Tuesday, April 3, 2012

ASBM Business Updates Vol.1(10) 2nd April 2012, Monday from Chanakya Central Library, Asian School of Business Management, Bhubaneswar.

 
 

 
ASBM Business Updates is a Selective Compilation of Business News from Various Sources. To find details follow the links.

ASIAN BUSINESS
Asian business people are nearly twice as optimistic today than they were in the last quarter of 2011, and much less negative about their future prospects according to a quarterly survey published today of Asia’s leading corporations and their outlook for the next six months. The survey, published jointly for the first time today by INSEAD and Thomson Reuters, shows 51.35 percent of those surveyed had a positive outlook for the next six months, while  the  number of negative responses dropped dramatically, declining to 4.04 percent from 14.71 percent in the fourth quarter of 2011.
Qantas will enter the alliance through its low-cost unit, Jetstar, which already runs joint-venture airlines in Singapore, Japan and Vietnam and its own airline in Australia and New Zealand.
Under the latest tie-up, China Eastern and Qantas will invest up to $198 million over three years, which will start in mid 2013 with three Airbus A320 aircraft, Qantas said on Monday. The fleet would then expand to 18 by 2015.
"Establishing Jetstar Hong Kong in the heart of Asia and on the doorstep of mainland China is a historic opportunity to continue the successful expansion of the Jetstar brand in this region," Qantas Chief Executive Alan Joyce said in a statement.

ASIAN MANAGEMENT
Asian stocks fell, led by material and information technology shares, amid concern earnings of Asian exporters are deteriorating and after Chinese banks were told they have misclassified their loans to local governments.
BYD Co., the Chinese carmaker partly owned by Warren Buffett's Berkshire Hathaway Inc., slumped 8.1 percent in Hong Kong after forecasting first-quarter profit may fall as much as 95 percent. Agricultural Bank of China Ltd. led Chinese banks lower in Hong Kong. Leighton Holdings Ltd. rose 2.9 percent after Australia's largest builder announced A$400 million ($419 million) in new work and a new managing director of its Asian, Indian and offshore divisions.
A SEA change is occurring. Driven by rising consumption and increased innovation over the last two decades, the centre of gravity in the global economy is rapidly shifting to Asia. The region's growth largely stemmed from its role as a workshop to the world, providing cheaper products to seemingly insatiable Western consumers.
But that was Asia 1.0 and all those engines are losing steam. Now it is Asian consumers, with unique and increasingly sophisticated needs, who are changing the way companies create, design and market products a new growth model we term Asia 2.0.

BANKING
The Reserve Bank of India (RBI) on Wednesday released guidelines on the gold loan business of non-banking financial companies (NBFCs), prescribing a minimum Tier-I capital of 12 per cent and loan-to-value (LTV) ratio of 60 per cent. It also restricted NBFCs from offering loans against gold bullion and coins.
NBFCs have been given two years to meet the new capital adequacy norms.
The move is aimed at limiting unbridled expansion of the gold loan portfolio of NBFCs, which otherwise may create an asset bubble and affect the financial health of these firms and their stakeholders.
“It’s observed that NBFCs predominantly engaged in lending against the collateral of gold jewellery have recorded significant growth in recent years, both in terms of size of their balance sheet and physical presence. This, in turn, has led to their increased dependence on public funds, including bank finance and non-convertible debentures issued to retail investors," RBI said in a press release, adding this business model had inherent concentration risk and was exposed to adverse movements in gold prices.
Volatility ruled the roost in trades today. The Sensex after touching a low of 17,179, recovered to a high of 17,458. However, it pared some gains and finally ended at 17,362 - up 165 points. Nifty ended up 50 points at 5,278.
Asian markets ended mostly in the negative zone. China's shrinking factory activity data dampened sentiments. Shanghai Composite slipped 1 per cent at 2,349. Nikkei was down 1 per cent at 10,011. Hang Seng was down 1 per cent at 20,669.
Foreign institutional investors (FIIs) bought shares worth a net Rs 246.56 crore on Thursday. FII have invested Rs 7,207.8 crore from March 9 to March 20, 2012.

Realty shares led the gains this afternoon. BSE realty index jumped 1.6 per cent to 1,791. Bankex was up 1.3 per cent at 11,860.

HDFC Bank and Infosys were the top contributors to the Sensex's upmove this afternoon. From the banking space, HDFC Bank added 2.2 per cent at Rs 514, ICICI Bank moved up 1.3 per cent at Rs 911. Bharti Airtel rebounded after the morning's fall and ended up 3.7 per cent at Rs 336.

BUSINESS MANAGEMENT
Convergys Corporation /quotes/zigman/230587/quotes/nls/cvg CVG -0.60% , a global leader in relationship management, announced today it has signed a definitive agreement to sell its Information Management (IM) business for $449 million in cash to NEC Corporation (NEC; TSE: 6701), a leader in the integration of IT and network technologies that benefit businesses and people around the world. The transaction covers all of the IM business, including its Smart Revenue Solutions for the telecommunications, cable, satellite, broadband, utilities, and logistics markets.
“NEC is acquiring a well recognized business, with solid client relationships, a strong solutions portfolio, and very talented base of employees,” said Jeff Fox, president and CEO of Convergys. “NEC’s established position in the industry, global scale, and commitment to invest in the business will benefit the customers and employees of IM. In return, the proceeds from the transaction further strengthen our balance sheet and allow us the financial flexibility to invest in our business and return capital to shareholders.”
Two weeks after it threatened to sue the board of directors of Coal India (CIL), London-based hedge fund, The Children’s Investment Fund (TCI), said it was unhappy with the company’s response and had written to coal secretary Alok Perti to change the top management of CIL, saying the company “lacked necessary leadership to develop operationally”.
“We are not going to keep sitting and wait for things to happen. It is not our nature to keep quiet. We are moving to the next stage of our action,” Oscar Veldhuijzen, partner, TCI, told Business Standard in a telephonic interview. “You will see the official response on Monday,” he said. Business Standard has reviewed a copy of the letter sent to the coal secretary. TCI is the second largest shareholder in CIL, with 1.01 per cent stake. The government of India owns 90 per cent

FINANCE
Widespread and reportedly roughshod questioning of Georgian billionaire opposition leader Bidzina Ivanishvili's supporters by state audit agency employees has sparked concerns by US Ambassador John Bass and human rights group Amnesty International that Georgia, already limbering up for its October parliamentary elections, is crossing the line between enforcement of campaign finance regulations and political intimidation.
Bass, an influential figure in staunchly pro-American Georgia, weighed in via Facebook late last week with a comment that the Chamber of Control’s recent activities do not “increase public confidence in this institution or in a competitive campaign environment.”
The popular deals website BuzzRaid.com has announced plans to expand their grocery coupons and personal finance sections. The site which already has a large coupon database featuring everything from Kohls coupons to Tracfone promo codes. The expansion of grocery and financial sections will take place over the next six months with many features going live today such as syndicated printable grocery coupons and personal finance tools as specified below in more detail.

INDIA BUSINESS
With the in-principle status of 'Most Favoured Nation' given to India by Pakistan, Indian oil companies such as Hindustan Petroleum Corporation (HPCL), Indian Oil Corporation (IOCL) and GAIL India are gearing up to cash in on the opportunity by exporting petroleum products and gas to its energy-starved neighbour. Pakistan's existing refining capacity meets only half itstotaldomestic requirement.On theother hand,India now exports almost onefourth of its 185 million-tonne refining capacity.

HPCL, which has almost completed it nine-million metrictonnes per annum (mmtpa) refinery in Bhatinda, Punjab along withsteelbaron LNMittal,isconsidering a proposalto build a 100-km long product pipeline to Lahore in Pakistan to export its refined products. Confirming this move, an HPCLboard member toldTOI, "We plan totapthecapital markets as soon as our Bhatinda refinery is nearing completion. A part of the IPO proceeds will be used to build a product pipelinetoLahore. We are strategically located to sell our productstoPakistan asthe border is less than 50 km away fromour refinery."
Pitching for greater tourist and business travel between the US and India, US Assistant Secretary of State for Consular Affairs Janice L. Jacobs on Thursday said her country gained from such exchanges and highlighted the new policy of easing renewal of visas for Indians.
Speaking to Indian and American business leaders, Jacobs, who is currently in India to hold consular dialogue, underlined the "mutually beneficial" nature of the US-India business-to-business relationship and the US efforts to promote trade and economic development by facilitating travel between the two countries.
"Encouraging and facilitating tourist and business travel is one of the ways we can boost US exports - and create American jobs, the goals of the President's National Export Initiative. "International business visitors bring more with them than economic stimulus. They bring their talents, culture, and ideas, and we benefit immensely from our exchanges," she said.

INDIAN MANAGEMENT
In an era when human resource management is considered to play a pivotal role in the growth of any organisation, why is it that some Indian companies have not reached their potential in streamlining and improving their HR processes despite investing time and resources? Why for many companies, there exists a wide gap between business objectives and talent priorities? Why do companies more often, rely on traditional approaches to manage talent? Many organisations are not agile enough to ‘fast track’ pivotal talent.

Delivering the keynote, Infosys Ltd Director Ravi Venkatesan said, “There is a sizeable amount of talent crisis in India, critical shortage of mid- level managers and CEO succession shortage. There is a need of HR to adapt to the changing social, economic and political trends. Organisations need to invest in people capability, bet on young professionals and give them leadership roles at the same time the HR professionals should come out of their predefined HR roles and run the business.”
US-based property consultants CB Richard Ellis (CBRE) and Jones Lang LaSalle(JLL) could soon follow international property consultant Knight Frank in launching a third-party realty fund in the country.
The Indian arm of CBRE is looking at raising Rs 250 crore for its maiden third-party property fund in India, said a source. CBRE is looking at tapping some large high net worth individuals (HNIs) for the domestic fund, which will have a Rs 500-crore corpus, he said. Most offshore investors are not interested in investing in Indian real estate and domestic funds have lesser restrictions. That may be prompting CBRE to look at domestic funds,” the source said. “Fund management is not a new area for CBRE.”
However, when asked, Anshuman Magazine, chairman and managing director of CBRE (South Asia), denied the firm was launching a fund of its own. “We are in the business of advising funds. We are strengthening our capital markets team and looking at advising more and more funds,” he said.
Internationally, CBRE Global Investors is one of the largest realty investment managers, with $ 94.1 billion in assets under management.
INSURANCE
After news Wednesday that Hartford Financial will no longer sell variable annuities, hedge-fund manager John Paulson still wants the company to spin off its property-casualty arm.
But some former insurance regulators have this message: hold your horses. Former top New Jersey insurance regulator Tom Considine says Hartford can’t make that decision in a vacuum, without regulatory input.
“Sometimes, masters of the universe don’t realize that regulators really do have the ability to say no,” said Considine, who stepped down as commissioner of the New Jersey Department of Banking and Insurance in February.
The busy tax saving season failed to bring cheer to the life insurance market as policy issuance continued to head south, pushing down sales or premium collection by 14 per cent in the current financial year.
While lack of products continued to be one of the key reasons for this fall in collection, the volatile equity market also took its toll. The worst sufferers were the private life insurers, as the number of policies issued by them is down nearly 28 per cent in the current financial year.
Premium collected by writing new policies between April and February nose-dived 19.25 per cent to Rs 24,835.65 crore from Rs 30,756.02 crore a year ago. The number of policies issued by the largest life insurer, Life Insurance Corporation (LIC) of India, too, declined 4.63 per cent in the same period.

INTERNATIONAL BUSINESS
International sanctions meant to deprive Iran's nuclear programme of funds and technology are squeezing Iran's vital oil exports and government finances. Following are details of major sanctions imposed on Iran by the United States, the European Union, and the United Nations over the years.
Initial sanctions were imposed after Iranian students stormed the US embassy and took diplomats hostage in 1979. Iranian products cannot be imported into the United States apart from small gifts, information material, food and some carpets.

From solar-powered lights to televisions that can withstand power blackouts, electronics mega-firms are wooing African consumers with products that target local, often challenging, environments.
Samsung Electronics, the world's largest maker of flat panels, memory chips and flatscreen televisions, aims to grow its business on the continent to $10 billion (7.5 billion euros) by 2015 in a five-fold increase from last year.
"This year we aim to get around three billion" dollars, said Park Kwang Kee, the company's Africa president and chief executive. "Our base is still not as big as other continents so... our growth rate is higher than the other continents. Other than South Africa, we have shown more than 100% for the last two years."
The International Monetary Fund predicts Sub-Saharan Africa's economy will grow by 5.5% this year, outpacing all regions apart from developing Asian markets, with some countries like Angola set for double-digit growth.

LOGISTICS
It’s been more than a year since UPS stopped asking and started telling.
No longer does the Sandy Springs company prompt customers to consider what brown can do for them. Instead, in its ads, UPS professes its love for the business that pulls its myriad pieces together: logistics.
The $6.77 billion purchase of Dutch package delivery company TNT last week — UPS’ largest-ever acquisition, by fivefold — is another piece of the puzzle that helps the company handle the cross-continental movement of goods, from packages to pallets. But it’s also a steppingstone toward UPS’ goal of providing customers a comprehensive range of solutions that go beyond simply delivering items. The newest tag line — “We [heart] logistics” — and catchy jingle just push the logistics piece to the forefront.

Sultan bin Soud Ahmed al Shidhany (Sultans Logistics) trading achieved a HSE milestone by working safely for 4 years and having driven 25 million kilometres without any lost time injury (LTI), effective on November 30, 2011, it was announced in their press statement.
They recently celebrated the occasion at their head office in Ghala, in the presence of their major clients, where the Managing Director, Sultan bin Soud al Shidhany, thanked the distinguished guests for their support, and noted, staff safety is their prime concern, as it forms the very core of the company’s HSE policy.
This achievement is the result of excellent staff performance in taking safety to heart and converting company ideals into reality. Safety is paramount throughout the organisation, noted the MD.

MANAGEMENT
Portfolio managers will be doing some last-minute shopping for winners from the big US stock market rally as they take part next week in the quarter-end ritual of window dressing.
The activity could help stocks resume their upward course in the week ahead and keep a long-expected pullback at bay.
The benchmark Standard & Poor’s 500 index is up 11.1 per cent so far for the first quarter and the year. That would follow a gain of 11.2 per cent for the fourth quarter.
If the trend holds, the S&P 500 will book its best back-to-back quarters since the second and third quarters of 2009.
The S&P 500 lost some ground in the past week, ending down 0.5 per cent after five straight weeks of gains, but that's only its second negative week for the year.
Rainwater harvesting facility will be made mandatory for all new buildings as part of the steps to overcome water shortage, Finance Minister K.M. Mani has said.
Presenting the budget for 2012-13 in the Assembly on Monday, Mr. Mani said solid waste management system would be made compulsory at all new flats. All welfare pensions, including freedom fighters' pension, would be distributed through banks.
This facility would be provided to the beneficiaries who opted for it. Large-scale modern waste treatment plants would be set up in Thiruvananthapuram, Ernakulam, Kottayam, and Kozhikode. A sum of Rs.1 crore was earmarked for the purpose. A sum of Rs.15 crore was set apart as a special assistance for waste management for the Kollam and Thrissur corporations. Liquid waste treatment plants will be set up in select districts for managing septage waste which was now polluting waterbodies. A sum of Rs.15 crore will be given through the Suchitwa Mission. A green technology centre will be opened with the cooperation of CESS for implementing the zero-waste project. A plastic shredding unit will be set up with the aid of Malabar Cements Limited and the shredded plastic will be used for road laying.

MARKETING
Marketing experts agree that if all things break right for Tebow, the Jets new backup quarterback could become one of the new faces of Madison Avenue.
One expert, Jim Andrews, the senior vice president of the Chicago-based sponsorship company IEG, estimated that Tebow could potentially be in line to earn $10 to $20 million if he becomes the Jets starting quarterback and leads them to a Super bowl title, something no Jets quarterback has done since the 1969 season.
"You'd have the perfect storm that marketers look for which is great athletic performance on the field but also a personality that people respond to positively off the field," Andrews said. "Get those things together, people are attached to who he is and he becomes a champion quarterback, that's the story marketers are looking to attach themselves too."
The Commerce Commission says it has received a complaint about the marketing of the new iPad as a 4G device, in the wake of court action in Australia against Apple over the same issue. The new iPad is capable of working on 4G mobile networks which provide faster mobile broadband than 3G networks as well as 3G mobile networks, but is currently only compatible with 4G networks in the United States and Canada. Australia has a 4G network built by Telstra, but all New Zealand mobile networks are 3G.

ODISHA BUSINESS
South Korean steel major Posco may begin work on its Rs 52,000 crore steel mill in Odisha in July, as the state government was likely to hand over 2,700 acres to it by June. "
The development follows Prime Minister Manmohan Singh's office reviewing with the Odisha government the progress of long-pending 12-million tonne steel plant in the state. Singh is on a visit to South Korea, where he is scheduled to hold talks with South Korean president Lee Myung- bak. The project is expected to figure in the discussions.
The steel plant, proposed at Jagatsinghpur district for over six years due to land acquisition hurdles. Sources said Posco is in possession of 500 acres It requires 4,004 acres for the 12-mtpa capacity plant.
The state government so far has acquired about 2,000 acres.
When contacted, a Posco official said once the state government transferred 2,700 acres to it, the company will go ahead with 4-mtpa capacity initially and augment it as and when the required land is available.
State-owned aluminium firm Nalco plans to invest Rs 2,343 crore next fiscal, a 76% rise in capital expenditure over FY12, to increase capacity, according to 2012-13 Budget documents.
A disinvestment candidate for the government's Rs 30,000 crore mop up target, Nalco spent Rs 1,333 crore this fiscal. The Budgeted outlay for the company in 2011-12 was 1,057 crore, but it was subsequently raised to 1,333 crore, the documents show.

The Odisha-based firm plans to invest Rs 57,903 crore by 2020 mainly for setting up two aluminium smelters, a report of the Parliamentary Standing Committee on Coal and Steel had stated earlier.

RETAIL
Reliance Retail plans to raise up to Rs 4,500 crore or $900 million from its parent company, Reliance Industries, to accelerate store openings and grow aggressively in select formats, even as some of its rivals look to shutter outlets and curtail expansion in the cash guzzling retail business.
"The funds will primarily be invested in adding several big-box stores as well as in expanding aggressively in the consumer durables and apparel formats," a senior Reliance Retail executive said. The company plans to double the number of its consumer durable stores and increase the number of apparel stores by 30%. A Reliance Retail spokesperson declined to comment. The Reliance Retail board will decide the mode of the Rs 4,500 crore fund infusion. The funds are expected to come in several tranches.
The maximum share capital of Reliance Retail as per its Memorandum of Association and Articles of Association can be Rs 15,000 crore and since it was set up in 2006, Rs 5,732 crore has been pumped in as equity into the company.
Retail sales volumes fell by a larger-than-expected 0.8pc between January and February, the Office for National Statistics (ONS) said, driven by a weak show from the clothing and household goods sectors.
And hopes for growth in the wider economy in the first quarter of the year were dealt a further blow as retail sales volumes in January were downwardly revised to 0.3pc from an estimate of 0.9pc.
A recent fall in inflation from above 5pc has eased the squeeze on household finances but February's figures, which also revealed a 0.4pc drop in retail sales values, show consumers are still reluctant to spend.
The City had been expecting a 0.4pc decline in February. Samuel Tombs of Capital Economics said: "February's UK retail sales figures leave the recovery on the High Street looking a bit more fragile than it previously seemed ... So, with yesterday's Budget doing little to ease the burden of the next round of austerity measures due to hit households in April, the high street recovery looks set to be short-lived again."

SUPPLY CHAIN
A new private-public collaboration will help small businesses strengthen their revenue streams by gaining access to more than $300 billion in combined supply chain spending by a consortium of 15 of America's largest corporations, the U.S. Small Business Administration said.
Supplier Connection, created by the IBM Foundation, is part of the American Supplier Initiative and is designed to help bridge the gap between small, nimble businesses looking for new opportunities and large corporations looking for innovative new ideas and diversity in their supply chains.
"The American Supplier Initiative is part of a comprehensive solution to grow small businesses, create jobs and to ensure that America has a strong, deep and diverse supply chain," said SBA Administrator Karen Mills. "While it is clear that becoming a corporate supplier can lead to business growth, breaking in can be a challenge for small businesses. The Supplier Connection will be one tool to help small businesses connect with corporate buyers. Tools like this help to ensure that more small businesses are part of commercial supply chains, which adds additional revenue streams. This is a proven formula for job creation."
The growth of contract manufacturing within the defence and aerospace industries means that OEMs of all sizes are stipulating rigorous control over component traceability.

The paper trail which defines the traceability of components starts with the original component manufacturer and ends as the product rolls off the contract electronic manufacturer’s (CEM’s) production line.

Along the way, the trail can pass through franchised or authorised distributors, independent brokers, grey market suppliers and even the excess inventory of other OEMs.

Whilst OEMs are not imposing a limit to the number of links within the supply chain, they are demanding that each link is identifiable and traceable.

Simply supplying a copy of the original component manufacturer’s paperwork is not enough to guarantee that the products are genuine and that they have been stored and handled correctly throughout their lifetime.
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Source of Information for this issue : Google alert accessed on 26th  and 30th  March,
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Best wishes

Compilation
 Sabita Sahu, B.A., PGDCA, MLISc, 
Professional Library Trainee

Concept, Layout and Editing
Rajashekhar Devarai
Chief Librarian


Information and Documentation Division,  Chanakya Central Library
Asian School of Business Management

Shiksha Vihar Bhola,
Barang Khurda Road, Chandaka
Bhubaneswar-754012



Sabita Sahu : Professional Library Trainee and R.S.Devarai : Chief Librarian, Knowledge and Information Services Unit, Chanakya Central Library, Asian School of Business Management, Bhubaneswar. chieflibrarian@asbm.ac.in ; www.asbm.ac.in

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