Monday, April 9, 2012

ASBM Business Updates Vol.1(11) 9th 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
Asia stocks mostly up as China manufacturing rises
Asian stock markets rose on Monday after a Chinese survey showed that manufacturers in the world’s No. 2 economy boosted production for a fourth straight month.
Japan’s Nikkei 225 index gained 0.8 percent to 10,163.59 despite businesses remaining pessimistic in the central bank’s latest “tankan” survey.
South Korea’s Kospi added 0.2 percent to 2,017.89 and Australia’s S&P/ASX 200 gained 0.1 percent to 4,341.20. Benchmarks in Indonesia and Singapore also rose.
Chinese manufacturing gained momentum for a fourth straight month in March, helped by a recovery in the auto, tobacco and electronics sectors, though analysts said conflicting data suggest lingering weakness.
Taking SME banking beyond borders
Reaching out to customers beyond geographic borders is a theme that keeps recurring during a short conversation with Sanjeeb Chaudhuri, regional head, South Asia, and group chief marketing officer for consumer banking at Standard Chartered.
In a recent interview with Gulf News, Chaudhuri said the bank's South Asia business is closely interlinked to its operations in the Middle East and Africa because of the strong trade linkages and the large number of South Asians working and doing business in the Middle East.
"In a globalised market environment, we can't talk about limiting ourselves to serving a set of customers in one country and another set in another country or geographic region. The trade links between South Asia and the Middle East are so strong that we as a bank are working on all options to offer seamless banking services to our customers across borders," Chaudhuri said.

ASIAN MANAGEMENT
Asian stocks rebound as Bernanke soothes investors
Asian stocks rebounded on Tuesday and the dollar struggled after Federal Reserve Chairman Ben Bernanke said ultra-loose monetary policy was still needed to reduce unemployment even though the U.S. economy has shown signs of improvement.
Wall Street stocks had risen more than 1 percent on Bernanke's comments, which supported views that easy monetary policy would remain in place for some time and fanned expectations for more asset purchases by the U.S. central bank. Global equities have been rallying since late last year, partly due to steadily improving U.S. economic data and massive doses of liquidity from central banks, but hit a bump in mid-March after China signalled its growth was moderating.
"We are clearly addicted to this highly liquid market, and Bernanke has reassured that it (will) stay up this way," said Kent Engelke, chief economic strategist at Capitol Securities Management.
DBS to pay $7.2 bln for Indonesia's Bank Danamon
DBS Group Holdings , Southeast Asia's biggest bank, has agreed to pay $7.24 billion for Indonesia's Bank Danamon, offering a 52 percent premium for a middle-ranking lender with high funding costs, raising questions on the price.
The takeover, Asia's fourth-largest financial services deal, would make Singapore-based DBS the fifth-biggest lender in Indonesia, one of the region's hottest markets where bank penetration is low and annual loan growth runs at 20 percent.
However, Danamon has lower returns on equity than some of its peers and a heavy exposure to auto financing, an area vulnerable to recently announced policymakers' steps to curb excessive lending in Southeast Asia's largest economy.

BANKING
The Sensex and the Nifty rallied on the last day of the quarter to post their first weekly rise in six, as lenders gained after the Reserve Bank of India's (RBI) surprise bond purchases were seen helping inject liquidity into the sector.
Banks also benefited from portfolio management as Friday also marked the end of the fiscal year.
Including Friday's gains, the banking sector surged 28 percent for the quarter, making it one of the top performing sectors from January to March.
The RBI stepped in on Friday to buy up to 100 billion rupees of bonds through open market operations on Friday, in what was a surprise move.

Life Insurance Corporation of India bought 1.584 crore shares of Punjab National Bank at Rs 1,003.69 each last week. By Friday, the last trading day of the week, the stock slipped to Rs 926, a decline of about 8.4 per cent.
LIC has not been very fortunate in its decision to buy the shares of 12 other public sector banks last week either. The shares which LIC agreed to buy or has already bought, lost between 0.8 per cent and 8.4 per cent of their value.

.BUSINESS MANAGEMENT
Great business on the cards
Citibank is back. After a lull induced by the credit crisis of 2008-09, the bank has returned with a sharply focussed strategy to expand in the retail banking space targeting the growing affluent middle class.
Driving the retail business in India is Anand Selvakesari, 44, Country Business Manager, Global Consumer Group, Citibank N.A.
The American bank, once synonymous with credit cards, is modelling its business as a one-stop financial services powerhouse that will offer services ranging from simple banking and credit cards to broking, insurance and wealth advisory services to every consumer segment.
Wells Fargo opens business for the ultra-wealthy
Wells Fargo & Co opened its new Abbot Downing business on Monday, o fficially merging two of its wealth management units under a new brand it hopes will expand its market share of America's richest families.
The new business, catering to ultra-high-net-worth individuals and families with $50 million or more in investable assets, resulted from the combination of Wells's Family Wealth unit and its Lowry Hill subsidiary. The name Abbot Downing comes from the 19th-century New Hampshire builder of the stagecoaches that have come to represent Wells Fargo. Since Wells first publicly announced the planned merger in November, the combined business has grown roughly 20 percent to $32.9 billion in client assets under management. In those five months, Steiner said the group had added five billionaires and 13 individuals with $100 million or more in investable assets to its client base.

INDIA BUSINESS
Global trade bodies warn PM of tax plan impact
International trade associations representing more than 250,000 companies have written to Prime Minister Manmohan Singh criticising new taxation proposals and warning that investment plans by overseas companies could be reconsidered.
India's budget last month outlined proposals that would allow authorities to make retroactive tax claims on overseas deals and bring in new anti-tax-avoidance measures, moves that have been criticised for further denting investor sentiment towards India.

"The sudden and unprecedented move in the Bill has undermined confidence in the policies of the Government of India toward foreign investment and taxation and has called into question the very rule of law, due process, and fair treatment in India," seven global trade bodies said in a letter to Singh seen by Reuters. "This is now prompting a widespread reconsideration of the costs and benefits of investing in India," continued the letter, signed by bodies including the U.S.-based Business Roundtable, the Confederation of British Industry and the Japan Foreign Trade Council.
Indian business supports Sri Lanka Expo 2012
A large number of Indian businessmen are visiting Sri Lanka Expo 2012.
According to Export Development Board officials, the Indian contingent which consists of over 200 participants is one of the largest at EXPO 2012.
The participation of the Indian business delegation at EXPO 2012 is being supported by the Confederation of Indian Industry (CII), Southern Gujarat Chamber of Commerce and Industry, Indian Importers Association, All India Rubber Industries Association, Andhra Chamber of Commerce and India - ASEAN - Sri Lanka Chamber of Commerce and Industry.
Apart from visiting EXPO 2012, the Indian delegation had a wide range of meetings at EXPO with members of the Ceylon Chamber of Commerce, Federation of Chambers of Commerce and Industry of Sri Lanka and other Chambers.
The CII delegation met Industry and Commerce Minister Rishad Bathiudeen on March 29.
INDIAN MANAGEMENT
L&T Finance Holdings has acquired Fidelity Worldwide Investment's India mutual fund business to boost growth in the country's growing but highly competitive asset management business.
Financial details of the deal were not disclosed.
The acquisition will provide L&T Finance, a unit of Indian engineering conglomerate Larsen & Toubro Ltd , more products and access to retail customers, the company said in a statement on Tuesday.
Shares in L&T Finance, which the market values at $1.6 billion, ended 4.2 percent higher at 50 rupees before the deal announcement, while the BSE Sensex rose 1.2 percent. Fidelity Worldwide was looking to sell its India mutual fund business, a source with direct knowledge said on January 30, as growing competition, weaker markets and regulatory changes take a toll on the sector's profitability.
A UK-based minority stakeholder in Coal India Ltd said late on Saturday it will file a petition in an Indian court this week claiming breach of fiduciary duties by the miner.
“The Children’s Investment Fund Management (UK) LLP (TCI) today announces that it has instructed its Indian lawyers, Luthra and Luthra, to begin the process of bringing legal action against Coal India Limited (CIL) and its directors,” the firm said in a statement on 31 March.
TCI wrote to the Indian finance secretary on 27 March alleging a breach of the UK and Cyprus treaties, as the government was directing Coal India to under-price its coal and to sign fuel supply agreements (FSAs) with power producers. The two treaties deal with mutual promotion and protection of investors.

INSURANCE
Owners of cars, commercial vehicles and two-wheelers will have to pay more towards insurance with enhanced motor insurance rates coming into effect from Sunday.
The premium rates for third party motor insurance in certain cases will go up by as much as 40 per cent from April 1, 2012, as per the notification of the Insurance Regulatory and Development Authority (IRDA).
The IRDA had earlier announced that the new rates of third party motor insurance premium would be revised at the end of every fiscal year.
Third-party insurance cover protects the vehicle owner from any financial liability, in case of damage to life or property in an accident to the third person.
As per the new rates, private car owners would have to pay premium depending on the size of the vehicles. The hike would be in the range of 6-40%.
The worst-case scenario for insurers in the Supreme Court review of the U.S. health-care law -- eliminating the mandate that everyone have insurance while other changes remain intact -- has been tested in states such as New York, Maine and Vermont.
It failed, insurers say.
The three states were among nine in the 1990s that tried to force insurers to sell policies to anyone who asked, regardless of health, without also mandating that other residents maintain coverage. As a result, as many as 90 percent of those under age 30 dropped their plans, knowing they could always pick them back up if they got sick. Premiums in some cases doubled.
By last year, six of the nine states had repealed the laws, according to Blue Cross & Blue Shield Association, a federation of insurers in Washington.
“The market reforms and the mandate are inextricably linked,” said Karen Ignagni, chief executive officer of America’s Health Insurance Plans, the industry lobbying group in Washington that represents Aetna Inc. (AET), Kaiser Permanente and more than a hundred other health plans. “What is most important for the justices is that they understand those linkages.”

INTERNATIONAL BUSINESS
More than 50 South African companies are heading to take part in the second BRICS Business Forum meeting in New Delhi, which kicks off on Wednesday.
The delegation under the auspices of Business Unity South Africa (BUSA) hopes to further bolster trade between South Africa and its partners in BRICS which had increased between 2007 to 2011 by 108 per cent, as compared with the 12 per cent growth in trade with the EU over the same period. BUSA chief executive Nomaxabiso Majokweni told Bua News that the April 2011 inaugural BRICS Business Forum in Hainan, China, had established a solid foundation for enhanced business ties amongst the biggest and fastest growing economies in the world.
"South African business needs to leverage on the commercial opportunities offered by Brazil, Russia, India and China for the mutual benefit of the grouping, South Africa and the African continent," Majokweni said.
Struggling BlackBerry maker Research in Motion Ltd said on Thursday that it plans to return its focus to its corporate customers after failing to compete with flashier, consumer-oriented phones such as Apple's iPhone and models that run Google's Android software.
RIM said it will focus its consumer efforts on targeted offerings that tap the company's strengths. That includes devices that employees will want to buy on their own and bring to the corporate environment. The company was exploring partnerships and other opportunities for consumer products that aren't deemed central. ``We can't do everything ourselves, but we can do what we're good at,'' RIM CEO Thorsten Heins said. RIM has had limited success trying to enter consumer markets in recent years, and Heins said a turnaround required ``substantial change.''
``We believe that BlackBerry cannot succeed if we tried to be everybody's darling and all things to all people,'' said Heins, who took over the company in January. ``Therefore, we plan to build on our strength.''

LOGISTICS
Chinese manufacturing gauges for March offered a mixed snapshot of the nation’s slowdown, underscoring a split among economists over whether the central bank will lower interest rates. A Purchasing Managers’ Index (PMI) rose to a one-year high of 53.1, exceeding economists’ estimates, a report from the logistics federation and the statistics bureau showed today. The gauge has a pattern of rising in March. A PMI from HSBC Holdings Plc and Markit Economics fell to a four-month low of 48.3.
Premier Wen Jiabao has pledged to “fine-tune” economic policies as needed as weakness in export demand and a cooling housing market restrain an economy that probably grew at the slowest pace in almost three years in the first quarter. While analysts in a Bloomberg News survey last week unanimously said that banks’ reserve requirements will fall, only nine of 20 predicted a cut in benchmark borrowing costs this year.
TVS Logistics buys UK's Universal Components for Rs 100 crore
TVS Logistics, a part of TVS Group, has acquired UK-based wholesaler and distributor of commercial vehicle parts Universal Components for Rs 100 crore, making it one of the company's largest acquisitions outside India.
"The total investments for the acquisition is Rs 100 crore. It was made through the Special Purpose Vehicle into Universal Components," TVS Logistics Managing Director R Dinesh told reporters here. He said the acquisition would help TVS develop its presence in the commercial and Light Commercial Vehicle spare parts range in other Asian markets and help acquire best practices.
The acquisition was made by floating a Special Purpose Vehicle -- TVS Europe Distribution Ltd -- promoted by TVS Group Companies' Sri Chakra and Associated Autoparts, here.
As part of the acquisition, TVS Europe Distribution has purchased 90 per cent of Universal Components UK Ltd, he said.

MANAGEMENT
The Reserve Bank on Thursday asked banks to improve their ability to manage stressed assets, but said there was nothing alarming about an unexpected rise in the non-performing assets (NPA) levels this fiscal.

"Concerns (on NPA) are there. Banks have to improve their ability to manage NPAs.
We have told banks what is their lacuna. They have to improve their information system. But we see that the situation is not alarming. Though this is our concern. Hope banks will be able to manage them," deputy governor KC Chakrabarty told reporters on the sidelines of a function organised by Yes Bank in Mumbai.
It can be noted that following the continued slowdown in economic activities on the back of rising interest rate regime, banks, especially the state-run ones, have been reporting higher NPAs in their books since the second quarter.
The country's largest lender SBI had reported record gross NPAs in Q3 at Rs 40,080 crore and saw an 87.5% spike in its provisioning. But private lenders are better off.
Fund Managers Aren't Showing Much Faith In Euro-Zone Debt

In an ominous sign for Europe’s sovereign-debt crisis, big global asset managers are showing little faith in government bonds sold by the euro zone’s debt-strapped nations, even as these markets have posted an impressive rally this quarter.
While banks and hedge funds have chased bond prices higher, fueled mainly by liquidity provided by the European Central Bank, Pacific Investment Management Co., or Pimco, the world’s biggest bond-fund manager, has slashed its already-depleted holdings in debt of Spain and Italy in February and has said it expects selling to return in coming months. Raiffeisen KAG has sold Spanish and French debt in recent weeks, holding less than is designated by benchmark indices. Frankfurt Trust Investment shifted its position on Spain back to underweight last week. BlackRock Inc. (BLK), meanwhile, has done no more than dip its toes in Italy this quarter and Fidelity Investments has refrained from buying altogether.
Such big investors regard the policy response until now, including cheap loans for banks from the European Central Bank, as a short-term fix and they believe the euro zone’s structural problems will take time to resolve. Without such big investors, many peripheral nations will face funding challenges, with several having been shut out of the capital markets. This means that the ECB may need to intervene more to prevent sharp rises in borrowing costs, but getting more financial aid from Germany and other creditor nations’ taxpayers could be a tall order.

MARKETING
Cipla pins hopes on European inhaler market
‎Cipla Ltd, a domestic pharmaceutical major, is set to tap the European inhaler market with generic drug launches in those markets. The company, with its product pipeline of 11 products, is mainly targeting a smaller pie of the blockbuster drug Seretide—a $2.5-billion product.
The respiratory market worldwide is estimated at $34 bilion, according to 2010 sales. The major markets in the US and European Union account for more than 80 per cent of the total global respiratory market. S Radhakrishnan, CFO, Cipla, said, "We have a market share of 70 per cent in the inhalation therapy segment in India. Given our technical strengths and expertise in this area, it is imperative for us to leverage these strengths not only in Europe but also in rest of the world."
Cipla is expected to launch Seretide (sold as Advair in the US) in the EU market by the middle of the financial year 2013. With about 60 to 70 per cent erosion and a 15 to 20 per cent revenue share, Cipla can earn revenue of about $200 million in the first couple of years, say analysts.
BMW's guerrilla marketing tactics for Mini
‎After BMW India discovered last year that over one lakh likes from its Facebook fans were from India, it took less than six months for the brand to launch its luxury small car, Mini, in the Indian market. Beetle of Volkswagen is the only competitor of Mini in the Indian market.
Sale of premium segment cars, largely dominated by Mercedes, Audi and BMW in India has been growing at a promising rate of over 50 per cent till the last quarter of 2011. Mini plans to focus on brand building with strong marketing activities in the next two years to cash in on the growing premium cars segment.
“We are focused on a strong, surprising, daring and unexpected marketing strategy for the Indian market,” said Dr Andreas Schaaf, President, BMW Group India.

In the overall marketing spends, the company will spend a large share of money on BTL activities than on classic ATL activities, informed Bejamin Nagel, Head, Mini India.

ODISHA BUSINESS

The state government is likely to ask Odisha Mining Corporation (OMC) to provide iron ore through long-term supply agreement to steel companies with whom it has signed MoU. However, steel manufacturers, already reeling under iron ore supply crunch for past couple of years, are sceptic about this decision. The Chief Secretary has called a meeting with OMC officials on this issue on Tuesday afternoon.
“It is the first time the government has made such a move after our repeated complain of supply problems. This signifies a change in government stand, but I am doubtful about the outcome of the meeting,” said P K Jain, president of Arati Steel and Power, citing slower pace of implementation of government decisions.
Out of 45 companies, who signed MoU with the government, only 20 steel companies have started production at a fraction of their installed capacity due to lower availability of key raw material. In last two years, iron ore supplies have dried after the state government took a pro-active step to stop illegal mining, by suspending mineral extraction in over 50 iron ore mines, which is half of total operating mines.
Mega handloom cluster likely to come up in Odisha's Bargarh district
The Centre would consider Odisha's proposal for establishment of mega handloom clusters in the state, Union Textile minister Anand Sharma said today.

"We will definitely be interested to work with Odisha for establishment of handloom clusters in the state. The ministry, however, will consider this only after receiving a detailed proposal," Sharma told reporters after meeting Chief Minister Naveen Patnaik.

Though Union Finance minister Pranab Mukherjee had announced the mega cluster proposal in his budget speech to benefit weavers across the country, the chief minister had expressed displeasure over exclusion of Odisha.

During the discussion, the chief minister raised issues relating to handloom, handicraft and marine products, Sharma said.

He said the ministry was setting up a National Institute of Fashion Technology here.

RETAIL
Game Group's UK shops rescued by OpCapita deal
A deal, which will safeguard the future of the bulk of its remaining 333-shops, is likely to be announced as early as Sunday morning.
Final negotiations were understood to be being completed on Saturday night. It is not known how many of Game’s remaining 2,814 employees will keep their jobs, however.
It is believed that a management team is in position to run the UK business. It is not thought that a deal to rescue the international parts of Game has yet been reached, although potential bidders include Hilco and GameStop, the American video game specialist.
Although the exact price OpCapita is to pay for control of Game’s UK assets is not known, it is thought likely it will have bought the assets out of administration for a nominal amount, believed to be £1.
The real cost, however, will be assuming control of the company’s £85m debt pile.
State Bank of India (SBI), the country's largest lender, has raised retail deposit rates 25 to 100 basis points (bps) for deposits maturing within a year. For retail deposits up to Rs 15 lakh, the bank will now offer 8 per cent for deposits maturing between 7 days to less than 1 years, except for 180 days where it will offer 7 per cent. The bank will also pay a premium of 100 bps for deposits of more than Rs 15 lakh but less than Rs 1 crore. For the 180 days bucket, the premium will be 200 bps for deposit of more than Rs 15 lakh to less than Rs 1 crore.
The short-term rates on certificates of deposit and bulk deposits have shot up in the past month, as banks scrambled for cash to boost balance sheet growth and meet yearly targets. “Since the bulk deposit rates are above 11 per cent, it is better to tap the retail deposit market, where the rates are slightly lower,” said an SBI official. This is the second deposit rate rise by SBI in less than a month, as it launched a scheme on March 1 offering 175-200 bps more over the card rates for deposits maturing within 180 days.

SUPPLY CHAIN
Supply Chain Fleet Operators Increasingly Turn to Natural Gas Power
In increasing numbers, major U.S. contract freight carriers are deploying heavy-duty natural gas-powered trucks to support their customers’ supply chain transport requirements. Clean Energy Fuels Corp. CLNE +0.90% , North America’s leading supplier of natural gas fuel for transportation, contracts with carrier fleet operators to provide compressed natural gas (CNG) or liquefied natural gas (LNG) fueling services at Clean Energy public access stations nationwide.
Among the most recent for-hire fleet operators to opt for natural gas fuel are Premier Transportation, headquartered in Atlanta, Georgia; Transplace, Frisco, Texas, and Glacier Transportation & Logistics, Atlanta, Georgia; Dillon Transportation LLC, Burr Ridge, Illinois; C.R. England, Salt Lake City, Utah; Ryder Dedicated Logistics, El Segundo, California; CEVA Logistics, Hoofddorp, the Netherlands; and Werner Enterprises, Omaha, Nebraska.
Ports' pivotal role in biomass supply chain
THE role of ports as a vital link in the biomass supply chain has been spelt out by a key figure looking to line up a phenomenal increase in demand for the green resource in this region.
With Drax Power Station at Selby just a few miles west from the beginnings of the Humber, the opportunity for northern Lincolnshire to capitalise on the renewable ambitions of Britain's biggest electricity generator is huge.
Immingham already supplies coal via train from Humber International Terminal and there is also an import facility in Hull.
Following on from yesterday's article focusing on the importance of slight increases in support for biomass from a Government consultation, the results of which are expected soon, Drax Power's production director Peter Emery has underlined the importance of the UK's fields and quays as it seeks a cleaner approach to keeping the UK's lights on.
Mr Emery said: "If we get the go-ahead from Government, £200 million of the £450 million investment would be for use in the supply chain, for investments such as pellet plant and port facilities. It is a major, major project.
______________________________________________________________________
Source of Information for this issue : Google alert accessed on 2nd April & Google search accessed on 8th April 201­­­­­­­­­­­­­­­­­­­­2.
We welcome your suggestions in improving this information updating service.
Knowledge Is Power. Be Informed, Be Knowledgeable, Be Powerful.
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
www.asbm.ac.in
Tel:0674-2374832, 2374833
E-mail:library@asbm.ac.in, chieflibrarian@asbm.ac.in


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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