ASBM Business
Updates is a Weekly Selective Compilation of Business News from Various
Sources. To find details follow the links.
ASIAN BUSINESS
Key benchmark indices provisionally closed near the
flat line after witnessing intraday volatility. Engineering & construction
major L&T tumbled over 7% after reporting weak Q1 results. Weak Q1 results from L&T had ripple effect on
shares of power equipment major Bharat Heavy Electricals (Bhel), which also fell sharply. The barometer index,
S&P BSE Sensex, was provisionally up 8.59 points or 0.04%, off
about 105 points from the day's high and up close to 90 points from the day's
low. The market breadth, indicating the overall health of the market, was
negative.
Reliance Industries (RIL) declined after Q1 results.
Asian Paints dropped after the company reported weak Q1
result at the fag end of the trading session. IT major TCS scaled record high.
Housing Development Finance Corporation (HDFC) edged higher after the company
reported good Q1 results on Friday, 19 July 2013. Among metal stocks, Tata
Steel hit 52-week low.
A bout of initial volatility was witnessed as key
benchmark indices trimmed losses after a weak opening. The Sensex reversed
initial losses and moved into positive zone in morning trade. The market
hovered in positive terrain in mid-morning trade. The Sensex extended intraday
gains in early afternoon trade. Key benchmark indices trimmed intraday gains in
mid-afternoon trade after weak Q1 results from engineering & construction
major L&T sent the stock tumbling. The Sensex regained positive zone after
slipping into the red in late trade.
The market may remain volatile this week as traders
roll over positions in the futures & options (F&) segment from the July
2013 series to August 2013 series. The near month July 2013 derivatives
contracts expire on Thursday, 25 July 2013.
Foreign institutional investors (FIIs) bought shares
worth a net Rs 252.26 crore on Friday, 19 July 2013, as per provisional data
from the stock exchanges.
Asian shares fell on Friday, with profit-takers
moving in at the end of a positive week, while dealers in Japan keep an eye on
weekend parliamentary elections.
The losses came despite another record-breaking
close for the Dow and S&P 500 on Wall Street, while the dollar gave up the
advances made against the yen in US trade.
Tokyo fell 1.48 percent, or 218.59 points, to
14,589.91, while Sydney lost 0.43 percent, or 21.3 points, to end at 4,972.1
and Seoul slipped 0.22 percent, or 4.07 points, to 1,871.41.
In the afternoon Hong Kong edged down 0.10 percent
and Shanghai tumbled 1.41 percent.
Global equities rose this week after Federal Reserve
chief Ben Bernanke told lawmakers in Washington that the bank’s $85
billion-a-month bond-buying scheme would be kept in place as long as the
economy needed it.
“Bernanke’s testimony has reassured the markets that
a relatively low interest rate environment will remain in place for the time
being,” SMBC Nikko Securities general manager of equities Hiroichi Nishi said.
On Wall Street, the Dow rose 0.50 percent and the
S&P 500 ended 0.50 percent higher thanks to another batch of impressive
earnings reports from corporate America. Bernanke’s assurances over the
stimulus also provided strong support.
However, with few new trading cues most markets
drifted lower as dealers wound up for the weekend.
In Tokyo, the Nikkei plummeted primarily on futures
selling in anticipation of a victory for Prime Minister Shinzo Abe’s ruling
party in Sunday’s vote.
“Foreign investors are the most common buyers of
futures and had been picking them up over the last 10 days or so in
anticipation of the Sunday Upper House Diet elections,” Tachibana Securities
market advisor Kenichi Hirano said
“It’s very possible that with an overheated and
thin-volume market, they are testing to see how far the Nikkei could fall,” he
told Dow Jones Newswires.
BANKING
Banking shares are continue under
pressure second day in a row after the Reserve Bank of India (RBI) announced a slew of measures to address exchange rate
volatility post market hours on Monday.
Union Bank of India, YES Bank, Oriental Bank of Commerce and Federal Bank are down more than 2%, while State Bank of India (SBI), ICICI Bank, HDFC Bank, Syndicate Bank, Vijaya Bank, IndusInd Bank and IDBI Bank are down 1-2% on the Bombay Stock Exchange (BSE).
The BSE banking index Bankex, the largest loser among the sectoral indices, is down 1.4% as compared to 0.29% rise in benchmark Sensex at 1155 hours. On Tuesday, Bankex has tanked nearly 5% against less than 1% fall in benchmark index.
The RBI took measures to tighten liquidity to defend the rupee. The measures included changes to Liquidity Adjustment Facility, increases in some interest rates and open market operations.
According to market experts the move may push up cost of borrowings for banks.
“Financial companies that are dependent on short-term wholesale funding are expected to be the most impacted by the Central Bank's measures to curb liquidity” says Sanjeev Zarbade, Vice President- Private Client Group Research, Kotak Securities.
Commenting on the same, Amar Ambani, Head of Research at IIFL, feels this move will hurt the stocks of banking and non-banking financial companies materially.
"Apart from hurting margins through higher borrowing cost, it may impact credit growth and asset quality. Increase in yields of long-dated government securities could spell treasury losses for some banks. In our view, wholesale-funded banks and NBFCs would be more adversely impacted as they may witness higher margin contraction," he stated.
'Moody's revises Singapore banking system rating to negative'
International rating agency, Moody's, has revised its outlook on Singapore's banking system from "stable" to "negative", expressing concern with the debt level rising in the city state, according to a media report.
Union Bank of India, YES Bank, Oriental Bank of Commerce and Federal Bank are down more than 2%, while State Bank of India (SBI), ICICI Bank, HDFC Bank, Syndicate Bank, Vijaya Bank, IndusInd Bank and IDBI Bank are down 1-2% on the Bombay Stock Exchange (BSE).
The BSE banking index Bankex, the largest loser among the sectoral indices, is down 1.4% as compared to 0.29% rise in benchmark Sensex at 1155 hours. On Tuesday, Bankex has tanked nearly 5% against less than 1% fall in benchmark index.
The RBI took measures to tighten liquidity to defend the rupee. The measures included changes to Liquidity Adjustment Facility, increases in some interest rates and open market operations.
According to market experts the move may push up cost of borrowings for banks.
“Financial companies that are dependent on short-term wholesale funding are expected to be the most impacted by the Central Bank's measures to curb liquidity” says Sanjeev Zarbade, Vice President- Private Client Group Research, Kotak Securities.
Commenting on the same, Amar Ambani, Head of Research at IIFL, feels this move will hurt the stocks of banking and non-banking financial companies materially.
"Apart from hurting margins through higher borrowing cost, it may impact credit growth and asset quality. Increase in yields of long-dated government securities could spell treasury losses for some banks. In our view, wholesale-funded banks and NBFCs would be more adversely impacted as they may witness higher margin contraction," he stated.
'Moody's revises Singapore banking system rating to negative'
International rating agency, Moody's, has revised its outlook on Singapore's banking system from "stable" to "negative", expressing concern with the debt level rising in the city state, according to a media report.
A rise in rates could erode the Singapore lenders'
credit profile in the next 12 to 18 months, 'The Straits Times' reported on
Tuesday citing a Moody's
rating report. Moody's pointed out that some households in Singapore might
struggle to pay off loans such as mortgages if interest
rates rise, as was expected.
Other agencies such as Fitch still have a rating of
"stable" on the outlook for the banking system in Singapore,
according to the report.
Moody's also maintained its outlook for the three
local banks - "negative" for DBS since August last year, and
"stable" for OCBC Bank and
United Overseas Bank.
Moody's said consistently low interest rates and
strong economic growth in Singapore have encouraged borrowing and boosted asset
prices.
The ration of Singapore dollar loans to deposits has
risen steadily to 79 per cent last year, the highest in six years.
Since 2009, household debt has risen 40.4 per cent
as monthly income rose 26.3 per cent.
These numbers could spell trouble when interest
rates rise, cautioned Moody's.
High debt "may leave some households with less
flexibility to adjust to higher interest rates or cope with the increasing risk
of rising unemployment
brought about by more challenging economic conditions", the report said.
The banking system would likely face challenges from
Singapore banks' overseas expansion forays too.
"Problem loans from outside Singapore, Southeast
Asia and Greater China increased to 45 per cent of the total non-performing
loans last year, up from 11 per cent in 2008," the local daily quoted
Moody's as saying.
Global interest rates rises might also cause
investors to shift funds out of emerging markets, which could "place
downward pressure on asset prices and collateral in several of the emerging
markets where Singapore banks operate," it said.
BUSINESS
The government, which recently issued an ordinance
to amend the Sebi
Act aimed at empowering the regulator on collective investment schemes, has
also carried out changes in the law relating to consent orders with
retrospective effect to provide the entire process a legal sanctity.
Consent orders are like an out-of-court-settlement
in the context of charges of violation of securities laws, introduced in 2007,
to ensure speedy disposal of cases. However, securities lawyers had raised
concerns that settlement of offences without legal sanction was not
appropriate. In fact in 2011, a public interest litigation was filed before the
Delhi
High Court seeking to quash the consent order circular on the grounds that
it did not have legislative backing unlike in the case of Income Tax or
Customs departments-whose settlement processes are backed by law.
Legal experts said the retrospective amendment has
"cut the suit to fit the body. By doing so, nothing which has been done
under the consent mechanism will be opened up".
"The latest ordinance has statutorily baptised
the consent process. The legal certainty to the consent process facilitates
closure without exposure," said Cyril Shroff, managing
partner of Amarchand
& Mangaldas & Suresh A Shroff & Co.
Sebi introduced the consent order mechanism six
years ago to offer swift remedies to close disputes, which otherwise get
entangled in long-drawn litigation. It was modelled on the US Securities
Exchange Commission's settlement system.
BUSINESS
COMMUNICATION
Voice over Internet
protocol (VOIP) has
brought about a complete overhaul of the way businesses communicate, says Rob
Lith, director of Connection Telecom.
The unprecedented efficiency and flexibility of
modern VOIP systems offer a “constantly expanding universe of communication
functions”, says Lith, with each function fulfilling niche requirements that
other modes of communication cannot fulfil. For instance, video conferencing, a
niche medium, has become easily affordable for even the most tight-budgeted of
businesses, he notes. “With hosted IP-based video, any business or contractor
can now rent virtual video conferencing rooms at very affordable monthly rates,
allowing them to rope in specialists at short notice, rather than schedule
meetings with multiple people inside and outside the organisation at much cost,
delay and inconvenience.”
Instant messaging (IM) is another important change
in the way business is conducted, he adds. “IM proves that, while e-mail and
voice conversations need never die, they aren’t suited to scenarios where
immediacy is vital and a degree of non-disruptive intrusion is palatable.”
IM is also taking on a new and important role in
customer interaction. “Given a choice, many people would find chat a better
option than a voice conversation, especially when busy, or on weekends and
public holidays, when it seems an enormous effort to pick up the phone and talk
to a support engineer. Chat does not require diverting your attention from your
PC, where, let’s face it, it is probably focused. And unlike a voice
conversation, it is easier to terminate a chat exchange with the minimum of
protocol observed.”
INDIA BUSINESS
Having
been a preferred route for foreign investors coming to India for a long time, Mauritius now wants Indian companies to use its platform for their outward investments to Africa.
Presenting
it as a 'gateway to Africa' for investments in various sectors, a high-level
delegation from Mauritius, comprising policymakers and industry players, has
come here to meet industry bodies and other stakeholders to apprise them about
the benefits of the Indian Ocean island nation.
"We
have recently seen an enormous increase in the number of global business
companies being incorporated in Mauritius and targeting Africa,"
Mauritius' integrated financial sector regulator FSC (Financial Services
Commission) Chairman Marc Hein told PTI here.
Hein, who
is part of this delegation, said "this increase demonstrates clearly the
reality that Mauritius is now truly an important gateway to investments into
Anglophone and Francophone Africa."
The term
'Anglophone Africa' is used for African countries with large English-speaking
population and these include Gambia, Sierra Leone, Liberia, Ghana, and Nigeria.
The
Francophone Africa is a contiguous area in West Africa and Central Africa, as
also Madagascar and Djibouti, where French-speaking population is high.
Mauritius itself
is a multi-lingual country with a large part of its working population speaking
English, French and Hindi among other languages.
Hein said
outward FDIs by Indian companies into Africa, by using Mauritius, would be a
natural progression for the age-old ties between the two countries, which have
shared very close economic ties for many years.
The
Mauritius government's investment promotion agency, Board of Investments (BOI)
Director Shamima Mallam Hassam also said that there were immense opportunities
for Indian companies in Africa.
"As
Africa continues to attract attention of global investors, traders and private
equities, we see an increasingly important role for Mauritius to play as the
ideal and preferred gateway and access centre to the continent," she said.
Global search engine provider Google will train
small and medium enterprises (SMEs) across the southern states to grow their
business by adopting digital advertising, a senior official said here today.
“We will train our partners in the southern region
to provide expertise in developing and launching digital campaigns for SME
businesses,” Google managing director Todd Rowe said in a statement here.
The training will offer end-to-end solutions,
including search engine marketing, localised solutions across Google’s
properties and mobile advertising platform. “During the training
programme, partners will have access to our products, co-branded market
collateral and research through our marketing and sales support,” Rowe said.
The company roped in 16 mid-size firms for the
training programme since September 2012 when it was launched in other regions
of the country.
“We have trained about 3,000 sales people to help
SMEs gain from digital advertising. We hope to replicate the model in the
southern region to add 3,000 more sales force by doubling our partner base,”
Rowe observed. According to Getit Infomedia chief executive Jaspreet Bindra,
with the internet changing the landscape of how customers reach out to
businesses, the search platform provider (Google) sees phenomenal growth in the
SMEs adopting the seamless network to expand their business.
INDIA MANAGEMENT
HSBC
Global Asset Management is
overweight on India. It is also overweight on the US, Eurozone and China.
However, it has neutral view on Japan.
''Given
the strong profitability for Indian stocks, the market has discounted a high level
of risk and this could create opportunities going forward, under the assumption
that the government remains committed to fiscal consolidation,'' said Herve
Lievore, senior marco and investment strategist, HSBC Global Asset
Management.
Chinese
stocks could suffer in the next few months of a slow pace of recovery and money
market tensions, while a better prospect for profit margins and low valuation
metrics could offer value in the medium term, Lievore opined.
On the US,
Lievore said, ''A strong US economic recovery, driven by the private sector and
improving housing market, along with fading tail risks and continued provision
of central bank liquidity all support US equities.''
While many
structural and reform measures remain to be accomplished, valuations are
supportive across Europe and there has been some progress on the policy front,
Lievore said on Eurozone.
Further on
Japan, Lievore said, ''Aggressive monetary and fiscal policy changes could
provide support to economic and corporate earnings growth, but the outlook is
still uncertain given that such aggressive policy has not been tried before.''
A $9 billion emerging markets fund run by Vontobel Asset Management has a quarter of its money in a
handful of Indian stocks, including ITC and Hindustan Unilever - an unusual bet at a time when the
country's economic woes have prompted many investors to flee.
Rajiv Jain's Virtus Emerging Markets Opportunities
Fund is also notable for his decision to largely shun China, citing worries about China's banking sector, which
he calls "a complete disaster".
Jain said he shares concerns about India but his bets are mainly consumer products firms able
to generate some of the fastest earnings growth in the world on the back of a
growing middle class.
"It should not be construed as being bullish on
India," he told Reuters in an interview. "It's four or five names."
"It's a function of what the opportunity set is
globally. If you look at the world today, it's not easy to find companies that
can deliver 20 percent-odd EPS growth," said Jain, 45, who manages $30
billion for New York-based Vontobel.
Beset by slowing growth and high inflation, India's
woes have been exacerbated by its crashing currency, and foreign investors sold
a net $1.5 billion of Indian shares in the four weeks to July 12.
By contrast, the fund's 27 percent weighting for
India is up from 24 percent at the end of last year, the highest in the world
among funds with $1 billion or more under management, data from Thomson Reuters
Lipper showed. The fund's benchmark has just a 6.8 percent weighting for India.
Most of the investment is in five stocks: cigarette
maker ITC , Hindustan Unilever , Nestle India , Asian Paints and lender
HDFC . Jain said his top India holding, ITC, had a high return on
capital and was in a business "almost impossible" to break.
INSURANCE
At long last, the government seems to be getting
ready to bite the bullet on FDI reforms in the insurance sector, which has been
held up for many years now. At a meeting chaired by Prime Minister Manmohan Singh on Tuesday, the
government has proposed to increase the FDI limit in the insurance sector to 49
percent from the current 26 percent, pending Parliament approval.
The reform if it gets passed in Parliament, will be
big boost the industry. As per the Insurance Regulatory and Development
Authority’s website, there are 24 general insurance companies and 23 life
insurance companies operating in India. According to industry observers,
a lot of international companies have been waiting to enter India and a further
opening up of the sector will give them an entry point. This will also be a
boost to the existing insurers, who are desperately looking for funds to
expand. “Fresh capital will allow them to stretch their arms further. They will
have more money to enter Tier II and III cities. As of now the focus of Indian
insurers is returns and hence they don’t take the risk of innovation. More
funds will increase their risk appetite,” said, Anuj Bhagia, CMO,
Policybazaar.com
INTERNATIONAL
BUSINESS
The G20 backed a
"fundamental" rethink of the rules on taxing multinational
corporations on Friday, taking aim at loopholes used by companies such as Apple
and Google to avoid billions of dollars in taxes.
The group of leading economies released an action plan drawn up by the Organisation for Economic Co-operation and Development (OECD) that said the existing system didn't work, especially when it came to taxing companies that trade online.
"It is a major breakthrough and is at the heart of the social contract," France's finance minister, Pierre Moscovici, told a news conference on the sidelines of a meeting of finance ministers from the Group of 20 leading nations in Moscow.
"People and companies have to pay the taxes that are due. It's the only way to operate in a fair and competitive society," added British finance minister George Osborne.
Large budget deficits and public anger at inter-company structures designed to channel profits into tax havens have prodded governments to act.
Google, Apple and others say they follow the law wherever they operate and pay what tax is due but also have a duty to shareholders to organise their affairs in a tax-efficient way.
Business groups welcomed the international approach being taken by the G20, saying unilateral action could hinder cross border trade and investment, but they advised caution in changing the current rules.
British business lobby group the CBI said it supported an examination of the loopholes that the OECD said facilitated profit shifting but questioned whether the OECD had "proven serious base erosion and profit shifting issues caused by these structures".
The group of leading economies released an action plan drawn up by the Organisation for Economic Co-operation and Development (OECD) that said the existing system didn't work, especially when it came to taxing companies that trade online.
"It is a major breakthrough and is at the heart of the social contract," France's finance minister, Pierre Moscovici, told a news conference on the sidelines of a meeting of finance ministers from the Group of 20 leading nations in Moscow.
"People and companies have to pay the taxes that are due. It's the only way to operate in a fair and competitive society," added British finance minister George Osborne.
Large budget deficits and public anger at inter-company structures designed to channel profits into tax havens have prodded governments to act.
Google, Apple and others say they follow the law wherever they operate and pay what tax is due but also have a duty to shareholders to organise their affairs in a tax-efficient way.
Business groups welcomed the international approach being taken by the G20, saying unilateral action could hinder cross border trade and investment, but they advised caution in changing the current rules.
British business lobby group the CBI said it supported an examination of the loopholes that the OECD said facilitated profit shifting but questioned whether the OECD had "proven serious base erosion and profit shifting issues caused by these structures".
LOGISTICS
Tesoro Logistics LP (NASDAQ:TLLP) declared a
quarterly dividend on Thursday, July 18th, ARN reports. Stockholders of record on Friday, August 2nd
will be given a dividend of $0.51 per share on Wednesday, August 14th. This
represents a $2.04 dividend on an annualized basis and a yield of 3.77%.
Several analysts have recently commented on the
stock. Analysts at Credit Suisse initiated coverage on shares of Tesoro
Logistics LP in a research note to investors on Tuesday. They set a “neutral”
rating and a $60.00 price target on the stock. On the ratings front, analysts
at TheStreet upgraded shares of Tesoro Logistics LP from a “hold” rating to a
“buy” rating in a research note to investors on Friday, June 7th. Finally,
analysts at Wunderlich raised their price target on shares of Tesoro Logistics
LP from $50.00 to $59.00 in a research note to investors on Wednesday, May 8th.
They now have a “hold” rating on the stock.
Four research analysts have rated the stock with a
hold rating and eight have issued a buy rating to the stock. Tesoro Logistics
LP presently has an average rating of “Buy” and an average price target of
$59.00.
Tesoro Logistics LP (NASDAQ: TLLP) traded down 0.79% on Thursday, hitting
$54.07. Tesoro Logistics LP has a 52-week low of $35.40 and a 52-week high of
$71.92. The stock’s 50-day moving average is currently $59.14. The company has
a market cap of $2.462 billion and a price-to-earnings ratio of 28.79.
ODISHA BUSINESS
ArcelorMittal, the world's top steelmaker,
said it would scrap a planned steel plant in Odisha due to delays in acquiring land and an iron ore
mine, obstacles that have also caused South Korea's POSCO to abandon plans.
The decision to scrap the planned 12
million-tonnes-a-year (MTA) plant in Odisha, comes a day after the world's
fifth biggest steelmaker, POSCO, said it was ditching a 6 MTA plant in
Karnataka because of delays in receiving iron ore mining rights and opposition
from residents which had held back land acquisition.
The failed projects will be a blow to the central
government, which on Tuesday relaxed foreign investment rules to draw in funds
needed to turn around slowing economic growth and support a weak rupee.
ArcelorMittal India and China Chief Executive Vijay Bhatnagar said the
company's other two projects in mineral-rich Jharkhand and Karnataka were
making "steady progress" and it would continue to pursue them.
The Jharkhand plant is expected to have an annual
capacity of 12 million tonnes, while the one in Karnataka is expected to have
capacity of 6 million tonnes.
"The delays relating to land acquisition and
allocation of captive iron ore blocks means (the Odisha) project is no longer
viable," Bhatnagar said.
POSCO said on Tuesday that it would focus on its
main steel project for a 12 MTA plant in Odisha.
An Odisha government official said ArcelorMittal had
not deposited the required 10 percent value of the 8,000 acres of land it
wanted.
Odisha has recorded about 22 per cent growth in software exports in 2012-13. In value terms, the software
exports from the state reached Rs 1,970 crore from Rs 1,611 crore in 2011-12.
Exports by IT units, registered with the Software Technological Parks of India (STPI) and Special Economic Zone stood at Rs 1,710 crore and Rs 260 crore respectively.
Infosys is the biggest software exporter from the state followed by Tata Consultancy Service (TCS), Tech Mahindra and Exilant Technologies, sources said.
The software export from the state in 2011-12 was valued at Rs 1,611 crore. This grew by 17 per cent from Rs 1,377 crore in 2010-11.
With the expansion of Tata Consultancy Services (TCS) and Mahindra Satyam (now Tech Mahindra) this year, we are expecting a similar growth rate in this fiscal, said Madhusudan Padhi, state IT secretary.
IT bellwether, TCS currently has a headcount of 1,000 and the expanded facility can accommodate 4,000 more employees. TCS had set up its development centre in the city - TCS Kalinga Park in 2009 on a 46-acre plot.
It may be noted, the state government has set a target of Rs 20,000 crore worth of software exports by 2020 in its new Information and Communication Technology (ICT) policy. The new policy envisages to attract top ten IT developers and five best Electronic System Design and Manufacturing (ESDM) companies to create 60,000 jobs in the state. The policy has incentives for both the software and hardware industries.
Exports by IT units, registered with the Software Technological Parks of India (STPI) and Special Economic Zone stood at Rs 1,710 crore and Rs 260 crore respectively.
Infosys is the biggest software exporter from the state followed by Tata Consultancy Service (TCS), Tech Mahindra and Exilant Technologies, sources said.
The software export from the state in 2011-12 was valued at Rs 1,611 crore. This grew by 17 per cent from Rs 1,377 crore in 2010-11.
With the expansion of Tata Consultancy Services (TCS) and Mahindra Satyam (now Tech Mahindra) this year, we are expecting a similar growth rate in this fiscal, said Madhusudan Padhi, state IT secretary.
IT bellwether, TCS currently has a headcount of 1,000 and the expanded facility can accommodate 4,000 more employees. TCS had set up its development centre in the city - TCS Kalinga Park in 2009 on a 46-acre plot.
It may be noted, the state government has set a target of Rs 20,000 crore worth of software exports by 2020 in its new Information and Communication Technology (ICT) policy. The new policy envisages to attract top ten IT developers and five best Electronic System Design and Manufacturing (ESDM) companies to create 60,000 jobs in the state. The policy has incentives for both the software and hardware industries.
RETAIL
Under pressure from international retailers, the
government might soon amend the foreign direct investment (FDI) policy on multi-brand retail trading (MBRT) by easing some conditions which had
drawn sharp criticism from global investors. However, there is no proposal to
hike the FDI limit in the sector from 51 per cent.
The department of industrial policy and promotion (DIPP), nodal agency for FDI policy under the ministry of commerce and industry, seems to have prepared a note for the Cabinet Committee of Economic Affairs (CCEA) to consider. It would mean changes in the FDI policy approved in September.
The government will seek to change three main conditions that have invited the most criticism by retail conglomerates such as Walmart, Tesco and Carrefour. This pertains to the riders concerning back-end infrastructure, mandatory sourcing and establishment of retail stores only in cities having more than a million population.
The move comes at a time when the economic scenario is gloomy, with the rupee at an all-time low and investment sentiment depressed. It was only last month that DIPP had issued a set of clarifications on these issues but this failed to soothe retailers’ nerves.
On back-end infrastructure, the government is planning to highlight the condition of creating “additional” infrastructure. A senior official, told Business Standard, the main reason why government opened the sector to FDI was “only” to create additional and state-of-art back-end infrastructure such as cold chains and storage facilities. For, the “present back-end facilities are not enough and the existing players will get an easy exit route if foreign retailers buy them out, leading to a real estate business of sorts.”
The department of industrial policy and promotion (DIPP), nodal agency for FDI policy under the ministry of commerce and industry, seems to have prepared a note for the Cabinet Committee of Economic Affairs (CCEA) to consider. It would mean changes in the FDI policy approved in September.
The government will seek to change three main conditions that have invited the most criticism by retail conglomerates such as Walmart, Tesco and Carrefour. This pertains to the riders concerning back-end infrastructure, mandatory sourcing and establishment of retail stores only in cities having more than a million population.
The move comes at a time when the economic scenario is gloomy, with the rupee at an all-time low and investment sentiment depressed. It was only last month that DIPP had issued a set of clarifications on these issues but this failed to soothe retailers’ nerves.
On back-end infrastructure, the government is planning to highlight the condition of creating “additional” infrastructure. A senior official, told Business Standard, the main reason why government opened the sector to FDI was “only” to create additional and state-of-art back-end infrastructure such as cold chains and storage facilities. For, the “present back-end facilities are not enough and the existing players will get an easy exit route if foreign retailers buy them out, leading to a real estate business of sorts.”
SUPPLY CHAIN
OKI, a leading telecommunications manufacturer with
headquarters in Japan, and the Yamato Group, one of Japan's leading logistics
companies, today announced the launch of a new transportation system that will
distribute precision equipment, such as ATM maintenance parts, safely and
precisely throughout China.
This follows a measure to restructure OKI's supply
chain management (SCM), with the goal of strengthening its ATM business
foundations in China. The new system will begin transporting materials in July
between OKI's maintenance parts warehouse in Shenzhen City, Guangdong, and a
maintenance site in Hebei. Having set a goal to reduce logistics costs for ATM
maintenance parts in China by 30% over the next three years, OKI will expand
the new transport system to serve all OKI maintenance sites throughout China
and pursue further SCM restructuring.
The new transportation system combines strengths
specific to the OKI and to the Yamato Group, including OKI's familiarity with
logistics in China and with package design technologies and the Yamato Group's
know-how in the area of total logistics management, including the selection of
optimal distribution modes, distribution status control, and delivery status
monitoring. In cooperation with OKI, the new B2B transportation system designed
for precision equipment covers all of China and marks a first for the Yamato
Group.
OKI began delivering ATMs to China in 2005 and has
to date delivered more than 80,000 units. OKI's cash-recycling ATMs currently
account for approximately 50% of this market, the leading market share. With
ever-growing numbers of ATMs installed in China and continuing expansion into
interior China, OKI needed to ensure a safe, secure, and effective
transportation system and provide access to speedy repairs and supply systems
for maintenance parts delivered to approximately 220 maintenance sites.
_______________________________________________________________
Source of
Information for this issue: Google alert accessed on 23rd and 26th July 2013
We welcome your suggestions in improving this information updating service.
Knowledge Is Power. Be Informed, Be Knowledgeable, Be Powerful.
Best wishes
Compilation
Sabita Sahu
Sabita Sahu
Junior Librarian
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
E-mail:library@asbm.ac.in, chieflibrarian@asbm.ac.in
Sabita Sahu :Junior Librarian 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
No comments:
Post a Comment