Download Daily_Markets_Eco_25Nov2011

Global - Economy and Market

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.

"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.
India - Economy and Market

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
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).

Cabinet to discuss FDI in multi-brand retail on Thursday
India's federal cabinet on Thursday will discuss allowing 51 percent foreign direct
investment (FDI) in multi-brand retail and 100 percent in single-brand retail, a
government spokeswoman said on Wednesday.

Power investment slows, chronic deficit worsens
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

Indian rupee seen near record lows; Indian shares hit 2-year
low, banks leads losses; Tata Group firms in focus
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.
Shares in companies that are part of salt-to-software Tata Group will be in focus
after the group named insider Cyrus Mistry as the successor to current Chairman
Ratan Tata, ending a global search that lasted for more than a year.
The Tata Group includes Tata Motors, owner of the Jaguar Land Rover brands and
maker of the Nano, the world's cheapest car, as well as top software firm Tata
Consultancy Services, steelmaker Tata Steel and dozens of other companies
Technology News –

HTC cuts Q4 revenue growth forecast; shares tumble
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.

Nokia Siemens Networks to slash staff by quarter
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.

Debt crisis fails to roil Indian IT cos' Europe plans
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.
====== Past important news =======
Global - Economy and Market

IMF beefs up lending tools as debt crisis spreads
The IMF on Tuesday beefed up its lending instruments and launched a six-month
liquidity line, throwing help to countries with solid policies that may be at risk from the
euro zone debt crisis.

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.

China: Funds outstanding for FX purchases fell in October,
reflecting the outflow of capital

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

RBI monitoring forex markets - Mukherjee
NEW DELHI - The Reserve Bank of India is monitoring forex markets and will take
required action as the situation unfolds, Finance Minister Pranab Mukherjee said on
Tuesday in a statement, after the currency skidded to an all-time low.

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.

RBI hints at more monetary action to curb inflation
HYDERABAD: Reserve Bank of India (RBI) Governor D Subbarao did not rule out
further monetary action to curb inflation.
"The direct role of monetary policy in combating food price pressures is limited, but in
the face of sustained high food inflation, monetary action may still be warranted to
anchor inflation expectations," he said while addressing the 25th annual conference of
the Indian Society of Agricultural Marketing.

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.

Citi sees 20% growth in India for next 2 years
Citigroup expects to boost its loans and deposits growth in India by about a fifth in
each of the next two years, its India head said, as the US bank enhances its focus on
emerging markets.
The bank is "comfortable" with its asset quality in India and has not slowed down
lending activity, Pramit Jhaveri said, amid concerns that a series of recent interest rate
hikes would result in corporate and consumer loan defaults.

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.

Finance Ministry clears stalled infrastructure projects worth Rs
25,000 crore
A finance ministry led inter-ministerial committee to fast track the clearances for
stalled infrastructure projects, has cleared three projects worth Rs 25,000 crore.
Financial Services secretary DK Mittal said that India Inc had earlier asked the
government to look into projects which were stuck because of various issues.
"The idea is to put these projects on the fast track and bank loans which have been
sanctioned should be disbursed for implementation," he said.
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.

Government brings farmers in loop to push FDI in multi-brand
retail
The government has readied a plan that will make it mandatory for foreign retailers
eyeing India's multi-brand retail sector to do bulk of their sourcing from small farmers,
its latest attempt to make the long-delayed reform palatable to opponents

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 –

Cognizant sees revenue growth amid Europe crisis
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.

IT firms such as Infosys, Mindtree & others not enthused by
rupee fall, call it short-term gain
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

Samsung says in last-stage talks to launch Google TV

Yahoo! India launches free video service
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.
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.
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.

HP seeks stability in 2012 after rocky year
SAN FRANCISCO - Hewlett-Packard Co will ramp up spending on research, sales and
turning around its flagging services arm in 2012, after its fourth-quarter profit fell
nearly 91 percent on weak computer sales.

Amazon may launch a smartphone in Q4 2012 - Citi
Nov 18 - Amazon.com Inc may launch its own smartphone in the fourth quarter of
2012, Citigroup said, citing its supply-chain channel checks in Asia.

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
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.

IT professionals take to incubation & mentoring start-ups
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.

AOL dial-up dwindles, but ad revenue rises

Android phone repair cost telcos billions: study
REUTERS - AOL Inc's third-quarter revenue dropped 6 percent because of its dwindling
dial-up Internet access business though it beat analysts expectations and its stock
rose more than 11 percent.
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.

Sony shares sink on massive loss forecast
TOKYO - Sony Corp warned of a fourth straight year of losses, with its television unit
alone set to lose $2.2 billion on tumbling demand and a surging yen, sinking its U.S.
shares and raising concerns about the viability of its high-profile TV business.

Lenovo Q2 profit up 88 pct, beats forecast
HONG KONG - Lenovo Group Ltd, the world's No. 2 PC brand, posted on Wednesday its
best quarterly profit in more than two years, helped by acquisitions and an increase in
sales in emerging markets such as China.
"Hard disk drive supplies and tablets taking away traditional PC market share will have
some impact on the company in the coming quarters," said Vincent Chen, an analyst
at Yuanta Research.
It also cautioned that a shortage of hard disk drives due to severe floods in Thailand
may hurt PC supply, Thailand is the world's No. 2 hard disk drive supplier.

Yahoo attempts right click with interclick buy
Yahoo Inc will pay $270 million for interclick inc as it tries to revive its ailing online
advertising business, even as the search and advertising giant continues to scout for
potential bidders.
New York-based interclick buys bulk-advertising space from larger players and resells
them to its clients.
With the interclick buy, Yahoo will get a firmer foothold in the market for nonguaranteed inventory ads for its own properties as well as third-party websites, said
Stifel Nicolaus analyst Jordan Rohan.

HP launches plan to build low-power servers
Hewlett Packard Co unveiled plans to develop extremely low-energy servers,
partnering with companies such as chip designers ARM Holdings Plc and Advanced
Micro Devices Inc in a move that could threaten the dominance of Intel Corp.

Telstra India JV gets Internet, long-distance telecoms licences
Top Australian phone company Telstra Corp's Indian joint venture has received three
new licences in India for Internet and national and international long-distance telecoms
services, the company said on Tuesday

Toshiba-Hitachi-Sony LCD alliance to buy Panasonic plant Nikkei
REUTERS - A public-private fund that will acquire the small- and midsize-LCD
operations of Toshiba Corp, Hitachi Ltd and Sony Corp will also buy a Panasonic Corp
factory for about 20 billion yen ($255.5 million), Japanese business daily The Nikkei
said.

Huawei looks for cloud acquisitions, partnerships

HTC sees Q4 revenue and shipments lower qoq

Panasonic sees $5.5 bln annual loss, worst in a decade

Samsung surges past Apple in smartphones, upbeat on Q4
Huawei Technologies Co Ltd, the world's No.2 network equipment maker, said it is
open to acquiring and partnering companies with expertise in producing software for
cloud computing.
Global technology companies from Cisco Systems Inc to Oracle Corp have been
acquiring companies to boost their capabilities in cloud computing -- the latest network
technology trend that stores applications, data and software online
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.
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.

HP ditches costly PC unit spin-off
Hewlett-Packard Co ditched a plan to spin off its personal computers unit, a month
after the ouster of CEO Leo Apotheker whose idea would have cost billions of dollars in
expenses and lost business.
================ > 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
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/