Download Daily_Markets_Eco_28Nov2011

Global - Economy and Market

Italy's Monti in austerity race as IMF role eyed
ROME - Prime Minister Mario Monti faces a testing week seeking to shore up Italy's
strained public finances, with an IMF mission expected in Rome and market pressure
building to a point where outside help may be needed to stem a full-scale debt
emergency.

China factory unrest flares as global economy slows

Europe's banks plan accounting tricks to look stronger

China kicks off yuan trading vs Aussie, Canadian dollar
DONGGUAN, China - In factory towns across China's export powerhouse in the Pearl
River Delta, a vicious cycle of slowing orders from the West and increasing wage
pressures has led to a series of major strikes that could reverberate through the
economy.
European banks are planning to change how they calculate risk-weighted assets to
make it look like they have improved their financial conditions. Such a change could
allow banks to avoid selling assets or new shares to meet new capital requirements.
SHANGHAI - China's yuan started trading against the Australian dollar and Canadian
dollar in the country's onshore forex market on Monday, the latest currency pairs to be
introduced as part of Beijing's efforts to promote the use of its currency.
8:33am IST

China on track to be world's biggest online market by 2015
China will replace the U.S. as the world's biggest online market by 2015, a Boston
Consulting Group report says. China will have more than $314 billion in online sales by
that year, the report says. China Daily (Beijing) (23 Nov.) 
Hungary: Moody's downgraded Hungary's government bond
rating by one notch to Ba1, below investment grade, and the kept its outlook
negative yesterday

Asian shares jump, euro firms amid Italy aid
TOKYO - Asian shares jumped and the euro firmed on Monday on hopes Europe will
come up with some concrete steps this week toward activating a crucial euro zone
bail-out fund and reports that the International Monetary Fund is considering helping
Italy.
MSCI's broadest index of Asia Pacific shares outside Japan .MIAPJ0000PUS rose 1.6
percent, after slumping to its lowest level since early October on Friday to mark a
fourth consecutive week of declines.
Japan's Nikkei .N225 gained 1.9 percent after hitting its lowest in two and a half years
on Friday.
India - Economy and Market

RBI: opening up retail to help growth, curb inflation
CHANDIGARH - India's growth story is still "credible" and the move to open up the
economy to global supermarket chains will help growth and control inflation, RBI
governor Duvvuri Subbarao said on Friday.
Rules stipulating that foreign supermarkets will have to source 30 percent of produce
from smaller industries cannot be restricted to the Indian market, as this would violate
World Trade Organisation guidelines, a senior official said.

India opens retail sector to foreign investment

This is a major and welcome change that could have important
implications for inflation going forward.
The specific conditions linked to the approval are yet to be announced.However, citing
an unnamed government official, Bloomberg has reported that these will
likely include two conditions: 1) large overseas retailers would be required to invest a
minimum of USD100mn million in India; and 2) the stores would be allowed only in
cities with at least 1 million inhabitants. The government will apparently also allow
100% foreign ownership of single brand retail operations, up from 51% earlier.
We think the liberalization measures could spur investment in food storage and
transportation facilities that would reduce wastage and therefore frequent supply
shortages that drive food price volatility. It is believed that
about 40% of India’s fruit and vegetables rot before they are sold, for example. This
has been a structural driver of food inflation that has partly kept WPI inflation
elevated.
Therefore, if the move successfully results in improved storage facilities, this should
provide some relief for the RBI in the future.

FX reserves at $308.624 bln as on Nov 18
MUMBAI - India's foreign exchange reserves fell to $308.624 billion on Nov. 18, from
$314.339 billion in the previous week, the RBI said in its weekly statistical supplement
on Friday.

Cabinet note on PSU cross-holdings soon

Foodgrain productivity up 8% at 1,921 kg/hectare in 2010-11
The finance ministry will move a cabinet proposal to allow government companies to
acquire equity in other public sector units.
Foodgrain productivity rose by 8 per cent to 1,921 kg per hectare in 2010-11 crop
year, Parliament was informed today.
The average growth in Gross Domestic Product (GDP) of agriculture and allied sectors
suffered a setback due to severe drought in many parts of the country during 2009-10
and drought/deficient rainfall in some states namely Bihar, West Bengal, Jharkhand
and East Uttar Pradesh in 2010-11
However, the GDP growth for agriculture sector touched 6.6 per cent in 2010-11 -- the
highest growth rate achieved in last six years -- on account of the corrective actions
taken by the government

Indian shares to open up; retailers, Reliance eyed
MUMBAI, Nov 28 - Indian shares are expected to start higher on Monday, supported by
firmer Asian markets and hopes the government will push more reforms after
liberalising foreign investment in the retail sector.
Technology News –

Mid-sized IT cos go for buyouts
Mumbai-based software products and services provider Infrasoft Technologies has mandated
three investment banks including Avendus Capital to look for acquisitions in the US in the
range on $10-15 million. This comes on the heels of Infrasoft's acquisition of the financial
services business of KPIT Cummins in October this year.
Cloud technology for instance has been a focus of many acquisitions in recent times with
companies like Aditi Technologies and Vembu Technologies making acquisitions in the space.
Internet startup Flipkart and BPOs like EXL and Hinduja Global Solutions (HGS) have also
bought companies over the last few months. HGS in August acquired Canada-based customer
relationship management company Online Support (OLS) for $78 million.
Dion Global Solutions, a software solutions provider for financial markets, today said it has
acquired UK-based wealth management and stock broking software provider Investmaster
Group for an undisclosed amount.

TK Kurien cleans up Wipro with elbow grease, puts it back on
growth path
Its operational metrics show that vitality is returning, helped in no small part by TK Kurien,
the man who took over as chief executive of the Bangalore based company nine months ago.
Volumes - a measure of the number of hours billed by software engineers - have jumped 6%
in the three months to September compared with the well under 2% quarterly growth when
Kurien took over. That was marginally behind larger rival TCS (6.3%) and ahead of Infosys
(4.6%).

HTC CFO says plans to launch competitive phones in Feb

AT&T to offer bigger asset sale to save T-Mobile deal Bloomberg
TAIPEI - Taiwanese smartphone company HTC Corp said it has confidence that new products
to be launched at the Barcelona Mobile Conference next February would be more
competititive and achieve better sales.
REUTERS - AT&T Inc is considering an offer to divest a significantly larger portion of assets
than it had initially expected, in order to salvage its $39 billion deal to buy T-Mobile USA,
Bloomberg reported citing a person familiar with the plan.
======= Past important news ==========
Global - Economy and Market

ECB mulls ultra-long loans to help banks
BRUSSELS - The European Central Bank is looking at extending the term of loans it
offers banks to 2 or even 3 years to try to prevent the euro zone crisis precipitating a
credit crunch that chokes the bloc's economy, people familiar with the matter say.

S&P cuts Egypt credit ratings after violence
Standard & Poor's lowered Egypt's credit rating on Thursday to B+ from BB- with a
negative outlook. It affirmed the B short-term rating, saying the political and economic
outlook had deteriorated following violence that has killed 39 people in five days.

China factories stall; euro zone looks bleak
LONDON/BEIJING - The euro zone economy showed signs of contraction in November
and China's factory sector shrank by the most in more than 2-1/2 years, raising the
risk the world is headed for a steep downturn.HSBC Holdings' Chinese manufacturing
index dropped from 51 in October, a sign of expansion, to 48 for November, which
indicates contraction. The index hadn't been that low since March 2009.

"Disastrous" bond sale shakes confidence in Germany
Wall Street falls for sixth day, The euro fell to a six-week low against the yen on
Thursday and Asian stocks were subdued after a "disastrous" German bond sale on
Wednesday sparked fears that Europe's debt crisis was starting to threaten even
Berlin, with the leaders of the euro zone's two biggest economies still at odds over a
longer-term structural solution. Oil slides nearly 2 percent on global economic woes.
The euro zone is unlikely to survive its sovereign debt crisis in current form, according
to a majority of leading economists and former policymakers polled by Reuters.

Mixed U.S. data raises questions on economic momentum
U.S. consumer spending growth slowed in October and business capital investment
plans were weak, raising questions about expectations for solid economic performance
in the fourth quarter.
Moody's Investors Service on Wednesday warned that its top credit rating for the United States could be
in jeopardy if lawmakers backtrack on $1.2 trillion in deficit cuts planned over 10 years.

Global shares slide on China flash PMI, U.S. growth fears
SINGAPORE - Asian shares, U.S. futures and oil fell on Wednesday as a weak Chinese
manufacturing survey renewed fears of a hard landing for the world's No. 2 economy,
exacerbating worries about faltering global growth following a downward revision of
U.S. GDP data.

Debt crisis sweeps towards heart of Europe
The euro zone's debt crisis swept closer to the heart of Europe despite a clear-cut
election victory in Spain for conservatives committed to austerity, adding to pressure
on the European Central Bank to act more decisively.
Spain's Socialists became the fifth government in the 17-nation currency area to be
toppled by the sovereign debt crisis this year. Portugal, Ireland, Italy and Greece went
before, while Slovakia's cabinet lost a confidence vote last month and faces a general
election in March.
Borrowing costs for both Spain and Italy hit levels considered unsustainable last week
before the European Central Bank stepped in to stabilise the market. French 10-year
bond yields have also ballooned , pushing the spread over German benchmark Bunds
to new euro-era highs.
Yields on Austrian 10-year bonds have also been pushed higher, with the spread over
German Bunds widening, and Dutch and Finnish 10-year bonds, usually considered
almost as safe as German debt, have also risen.
"One simply cannot build a growth strategy on accumulating more debt, when the
capacity to service the current debt is questioned by the markets," Rehn told a
Brussels seminar. "One cannot force foreign creditors to lend more money, if they
don't have the confidence to do it."
Ratings agency Moody's said a recent rise in interest rates on French government debt
and weaker economic growth prospects could be negative for France's credit rating.

Germany and France are at odds over ECB's role in crisis
Germany remains opposed to giving the European Central Bank a strong role in
defending the euro, while France demands that the ECB do whatever is necessary to
hold together the currency union. German Chancellor Angela Merkel said the European
Financial Stability Facility, not the ECB, is the best mechanism for dealing with the
eurozone's sovereign-debt crisis.

StanChart cuts exposure to euro zone banks - FT
Standard Chartered has cut its exposure to euro zone banks and boosted business with
Chinese financial institutions due to the European sovereign debt crisis, the Financial
Times on Monday quoted the bank's Asia chief executive as saying. "We have just
taken a broad look and said we don't think we have to be as heavy as we were in the
past," Jaspal Bindra said, according to the article.

Moody's said it may slap a negative outlook on France's Aaa rating
in the next three months if slower growth and the costs of helping bail
out banks and other euro zone members stretch its budget too much.
Moody's Investors Service has today downgraded by two notches Spain's
government bond ratings to A1 from Aa2.
1) Spain continues to be vulnerable to market stress and event risk.
2) The already moderate growth prospects for Spain have been scaled back further
in view of (i) the worsening global and European growth outlook and
(ii) Difficult funding situation for the banking sector and its impact on the wider
economy.
3) Lower economic growth in turn will make the achievement of the ambitious
fiscal targets even more challenging for Spain.
"It's a familiar pattern these days, to sell stocks whenever
there's bad news from Europe and buy them back whenever
there's good news, but investors are getting tired of it,"
India - Economy and Market

Food inflation slips to four-month low of 9.01%

Sept-qtr GDP growth seen slowest in over 2 years

2,000 Crore bonanza for NHAI: Amid slowdown, highways are
going for premium
Food inflation fell to nearly four-month low of 9.01% for the week ended November
12, prompting Finance Minister Pranab Mukherjee to express the hope that the overall
price situation will improve in the coming weeks.
Food inflation, measured by the Wholesale Price Index (WPI), was 10.63% in the
previous week. It was 11.38% in the corresponding period in 2010.
REUTERS FORECAST - The Indian economy probably grew an annual 6.9 percent in the
quarter through September, at its weakest pace in more than two years, the median
forecast from a poll of 22 economists showed.
India's industrial output grew by a meagre 1.9 percent in September from a year
earlier, the slowest pace in two years.
The Indian services sector contracted at its fastest pace in over two years during
October, knocked by a slump in global demand and tight monetary policy.
The partially convertible rupee hit a record low of 52.73 against the U.S. dollar on Nov.
22, as investors fled risky assets and its recent weakness is expected to spike India's
import bill and in turn, push up prices.
The Reserve Bank of India may hold rates in its December policy review as growth
risks from a slowing economy and a fragile global economic environment take centre
stage. It had said in the October review that further rate increases may not be needed,
if inflation starts to ease from December.
Indian exports in October probably slowed to just over 10 percent from a high of 82
percent in July, reflecting risks to growth coming from the euro zone beset with
sovereign debt woes.
The National Highways Authority of India (NHAI) has got over Rs 2,000 crore as
premium from awarding highway projects during the current financial year and to the
authority's surprise some of the nondescriptive stretches have gone for premium.
Highways sector is emerging as a sunrise one amid Indian economy is coming under
slowdown grip.

RBI tweaks ECB norms to stem falling rupee
In an effort to stem rupee's downward spiral, the Reserve Bank of India (RBI) on
Wednesday, directed Indian companies to bring back offshore funds, raised through
external commercial borrowings (ECBs) for the purpose of domestic business
expenditure. Those funds need to be parked with Indian banks.
"The proceeds of the ECB raised abroad for rupee expenditure in India, such as, local
sourcing of capital goods, on-lending to self-help groups or for micro credit, payment
for spectrum allocation etc. should be brought immediately for credit to rupee accounts
with AD category I banks in India,” RBI said in a release.
ECB enables companies to borrow at a cheaper rate as domestic interest rates are
costlier than international rates. However, RBI sets ceiling of ECB borrowing rates as
excessive borrowings through ECBs will lead to drying up of foreign exchange reserve.
Companies raising funds through ECBs are required to repay their loans only in foreign
currency.

INR: Structural concerns haven't changed

Power investment slows, chronic deficit worsens
INR has been one of the weakest currencies globally across time periods. Opinions
might vary, but this is likely due to: a) possible further widening of the trade deficit in
Oct/Nov over the Sep-11 record; b) muted FII debt and equity flows (no outflows, but
India needs strong inflows); and c) falling hedged rate arbitrage as hedging costs have
risen.
With a bleak outlook for equities, only debt inflows can fund the widening current
account deficit. As Indian corporates access to dollar debt is constrained, portfolio debt
flows must rise. A debt supported currency remains fundamentally weak : hedging
costs have risen 120bps since early Oct.
With US$20bn of External Commercial Borrowings (incl. Converts) maturing in the
next 12 months (Fig 4), the government is relaxing portfolio flow limits: lock-in for
infra-bonds was relaxed to 1 year (from 5) for $5bn (out of $25bn) and FII limits in
government and corporate bonds raised by $5bn each (auction on 30-Nov).
Investments into India's power sector are slowing despite a chronic electricity shortage
that threatens GDP growth, executives told the Reuters India Investment Summit, due
to coal shortages, land hassles and an inability by distribution companies to raise
tariffs.
Asia's third-largest economy, where blackouts are common, faces a peak power
shortage of 13 percent as rising demand from industry, homes and shopping malls
outstrips capacity growth

RBI removes cap on forex supply via INR swaps
MUMBAI: RBI said it was removing the limit of $100 million placed on net supply of
foreign exchange in the market through rupee swaps.
There were no limits on banks for undertaking swaps to facilitate customers to hedge
their foreign exchange exposures, but there was a limit of $100 million for net supply
of foreign exchange in the market.

RBI allows foreigners to invest in infra debt funds
MUMBAI - The RBI on Tuesday said foreigners can invest in rupee and foreign currency
denominated bonds issued by infrastructure debt funds (IDFs) which have been set up
as non-banking financial firms.

Weighing several options to meet Rs 40K crore divestment
target: Finance Ministry
The government is considering various options, apart from the public offer route, to
achieve the disinvestment target for the fiscal.

Delhi to construct Rs.3,100 crore industrial hub
The Delhi government will set up a Rs.3,100 crore multi-level manufacturing hub to
encourage non-polluting small and medium industries in the capital, Delhi Industries
Minister Ramakant Goswami said Monday.

In mid-course shift, government talks growth, overlooks fiscal
deficit
NEW DELHI: In a subtle shift in policy, the government has indicated that sustaining
growth will take precedence over meeting the fiscal deficit target indicated in the
February budget.
"We have to be careful not to over-do ourselves in reaching this target since that can
have an excessive slowing down impact on growth," finance minister Pranab
Mukherjee said in Parliament while making a suo-motto statement on inflation.

Gujarat to have separate Japan office to facilitate investments
"Industrial Extension Bureau (iNDEXTb) has recently signed a memorandum of
understanding (MoU) with the Bank of Tokyo and Mitsubishi UFJ Limited to set up a
desk in iNDEXTb dedicated to facilitate Japanese companies invest in Gujarat," a senior
official of iNDEXTb told ET. Bank of Tokyo will send a formal proposal to iNDEXTb, on
the basis of which the proposed desk will start functioning.
Gujarat is one of the largest beneficiaries of the Delhi-Mumbai Industrial Corridor,
coming up in partnership with Japan. About 40% of the corridor passes through
Gujarat. Japanese companies are also involved in projects coming up as a part of
Dholera Special Investment Region. Their major involvement is in setting up of smart
cities with waste and water recycling projects. A similar city is also coming at at
Changodar in Ahmedabad.
A large number of Japanese companies are expected to participate in the next Vibrant
Gujarat Global Summit 2013.

FY12 fiscal deficit to breach 4.6 pct of GDP target - Montek
India's fiscal deficit in the current fiscal year will exceed 4.6 percent of the gross
domestic product target, though the final figures would depend on the actual
expenditure, Planning Commission deputy chairman Montek Singh Ahluwalia told CNBC
TV18 news channel on Monday.

Wholesale price inflation (WPI) in October, at 9.7%, marginally
exceeded the consensus expectation (according to Bloomberg),
but is hardly cause for panic according to Credit Suisse
The headline number was the same as in September (to one decimal place), and we
very much doubt it will be high enough to persuade the RBI to hike at its December
meeting. With growth variables now more important in the central bank's decisionmaking process and last Friday's (11 November) industrial production number for
September disappointing, we believe the RBI is likely to remain on hold. Indeed, we
continue to believe that the policy rate has now peaked and expect the first cut to be
delivered in the April-June quarter of 2012.
In seasonally adjusted terms, CS estimates that the headline
WPI rose 0.7% on the month - the same as in September.
This reasonably strong rise reflected a 2.1% month-on-month seasonally adjusted
increase in primary food prices, while fuel was up 1.3%. The manufacturing
component, which represents 65% of the overall index, increased just 0.5%, which is
also true of the RBI's preferred measure of core inflation (manufacturing excluding
food). On a 3 month-on-3 month seasonally adjusted basis, we estimate core inflation
rose an annualized 3.9%, well below the 7.6% year-on-year increase. This together
with the fact that, for the first time in months, there was no upward revision to the
historical WPI data, should cause the central bank to breathe a little more easily.
We expect year-on-year WPI inflation to drop from here.
Between October 2010 and January 2011, our calculations suggest that the level of the
WPI rose a seasonally adjusted 4.3%. This in turn suggests that even if we see
another three months of 0.7% month-on-month increases, the year-on-year rate
would be down to 7.4% by January. With this in mind, and given the falls in rupeedenominated international commodity price inflation, which we expect to continue, the
RBI's March 2012 forecast of 7.0% does not look overly ambitious to us. In fact, we
expect it to undershoot this number, helping to explain our interest rate views.
Of course, a 6.5%-7% inflation number is no reason for huge
celebration, but we are hopeful that the headline rate will
continue to trend lower through much of 2012/13.
This is heavily dependent on there being no spike in commodity prices, which may
seem an unwise assumption given the increasing risk of a third QE program in the US.
Nevertheless, if we are right in believing that Chinese growth will soften and Western
activity will remain soft, then powerful countervailing influences on commodity prices
will be present as well.

Industrial production disappointed in September, coming in at
just 1.9% year on year.
This was down from 3.6% in August, below the consensus market expectation of a
3.5% outturn (according to Bloomberg). This was down from 3.6% in August, below
the consensus market expectation of a 3.5% outturn (according to Bloomberg), and
was the weakest figure since September 2009. RBI made it clear following its last
policy meeting that its rate decisions would no longer be all about inflation, but rather
growth developments would take greater prominence.
The three projects which have been approved are L&T Metro Hyderabad, Hinduja
Power, Vishakhaptanam and Seembari Expressway, Andhra Pradesh. the biggest being
L&T Metro project which involves sanctions of around Rs 16,000 crore.

India solar power costs could fall by 40% by 2015
India's solar power costs could fall by more than 40% by 2015, allowing the industry
to compete against domestic oil and gas firms without the help of state subsidies, the
head of Lanco Solar told Reuters on Wednesday.
Solar technology could provide a kilowatt hour of power at about Rs 7 to 8 a unit in the
next few years, down from the current Rs 11 to 12, due to surging global capacity,
said Lanco Solar CEO V. Saibaba.
That would enable solar power to become a more viable option to coal, which costs
around Rs 2 a unit, in fuelling Asia's third largest economy and the world's third-worst
carbon polluter.

National Highways Authority of India to launch its Rs 100 bn
retail tax free bond issue end November
National Highways Authority of India (NHAI) and Indian Railway Finance Corp (IRFC)
can each raise 100 billion, while Housing and Urban Development Corp. (HUDCO) and
Power Finance Corp can each raise 50 billion rupees, the Central Board of Direct Taxes
said in a notification posted on its website

Private sector lender Kotak Mahindra Bank said on Sunday it
raised its saving bank interest rate and base rate, following a
deregulation in savings deposit rates by the Reserve Bank of
India (RBI).
 25th Oct - India Monetary Policy Meeting, Repo Rate % 8.25
to 8.5
India Monetary Policy Meeting, Reverse Repo Rate % 7.25 to 7.5 RBI Indicated a
pause in policy rates from here on. RBI to consider rate cuts: 1) WPI inflation "has to
down come below 7% before the RBI considers reversing" it's stance; and 2)
considerations for a reversal in stance would depend not just on the "level of inflation,
but on growth as well".
India's food price index rose 11.43% and the fuel price index climbed 14.70% in the
year to Oct. 15, government data on Thursday showed.

Special Views - New Delhi's fiscal profligacy starts to bite
India is set to bust its fiscal deficit to GDP target. Half way through the year, it has
used two-thirds of the sums set aside. With inflation close to 10 percent and growth
sluggish, there is an urgent need for the government to get a grip of public spending.
Only with economic growth can he afford to help rural voters through fuel subsidies,
food handouts and employment guarantees. It's only sustainable growth that will
improve standards of living across the subcontinent
Without sufficient growth, moreover, the measures might only serve to raise demand
without increasing supply -- and that would make inflation worse.
Interest rates have been increased no fewer than 13 times since March 2010, but
loose public spending undermines the central bank's efforts to keep the lid on prices.
And while rate hikes are having only a muted impact on inflation, they raise the cost of
borrowing for Indian business. This, in turn, has led to reduced investment and slower
growth.
A quick fix would be to sell stakes in state owned businesses. It would also send a
positive signal to the private sector that the state was reducing its control over the
economy.
But ultimately, India may require a dose of austerity and further economic reforms.
Politicians fear the loss of support of key voters if the handouts are taken away. But
the same voters will suffer from sky-high inflation and sluggish growth. They will be
thankful if tighter fiscal policy leads to lower inflation and spurs economic growth back
towards 9 percent.
India's fiscal deficit reached almost 71 percent of its full-year target in the first half of
the year, government data showed on Oct 31. The government has budgeted a fiscal
deficit of 4.6 percent of gross domestic product (GDP) for the current year.
Indian 10-year bond yields are rising -- from 8.44 percent one month ago to 8.97
percent on Nov. 1. The consumer price index (CPI) was running at an annual rate of
10.1 percent in September compared with an 8.99 percent annual rise in the previous
month.
Technology News –

TCS targetting 1000 customers in SMB segment this year
KOCHI: Tata Consultancy Services (TCS), which launched a first of its kind fully
integrated information technology solution for Small and Medium Business (SMB)
segment recently, today said it was targeting to reach over 1000 customers in the
segment nationally this year, a top official today said.
iON, TCS's strategic unit for small and medium business, presently has over 250
customers who are experiencing the benefits of increased efficiencies, predictability of
technology, talent on call and an expanded customer based following the end-to-end
integrated suite of cloud based business solutions, V Ramaswamy Global Head iON told
reporters here. The third generation service model allows SMBs to capture growth
through seamless technology deployment.
To provide its customers with seamless service, iON has created an eco-system of over
100 Cloud Service Partners across India. iON's industry solutions are currently
available for Manufacturing, Textile, Education, Retail, Restaurant, Wellness and
Professional services.

Alibaba.com posts slowest quarterly growth in almost 2 yrs
SHANGHAI - Alibaba.com, China's largest e-commerce firm, posted an 11.9 percent
rise in quarterly net profit, its slowest growth in nearly two years, with the company
raising concerns due to a weak trade outlook stemming from debt woes in Europe and
the United States.

HTC cuts Q4 revenue growth forecast; shares tumble

Nokia Siemens Networks to slash staff by quarter

Debt crisis fails to roil Indian IT cos' Europe plans
TAIPEI - Taiwan's HTC Corp cut its revenue forecast for the fourth quarter to no
growth over the same period a year earlier from around 20 percent to 30 percent year
on year growth previously, surprising the market and sending its shares tumbling 7
percent.
HELSINKI - Nokia Siemens Networks, the world's second-largest maker of mobile
phone network equipment, is axing 17,000 jobs, nearly a quarter of its workforce, to
help save about 1 billion euros ($1.35 billion) a year.
BANGALORE - Indian IT services exporters are on track to increase Europe's share in
their revenue and see only a short-term impact of the paralysing debt crisis, top
executives said at the Reuters India Investment Summit.

Mastek to develop software for US-based Cypress Property &
Casualty Insurance Company
The software, developed by Mastek, will significantly reduce the waiting time for
customers and the unit cost of the policy, Cypress CEO.

IBM expands India operations; opens 3 regional offices

Madhya Pradesh to allocate 100 acres for Infosys centre at
Indore
Technology giant IBM today said it plans to set up offices in 40 cities across India by
2013.
It announced the opening of three regional offices in Dehradun, Guwahati and Raipur,
taking the total number of branch offices to 18 across India.
"A go-ahead has been given to allocate 100 acres to Infosys in Indore to set up a
centre," Madhya Pradesh Commerce and Industries Minister Kailash Vijayawargiya told
reporters here.
The BJP-ruled state is having similar discussions with Tata Consultancy Services (TCS)
as well.

Cognizant sees revenue growth amid Europe crisis

IT firms such as Infosys, Mindtree & others not enthused by
rupee fall, call it short-term gain
As the Euro zone crisis deepens and businesses outsource to cut costs amid the
uncertainty, Cognizant Technology Solutions expects revenue from Europe to grow
significantly, a top executive at the software services company said at the Reuters
India Investment Summit.
"Today, Europe is 18% of revenue ... when I look at 4-5 years (ahead), I expect it to
be at a significantly higher percentage of revenue," he said.
"We continue to focus on tuck-under acquisitions, which we define as USD 200 million
or less in revenue," Coburn said.
Coburn said healthcare, which contributes about 26% of revenue, and smaller verticals
like retail and manufacturing will grow at a faster rate than financial services.
With about half its revenue coming from the financial services segment, the company
has been trying to reduce its dependence on any one segment.
The $70-billion India's IT-BPO industry, for the first time, is not so exuberant about
small gains in operating margins due to a Rupee fall. India's top four IT companies TCS, Infosys, Cognizant, Wipro and HCL Tech - have together hedged close to $5
billion in hedges, mostly around Rs45-49 to a dollar, which prevents them from
expecting a windfall gain.
Every 1% change in rupee has a 40-50 basis points impact on IT companies'
profitability. This historic fall prevents the industry to gain too much in the short-term.
"If we assume the rupee ends on this level ofRs53 till the end of this quarter, there will
be an over 10% depreciation and a corresponding margin benefit for us," said Ravanan
Rostow, CFO, Mindtree.
HCL Technologies remains the favourite pick of Goldman Sachs, amongst the large
tech companies who would benefit the most, as it hedged lesser.

Facebook, HTC building Android smartphone: Report
SAN FRANCISCO: Facebook has allied with Taiwan's HTC to build a customized
smartphone powered by Google's Android mobile operating system, according to
technology blog All Things Digital.

Samsung says in last-stage talks to launch Google TV
SEOUL - Samsung Electronics, the world's top TV maker, is in last-stage talks with
Google to roll out its Google TVs, the head of Samsung's TV division told reporters on
Tuesday.Google TV -- which currently comes built-in on certain Sony Corp television
models and on Logitech International set-top boxes -- allows consumers to access
online videos and websites on their TVs, as well as specialised apps such as video
games.

Yahoo! India launches free video service
Search engine giant Yahoo! India today launched a new video service that will provide
users access to genuine content and offer advertisers a new revenue platform.
"What we offer users is a clutter-free viewing experience. So, when they access Yahoo!
Videos, they can be sure they get the genuine video they are looking for. Also, since
users will not be allowed to rip videos from the sites, all copyrights are protected,"
Tadanki said.
The move follows Yahoo India's launch of Movieplex, which provides users licensed
full-length movies for free.

Google launches music service
LOS ANGELES - Google Inc has turned on the music at its new online store, aiming to
wrest the lead from Apple Inc and Amazon.com Inc in audio entertainment distribution
despite the absence of a major record label.

Infosys warns of revenue slowdown
Infosys has raised warned of deteriorating economic environment which has the
potential to adversely affect revenue growth in the coming months.

IT spend will grow only 3.8% in 2012: Gartner
BANGALORE: Research firm Gartner expects growth in global IT spend to slow down in
2012 as companies grapple with slower growth and economic uncertainties in
developed markets. According to Peter Sondergaard, senior vice-president and global
head of research at Gartner, IT spends will increase by a modest 3.8% in 2012
compared to 5.9% this year.

India IT spending to reach $79.8 billion in 2012: Gartner

Infosys launches XBRL filing solution to help companies file
financial statements
NEW DELHI: Indian companies are expected to continue investing in IT infrastructure
despite global economic challenges and the country's IT spending is projected to grow
9.1 per cent to $ 79.8 billion in 2012, according to research firm Gartner.
NEW DELHI: Country's second largest software exporter Infosys today announced the
launch of XBRL filing solution to help companies file their financial statements in the
format mandated by the Ministry of Corporate Affairs.
"XBRL Filing solution is a ready to use tool, in which users can convert their excelbased financial information into XBRL (eXtensible Business Reporting Language)
format in a few simple steps," Infosys said in a statement.
This standalone solution can be integrated into a Microsoft Excel format and can be
used immediately after installation, it added.

HTC beats Samsung in American smartphone market with 24%
Share
TAIPEI | TORONTO: HTC edged out Samsung Electronics to become the largest
smartphone vendor in the US, capitalising on the Android platform's popularity and a
lull in demand for iPhones to overtake Apple and Research In Motion. A 10 percentagepoint jump in share from a year earlier gave Taoyuan, Taiwan-based HTC 24% of the
world's largest smartphone market in the third quarter, ahead of Samsung's 21%, Palo
Alto, California-based researcher Canalys said in a statement on Tuesday.

ExlService ups FY12 guidance to $358 million
NEW DELHI: Despite a foreign exchange headwind, Nasdaq-listed BPO ExlService
Holdings expects its 2011 revenues to close at $358 million from $354 million
predicted last quarter, on increased cash flows from its recent acquisitions such as OPI
and Trumbull in the US.
EXL, which counts British Gas and American Express as its main customers, had
acquired OPI Systems in the US for $91 million early this year. The firm earned
revenues of $100 million in the quarter, compared to $85 million last quarter. Only
about 15% growth was organic. The firm bettered rival WNS' growth, whose revenues
actually declined 23% this quarter, from last year.

Groupon raises $700 mln in biggest Internet IPO since Google

IT professionals take to incubation & mentoring start-ups
REUTERS - Groupon Inc raised $700 million after increasing the size of its initial public
offering, becoming the largest IPO by an Internet company since Google Inc raised
$1.7 billion in 2004.
BANGALORE: More technology professionals are turning towards incubation and
mentoring of fresh start-ups as the early stage ecosystem expands across the country.
The newest incubator firm to launch is Angel Prime which plans to invest between
$200,000 and $800,000 in every start-up in its portfolio.
The fund has been set up by Bala Parthasarathy, Shripati Acharya and Sanjay Swamy
who earlier worked with multinational technology firms and subsequently launched
their own start-ups.
"There is a gap in India in terms of risk-taking for young start-ups, not just financial
help but support in all forms, that is the hole we are trying to plug," said
Parthasarathy, who earlier worked at Hewlett-Packard.

Wipro loses lead in outsourced R&D to HCL Tech
BANGALORE: Wipro Technologies, which has for years been the market leader in
outsourced engineering and R&D (ERS) services in India, has just been upstaged by
HCL Technologies.
In the quarter ended September, HCL Tech reported $186 million in ERS revenues,
against Wipro's $184 million. HCL Tech said that two years ago, in the July-September
2009 quarter, the company was behind Wipro by $54 million (annually a difference of
about $200 million).
Zinnov Management Consulting estimates the R&D offshoring market in India will
reach $13.1 billion in 2011, a growth of 11.4% over 2010. The major sectors that
outsource ERS include independent software vendors, semiconductor and telecom,
aerospace & defense, and transport.
Though lower-end work continues to form a major portion of the industry, clients are
now handing over the entire product lifecycle responsibility as well.
This includes conceptualizing the product and its go to market strategy, designing the
technology architecture and delivering the integrated product. Apart from software
skills it also requires skills in areas like mechanical engineering and semiconductor.

Android phone repair cost telcos billions: study
Reuters - Fitting older versions of Google's Inc popular Android software to cheaper
cellphones could send the repair costs of global telecoms operators up as much as $2
billion, a study by wireless services firm WDS showed.

HTC sees Q4 revenue and shipments lower qoq
TAIPEI - Taiwanese smartphone maker HTC Corp said on Monday it sees slightly lower
revenue and shipments in the fourth quarter than in the third, citing uncertainties from
new models going to be launched by the company and competitors, as well as global
economic invisibility.

Panasonic sees $5.5 bln annual loss, worst in a decade

Samsung surges past Apple in smartphones, upbeat on Q4
TOKYO - Japanese electronics maker Panasonic Corp forecast an annual net loss of 420
billion yen ($5.5 billion), its biggest in a decade, as restructuring costs ballooned, and
a soaring yen and weak demand in the United States and Europe eroded income.
Samsung Electronics Co overtook Apple Inc as the world's top smartphone maker in
the July-September period with a 44 percent jump in shipments, and forecast strong
sales in the current quarter in a clear warning to its rivals.
Samsung only entered the smartphone market in earnest last year, but its sales have
skyrocketed thanks to a sleek production system that rapidly brings new products to
market. Apple introduced its first iPhone in 2007.
Profits from the South Korean firm's telecoms division, announced on Friday, more
than doubled from a year ago to a record 2.5 trillion won ($2.2 billion) and accounted
for 60 percent of Samsung's total profit, offsetting a plunge in earnings from its breadand-butter memory chips.
================== > Appendix < ====================
1) OMO – Open market Operations
2) OIS - An interest rate swap involving the overnight rate being exchanged for some fixed
interest rate
3) Debt-to-GDP ratio: In economics, the debt-to-GDP ratio is one of the key indicators of
the health of an economy. It is the amount of national debt of a country as a percentage of its
Gross Domestic Product (GDP). A low debt-to-GDP ratio indicates an economy that produces a
large number of goods and services and probably profits that are high enough to pay back
debts. In general terms Debt-to-GDP measures the financial leverage of an economy.
Governments aim for low debt-to-GDP ratios and can stand-up to the risks involved by
increasing debt as their economies have a higher GDP and profit margin.
US
Japan
India
Brizil
China
= 99% to GDP
= 229% to GDP
= 68% to GDP
= 65% tp GDP
= 17% Tp GDP
4) The Wholesale Price Index (WPI) is the price of a representative basket of wholesale
goods. Some countries (like India and The Philippines) use WPI changes as a central measure
of inflation. However, United States now report a producer price index instead.
The Wholesale Price Index or WPI is "the price of a representative basket of wholesale goods.
Some countries use the changes in this index to measure inflation in their economies, in
particular India – The Indian WPI figure is released weekly on every thursday and influences
stock and fixed price markets. The Wholesale Price Index focuses on the price of goods traded
between corporations, rather than goods bought by consumers, which is measured by the
Consumer Price Index. The purpose of the WPI is to monitor price movements that reflect
supply and demand in industry, manufacturing and construction. This helps in analyzing both
macroeconomic and microeconomic conditions.
Calculation
The wholesale price index (WPI) is calculated based on the wholesale price of a few relevant
commodities of over 2,400 commodities available. The commodities chosen for the calculation
are based on their importance in the region and the point of time the WPI is employed. For
example in India about 435 items were used for calculating the WPI in base year 1993-94
while the advanced base year 2004-05 uses 676 items. The indicator tracks the price
movement of each commodity individually. Based on this individual movement, the WPI is
determined through the averaging principle.
5) Fiscal Deficit
The fiscal deficit is the difference between the government's total expenditure and its total
receipts (excluding borrowing). The elements of the fiscal deficit are (a) the revenue deficit,
which is the difference between the government’s current (or revenue) expenditure and total
current receipts (that is, excluding borrowing) and (b) capital expenditure. The fiscal deficit
can be financed by borrowing from the Reserve Bank of India (which is also called deficit
financing or money creation) and market borrowing (from the money market, that is mainly
from banks).
6) Balance of Payment
The two principal parts of the BOP accounts are the current account and the capital
account.
The current account shows the net amount a country is earning if it is in surplus, or
spending if it is in deficit (trade deficit). It is the sum of the balance of trade (net
earnings on exports minus payments for imports), factor income (earnings on foreign
investments minus payments made to foreign investors) and cash transfers. It is called
the current account as it covers transactions in the "here and now" - those that don't give
rise to future claims.
The capital account records the net change in ownership of foreign assets. It includes
the reserve account (the foreign exchange market operations of a nation's central bank),
along with loans and investments between the country and the rest of world (but not the
future regular repayments/dividends that the loans and investments yield; those are
earnings and will be recorded in the current account). The term "capital account" is also
used in the narrower sense that excludes central bank foreign exchange market
operations: Sometimes the reserve account is classified as "below the line" and so not
reported as part of the capital account.
Expressed with the broader meaning for the capital account, the BOP identity assumes
that any current account surplus will be balanced by a capital account deficit of equal size
- or alternatively a current account deficit will be balanced by a corresponding capital
account surplus:
The balancing item, which may be positive or negative, is simply an amount that
accounts for any statistical errors and assures that the current and capital accounts sum
to zero
================== > Imp Links < ====================
http://in.reuters.com/finance/economy
http://www.moneycontrol.com/news/economy-5.html
http://economictimes.indiatimes.com/news/economy/articlelist/1373380680.c
ms
http://in.reuters.com/finance/markets
http://in.reuters.com/finance/markets/india-stock-market
http://in.reuters.com/news/technology
http://economictimes.indiatimes.com/tech/articlelist/13357270.cms
http://www.macroscan.org/