Global Business

Global Corporate

1 Microsoft deal distracting Yahoo

Yahoo Inc has faced significant distraction from Microsoft Corp's unsolicited takeover bid, the company warned investors on Wednesday in its annual report filed with U.S. regulators. The Silicon Valley Web pioneer said in its annual report to the U.S. Securities and Exchange Commission that Microsoft's cash-and-stock deal, now valued at $41.6 billion, may continue to prove a distraction for the company and its management. Earlier this month, Yahoo's board of directors rebuffed Microsoft's offer. Microsoft has responded by saying its offer is full and fair" and has raised the prospect of a campaign to elect a rival slate of directors that would back its offer. The review and consideration of the Microsoft proposal and any alternate proposals have been, and may continue to be, a significant distraction for our management and employees," the company said in its report to the SEC.

28th February 2008, www.bbc.co.uk

2 Volkswagen drives up 2007 profits

Volkswagen, the car maker behind the Audi, Lamborghini and Bentley brands, sold a record 6.2 million cars in 2007. Improved productivity and rising demand in Asia and Eastern Europe boosted profits by 40% to reach 6.15bn euros (£4.7bn;$9.3bn). Europe's biggest car-marker has been expanding into emerging markets and has improved its market share in Europe. Volkswagen said it expects growth to continue in 2008, with nearly all brands bringing out new models. We expect deliveries to customers to exceed the record set in 2007 with sales figures rising in the Asia-Pacific and central and Eastern Europe regions in particular, the company said in a statement.

29th February 2008, www.bbc.co.uk

3 HSBC in $17bn credit crisis loss

HSBC, the UK's largest bank, has said it has made a $17.2bn (£8.7bn) loss after the decline in the US housing market hit the value of its loans. But its annual profits still rose 10% to $24.2bn (£12.2bn), up from $22.08bn the year before. The write-down is the largest of the big-five UK banks because HSBC has large operations in the US. The bank said the global financial system had come under extraordinary strain in 2007. "The outlook for the rest of 2008 is uncertain," said HSBC chairman Stephen Green. The economic slowdown and the credit outlook in the US may well get worse before they get better," he added. Whilst the credit crisis, caused by problems in the US housing market, hit HSBC's US operations, the bank enjoyed strong growth in Asia, Middle-East and Latin America.

1st March 2008, www.bbc.co.uk

4 Microsoft targets the mobile web

Microsoft has launched a bid to capture a segment of the growing market for rich web content on mobile phones. The software firm has signed a deal with handset manufacturer Nokia to bring its Silverlight platform to millions of mobile phones. Silverlight is seen as a competitor to Adobe's Flash, which is already used by popular websites such as YouTube. The software will first be available on Nokia's high end smart phones running a Symbian operating system. Nokia's S60 platform, which uses Symbian, will be the first to take advantage of Silverlight. S60 is used in handsets built by LG and Samsung as well as Nokia and is the most popular smart phone software platform with more than 53% market share. It is used in Nokia's latest N96 phone, the successor to its popular N95. Other handsets and internet tablets running different software will follow at a later date, according to the firm. Silverlight allows designers and developers to produce rich web applications that are independent of browser, operating system and handset. Microsoft has stressed its value for developing Web 2.0 applications that would work on a computer, but also on any other device including mobile phones.

2nd March 2008, www.bbc.co.uk

5 Indian switchgear major acquires UK firm
Indian switchgear major Victory Group has acquired a British manufacturer of control gear products Craig and Derricott for an undisclosed sum. With the acquisition of the West Midlands-based group on Thursday, the Hyderabad-based company became the latest Indian company to expand to Britain. Under the new ownership, Craig and Derricott will continue to operate as a UK company, supporting the existing product range whilst benefiting substantially from the Victory Group's investment in new products and capabilities. Craig and Derricott's specialist switchgear has an unrivalled reputation and will support our own ambitious plans for expansion in countries such as India, Africa, China, the Middle East and America, Mahindra Vaddineni, Managing Director of The Victory Group, said after the acquisition. Andrew Dolman, who is currently the engineering director of Craig and Derricott, will become the new managing director of the company, whose production would be retained in the Midlands.

3rd March 2008, www.financialexpress.com

6 NALCO bags award as largest exporter
National Aluminium Company (NALCO) has been awarded a gold trophy by Engineering Export Promotion Council as the top exporter in large enterprise category. NALCO has also been lauded for its contribution to engineering export in 2005-2006. P K Parida, Executive Director (Marketing) of NALCO received the award from German Consul General in Kolkata, Guenter Wehrman, in a function held in Kolkata on Thursday. According to NALCO authorities, it has played a key role in the export of alumina and aluminium from India. The company's products are exported to more than 30 countries. In 2005-06, the company exported 8,62 lakh tones of alumina and 95,747 tonnes of aluminium, earning foreign exchange of Rs 2,307 crore. It stood at Rs 2,586 crore last year.

1st March 2008, www.economictimes.com

7 Indian tea company enters UAE market
India's largest privately held tea company plans to enter the UAE's retail market. Wagh Bakri Tea Group has appointed a local supermarket chain as its UAE distributor. The company, with a turnover of USD 65 million, sells over 20 million kgs of tea worldwide each year. Already catering to 300,000 outlets across India and operating in major Markets such as the US, Canada, Australia, Singapore and Japan, the company hopes to expand its operations in the Arab and African regions with Dubai as a base. In the next five years, we will set up a teabag machine in one of the free trade zones in Dubai. We will cater to the entire Arab and African region here, said Parag Desai, director, Wagh Bakri Tea Group. The company recently purchased a USD 13.6 million tea bag machine from Italy. The machine can make 250 staple-free teabags a minute.

4th March 2008, www.economictimes.com

8 Advanta acquires US firm's business for $10.5 mn
Advanta India on Tuesday said it has acquired the business of Garrison & Townsend for 10.5 million dollars (about Rs 42 crore), a move that will strengthen the domestic seed marketing company's presence in the United States. The company has bought the entire business of Texas-based Garrison & Townsend (GT), LP through its subsidiaries, Advanta India informed the Bombay Stock Exchange in a filing. GT has strong presence in grain sorghum, a cereal that thrive in semi-arid regions and used a food item. Its products are marketed throughout the US as well as in Italy, Israel, Pakistan, Mexico, Central America, South America and Japan. Advanta India is an associate company of United Phosphorus Ltd (UPL), agrochemicals company and is the holding firm for the global business of Advanta, an American banking company.

3rd March 2008, www.reuters.com

Global Outsourcing

9 Online HL7 course to boost healthcare outsourcing to India

Software professionals from India can now appear for an online course, which will prepare them for a Health Level Seven (HL7) certification -- a standard which helps hospitals and clinics from all over the world to exchange medical data besides being important for clinical trials. The last date for registration is March 3, 2008. The hospital care business in the US amounts to approximately $700 billion, and administrative costs are estimated to be 14% or around $100 billion. Spending from the US market is expected to grow to $38 billion during 2007-08, states a report by Zinnov Research and Consulting, making healthcare outsourcing a big business opportunity. The global healthcare provider market currently is dominated by firms like CSC, IBM, Accenture, EDS and Perot Systems. Indian service providers accounted for only $115 million (Rs 460 crore) worth of outsourcing during 2005-06. One reason is that India does not have enough HL7-certified professionals, which this online course intends to bridge. Indian firms, though, are getting their act together. HL7 India has been conducting certification exams in India since 2002, and India currently has around 300 HL7-certified professionals.

27th February 2008, www.businessstandard.com

10 Cost pressures push additional outsourcing of services

Some Oakland County companies are doing brisk business providing outsourced services, as sectors including automotive, discrete manufacturers and schools look to cut costs. Outsourcing of functions such as cleaning, payroll, distribution and information technology stretches back decades in some cases, said Jagdish Dalal, managing director, thought leadership, for the International Association of Outsourcing Professionals. But with globalization squeezing costs, various estimates show U.S. companies account for about $4 trillion in outsourced activity per year. Local firms aiming to capitalize on outsourcing say they are benefiting from pressure to cut costs and centralize purchasing. Those two markets are the company's primary targets, while MR1 has more recently begun working with banks to manage properties in foreclosure. The company, with five internal employees and 13 others filling management functions in local plants, is part of a partnership bidding on multimillion-dollar contracts to provide maintenance and janitorial services for Birmingham Public Schools.

28th February 2008, www.tutorial-reports.com

11 Capita profits from increase in outsourcing work

Outsourcing giant Capita Group said Britain's companies are contracting out work at unprecedented rates ahead of a potential economic downturn as it reported a 19pc increase in full-year profits. Chief executive Paul Pindar made the comments as Capita, which provides back office outsourcing, reported the jump in profits to £271m pre-tax on a 19pc increase in revenues to £2.07bn. Trading conditions are buoyant, he said. "If we are going to enter an economic downturn then it will be positive for us." He added that financial services firms, which have been hit hardest by the credit crunch and US mortgage crisis, had proved more willing to discuss outsourcing opportunities in recent months.

1st March 2008, www.tutorial-reports.com

12 Nokia Siemens, TCS sign outsourcing deal

The Finland-based telecom gear manufacturer Nokia Siemens Networks has signed a multi-million euro deal with Tata Consultancy Services to transfer product engineering and R&D services, as well as parts of the Operations and Business Software (OBS) business unit activities from Nokia Siemens Networks to TCS. The reassigned parts belong to the Nokia Siemens Networks development centre in Düsseldorf, Germany, including 90 employees who will be transferred to TCS, as part of this engagement. With this agreement, Nokia Siemens Networks and TCS will create an efficient set-up, whereby TCS will provide global R&D services to Nokia Siemens Networks by leveraging its expertise in the telecommunications sector.

1st March 2008, www.businessstandard.com

13 Cashing in on the outsourcing boom

Capita, the business process outsourcing group, once again pleased investors with solid 19 per cent growth in sales and profits. It is trading at 21 times estimated future earnings, which seems high but for three factors. First, Capita has delivered 25 per cent average earnings per share growth in the past five years (22 per cent in 2007) and its management says it is "comfortable" with market expectations of further revenue growth. Second, as a business whose selling point is that it cuts its customers' costs, Capita looks well set to weather any economic showers.

2nd March 2008, www.economictimes.com

14 Obama opposes outsourcing of jobs

Continuing to play the anti-outsourcing card, Democrat presidential front-runner Barack Obama on Wednesday said while America cannot "shy away" from globalisation, it would have to take measures to ensure that jobs are not shipped overseas. We have to stop providing tax breaks for companies that are shipping jobs overseas and give those tax breaks to companies that are investing here in the United States of America, Obama said in during a debate with rival Senator Hillary Clinton in Cleaveland, Ohio.The Illinois Senator, playing to the gallery of those workers who have been displaced in manufacturing jobs as a result of the North American Free Trade Agreement (NAFTA) and generally to the anti-outsourcing crowd, said he would ensure that every pact the US signs has environmental, safety and labour standards to protect workers and consumers alike.

29th February 2008, www.bpoindia.org

Global Economy

15 Canada cuts rate as economy cools

The Bank of Canada has cut interest rates and suggested more cuts might be needed to counter the impact of the slowing US economy. The Canadian central bank reduced interest rates by half a percentage point to 3.5% from 4%. There are clear signs that the US economy is likely to experience a deeper and more prolonged slowdown than had been projected, the bank stated. Canada sells about 75% of its exports to the US. The bank added that risks to Canada's economic outlook were materialising and in some cases intensifying. This stems from further weakening in the residential housing market, which is adversely affecting other sectors of the US economy and contributing to further tightening in credit conditions, it said. This is the second time this year the bank has cut rates in a bid to boost the economy. In January the bank reduced rates to 4% from 4.25%.

Central banks worldwide have reduced rates since the credit crunch hit last summer, amid fears the US slowdown could turn into a wider recession.

4th March 2008, www.bbc.co.uk

16 Australian rates at 12-year high

Australia's central bank has raised its key interest rate to its highest level in 12 years, as it attempts to combat rising prices. The Reserve Bank raised rates by 0.25% to 7.25% in a bid to dampen domestic demand and keep a lid on inflation. The move was anticipated, but will put increasing stress on home owners struggling to pay their mortgages. It is the 12th rate rise in Australia in the last six years and some believe there is more to come. Home owners with a US$280,000 (£141,000) mortgage will face extra repayments of about $50 a month. Many mortgage holders in Australia will be feeling the pain, while others simply cannot afford to enter the property market, says the BBC's Australia Correspondent Phil Mercer.

3rd March 2008, www.bbc.co.uk

17 US service industry shrinks again

The US service sector contracted less than analysts had expected in February, according to a survey from the Institute of Supply Management (ISM). The ISM's index of service sector activity hit 49.3 last month, up from 44.6 in January. A figure of less than 50 indicates contraction. Analysts had forecast 47.3 and the better-than-expected figure sent stocks up and strengthened the US dollar. Services account for two-thirds of economic activity in the US. The figure was greeted positively by the market after January's fall - which represented the first decline below 50 since 2003. The data was "a big relief after January's number had been so incredibly weak", said Stephen Stanley, head economist at RBS Greenwich Capital Markets.

1st March 2008, www.bbc.co.uk

18 India’s exports grow 20.47% in Jan

India’s exports showed a healthy growth of 20.47 per cent in January this fiscal over the same month last year, but expanded by a single digit figure of 7.66 per cent in rupee terms due to pricey domestic currency. Exports increased to 13.14 billion dollars in January 2008 from 10.9 billion dollars a year ago, while imports grew by a huge 63.57 per cent to 22.50 billion dollars, leaving a trade deficit of 9.36 billion dollars. With only two months to go for conclusion of the current financial year, exports during April-January period amounted to 124.19 billion dollars, leaving a balance of 35.81 billion dollars to meet the 160 billion dollar target. We hope to achieve exports in the range of 150 to 155 billion dollars in the current fiscal, Commerce Secretary G K Pillai said.

29th March 2008, www.financialexpress.com

19 Defence budget crosses Rs 1 Lakh crore mark

India's defence spending will for the first time ever cross the Rs one lakh crore mark with the Government on Friday announcing a ten per cent raise in the allocation for the year 2008-09. In a clear signal that there would be no let up in the ongoing mammoth modernisation drive of the armed forces, Finance Minister P Chidabaram said that the defence allocation for the coming year would be Rs 1,05,600 crore, a hike of ten per cent from last year's allocation of Rs 96,000 crore. But in actual terms, the hike is 14.16 per cent as that of last year as the Defence Ministry could only spend Rs 92,500 crore, leaving a sum of Rs 3,500 crore unspent, apparently due to two major contracts for purchase of helicopters and 155 MM artillery guns not going through.

29th February 2008, www.economictimes.com

20 Budget offers loan waiver to farmers

With polls round the corner, the Government on Friday announced a Rs 60,000 crore package for waiving off of loans of three crore debt-trapped small and marginal farmers and one time settlement of dues for one crore farmers. There are about 750 million (75 crore) farmers in the country. Presenting the Union Budget for the year 2008-09, the finance minister P Chidambaram said that all agriculture loans of three crore small and marginal farmers that were disbursed by banks till March 31, 2007 and were overdue on December 31, 2007 and remained unpaid till February 29, 2008 would be waived off.

1st March 2008, www.economictimes.com

Global Markets

21 Rupee falls against US dollar

The Indian rupee continued its slide against the greenback, tumbling by 20 paise in late morning trade in line with a plunge in equity Markets amid dollar's weakness overseas. Weak dollar against its major rival globally normally provides a boost to the local currency but the ailing stocks had adverse impact on the rupee sentiment, forex dealers said. The rupee opened weak at 40.14/16 a dollar and later hit a low of 40.21 for the first time after September 19, 2007. The currency was quoted at 40.18/19 a dollar in late morning deals. The dollar fell sharply against the Euro and the yen in overseas market last Friday due to weaker American stocks and weak US economic data.

3rd March 2008, www.financialexpress.com

22 Sensex down 939 pts, ends below 17k

The Bombay Stock Exchange benchmark Sensex provisionally fell 5.34 percent on Monday, led by losses in Reliance Industries, with sentiment weighed down by a sell-off in global Markets on growing fears of a recession in the United States. The 30-share BSE index provisionally closed down 939.18 points at 16,639.54, with 26 of its components falling. The broader 50-issue NSE index provisionally lost 5.35 percent to 4,944.05.

3rd March 2008, www.economictimes.com

23 Sensex sheds 245 points on tax concerns

Finance Minister P Chidambaram's Budget proposal to increase the short-term capital gains tax to 15 per cent did not go down well with investors as the benchmark Sensex dipped over 245 points on Friday. The 30-share Sensex, which remained flat in pre-Budget trading, dropped 245.76 points at 17,578.12. It touched the day's low of 17,258.20 and a high of 17,779.54 points. National Stock Exchange index Nifty moved between 5,290.80 and 5,098.35 points, before ending at 5,223.50, a loss of 61.60 points. Marketmen said besides the hike short-term capital gains tax, the other proposal to waive some farm loans also dampened the sentiments.

2nd March 2008, www.economictimes.com

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