ASIAN
BUSINESS
BUSINESS
is calling for bipartisanship over the broad direction of the federal
government's Asian century white paper, as Australia sets course to ramp up its
engagement with Asia.
The Business Council of Australia (BCA) and Australian
Chamber of Commerce and Industry (ACCI) said the challenge will be to implement
the policies to fulfil the goals for 2025 of the white paper given the long
time frame.
"There will be debate about the specific policy
solutions to the challenges outlined in the white paper, but what is needed is
bipartisanship on the broad direction," BCA head Jennifer Westacott said
in a statement.
"Clearly the government must take the lead in
adhering to and delivering on many of the policy commitments, but equally the
business community plays a significant and critical leadership role."
ACCI chief Peter Anderson said governments, the
federal opposition and the finance sector needed to follow through on goals to
improve competitiveness, trade finance, Asian language and cultural learning.
"It sets the right ambition and points to more than enough economic, trade
and social pathways for regional prosperity to keep both government and opposition
away from the gender wars or partisan politics from now until the next election
if they have enough will and discipline," he said.
Asian shares edged higher on Thursday as signs of
recovery in China and the United States eased fears of deteriorating global
growth, but sentiment remained vulnerable with weak corporate earnings
continuing to undermine investor confidence.
The
MSCI index of Asia-Pacific shares outside Japan was up 0.3 percent, having fallen
the past four days. Australian shares inched up 0.2 percent with increases in
copper and oil prices, while South Korean shares trimmed earlier losses to
trade nearly flat ahead of third quarter results from Hyundai Motor Co. Japan's
Nikkei average rose 0.5 percent.
Credit Suisse said in a research
note that Asian companies which have already reported third-quarter earnings
have only had a slight negative surprise.
"While it is early days in the
Asian reporting season with only 58 stocks or 12.3 percent of market
capitalisation having reported, so far the change to 2013 estimate consensus
EPS for companies that have reported since 30 September is -0.2 percent,"
it said.
The outlook also improved, with 48
percent of the companies which have reported the latest earnings downgrading
forecasts, compared with two-thirds in the previous quarter, it said.
Southeast Asia is becoming one
bright spot in a world of gloomy corporate earnings, with strong profit growth
powered by a population of 600 million people increasingly willing, and able,
to spend in their fast growing economies.
ASIAN MANAGEMENT
Opalesque Industry Update - Sturgeon
Capital is an alternative investment manager focused on Central Asian markets.
Founded in 2006 with the launch of the flagship Sturgeon Central Asia
Fund, the Firm has been managing public equities, fixed income and private
equity investments in Central Asia for 6 years. Sturgeon Capital now also
manages Tau Capital, a London AIM-listed closed end fund investing in public
and private equities in Kazakhstan and the surrounding markets.
Although a long-bias strategy,
Sturgeon’s experience in investing in regional equities and
understanding of the specific macro influences affecting regional markets will
be leveraged to maximise returns.
The Sturgeon Central Asia Equities
Fund will invest primarily in equity securities of companies listed on
regulated markets but which have a substantial exposure to Central Asia and the
supporting regional macro growth dynamics.
“We have been investing in regional
equities, both locally and internationally listed, since the Firm was founded.
Investors have often asked us to create an equity-only strategy focused on
Central Asia and we have always considered doing so since 2006. We have been
watching local stocks and markets for over 12 months with a view to launching
such a strategy, and in our view this is now an excellent time to do so” said
Taco Sieburgh Sjoerdsma, CFO of Sturgeon Capital.
Asian stocks fell, with the regional benchmark index bound for
a third day of losses, after companies including Acer (2353)
Inc. posted earnings that missed estimates and Moody’s Investors Service
lowered credit ratings on five Spanish regions.
Acer slid 3.5 percent in Taipei as Asia’s
second-largest computer maker posted third-quarter profit and sales that missed
estimates. Canon Inc., a camera maker that gets about 31 percent of sales from
Europe, dropped 1.5 percent in Tokyo. Kansai Electric
Power Co. (9503) slumped 13 percent after the Nikkei newspaper reported the
Japanese utility won’t pay a dividend. The MSCI Asia Pacific Index lost 0.5
percent to 122.59 as of 9:02 p.m. in Tokyo, erasing gains of as much as 0.3
percent. Almost two shares dropped for each that climbed on the measure. The
gauge rebounded 13 percent from this year’s low on June 4 through yesterday as
stimulus measures in the U.S., Japan and China boosted market sentiment amid a
global economic slowdown and Europe’s debt crisis.
“External factors such as the European debt crisis and
the U.S. elections are still the biggest risks for the market,” said Angus Gluskie, managing
director at White Funds Management in Sydney, which manages more than $350
million.
BANKING
As a result of interest reversal on
restructured loan accounts during the quarter, Indian Overseas Bank reported a
24 per cent drop in net profit for the quarter ended September 30 at Rs 158.43
crore against Rs 207.46 crore in the corresponding previous year quarter.
The bank’s total income rose to Rs
5,515.02 crore from Rs 4,822.56 crore, registering a growth of 14.36 per cent.
Announcing the results, the bank’s Chairman and Managing Director M. Narendra,
said interest reversal on restructured accounts and additional provisions made
during the quarter amounted to Rs 168 crore. “But for that, our gross and net
profits would not have fallen,” he said.
Gross NPAs (non-performing assets) as on
September 30, went up to Rs 5,930 crore from Rs 3,898 crore in the previous
year. Narendra said this was because there were a few major accounts which
turned NPAs during the quarter. According to him, nine major accounts — from
pharma, engineering and manufacturing sectors — worth Rs 650 crore became NPAs.
“However,” he said, “some of them are in
the process of a corporate debt restructuring programme and the results are
expected.” Giving the break-up of the gross NPA, he said while domestic NPAs
accounted for Rs 5,300 crore, overseas NPAs accounted for Rs 629 crore. Net
NPAs at the end of the quarter stood at Rs 3,378 crore (2.25 per cent) as
against Rs 1,505 crore (1.21 per cent) in the previous year.
In the history of Indian banking,
possibly no other developments have had as much fundamental and revolutionary
impact as the overnight nationalisation of banks in 1969. And, then, some 25
years later, pursuant to the Narasimham Committee recommendations, the RBI
giving out licences to set up new commercial banks in the private sector.
At their respective times, both these
momentous steps, had phenomenal positive impact and rewrote the rules of the
game for Indian banking. The structure and the system that we have today is,
unarguably, the result of these two developments.
Even as the so-called new-generation
private sector banks grew at a fast pace, eating into the market shares of the
older public sector and private banks, it is critical to understand that they
also created new products/services, new mix of revenues-costs-profits and,
thereby, made the entire banking system reorient basic business models.
For more than three years now,
interested parties have been voicing both for and against starting the next
phase, that is, of allowing the entry of more private banks.
The then Finance Minister, Pranab
Mukherjee, in his 2010 Budget speech, announced that business houses and NBFCs
(non-banking finance companies) would be allowed to set up banks. This
generated a lot of interest. Since then, there have been many strong voices on
this subject.
The RBI itself has discussed this,
notable being its view that licences would be given only after the Banking Laws
Amendment Bill is passed by Parliament.
BUSINESS
South Africa is one of the countries that have evinced
interest in investing in sectors like infrastructure and tourism in
Uttarakhand.
South
African High Commissioner H M Majeke, who attended the Second Ambassadors' Meet
which concluded here yesterday, told the organisers that his country would like
to invest in infrastructure facilities like airport in the hill state.
"South Africa has identified Uttarakhand as one of the important places
for investments," Majeke said. "This is a very good
opportunity for a country like South Africa, which is ready to build airports
in Uttarakhand," said Pankaj Gupta, president of the Indian Association of
Uttarakhand, which organised the two-day business meet.
Georgia has also said it would like
to develop a partnership with Uttarakhand in the tourism sector, the hill state
being bestowed with an immense natural bounty.
Majeke also invited Chief Minister
Vijay Bahuguna and industrialists from the state to visit South Africa to hold
business talks. South Africa also agreed to open a diplomatic office in the
state.
Majeke also showed keen interest in
the animal husbandry sector and also visited the Kalsi livestock breeding
centre near Dehradun.
Even as the Supreme Court is set to hear the petition
to ban testing of genetically modified (GM) crops on October 29, the apex body
that is supposed to regulate GM crops in the country, the Genetic Engineering
Appraisal Committee (GEAC), has been in limbo since April when it last met.
The
GEAC was last reconstituted in June 2009 for three years. Since its tenure
ended in June, the committee has neither been reconstituted nor its tenure
extended. According to senior scientists, this has severely harmed the progress
made in field testing and research of new crop varieties. “The
GEAC was a representative body, having members from all stakeholders. Now when
it has been made non-functional, a lot of work in the field of research and
development of new crop varieties has been pending for want of proper
clearance,” a senior official from the Indian Council of Agriculture Research
(ICAR) said.
He added the role of the GEAC has
now been taken over by other committees, which are not fully representative.
In its prime, GEAC comprised almost
30 members including independent experts, representatives from India’s premier
science and biotechnology bodies such as the Council for Scientific and
Industrial Research, ICAR, department of biotechnology, officials from the
directorate of plant protection, quarantine & storage and the department of
industrial policy and promotion, etc.
BUSINESS COMMUNICATION
Tata Communications, formerly Videsh Sanchar Nigam
Ltd, plans to have 90 per cent of its voice business from contractual customers
over the next three years, up from 70 per cent now.
The
company, which has a global network of submarine cables, is a leading provider
of international wholesale voice communication services. It has 1,600 direct
and bilateral relationships with leading international voice telecommunications
providers. With the onslaught of video calling
solutions such as Skype and Google Talk, international voice traffic is growing
at a meagre four per cent. Despite this, in 2011-12 Tata Communications handled
46.72 billion minutes of international voice traffic globally, an annual growth
of 13.4 per cent.
The success of this growth lies in
the company’s strategy to convert the business into a long term outsourcing
model from a traditional spot model.
“We believe the voice market is
shrinking and moving to IP to data and so on,” said Michel Guyot, president,
global voice solutions, Tata Communications. “So, we are converting the
commoditised voice business into a long term viable outsourcing model where
customers can plug in for additional services,” he said.
A couple of years ago, the company
signed a deal with BT to outsource their voice traffic. It provided BT with
system and pricing tools along with global connectivity. “This way, we have
gone beyond the voice business; it is more of a solution that we are offering,”
said Guyot.
The International Association of
Business Communicators (IABC), an American based company, seeks to build
professional communicators to enable them to become authentic voices of the
organisations they serve. The IABC is a global network of
communication professionals committed to improving organisational effectiveness
through strategic communication. Speaking at the launch of the Association in
Botswana on Friday, executive chairman, Kerby Meyers, explained that
communication professionals will have access to a network of 14 000 like minded
people across the globe and this will enable them to have sustainable business
policies and processes:
"By establishing an IABC chapter in Botswana, communication professionals will also have access to resources and strategic partners enabling sustainable business and effective implementation of policies and processes," he said.
Kerby said the organisation will help to raise the awareness of the industry to the key role of skilled communication professionals. However, Meyers noted that performance and the driver of employee effective communication is a leading indicator of financial engagement.
"By establishing an IABC chapter in Botswana, communication professionals will also have access to resources and strategic partners enabling sustainable business and effective implementation of policies and processes," he said.
Kerby said the organisation will help to raise the awareness of the industry to the key role of skilled communication professionals. However, Meyers noted that performance and the driver of employee effective communication is a leading indicator of financial engagement.
BUSINESS
MANAGEMENT
A day after resolving the impasse over salary issue
with its employees, the Kingfisher Airlines top brass discussed revival plans
with aviation regulator DGCA here today.
"It was a general meeting. We had a discussion
with the DGCA to get a better understanding about presenting the revival plan
(of the airline). We will get back to them very soon," airline CEO Sanjay
Aggarwal said after a 30-minute meeting with DGCA chief Arun Mishra here.
"We
have not submitted any revival plan yet. But we will present it soon. No
time-frame has been specified," he said when asked by when they planned to
submit their revival plan as well as revocation of suspension of their flying
license (Scheduled Operator's Permit) by the DGCA. The
license of Kingfisher was issued on August 26, 2003, and is valid till December
31 this year.
Later, DGCA sources said that
Aggarwal and Kingfisher promoter Vijay Mallya would soon discuss among
themselves the operational and financial plan for revival of the cash-strapped
carrier.
This would include the number of
aircraft they have, the routes they want to operate on, apart from financial
issues including debt repayment, the sources said, adding they would have to
submit a comprehensive plan on all these issues to convince DGCA to revoke
suspension of their flying permit.
Blackstone Group LP is preparing to launch a multibillion-dollar
fund that will buy stakes in hedge fund managers in the secondary market, as
traditional buyers such as banks pull back amid disappointing fund performance
and regulation.
Blackstone,
whose hedge-fund solutions business has $46.2 billion in assets under
management, sees an opportunity to provide an exit for banks, insurers and
other financial institutions that need buyers willing to take on what are
particularly illiquid investments, a source familiar with the firm's plans
said. No target for the size of the new fund had been set,
although it could attract between $2 billion and $3 billion, the person said.
Blackstone will start marketing the fund to potential investors soon, hoping
for returns over 20 percent, the source added.
Blackstone declined to comment.
The new fund is the latest example
of diversified private equity firms seeking to take advantage of traditional
providers of capital on Wall Street that are taking a step back. KKR & Co
LP , citing the financing challenges of those relying on the traditional
financial services industry, launched a new capital markets business in July,
targeting middle-market companies.
But Blackstone's new fund will be
entering a niche space with few players. Its main competitor will be Neuberger
Berman Group LLC, whose Dyal fund also targets hedge fund GP stakes in the
secondary market.
FINANCE
India's Entertainment & Media sector is expected to grow steadily over the next five years
as per CII-PwC's latest report titled 'India
Entertainment & Media Outlook 2012'. The industry is expected to
exceed INR 175,000 crores growing at a CAGR of 17%1 from 2012 to 2016.
The CII-PwC report, 'India Entertainment & media Outlook 2012' is going to
be released on Monday at the "India-Big Picture" CII-Media and
Entertainment Summit.
Advertising segment in India is dominated by the
television and print sectors with combined contribution of over 80% in the total
revenue pie. Both these segments are expected to continue to be dominant in the
next five years.
The Indian E&M industry is among the top 15
markets in the world and the fastest growing one, followed by China, Russia and
Brazil. This growth is largely coming from the burgeoning internet segment
which has the potential to outshine the print sector by 2014.
The Potential Game Changers in this area are going to
be the Advertising Spend, Consumer spend, infrastructure and policy support.
Indian generic drug makers, such as Ranbaxy, Lupin, Dr
Reddy’s and Aurobindo, which often opt to challenge patents in the US, might
have to wait longer to launch their generic versions there.
For
the next few years, the US Food and Drug Administration (FDA) has extended the
timeline by 10 months for granting tentative approval to generic drug
applications filed under Paragraph IV of its rules, seeking 180 days of
marketing exclusivity. A Paragraph IV filing is made when the generic applicant
believes its product does not infringe the innovator’s patents or such patents
are not valid or enforceable. The FDA, under a recent amendment to
the Food and Drug Administration Safety and Innovation Act, has increased the
timeframe for giving a tentative nod to such applications filed between January
1, 2010 and July 9, 2012 to 40 months from the earlier 30 months.
Generic drug makers are required to
forfeit their exclusive marketing rights for the product in case they fail to
secure tentative approval for their drug within this period.
According to an industry source, the
move is not limited to applications filed between January 1, 2010, and July 9,
2012. “For applications whose 30-month stay expires between October 2015, and
September 30, 2016, the 30-month period will be extended to 36 months,” the
source says.
INDIA BUSINESS
Procter
& Gamble said emerging markets contributed 38% of business even as the
world's largest household products maker faced a moderate slump in sales in
China, Russia, Turkey and Brazil. The India market on the other hand, grew 25%
year-on-year organically, the maker of Tide detergent said while announcing its
results for the first quarter of fiscal 2013. Revenue came in line with market
expectations at $20.74 billion but was down 3.7% year-on-year. Organic sales
rose 3% against Unilever's 5.9% from last year, primarily driven by price
hikes.
For rival Unilever, emerging markets now contribute more than half of its sales at 54.5%.
Thus, to enhance contribution of emerging markets, P&G is planning to introduce 20 new categories and is building 15 plants in these markets . P&G plans to invest Rs 1540 crore in the Indian home products business). The company also launched Oral-B toothpaste in Venezuela, Greece, Portugal and Israel, and aims to launch it in several more markets over the next six months, a report from Edelweiss Securities, a domestic brokerage firm said. P&G is facing several headwinds related to costs and slower growth in developed countries and China, which has put the company on the backfoot. However, given its vast product portfolio and enforcing its plan to cut costs by $10 billion by 2016 it is expected to help the company improve profitability. P&G is also stepping up activities in emerging markets and has guided for 8-9% organic sales growth in developing markets for the fiscal year.
For rival Unilever, emerging markets now contribute more than half of its sales at 54.5%.
Thus, to enhance contribution of emerging markets, P&G is planning to introduce 20 new categories and is building 15 plants in these markets . P&G plans to invest Rs 1540 crore in the Indian home products business). The company also launched Oral-B toothpaste in Venezuela, Greece, Portugal and Israel, and aims to launch it in several more markets over the next six months, a report from Edelweiss Securities, a domestic brokerage firm said. P&G is facing several headwinds related to costs and slower growth in developed countries and China, which has put the company on the backfoot. However, given its vast product portfolio and enforcing its plan to cut costs by $10 billion by 2016 it is expected to help the company improve profitability. P&G is also stepping up activities in emerging markets and has guided for 8-9% organic sales growth in developing markets for the fiscal year.
Recognising the rapid growth and huge
potential, particularly among SMEs in Maharashtra, Ras Al Khaimah Free Trade
Zone Authority (RAK FTZ) has invited Indian entrepreneurs to set up business in
the United Arab Emirates (UAE).
UAE-based RAK FTZ is holding a series of
seminars and presentations followed by B2B interactive sessions for
entrepreneurs in Mumbai from October 30 to November 1. Senior officials from
RAK FTZ will meet and assist businessmen in setting up operations in the UAE, a
statement said here on Sunday.
With an initial investment of just Rs
2.5 lakh, Indian businessmen have the opportunity to set up an office in the
UAE and enjoy all tax incentives and 100 per cent capital & profit repatriation,
it said.
Furthermore, they are eligible to apply
for one UAE residence visa (family status) valid for three years and a bank
account in UAE plus other advantages, the release said.
According to Maryam Al Murshedi, Deputy
Director General of RAK FTZ, “we are looking to strengthen our position as a
business hub and help SMEs connect to emerging markets such as the Middle East
and North Africa. We are also focusing on providing more value-added services
for our clients.”
INDIA
MANAGEMENT
APG Asset Management, one of the world's largest
pension asset man agers, and at least two sovereign wealth funds — Abu
Dhabi Investment Authority and The Government of Sin gapore Investment
Corp— will invest directly in the Indian real estate
market moving away from their earlier strategy of routing investments
through PE funds. The move to directly invest comes at time when nearly half
the real estate funds in India have been unable to offer attractive returns as
India's once soaring real estate sector is crippled by increasing debt and
plunging sales. In the last five years realty funds have delivered exits worth
$4 billion (Rs 21,000 crore), compared with $17 billion of foreign
direct investment raised for the sec tor, according to industry estimates.
APG, which manages about 300 billion euro in assets, now plans to work directly
with real estate developers, as it looks to establish a stronger footprint in
the country' property sector.
"While we do not rule out fund invest ments, our
preferred approach is to work with developers and operating partners on a
selective basis and create platforms for future growth," Sachin Doshi,
senior portfolio manager of APG Asset Management Asia, said in an email.
The Dutch pension fund will seek in vestments between
$100 million and $300 million. In July, an APG-led consortium entered into a
pact with realty developer Godrej Properties
for a Rs 770-crore ($143 million) investment in its residential projects. Private
equity participation in the sec tor has dramatically slowed down in the
first half of 2012, with the total number of deals with announced value in the
space plunging 63% to 12, as against 32 in 2011.
Norway-based Telenor ASA found a new
Indian partner in a low-profile local businessman as part of its strategy to
rescue and rebuild its business in the country from the ruins of its
now-terminated joint venture with Unitech Ltd.
The Norwegian company has chosen
Lakshdeep Investments and Finance Pvt. Ltd, the family held investment firm of
Sun Pharmaceutical Industries Ltd executive director Sudhir Valia,
to be its partner.
Not much is known about Valia except
that he’s a chartered accountant and is also on the board of Fortune Wealth
Management Co. India Pvt. Ltd, besides being the brother-in-law of Dilip
Shanghvi, managing director of Sun Pharma. Valia’s family has other
investments, including a 2,600MW power project in Andhra Pradesh.
Telenor’s Indian
entity Telewings Communications Pvt. Ltd will have 26% of its equity held by
Lakshdeep. The remaining 74% will be held by the Norwegian company, said an
official with knowledge of the deal.
“This is a financial investment by
Mr Valia in his personal capacity,” Telenor said in a release.
Telenor has applied to participate
in the upcoming auction for second-generation (2G) telecom spectrum, expected
to begin 12 November, through Telewings. The department of telecommunications
will publish the list of pre-qualified bidders on Sunday.
The Uninor (Unitech Wireless Ltd)
joint venture with Unitech had all 21 licences scrapped by the Supreme Court on
2 February owing to irregularities in the allocation of spectrum. Uninor’s
licences were among the 122 belonging to nine companies that were cancelled by
the Supreme Court at the time. The spectrum that was thus freed up is shortly
coming up for the auction in which Telewings will participate.
INSURANCE
The Obama administration will soon take on a new role
as the sponsor of at least two nationwide health
insurance plans to be operated under contract with the federal government
and offered to consumers in every state. These multistate plans were included
in President Obama’s health care law
as a substitute for a pure government-run health insurance program — the public
option sought by many liberal Democrats and reviled by Republicans. Supporters
of the national plans say they will increase competition in state health
insurance markets, many of which are dominated by a handful of companies.
The national plans will compete directly with other
private insurers and may have some significant advantages, including a federal
seal of approval. Premiums and benefits for the multistate insurance plans will
be negotiated by the United States Office of
Personnel Management, the agency that arranges health benefits for federal
employees. Walton J. Francis, the author
of a consumer guide to health plans for federal employees, said the personnel
agency had been “extraordinarily successful” in managing that program, which
has more than 200 health plans, including about 20 offered nationwide. The
personnel agency has earned high marks for its ability to secure good terms for
federal workers through negotiation rather than heavy-handed regulation of
insurers.
The Indian insurance broking industry is expected to
witness a rise in mergers and acquisition (M&A) on the back of expected
reforms, according to multiple industry sources, who said existing players
would welcome the government’s proposed plan to increase foreign direct
investment (FDI) in insurance limits to 49% from 26%.
Should the government increase FDI, a decision which
could be taken by December, three main factors would spur M&A in the
sector, industry sources agreed. One, overseas insurance brokers would seek to
increase their holdings in existing Indian partnerships; two, overseas brokers
not yet in the country could seek deals; and three, domestic consolidation
would occur in the fragmented industry as companies seek to gain scale. Agrees
Arvind Laddha, CEO of Vantage Insurance Brokers. “The insurance broking
industry is going through a phase of consolidation, FDI is surely a catalyst.
The growth life and general insurance companies in the last decade saw many
players enter the broking space. However, now life insurance business has been
contracting on a month-on-month basis and except motor, none of the general
insurance businesses have seen a very good growth. Therefore, those broking
companies, which did not see a very good growth so far will be brought out.”
INTERNATIONAL
BUSINESS
The world's markets may believe that the worst of the
financial crisis in Europe
is over after three turbulent years, but those people who control the purse
strings of the world's businesses are not breathing any easier.
An annual survey of finance directors from global
business consultancy BDO
finds that the crisis over too much government debt in Europe
remains one of their key concerns, so much so that Greece is
considered a riskier place to invest and set up business in than war-torn Syria. Only Iran and Iraq are
considered more risky than Greece, which also struggles to convince its
international creditors that it deserves bailout loans to avoid bankruptcy and
a possible euro exit.
"CFOs are becoming increasingly wary of Southern
Europe, parts of which they now see as risky as the politically unstable
countries of the Middle East," said BDO chief executive Martin Van Roekel.
Greece isn't the only country in the 17-country group
that uses the euro in the survey's top 10 riskiest countries to invest in.
Spain, which even as the eurozone's No. 4 economy with a
long-standing relationship with Latin America, stands at No. 7.
This reluctance by finance directors, particularly
from fast-growing economies such as Brazil and China, to invest in Europe's
indebted countries goes to the heart of the financial crisis. A major part of
these countries' recovery is dependent on the private sector stepping in to
fill the investment
gap left by cuts in government spending.
The US economy expanded
at a slightly faster 2 per cent annual rate from July through September, helped
by a rise in consumer spending and a burst of government spending. The report
may help President Barack Obama's campaign message that the economy is
improving.
The report is the last snapshot of economic growth
before Americans choose a president in 11 days. Growth improved from the 1.3
per cent rate in the April-June quarter, the Commerce
Department said Friday. Still, growth remains too weak to rapidly boost
hiring. And the 1.74 per cent rate for 2012 so far trails last year's 1.8 per
cent growth, a point Republican rival Mitt Romney
will emphasize.
The economy improved because consumer spending rose 2
per cent in the July-September quarter, up from 1.5 per cent in the second
quarter. Spending on homebuilding and renovations increased more than 14 per
cent. And federal government spending expanded sharply on the largest increase
in defense spending in more than three years.
Growth was held back by the first drop in exports in
more than three years and flat business investment in equipment and software.
The economy was also slowed by the severe drought this summer in the Midwest.
That sharply cut agriculture stockpiles and reduced growth by nearly a half-point.
The government's report covers gross domestic product.
GDP measures the
nation's total output of goods and services _ from restaurant meals and
haircuts to airplanes, appliances and highways.
LOGISTICS
Transport Corp of India, the nation’s third-largest
logistics company, plans its biggest investment in five years to prepare for a jump in
freight demand as retailers such as Walmart Stores Inc open outlets.
The
company will spend Rs 150 crore ($28 million) in the year to March 31 to add
more trucks and build warehouses, Joint Managing Director Vineet Agarwal said in an interview. The spending may help
Transport Corp’s supply chain division, which offers warehousing and packaging,
to expand more than 20 per cent annually through 2017, he said. The
operator plans to add 1,000 more trucks in five years, Agarwal said, as India’s
decision to allow foreign investment in retail stores will help create more
supermarkets and boost transportation of farm and factory products. Deutsche
Post AG’s DHL Supply Chain last week said it would invest euro 100
million ($131 million) to strengthen operations in the country.
“Once overseas investments start
coming into retail sector, it’ll help Transport Corp,” said Rajni
Ghildiyal, an analyst with Asit C Mehta Investment Interrmediates
Ltd. “The strategy to place itself as a supply chain solutions provider will
help it exploit the potential.”
Transport Corp rose 0.9 per cent to
Rs 64.9 in Mumbai today. The stock declined 13 per cent in the past year,
making it the worst performer on the 29-company Bloomberg Industries Express
& Courier Services index after Hanjin Transportation Co.
Sales at Transport Corp’s supply
chain division rose 21 per cent to Rs 580 crore in the year ended March 31,
data compiled by Bloomberg show. The business contributed about 30 per cent of
total sales, up from 14 per cent four years ago.
XPO Logistics, Inc. (NYSE: XPO) today
announced that it has acquired the operating assets of Turbo Logistics, Inc.,
the freight brokerage division of Ozburn-Hessey Logistics, LLC (OHL). The cash
purchase price was $50 million, excluding any working capital adjustments, with
no assumption of debt. The acquisition is expected to be immediately accretive
to earnings.
Founded in 1984, Turbo Logistics serves
more than 600 customers through four locations: Gainesville, Ga.; Reno, Nev.;
Chicago, Ill.; and Dallas, Texas. The company had 170 employees and trailing 12
months revenue of approximately $124 million as of September 30, 2012.
Bradley Jacobs, chairman and chief
executive officer of XPO Logistics, said, "Turbo Logistics is a well run,
highly scalable brokerage business that has earned 28 years of respect in the
industry. They have a strong carrier network and deep relationships in the
retail, manufacturing and food and beverage sectors. Turbo's expedite business
has synergies with our Express-1 expedite division, and on the truckload side,
we've now acquired a significant position in the temperature-controlled freight
market.
"We're very pleased that David
Coker and Jeff Battle will be staying on in leadership positions. Their
combined 33 years of experience at Turbo will help us scale up in Gainesville,
the largest location, and in Reno. Our plan for Chicago is to merge it with one
of our fastest-growing cold-starts, led by Abtin Hamidi. We'll do the same in
Dallas, where we have a cold-start run by Doug George that's gaining traction.
We're effectively creating large, combined platforms that we can scale up
dramatically in these two metro areas."
MANAGEMENT
Blackstone
Group LP is preparing to launch a multibillion-dollar fund that will buy stakes
in hedge fund managers in the secondary market, as traditional buyers such as
banks pull back amid disappointing fund performance and regulation.
Blackstone, whose hedge-fund
solutions business has $46.2 billion in assets under management, sees an
opportunity to provide an exit for banks, insurers and other financial
institutions that need buyers willing to take on what are particularly illiquid
investments, a source familiar with the firm's plans said.
No target for the size of the new
fund had been set, although it could attract between $2 billion and $3 billion,
the person said. Blackstone will start marketing the fund to potential
investors soon, hoping for returns over 20 percent, the source added.
Blackstone declined to comment.
The new fund is the latest example of
diversified private equity firms seeking to take advantage of traditional
providers of capital on Wall Street that are taking a step back. KKR & Co
LP , citing the financing challenges of those relying on the traditional
financial services industry, launched a new capital markets business in July,
targeting middle-market companies.
But Blackstone's new fund will be
entering a niche space with few players. Its main competitor will be Neuberger
Berman Group LLC, whose Dyal fund also targets hedge fund GP stakes in the
secondary market. Goldman
Sachs Group Inc's Petershill fund was also active in this area.
Vijay Mallya's quest to raise funds seems to have hit
a speed breaker. Sources say that the United Spirits Limited-global spirits
company Diageo deal has hit a roadblock over issues related to management
control.
According to sources there are two important issues
that have to be clarified. First, about the management control and second,
about the no extension given to United Spirits to bring down stake in Whyte
& Mackay by the UK regulatory authorities.
Earlier, Vijay Mallya had agreed to give up majority
control in terms of shareholding. However, it was discussed that Mallya will
continue to remain the chairman of the joint entity. Right now, USL is asking
for clarity on the number of seats they will hold on the board and they also
want two-three USL senior representatives and UB Group representatives to
continue on the management of the company.
They are looking for a joint management structure,
which Diageo is not comfortable with, considering the fact that Diageo will be
acquiring majority stake.
According to their view Vijay Mallya can remain the
chairman they would prefer if they takeover the management, so that is an
important issue and that will define the future of the joint entity.
MARKETING
Discovery Communications today formally
launched its kids channel Discovery Kids in Andhra Pradesh, targeting children
below the age of 11 years.
The channel, which is Discovery
Communications’ eighth channel in India, was rolled out last month in three
languages — English, Hindi and Tamil.
Discovery is today amongst the 10
most-viewed channels in India, with 140 million viewers clicking on to it every
year.
Rajiv Bakshi, Vice-President (Marketing),
South Asia, said the kids genre was third in terms of TV viewership, after
entertainment and movies. “In terms of advertisement revenue, this genre had a
market of Rs 300-400 crore, after the entertainment and movies genres,” he
said.
Discovery Kids will be competing with
some 10 channels in this genre, including Turner’s Cartoon Network and Pogo,
Viacom’s Nickleodeon, Disney Channel and Hungama. “The market is huge as there
are an estimated 380 million children below the age of 14,” he said.
Discovery has designed its content based
on a research it undertook earlier that revealed that a majority of parents did
not approve of what their kids were watching. .
Bakshi said Discovery Kids would be
different from the rest of the channels. The content will be entertainment
embedded with learning. Animation has a share of 70 per cent of the total
content, the rest being live, he said, adding that this ratio will continue.
Intuit has integrated the online marketing software
gained through its $423.5 million acquisition of Demandforce with its
QuickBooks accounting software, giving small businesses a way to make closer
connections with customers, the company announced Thursday.
Small companies lack the resources to "market
their business, tell their story and keep up regular communications with
customers," said Patrick Barry, chief marketing officer for Demandforce.
Those tasks have become more complex with the rise of the Internet, social
media and mobile devices, he said.
The QuickBooks integration allows Demandforce to load
customer and transaction data from QuickBooks into its cloud-based service and
use it to create marketing campaigns and other forms of customer outreach. For
instance, Demandforce could send "thank you" emails automatically to
customers after QuickBooks completes a transaction. The system can also build
campaigns based on QuickBooks data showing which customers came into a
business, what they bought, and how much they spent.
Demandforce is known for integrating with many
industry-specific back-end systems used by small businesses such as dentist
offices, repair shops and spas. But the Quickbooks integration expands
DemandForce's reach to potentially millions of additional prospective users who
have more general business processes, he said.
Demandforce is now available for the QuickBooks Pro,
Premier and Online editions. Pricing information for Demandforce wasn't
available, with monthly subscription costs varying according to a customer's
size, according to Barry.
ODISHA
BUSINESS
The fate of the IT park to be set up by K Raheja Corporation in Bhubaneswar is almost sealed as the
company has not progressed with the project since it had signed a pact with the
state government.
The
Odisha government had entered into a memorandum of
understanding (MoU) with the K Raheja Corporation in 2008 for setting up an IT
park in the Mancheswar industrial estate area (25 acres). “We
have to take a call on the issue as the designated time period for developing
the project has lapsed,” a top official of the state IT department told
Business Standard.
The company has not shown any
keenness in setting up the park as the land allotted to it is lying vacant for
more than two years. We will now annul the agreement, the official added.
The IT Park was expected to generate
employment opportunities for 12,000 persons in three-four years. With an
investment of Rs 250 crore in the first phase, the construction was expected to
be completed in three years.
It was to be developed in
public-private-partnership (PPP) mode having 10 lakh square feet of space to be
used by different IT and ITeS companies coming to Odisha.
The energy department in the state of Odisha, India
will commence a feasibility study to identify possible locations for the
construction of small hydro electric projects (SHEPs).
About 200-250 locations have been identified by the department
to enhance hydro power generation across the state, reported Business Standard.
The Odisha Hydro Power Corporation (OHPC) is compiling
a pre-feasibility report for five new hydro power projects, having a combined
capacity to generate 1543MW of electricity.
Projects include the 510MW Balimela pump storage
project, the 110MW Bhimkund & Baigundi project, the 600MW Indrabati pump
storage project, the 3MW Kanpur small hydroelectric project and the Upper Kolab
pump storage project.
The state government is currently under agreements
with 36 hydro project developers entailing an investment of INR22.5bn ($407.4m)
to generate nearly 472MW of electricity.
RETAIL
Retail Adventures is the largest trader of discount
stores such as Sam's Warehouse, Crazy Clark's, Chickenfeed and Go-Lo stores.
The company's board of directors made the decision to
place the company in voluntary administration and appointed Deloitte's Vaughan
Strawbridge and two of his partners to oversee the restructure of the business,
the company said in a statement.
Under the restructure, the company's 238 stores and
5000 full-time staff will continue under the Sam's Warehouse and Crazy Clark's
brands.
The company said 29 Crazy Clark's, Go-Lo and
Chickenfeed stores have already been closed, with more store closures expected
in NSW, Victoria and Tasmania.
It said 57 Chickenfeed and Go-Lo stores will be
rebranded as Crazy Clark's stores. Retail Adventures chief executive Penny Moss
said all staff who lose their jobs will be paid their entitlements with
alternate employment offered where possible.
Leather bags and accessories brand Lavie, a part of Planet Retail,
is planning to enter new segments like ladies footwear, watches and jewellery
in the next two-three years.
"We will be expanding into ladies footwear. We
want to be the preferred accessories player for women. It would include
eyewear, time-wear, jewellery. That is the vision of the brand but we will take
it step by step. By 2015-16 we will be present in all these categories," Lavie Bags brand
head Sandeep
Goenka told PTI here. The handbags are currently outsourced from around the
world and is exclusive to Lavie, he said, adding the brand is mulling to set up
its own manufacturing unit in India.
"We are open to the idea of local manufacturing.
We have not been able to scout around for our unit currently, but we have been
looking for options," he said, adding there is no time-frame for setting
up a facility here.
The fashion and lifestyle brand is eyeing a turnover
of Rs 120 crore by 2015 but Goenka declined to divulge the brand's present turnover.
"By 2015-16, we will be a Rs 110-120 crore brand. We plan to have
double-digit growth."
Lavie bags are available at multi-brand retail outlets
besides seven exclusive stores and they are looking at expansion. "We have
seven stores currently and plan to open another 10-15 in the coming calendar
year," Goenka said without giving details on investment for the new
outlets.
The brand spends close to 10-12 crore on marketing
activities.
SUPPLY
CHAIN
Apple may have announced its
latest product to its adoring followers, but analysts are wary
that consumers may be waiting longer than usual to get hold of the iPad Mini due to supply
concerns.
As was widely predicted, Apple
announced a smaller iPad device, costing £269 in the UK, as well as a new iPad
4 and refreshes in its notebook and PC ranges.
However, with demand likely to be
high for the new devices, particularly the cheaper Mini tablets, panel supplies
are expected to be even more constrained than usual.
According to DisplaySearch, Apple
has changed up its supply chain for the Mini, continuing to work with LG Display, which will supply to
Apple's Taiwanese manufacturing partner Foxconn, and adding a new
supplier to its chain, AUO,
which provides panels to Pegatron.
According to reports in the run up
to the Mini, manufacturing will be split roughly equally between the two
manufacturers, with AUO likely to take up to 60 percent of the production as it
effectively takes the place of Samsung.
With the ongoing fight with Samsung
over intellectual property, Apple started dissolving its relationship with the
former ally, leaving the firm with limited options. Samsung had
previously been a reliable partner and Apple is now having to deal with an
altered supply chain.
Analysts point out AUO has had yield
problems with its 7.9 inch panels. These production problems are resulting in
tightened supply to Pegatron which is tasked with putting the final touches to
the devices.
This means that in September, AUO
shipped just over 100,000 units, a third of what Apple's other supplier for the
Mini, LG Display, managed in the same month.
Retail giant Walmart announced new commitments
Thursday which the company says will increase the sustainability of its supply
chain in China, the U.S. and around the world.
The world’s largest retailer -- which operates a chain
of big-box stores around the globe known for deep discounts – is placing China
at the center of its plans to fund research focused on sustainable business and
supply chains, as well as to increase the standards of its sourcing and product
design.
“The impacts of these commitments will be global and
make a difference around the globe,” Walmart CEO Mike Duke said in front of a
Beijing, China audience that included U.S. Ambassador to China Gary Locke,
Chinese government officials, nongovernmental organizations, suppliers and
academics.
Duke announced the Walmart Foundation will grant $2
million to The
Sustainability Consortium to set up shop in China and begin research aimed
at stimulating the growth of sustainable business.
First launched with Walmart funding in 2009, The
Sustainability Consortium develops reporting tools and metrics designed to
measure sustainability. It worked together with Walmart to develop the
retailer’s Sustainability
Index, a much-publicized effort launched three years ago. The index
measures the sustainability of products across a list of 100-plus categories.
By the end of 2012, Walmart says that 100 more product categories will be
added.
Sabita Sahu : Professional Library Trainee and Syamaghana Mohanty : 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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Information for this issue: Google alert accessed on 29th, 30th Oct and 2nd Nov 2012
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Compilation
Sabita Sahu
Sabita Sahu
Professional Library
Trainee
Concept, Layout and
Editing
Syamaghana Mohanty
Chief Librarian
Chief Librarian
Information and
Documentation Division, Chanakya Central Library
Asian School of
Business Management
Shiksha Vihar Bhola,
Barang Khurda Road,
Chandaka
Bhubaneswar-754012
Tel:0674-2374832, 2374833
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