Global Business

Global Corporate

1 Bradford & Bingley chief resigns
The boss of Bradford & Bingley has quit "due to a serious cardiovascular condition", the firm has announced. Chief executive Steven Crawshaw is leaving the UK mortgage lender with immediate effect, and will be replaced by chairman Rod Kent in the short term. Mr Crawshaw's departure comes a day before a trading update and reports say the firm will issue a profit warning. The firm has been hit hard by the credit crisis and is trying to raise £300m to boost its balance sheet. In May, the firm said it would launch a rights issue in an attempt to help offset some of its weakening investment, having only a month earlier denied it would be seeking to raise funds. B&B saw its profits drop by almost half after writing down assets, including those linked to US mortgages. Pre-tax profit fell to £126m in 2007 from £246.7m the year before. As the UK's biggest buy-to-let lender, B&B has 20% of that market which has suffered following recent market turmoil. Banks worldwide have seen huge losses linked to problems in the struggling US housing market. Problems started when borrowers in the US, with no or limited credit history, started to default in large numbers once interest rates became too high. Many of those loans to so called sub-prime borrowers had been grouped together, repackaged and sold on to banks as an investment with high returns worldwide.
1st June 2008, www.bbc.co.uk

2 Barclays to cut penalty charges
Barclays Bank is to cut the charge levied each time customers go beyond an agreed overdraft limit. The penalty will change to £8 for each transaction made while in the red without permission, from a levy of up to £35 a day. The change, happening in August, comes as eight banks prepare to defend the fairness of their overdraft charges in a high-profile High Court case. The bank is also offering a temporary authorised overdraft extension for £22. The Office of Fair Trading estimates that the banks make £3.5bn a year in unauthorised overdraft charges. In 2007, Barclays paid £116m to customers who sued for the return of their overdraft charges.
30th May 2008, www.news.bbc.co.uk

3 Wal-Mart puts the squeeze on food costs
With gas, grain, and dairy prices exploding, you'd think the biggest seller of corn flakes and Cocoa Puffs would be getting hit by rising food costs. But Wal-Mart has temporarily rolled back prices on hundreds of food items by as much as 30% this year. How? By pressuring vendors to take costs out of the supply chain. When our grocery suppliers bring price increases, we don't just accept them, says Pamela Kohn, Wal-Mart's general merchandise manager for perishables. To be sure, Wal-Mart (WMT, Fortune 500) isn't the only retailer working to cut fat from the food chain, but as the largest grocer - Wal-Mart's food and consumables revenue is nearly $100 billion - it has a disproportionate amount of leverage. Here's how the retailer is throwing its weight around.
29th May 2008, www.money.cnn.com

4 Tata Motors sinks on fundraising plan
Shares of India's Tata Motors Ltd. fell more than 8% Thursday, a day after the company said it would raise $1.68 billion through new shares to finance its recent purchase of Jaguar and Land Rover. Shares fell to $13.61 and analysts were watching for further declines amid sluggish demand for trucks, buses and cars and rising commodity costs. Citigroup (C, Fortune 500) cut its 12-month price target on Tata Motors (TTM) to $18.50 from $21.37, Jamshed Dadabhoy, an analyst at Citigroup Global Markets India, said in a note. Tata Motors, India's biggest automaker by sales, said Wednesday it planned to raise the money through rights issue of equity shares, leading to fears that the stock value would be diluted. The rights issues will expand the company's equity capital by about 30% to 35% in the current fiscal year that began April 1, the company said.
29th May 2008, www.money.cnn.com

5 Vodafone CEO Sarin stepping down
Mobile phone company Vodafone PLC on Tuesday announced a return to full-year net profit from a loss the previous year, and said chief executive Arun Sarin would step down at the end of July. Sarin has held the top job for five years and will be replaced by his deputy, Vittorio Colao. The departure of Indian-born Sarin, 53, came as a surprise to many. He faced disquiet two years ago, when nearly 10% of Vodafone shareholders voted against his re-election as chief executive. But the company has since outperformed analysts' forecasts and enjoyed revenue growth in fast-growing markets such as India and Turkey. Under his tenure, Vodafone's (VOD) customer base expanded from 120 million to 260 million around the world. Sarin said he felt the timing was right to handover as the company is in a good position strategically. I've achieved what I set out to achieve when I took the position, Sarin said in a conference call. Vodafone shares rose 2.1% on the London Stock Exchange.
28th May 2008, www.money.cnn.com

6 Rel Comm buys UK's Vanco for Rs 327 cr
Reliance Communications Ltd, India's No.2 mobile operator, said on Monday its Reliance Globalcom unit has bought UK-based global managed network services provider Vanco for $77 million. Reliance Communications, which earlier on Monday said it had started exclusive talks with South Africa's MTN Group that could create a $63 billion telecoms giant, said the acquisition of Vanco would add $365 million in annual revenue. Reliance Globalcom will pay $76.9 million for "100 percent equity of Vanco Group free of debt", the Indian firm said in a statement.
28th May 2008, www.bbc.co.uk

7 Colgate Palmolive Q4 net up 10% at Rs 55.62 cr
FMCG major Colgate-Palmolive India on Friday announced a net profit of Rs 55.62 crore for the quarter ended March 31, a 10 per cent growth over the corresponding period a year-ago. The company had a net profit of Rs 50.59 crore in the fourth quarter of FY'07, Colgate-Palmolive said in a filing to the Bombay Stock Exchange. The total revenue rose to Rs 412.73 crore for the latest quarter from Rs 360.6 crore in the same period a year-ago. The board has declared a dividend of Rs 7 on shares of face value Rs one for the financial year 2007-08. For the year ended March 31, the company announced a consolidated net profit of Rs 235.76 crore, a 59 per cent growth over the year-ago period. The company had a net profit of Rs 148.39 crore in FY'07.
30th May 2008, www.financialexpress.com

8 Bajaj motorcycle sales up 7.57% in May
Country's second largest two-wheeler maker Bajaj Auto today reported a 7.57 per cent rise in its motorcycle sales in May at 1,79,649 units compared to 1,67,008 units in the same month last year. The sale of total two wheelers during the month stood at 1,80,935 units, a jump of 6.86 per cent over the last year's corresponding month's sale of 1,69,327 units, BAL said in a statement. The total two and three wheeler sale in May was increased by 4.17 per cent to 2,01,511 units from 1,93,437 units in the same period last year, it said. BAL's exports rose to 60,215 units in May from 49,203 units in the corresponding period last year.
1st June 2008, www.financialexpress.com

9 PepsiCo, Citi best cos for multicultural women
With their employee-friendly and innovative initiatives, two American corporate giants PepsiCo and Citigroup -- led by India-born chief executives have made into a list of best employers for multicultural women. Evaluating the presence and prominence of coloured women in the US corporate world, the list of 20 Companies has been drawn up by US-based Working Mother magazine. It is primarily on the basis of diversity programmes for such employees. These businesses recognise that it is not just about recruitment. Many use real inclusion programmes to actively develop, retain, and promote their multicultural employees," the magazine said in an accompanying report. Beverages major PepsiCo is led by Chennai-born Indra Nooyi, named by Fortune magazine as one of the most powerful business people in the world, while Nagpur-born Vikram Pandit is the chief executive of banking giant Citigroup.
2nd June 2008, www.financialexpress.com

Global Outsourcing

10 Spherion Merges Assessment Business into Recruitment Process Outsourcing Division
Spherion Corporation today announced the expansion of its recruitment process outsourcing (RPO) operations by merging its assessment business with the company's RPO services division. This strategic decision underscores Spherion RPO's commitment to providing the highest level of service to its RPO clients. Spherion's depth and breadth of experience in candidate assessment, as well as its proprietary PeopleScreen(R) technology, will add long-term value for clients in an increasingly challenging hiring market. As an established market leader in end-to-end RPO engagements, Spherion is committed to working with clients to find the best candidates for all open positions. The addition of the assessment offering in the RPO services division will provide the highest quality support for clients during the candidate screening process. Spherion's PeopleScreen(R) technology provides a cost effective, consistent method to prescreen for qualified candidates that also ensures objectivity in accordance with legal requirements.
28th May 2008, www.tutorial-reports.com

11 Locals react to news of DHL's outsourcing to UPS
ABX Air's owner, Air Transport Services Group Inc., announced on Wednesday, May 28, that DHL, a company ABX Air makes delivery flights for, had chosen to remove 39 of the aircraft that ABX Air operates. DHL has chosen to hire out its air cargo deliveries to United Parcel Service instead. ABX Air currently employs 7,000 people. By using UPS instead of ABX Air, as many as 500 employees could be out of a job, the company said. When Amber Parker heard that hundreds in the area may lose their jobs she immediately feared for the families working at ABX Air. Ashley Shelton also took the news personally, That would really (be bad) because my brother just got a job there. Holden, in fact, was considering applying to the company until he heard the news, as was Dillon Asher. Asher had been enjoying an afternoon at a park near downtown when he found out.I think it's a bunch of bull, really, he said. A lot of people I know work there.
29th May 2008, www.tutorial-reports.com

12 Scotland call-centre workers fear job outsourcing to India
A leading business services firm in Scotland has announced that it is relocating more than 300 of its jobs to India. Capita said that it had already circulated a formal notice among its staff, intimating that their jobs were at risk of redundancy. The company, however, expressed confidence that many of the workers would be redeployed, and that their staff could apply for new jobs in the company. However, that would mean a transfer to Glosgow from England. It said that its site in Wythall, Birmingham, was being closed, and, as a result, about 375 positions were expected to be moved to Glasgow, where a call centre and centre of excellence would be set up. Consequently, said a spokeswoman for Capita, the current 302 administrative positions in Glasgow would have to be relocated to Mumbai in India. In January, Capita advised all 375 roles in the Wythall site would be relocated either to Glasgow, Mumbai, or another Capita site. Further consideration has been given to the roles currently operating from the Glasgow site to create ccommodation to accept the transferring work from Wythall, the Scotsman quoted her as saying.
30th May 2008, www.economictimes.indiatimes.com

13 Toshiba reveals Taiwanese LCD outsourcing deal
Toshiba has become the first Japanese maker to outsource production of some of its LCD panels, with a deal to source panels from Taiwan revealed yesterday. Speaking to Current.com.au, a Toshiba Japan spokesperson confirmed reports in the Nikkei Shimbun that Toshiba had begun outsourcing low-cost model production to the unnamed maker from February this year. The televisions would be for the US market only at this stage the spokesperson said, with the company deciding on any expansion of the strategy based on market conditions. According to the Nikkei report, which quoted from an interview with company president Atsutoshi Nishida, Toshiba would now focus its production plans on mid-high end televisions. Nishida also said Toshiba would introduce a new portable video player during 2010.
29th May 2008, www.current.com.au

14 India's Wipro sees outsourcing deals picking up
Wipro Ltd India's third-largest software services exporter, is seeing a pick up in outsourcing deals and relatively stable pricing, a senior official said on Friday. The feeling is that the worst is behind us... but it is too early to give it all clear, Girish Paranjpe, joint-CEO of Wipro's IT business, told reporters. In April, New York-listed Wipro posted its slowest quarterly earnings growth in about five years, and said it was cautious about its near-term prospects because of global market uncertainty. Asked if Wipro, which offers IT solutions such as system integration, software application development and back-office services, faced any pricing pressure, Paranjpe said: "We have not seen too many signs of that.
30th May 2008, www.reuters.com

15 Legal outsourcing suit spotlights surveillance fears
Some lawyers are worried that the growing practice of outsourcing legal work to overseas companies is undermining the constitutional guarantees that protect the privacy of lawyer-client communications, leaving them vulnerable to electronic spying by the federal government. Paralegal firms in India are doing a booming business handling the routine legal work of American law firms, such as drafting contracts, writing patents, indexing documents or researching laws. These so-called legal process outsourcing firms charge an average of about $40 an hour for their work, about one-quarter to one-third of what the work would cost in the United States. But a lawsuit filed this month by the Bethesda firm of Newman, McIntosh & Hennessey argues that the constitutional guarantees that protect confidential communications between lawyers and clients may not apply when legal work is transmitted abroad - typically by e-mail, fax or telephone.
31st May 2008, www.washingtontimes.com

16 RP a strategic partner for HP's outsourcing plan
HP is leveraging on the vast supply of knowledge workers in growing its outsourcing operations in the country, a top local executive said. HP began its outsourcing operations in the Philippines around 2003 following a long-term services deal with Procter and Gamble. Since then, the client base served by the local delivery center has grown to around 80 companies, according to Noel Mendoza, director of HP's Philippines global delivery center. HP's local delivery center has also grown to more than 1,500 employees. Unlike most business process outsourcing (BPO) companies present in the country, HP provides higher-value services making the Philippines a "strategic" partner for the company's global customers.
1st June 2008, www.tutorial-reports.com

Global Economy

17 India's economic expansion slows
The Indian economy grew by a faster-than-expected 8.8% from January to March compared with a year earlier. The growth was driven by a strong performance from the service and construction sectors. But overall, the rate of expansion is slowing and economists are concerned about high inflation caused by rising food and fuel prices. Growth is expected to continue to slow this year, but will remain higher than most other economies in the world. There will be deceleration this year coming from industry and high interest rates, said economist Saugata Bhattacharya, from the Mumbai-based Axis Bank. Industrial impulses will be curtailed. However, there will be a partial offsetting if agriculture and monsoons will be good, he said. The construction sector expanded significantly, growing by 12.6% between January and March, compared with 7.1% during the previous three months. Growth in the manufacturing sector slowed to 5.8%, as against 9.6% in the previous quarter - a rate of increase that would be the envy of many developed economies.
30th May 2008, www.bbc.co.uk

18 World Bank offers $1.2bn food aid
The World Bank is to offer immediate financial help to countries worst hit by sharp rises in food prices as part of a $1.2bn (£608m) assistance package. Grants worth a total of $200m are being set aside for "high priority" countries most at risk from acute hunger. Haiti and Liberia will get $10m each to feed their most vulnerable people while Djibouti will receive $5m. The World Bank says 100 million people could be impoverished by the rising cost and scarcer availability of food. It has also identified Togo, Yemen and Tajikistan as being in need of immediate assistance following recent needs assessments. It is crucial that we focus on specific action," said World Bank president Robert Zoellick. Countries will be able to access money to provide food for schools and other core services as well as to buy essential items such as seeds and fertilizer. The BBC's Kim Ghattas in Washington says the money is part of a fast track programme to address immediate requirements in the global food crisis. Some of it will be used to handle immediate humanitarian needs, for example for pregnant woman and young children. The World Bank will also devote an additional $2bn next year to funding agricultural projects, including crop insurance schemes.
29th May 2008, www.news.bbc.co.uk

19 South Korean inflation picks up
Inflation in South Korea has hit a seven-year high as a result of rising energy and food costs. Consumer prices in May were up 4.9% from a year earlier - the strongest growth since June 2001. Economists had expected the annual rate of inflation to hit 4.3% in May, up from April's level of 4.1%. The inflation rate has now been above the central bank's target for six months in a row, raising expectations of an increase in interest rates. Park Sang-Hyun, chief economist at CJ Investment & Securities, said that the jump in inflation was primarily caused by rising oil and raw material prices. In the future, there may be room for an interest rate hike if prices continue to go higher, but I rather expect the government would let the won strengthen.
2nd June 2008, www.news.bbc.co.uk

20 Online shopping 'defies slowdown'
Online retailing is continuing to boom in the UK despite pessimism about the economy, according to a survey. The amount of money spent by consumers shopping online increased by 35% to £14.7bn last year, retail analysts Verdict Research said. The growth rate - the fastest in six years - is about 10 times that of the UK's retail market as whole. Among 4,000 shoppers quizzed, making better use of leisure time was the main reason given for online shopping. The growth in internet access and users making more regular and expensive purchases online meant the growth would continue, Verdict's report suggested. It forecast that online retail sales would reach £44.9bn by 2012, about 13.8% of total spending. But while some of this was cannibalization - people buying via their computers what they would previously have gone to shops for - physical shopping was far from doomed, the report said. There is still a need and place for physical locations - the key is to ensure that synergies with online retailing are exploited to drive footfall to stores, Verdict said.
3rd June 2008, www.news.bbc.co.uk

21 Inflation at 8.1% is worrisome: FM
Describing inflation at 8.1 per cent as worrisome, Finance Minister P Chidambaram on Friday said steps will be taken to moderate and reverse headline inflation, but the outcome also depends on the global crude and commodity prices. Nobody has drawn any great satisfaction at 8.1 per cent inflation. 8.1 (per cent) is a worrisome inflation. But the measures, we have taken, have contained inflation. We are confident that we will gain mastery over this inflation and inflation will be contained over time, Chidambaram said in New Delhi. However, moderation in inflation depends on global crude oil and commodity prices, he said, adding, Surely, we are still in full control over the situation.
30th May 2008, www.financialexpress.com

22 Fuel price hike inevitable: PM
With political parties including the Left opposing hike in fuel prices, Prime Minister Manmohan Singh on Monday warned government is not in a position to fully insulate the consumer from the impact of rising oil prices. We cannot allow the subsidy bill to rise any further. Nor do we have the margin to fully insulate the consumer from the impact of world commodity and oil price inflation, Prime Minister said, addressing the Assocham's annual meeting in New Delhi. Calling for a wider political consensus, Singh said the government could insulate poor people up to a point and economic pricing of oil was essential to sustain growth. However, he expressed confidence that the Indian Economy would continue to grow at 8 per cent and above despite global slowdown. India has maintained the economic growth of 9 per cent and above for the last three years.
2nd June 2008, www.financialexpress.com

Global Markets

23 Equities close in red, fuel price eyed
The Bombay Stock Exchange benchmark Sensex on Thursday plunged by over 209 points on selling by funds after reports that the government was planning to hike retail fuel prices to offset losses of oil Companies on account of high crude prices. The 30-share index, which opened higher by 140.66 points, fell later in the day by 209.11 points to close at 16,316.26. It touched the day's high of 16,666.03 and a low of 16,196.02 points. The wide-based National Stock Exchange index Nifty fell by 83.05 points at 4835.30, after touching a high of 4957.40 and low of 4801.90 points. The market fell after reports that the government might consider a hike in petrol prices in the face of a record rise in crude oil prices on the overseas front. Oil and gas index suffered the most by 206.49 points at 10,571.42 followed by banking index by 214.69 points at 7718.81. Auto index fell by 151.22 points at 4410.81.
29th May 2008, www.financialexpress.com

24 Oil slips below $126 per barrel
Oil dropped below $126 on Friday after a regulatory probe into possible price manipulation added to trader caution and a stronger US dollar offset the impact of a big drop in US crude stocks. US crude dipped 77 cents to $125.85 a barrel by 1030 GMT. London Brent dropped 49 cents to $126.40. Prices hit an all-time high of $135.09 a barrel last week, driven by concern supplies will struggle to match demand over the long term, as well as a weak US currency, which makes dollar-denominated commodities attractive to investors. Since then, the market has fallen by around $10, pulled lower by mounting evidence that in the short term high prices have begun to erode demand. An announcement on Thursday of an investigation by US regulator the Commodity Futures Trading Commission (CFTC) heightened the cautious mood. A rebound in the dollar, speculation about US interest rate hikes and the announcement by the CFTC of measures to enhance the oversight of energy futures Markets may be seen as potentially stemming future investment flows into energy and other commodities, said Antoine Halff of Newedge USA.
30th May 2008, www.financialexpress.com