March 19, 2010 in FOCUS Impatience Breeds Anxiety, Fear, Discouragement and Failure
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March 19, 2010 IN FOCUS Impatience breeds anxiety, fear, discouragement and failure. Patience creates confidence, Weekly Indicators decisiveness, and a rational outlook, which eventually leads to success. (Brian Adams) Indicators Current Last Week S&P upgrades outlook on India to “Stable” Sensex 17,578 17,167 Global credit rating agency, Standard & Poor’s (S&P) has revised the outlook on Nifty 5,263 5,137 India to “Stable” from “Negative” due to improved government finances. The Forex Reserves US$279.7 bn US$278.43 bn agency, which identified inflation as the only downside, also affirmed the “BBB-” WSP Inflation 9.89% (Feb) 8.56% (Jan) long-term and “A-3” short-term sovereign credit ratings on India. Ratings below Food Inflation 16.3% 17.81% “BBB-” are non-investment grade. The outlook revision follows the government’s decision to prune subsidies. S&P expects India's GDP growth to be 8% in FY11, Exchange Rates which is higher than that of many other countries and exceeds its own previous Currency Current Last Week expectations. Moreover, S&P views India's external position as resilient. US$1 Rs. 45.48 Rs. 45.45 However, the ratings continue to be constrained by the high government debt € 1 Rs. 61.89 Rs. 62.27 burden and deficit, and India's weak fiscal profile. Meanwhile, the Prime £ 1 Rs. 69.0932 Rs. 68.4886 Minister's advisory panel has said that S&P's decision to revise upwards the JP¥ 100 Rs. 50.28 Rs. 50.14 country's rating outlook to stable from negative would make help boost Global Economic News investment inflows. Japan's consumer confidence rose to 40 in Feb’10 Moody’s warns US of downgrading rating from 39.4 in Jan’10 Fed has left its benchmark interest rate unchanged Moody’s Investors Service has sounded a stern warning saying triple A rated at zero to a quarter percent (AAA ) US treasury bonds – the safest investments in the world – could be Eurozone core inflation at all-time low; stood at downgraded if the administration fails to manage the federal debts. A rise in the 0.8% in Feb’10, down from 0.9% in Jan’10: Eurostat proportion of its revenue that the US government spends servicing its debt over The Policy Board of the BoJ has decided to retain the next 10-years, as outlined in the federal budget in February, would see the the overnight call rate at 0.1% US government’s “AAA” rating come under pressure, Moody’s added. Moody The average asking price for a home in the UK was up just 0.1% MoM in Mar’10 stated that the US and other western nations have moved substantially closer to The US business inventories came in unchanged in losing gilt edged ratings. “Unless we have the political will to cut spending and Jan’10 following a revised 0.3% decrease in Dec’09 raise taxes, our debt levels are reaching the risk level for a downgrade,” the Eurozone employment declines 0.2% QoQ in agency warned. fourth quarter: Eurostat India among top 3 investment destinations: Columbia varsity report Singapore's banking system outlook remains stable: Moody's India is among the world's top three preferred investment destinations, but German economy is likely to grow 1.8% this year equity caps limit the size of potential inflows, reveals a report by Columbia and next: IWH University. The report cited liberalization in FDI policy and several economic RBA Board hikes cash rate by 25 basis points to 4% sectors, a globally competitive workforce, and rapid GDP and market growth as The US industrial production edged up by 0.1% in the main drivers of foreign investment in India. Yet, it said equity caps limit the Feb’10 following an unrevised 0.9% increase in size of potential new inflows and national security concerns might prompt more Jan’10. The capacity utilization rose to 72.7% in Feb’10, following a revised 72.5% in Jan’10 oversight of FDI approval processes. According to the 15-page report “Inward NAHB/Wells Fargo Housing Market Index fell to a FDI in India & Policy Context” India is also the 13th largest in terms of foreign reading of 15 in Mar’10 from a reading of 17 in Feb’10 investment inflows, which have risen 15-fold since 2000. Although the global Global Corporate News crisis slowed the rate of FDI growth in India in 2009, it also helped reinforce India's position among global investors, as despite the crisis, a number of leading Royal Bank of Scotland is planning to restructure its balance sheet through a programme which may global firms have announced large-scale investments in various sectors. involve buying back of around £10 bn of the British bank's debt. Hang Seng BeES… India’s first international ETF opens for trading Dell has filed a lawsuit against Sharp Corporation, Now thw Indian investors can invest in China with India’s first international ETF Hitachi, Toshiba Corporation and two other i.e. Hang Seng Benchmark Exchange Traded Scheme – Hang Seng BeES – listed companies for alleged price fixing of LCD displays Bank of America is reportedly planning to seek on the NSE with symbol HNGSNGBEES. The fund was open for public subscription approval from China to expand its operations in last month from 15-24 February. The fund is first international ETF promoted by the fast-growing country. Benchmark Mutual Fund and tracks Hang Seng Index that comprises of 42 Lehman Brothers Holdings has filed a plan with the US bankruptcy court in Manhattan to wind companies including HSBC Holdings, China Mobile, Bank of China, Cathay Pacific down its remaining assets and operations Airways and China Construction Bank Corporation and represents approximately Discover Financial Services has posted $122.2 mn profit in Q1, as against of $118.4 mn profit in Q1 60% of the total market capitalization of Hong Kong stock Exchange. The asset last year allocation under this scheme will be 90-100% in securities constituting Hang Siemens is planning to cut at least 1,000 jobs in Seng Index and; 0-10% in money market instruments, G-Secs, bonds, debt SIS Information Technology business to prepare the unit for a possible sale or IPO instruments and cash at call, mutual fund schemes / overseas exchange traded Nike has posted $496.4 mn profit in Q3, as against funds based on Hang Seng Index. Hang Seng BeES is design to take care of the $243.8 mn profit in Q3 last year foreign exchange conversions and investors in India can invest in Rupee terms through their Demat and Trading account or through a NSE member who can execute the order. The fund is ideal for investors who want to have international Asim Mohapatra exposure and are bullish on China, which even in the face of a global recession Content Editor has been a source of interest for investors around the world. [email protected] Info-Spectrum Bridging the Information Gap in Corporate Landscape 1. Economy 03-04 2. Infrastructure 05-06 3. Sectors 07-17 A. IT & ITeS 07-08 B. Telecom 09-10 C. Pharma & Healthcare 11-12 D. Auto & Auto Ancillaries 13 E. Banking & Financial Services 14 F. Steel, Metals & Minerals 15 G. Miscellaneous 16-17 4. Ratings & Delistings 18-19 5. Insurance & Mutual Funds 20 6. M&As 21-22 7. Ensuing Events 23 8. Global 24-28 • Global Economy 24-26 • Global Business 27-28 Please Use Bookmarks for Easy Navigation INDEX Weekl y Newsletter 2 Info-Spectrum Bridging the Information Gap in Corporate Landscape ECONOMY India among top 3 investment destinations: report India is among the world's top three preferred investment destinations, but equity caps limit the size of potential inflows, reveals a report by Columbia University. The report cited liberalization in FDI policy and several economic sectors, a globally competitive workforce, and rapid GDP and market growth as the main drivers of foreign investment in India. Yet, it said equity caps limit the size of potential new inflows and national security concerns might prompt more oversight of FDI approval processes. According to the 15- page report “Inward FDI in India & Policy Context” India is also the 13th largest in terms of foreign investment inflows, which have risen 15-fold since 2000. The report said while investors initially concentrated on manufacturing, power and telecommunications, they now focus on services. Among other visible trends, firms in developed countries dominated investment in the 1990s, but in the past decade developing country investors have also become significant, it said. A third of the post-2000 inflow is invested around Mumbai, a manufacturing hub, and one-fifth around Delhi, a services hub. Since most global firms found that their Indian and Chinese operations considerably outperformed their developed market investments, they now accord even greater strategic value to these two destinations, the report pointed out. Noting that India's attractive GDP growth rate and superior market performance are likely to attract growing FDI inflows, the report said CEOs consistently rank India as one of the world's top 3-5 preferred investment destinations in recent global surveys. Although the global crisis slowed the rate of FDI growth in India in 2009, it also helped reinforce India's position among global investors, as despite the crisis, a number of leading global firms – including Volkswagen, Telenor, LG, Cairn, and a number of IT companies – have announced large-scale investments in various sectors. In contrast to the favourable development of economic drivers of inward FDI, the security-induced tightening of approval procedures and oversight policies might limit the potential inflow of FDI, as might the difficulty in obtaining operational clearances,” the report added.