The stocks fell over 5 per cent each.The auto
index on the BSE dropped 1.6 per cent.
21st July 2009,
www.profit.ndtv.com
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