New Delhi: According to the estimates by the Ministry of Statistics and Programme Implementation, the Indian economy has registered a growth of 7.4 per cent in 2009-10, with 8.6 per cent year-on-year (y-o-y) growth in its fourth quarter. The growth is driven by robust performance of the manufacturing sector on the back of government and consumer spending. GDP growth rate of 7.4 per cent in 2009-10 has exceeded the government forecast of 7.2 per cent for the full year.
According to government data, the manufacturing sector witnessed a growth of 16.3 per cent in January-March 2010, from a year earlier. The farm output rose at an annual rate of 0.7 per cent during the quarter on the back of a good winter harvest. The expansion in the March quarter was driven by government spending, manufacturing and services.
The government estimates the economy to grow at a rate of 8.5 per cent in 2010-11 driven by better farm output and a global recovery. The Finance Minister, Mr Pranab Mukherjee said that growth would exceed the government's estimate for the current fiscal. The farm sector, which constitutes nearly 17 per cent of the economy, is expected to perform well on the prediction of normal monsoon this year
Success in my Habit
Monday, May 31, 2010
Neeraj Patil elected Mayor of London Borough of Lambeth
New Delhi: Neeraj Patil, a leading NRI doctor, currently working as a consultant with A&E and a governor of Guys and St Thomas Hospital in central London, has been elected Mayor of the Borough of Lambeth.
Dr Patil, born and brought up in Kamalapur in Gulbarga district in Karnataka, completed his MBBS from M R Medical College, Gulbarga in 1992. He served in the Osmania Medical College for some time before he came to the UK for higher studies.
He has worked as an Accident and Emergency Consultant and a doctor for 14 years in over 25 National Health Services hospitals across UK.
Dr Patil, born and brought up in Kamalapur in Gulbarga district in Karnataka, completed his MBBS from M R Medical College, Gulbarga in 1992. He served in the Osmania Medical College for some time before he came to the UK for higher studies.
He has worked as an Accident and Emergency Consultant and a doctor for 14 years in over 25 National Health Services hospitals across UK.
Neeraj Patil elected Mayor of London Borough of Lambeth
New Delhi: Neeraj Patil, a leading NRI doctor, currently working as a consultant with A&E and a governor of Guys and St Thomas Hospital in central London, has been elected Mayor of the Borough of Lambeth.
Dr Patil, born and brought up in Kamalapur in Gulbarga district in Karnataka, completed his MBBS from M R Medical College, Gulbarga in 1992. He served in the Osmania Medical College for some time before he came to the UK for higher studies.
He has worked as an Accident and Emergency Consultant and a doctor for 14 years in over 25 National Health Services hospitals across UK.
Dr Patil, born and brought up in Kamalapur in Gulbarga district in Karnataka, completed his MBBS from M R Medical College, Gulbarga in 1992. He served in the Osmania Medical College for some time before he came to the UK for higher studies.
He has worked as an Accident and Emergency Consultant and a doctor for 14 years in over 25 National Health Services hospitals across UK.
Reinsurance
Reinsurance
Reinsurance is a contract between the insurance company (insurer) and a third party (re-insurer), wherein the latter will protect the former by paying losses sustained by it under the original contract of insurance.
Re-insurers from London, as well as other parts of Europe, see significant potential in the re-insurance market in India. Top four global re-insurers, Lloyds, Swiss Re, Munich Re and Berkshire Hathaway are amongst those eyeing India.
Bancasssurance
Private insurers have adopted bancassurance in a much bigger way than the state-owned Life Insurance Corporation (LIC) in the recent years. Bancassurance is distribution of insurance products through a bank's network.
In 2008-09, private insurers forked out US$ 44.4 million as commission for banassurance, while the payout by LIC for this distribution model was US$ 25,948.
Investment Policy
The FDI limit in the insurance space for foreign players is capped at 26 per cent—permissible under the automatic route subject to a licence from the official regulator, IRDA—but the government is planning to raise it to 49 per cent and a bill to give effect to the proposal is pending in the Rajya Sabha.
IRDA has stipulated that the mandatory ceding by every general insurer in the country to the national reinsurer – General Insurance Corporation (GIC), would continue to remain at 10 per cent as under current regulations.
IRDA has also allowed insurance companies to offer 'Health plus Life Combi Product', a policy that would provide life cover along with health insurance to subscribers.
Pension Fund Regulatory and Development Authority (PFRDA) would launch a low-cost pension scheme on April 1, 2010, to provide social security cover to economically weaker sections like rickshaw pullers, barbers and daily-wage labourers.
The Road Ahead
Saturation of insurance markets in many developed economies has made the Indian market more attractive for international insurance players, according to 'Booming Insurance Market in India (2008-2011)”. Further, according to the report,
Total life insurance premium in India is projected to grow US$ 266 billion by 2010-11
Total non-life insurance premium is expected to increase at a compound annual growth rate (CAGR) of 25 per cent for the period spanning from 2008-09 to 2010-11
The home insurance segment is set to achieve a 100 per cent growth as financial institutions have made home insurance obligatory for housing loan approvals
In the next three years, health insurance is poised to become the second largest business for non-life insurers after motor insurance
Reinsurance is a contract between the insurance company (insurer) and a third party (re-insurer), wherein the latter will protect the former by paying losses sustained by it under the original contract of insurance.
Re-insurers from London, as well as other parts of Europe, see significant potential in the re-insurance market in India. Top four global re-insurers, Lloyds, Swiss Re, Munich Re and Berkshire Hathaway are amongst those eyeing India.
Bancasssurance
Private insurers have adopted bancassurance in a much bigger way than the state-owned Life Insurance Corporation (LIC) in the recent years. Bancassurance is distribution of insurance products through a bank's network.
In 2008-09, private insurers forked out US$ 44.4 million as commission for banassurance, while the payout by LIC for this distribution model was US$ 25,948.
Investment Policy
The FDI limit in the insurance space for foreign players is capped at 26 per cent—permissible under the automatic route subject to a licence from the official regulator, IRDA—but the government is planning to raise it to 49 per cent and a bill to give effect to the proposal is pending in the Rajya Sabha.
IRDA has stipulated that the mandatory ceding by every general insurer in the country to the national reinsurer – General Insurance Corporation (GIC), would continue to remain at 10 per cent as under current regulations.
IRDA has also allowed insurance companies to offer 'Health plus Life Combi Product', a policy that would provide life cover along with health insurance to subscribers.
Pension Fund Regulatory and Development Authority (PFRDA) would launch a low-cost pension scheme on April 1, 2010, to provide social security cover to economically weaker sections like rickshaw pullers, barbers and daily-wage labourers.
The Road Ahead
Saturation of insurance markets in many developed economies has made the Indian market more attractive for international insurance players, according to 'Booming Insurance Market in India (2008-2011)”. Further, according to the report,
Total life insurance premium in India is projected to grow US$ 266 billion by 2010-11
Total non-life insurance premium is expected to increase at a compound annual growth rate (CAGR) of 25 per cent for the period spanning from 2008-09 to 2010-11
The home insurance segment is set to achieve a 100 per cent growth as financial institutions have made home insurance obligatory for housing loan approvals
In the next three years, health insurance is poised to become the second largest business for non-life insurers after motor insurance
Health Insurance
Health Insurance
The health insurance market stood at around US$ 1.5 billion in 2008-09 and is expected to grow to US$ 9 billion by 2016-17. While health insurance policies are mostly provided by general insurance companies, life insurers contribute about five per cent to the overall health insurance business.
Apollo DKV Health Insurance has renamed itself Apollo Munich Health Insurance as a part of its five-year strategic plan to gain a five per cent market share. Apollo Munich is a joint venture between Asia’s largest integrated healthcare provider, The Apollo Hospitals Group, and Germany-based Munich Re's segment, Munich Health.
Max India is planning to invest US$ 43.25 million in its health insurance joint venture (Max Bupa) and will launch a product over the January–June 2010 period.
Star Health and Allied Insurance expects to invest US$ 38.9 million during the current financial year to grow its health insurance business, taking the total invested capital to US$ 67 million.
US-based health insurer CIGNA is looking at entering the Indian market.
The health insurance market stood at around US$ 1.5 billion in 2008-09 and is expected to grow to US$ 9 billion by 2016-17. While health insurance policies are mostly provided by general insurance companies, life insurers contribute about five per cent to the overall health insurance business.
Apollo DKV Health Insurance has renamed itself Apollo Munich Health Insurance as a part of its five-year strategic plan to gain a five per cent market share. Apollo Munich is a joint venture between Asia’s largest integrated healthcare provider, The Apollo Hospitals Group, and Germany-based Munich Re's segment, Munich Health.
Max India is planning to invest US$ 43.25 million in its health insurance joint venture (Max Bupa) and will launch a product over the January–June 2010 period.
Star Health and Allied Insurance expects to invest US$ 38.9 million during the current financial year to grow its health insurance business, taking the total invested capital to US$ 67 million.
US-based health insurer CIGNA is looking at entering the Indian market.
Project Insurance
Project Insurance
Insurance companies are also witnessing increasing demand for project insurance in the last few months. Corporates are beginning to demand project insurance across sectors such as power generation with the cover beginning right from the start of the project till it is declared ready for commercial use. Some of the big projects also take cover for financial loss arising out of delay in completion.
Industry players estimate that premiums collected from project insurance will be around US$ 216.2 million for the industry as a whole and is expected to increase significantly.
Oriental Insurance Company Ltd will be offering comprehensive project insurance for the Tata Power Project at Mundra in Gujarat.
Insurance companies are also witnessing increasing demand for project insurance in the last few months. Corporates are beginning to demand project insurance across sectors such as power generation with the cover beginning right from the start of the project till it is declared ready for commercial use. Some of the big projects also take cover for financial loss arising out of delay in completion.
Industry players estimate that premiums collected from project insurance will be around US$ 216.2 million for the industry as a whole and is expected to increase significantly.
Oriental Insurance Company Ltd will be offering comprehensive project insurance for the Tata Power Project at Mundra in Gujarat.
General Insurance
General Insurance
The total number of general insurers registered with IRDA has gone up to 22, with the registration of SBI General Insurance Company Limited, a joint venture general insurance company promoted by State Bank of India and Insurance Australia Group, Australia, as a general insurer in December 2009. Moreover, L&T General Insurance is readying to launch its operations in the next three to five months.
The Gross Premium underwritten by public sector non-life insurers for the April-December 2009 period posted year-on-year growth of 11.37 per cent as compared to the year-on-year growth of 7.93 per cent posted by private sector non-life insurers. Overall, the non-life insurance sector grew 9.95 per cent in April-December 2009, compared to the corresponding period last year. According to IRDA data, out of the US$ 5.46 billion premium underwritten by the industry during the April-December 2009 period, US$ 3.24 billion came from the four public sector companies as compared to US$ 2.91 billion during the same period in 2008.
Moreover, in the 2010-11 budget, Finance Minister, Mr Pranab Mukherjee, has decided to roll back the government’s decision to tax the unrealised gains of non-life insurance companies. “The appreciation in the value of investments, being in the nature of unrealized gain is not taken into account for determining profit or loss of non-life insurance business as per the IRDA regulations. It is, therefore, proposed that the unrealized gains due to appreciation in the value of investments will not be included in the total income,” according to the budget documents.
According to data from the IRDA (Summary Reports of Motor Data of Public and Private Sector Insurers - 2008-09), in 2008-09, nearly 30 million vehicles were registered and a total premium worth US$ 2.03 billion was collected.
The total number of general insurers registered with IRDA has gone up to 22, with the registration of SBI General Insurance Company Limited, a joint venture general insurance company promoted by State Bank of India and Insurance Australia Group, Australia, as a general insurer in December 2009. Moreover, L&T General Insurance is readying to launch its operations in the next three to five months.
The Gross Premium underwritten by public sector non-life insurers for the April-December 2009 period posted year-on-year growth of 11.37 per cent as compared to the year-on-year growth of 7.93 per cent posted by private sector non-life insurers. Overall, the non-life insurance sector grew 9.95 per cent in April-December 2009, compared to the corresponding period last year. According to IRDA data, out of the US$ 5.46 billion premium underwritten by the industry during the April-December 2009 period, US$ 3.24 billion came from the four public sector companies as compared to US$ 2.91 billion during the same period in 2008.
Moreover, in the 2010-11 budget, Finance Minister, Mr Pranab Mukherjee, has decided to roll back the government’s decision to tax the unrealised gains of non-life insurance companies. “The appreciation in the value of investments, being in the nature of unrealized gain is not taken into account for determining profit or loss of non-life insurance business as per the IRDA regulations. It is, therefore, proposed that the unrealized gains due to appreciation in the value of investments will not be included in the total income,” according to the budget documents.
According to data from the IRDA (Summary Reports of Motor Data of Public and Private Sector Insurers - 2008-09), in 2008-09, nearly 30 million vehicles were registered and a total premium worth US$ 2.03 billion was collected.
Life Insurance
Life Insurance - FEB 2010
The US$ 41-billion Indian life insurance industry is considered the fifth largest life insurance market, and growing at a rapid pace of 32-34 per cent annually, according to the Life Insurance Council. Since the opening up of the insurance sector in India, the industry has received FDI to the tune of US$ 525.6 million. The government is likely to reintroduce the Insurance Bill which proposes to increase the FDI cap in private sector insurance companies from 26 per cent to 49 per cent.
The total number of life insurers registered with the Insurance Regulatory Development Authority (IRDA) has gone up to 23, with registration of the India First Life Insurance Company Limited, a joint venture life insurance company promoted by Bank of Baroda and Andhra Bank, India and Legal & General Middle East Limited, UK. The Life Insurance Corporation (LIC) posted a 50 per cent growth in new premium collection in the first nine months of the 2010 fiscal, increasing its market share to 65 per cent from 56 per cent a year ago.
LIC’s new premium collection touched US$ 9.58 billion in the April-December 2009 period while the combined business of the 22 private insurers grew to US$ 5.07 billion from the previous year, as per data collated by the Insurance Regulatory and Development Authority (IRDA). Overall the industry grew at 29 per cent in the April-December period of the fiscal year 2010.
The life insurance industry had earlier been expected to grow by 15 per cent in the 2010 fiscal year and cross the US$ 54.1 billion mark in total premium income by the end of March 2010, according to industry body, Life Insurance Council.
However, industry experts now believe that India's life insurance industry is likely to grow by around 10 per cent in 2010 over the previous year, mainly due to increased efficiency but also due to expansion in small towns and villages.
In order to support the aggressive growth in premium income in the current financial year, Future Generali India Life Insurance (a joint venture between the Future Group and the Italy-based Generali Group) has proposed to infuse an additional equity of US$ 32.55 million before the end of March 2010.
The US$ 41-billion Indian life insurance industry is considered the fifth largest life insurance market, and growing at a rapid pace of 32-34 per cent annually, according to the Life Insurance Council. Since the opening up of the insurance sector in India, the industry has received FDI to the tune of US$ 525.6 million. The government is likely to reintroduce the Insurance Bill which proposes to increase the FDI cap in private sector insurance companies from 26 per cent to 49 per cent.
The total number of life insurers registered with the Insurance Regulatory Development Authority (IRDA) has gone up to 23, with registration of the India First Life Insurance Company Limited, a joint venture life insurance company promoted by Bank of Baroda and Andhra Bank, India and Legal & General Middle East Limited, UK. The Life Insurance Corporation (LIC) posted a 50 per cent growth in new premium collection in the first nine months of the 2010 fiscal, increasing its market share to 65 per cent from 56 per cent a year ago.
LIC’s new premium collection touched US$ 9.58 billion in the April-December 2009 period while the combined business of the 22 private insurers grew to US$ 5.07 billion from the previous year, as per data collated by the Insurance Regulatory and Development Authority (IRDA). Overall the industry grew at 29 per cent in the April-December period of the fiscal year 2010.
The life insurance industry had earlier been expected to grow by 15 per cent in the 2010 fiscal year and cross the US$ 54.1 billion mark in total premium income by the end of March 2010, according to industry body, Life Insurance Council.
However, industry experts now believe that India's life insurance industry is likely to grow by around 10 per cent in 2010 over the previous year, mainly due to increased efficiency but also due to expansion in small towns and villages.
In order to support the aggressive growth in premium income in the current financial year, Future Generali India Life Insurance (a joint venture between the Future Group and the Italy-based Generali Group) has proposed to infuse an additional equity of US$ 32.55 million before the end of March 2010.
Life insurance industry gains 68% in new biz
Mumbai: The life insurance industry recorded 68 per cent increase to Rs 25,399 crore in new business premium collected in March 2010 compared to Rs15,090 crore in the corresponding month in 2009.
Insurers witnessed a spurt in business during the last month of the financial year — with contributions over 23 per cent of the total collection in 2009-10 — as individuals opted to purchase covers to avail tax benefits.
Private players registered a whopping 47 per cent growth in the new business premium while state-owned Life Insurance Corporation of India (LIC) posted 83 per cent increase in new business income in March.
“Last quarter contribute to 40 per cent of sales. But March experienced the maximum inflow,” said a senior executive of a life insurance company.
No More Gloomy
Insurers Apr-Mar 2009 Apr-Mar 2010 % Chg
LIC 52,954 70,891 33.87
SBI Life 5,386 7,041 30.73
ICICI Prudential 6,813 6,334 -7.03
Bajaj Allianz Life 4,492 4,451 -0.91
Reliance Life 3,514 3,921 11.58
HDFC Standard Life 2,644 3,261 23.34
Birla Sun Life 2,824 2,958 4.75
Max New York Life 1,844 1,848 0.22
Private total 34,154 38,399 12.43
Total 87,108 109,290 25.46
Figures in Rs cr
Source: Irda
SBI Life has pipped ICICI Prudential to become the largest private sector insurer in terms of new business premium. SBI Life recorded 71 per cent increase in new business premium collection to Rs 1,775 crore as against Rs 1,038 crore March 2009. ICICI Prudential recorded 53 per cent increase to Rs 1,362 crore in March 2010 against Rs 887 crore in the corresponding month a year ago.
In 2009-10, SBI collected premium of Rs 7,041 crore from the sale of new policies, while ICICI Prudential recorded 7 per cent decline in new business collections to Rs 6,334 crore. Insurers sold 10.55 million new policies with LIC bagging 8.52 million and private companies 2.03 million. Group premium contributed 51 per cent for the month with SBI and ICICI Prudential making large contributions. LIC increased its market share by 4 per cent in total premium collection from 2009. At the end of March 2010, LIC holds 65 per cent market share in terms of new business income collection with the private sector contributing the remaining 35 per cent share last fiscal
Insurers witnessed a spurt in business during the last month of the financial year — with contributions over 23 per cent of the total collection in 2009-10 — as individuals opted to purchase covers to avail tax benefits.
Private players registered a whopping 47 per cent growth in the new business premium while state-owned Life Insurance Corporation of India (LIC) posted 83 per cent increase in new business income in March.
“Last quarter contribute to 40 per cent of sales. But March experienced the maximum inflow,” said a senior executive of a life insurance company.
No More Gloomy
Insurers Apr-Mar 2009 Apr-Mar 2010 % Chg
LIC 52,954 70,891 33.87
SBI Life 5,386 7,041 30.73
ICICI Prudential 6,813 6,334 -7.03
Bajaj Allianz Life 4,492 4,451 -0.91
Reliance Life 3,514 3,921 11.58
HDFC Standard Life 2,644 3,261 23.34
Birla Sun Life 2,824 2,958 4.75
Max New York Life 1,844 1,848 0.22
Private total 34,154 38,399 12.43
Total 87,108 109,290 25.46
Figures in Rs cr
Source: Irda
SBI Life has pipped ICICI Prudential to become the largest private sector insurer in terms of new business premium. SBI Life recorded 71 per cent increase in new business premium collection to Rs 1,775 crore as against Rs 1,038 crore March 2009. ICICI Prudential recorded 53 per cent increase to Rs 1,362 crore in March 2010 against Rs 887 crore in the corresponding month a year ago.
In 2009-10, SBI collected premium of Rs 7,041 crore from the sale of new policies, while ICICI Prudential recorded 7 per cent decline in new business collections to Rs 6,334 crore. Insurers sold 10.55 million new policies with LIC bagging 8.52 million and private companies 2.03 million. Group premium contributed 51 per cent for the month with SBI and ICICI Prudential making large contributions. LIC increased its market share by 4 per cent in total premium collection from 2009. At the end of March 2010, LIC holds 65 per cent market share in terms of new business income collection with the private sector contributing the remaining 35 per cent share last fiscal
Essar to buy AGC for Rs 205 cr
Mumbai: Deal will put BPO arm, Aegis, among top five IT solution providers in India.
The Essar group today said it would acquire US-based Avaya’s entire 59.13 per cent stake in AGC Networks, a company in the area of communications solutions, for $44.5 million (Rs 205 crore) or Rs 245 a share.
Business Standard had, on May 16, reported that Aegis, the business process outsourcing (BPO) arm of the Essar group, was in advanced talks to acquire AGC Networks. This acquisition would make Aegis among the top five information technology solution providers in the country.
The acquisition would be done through Essar Services Holdings Ltd (ESHL). Essar Capital Finance Pvt Ltd, along with ESHL, will announce the mandatory open offer tomorrow for an additional 20 per cent stake at a price determined in accordance with the formula specified in the takeover regulations. Assuming all shares are tendered in the open offer, its size would be Rs 78 crore.
Avaya Inc, the US-based business communication systems provider, owns the 59.13 per cent stake in AGC through Avaya Mauritius (33.63 per cent) and Avaya International LLC (25.50 per cent). Other than the promoters, Reliance Capital Trustee Company Ltd A/c Reliance Growth Fund holds 6.6 per cent stake and SBI Mutual Fund has one per cent holding.
AGC Networks, earlier known as Avaya GlobalConnect Ltd, is a converged communications provider focused on the India and Australia market. It employs around 500 people. The current management is expected to continue and spearhead the business, post-closing. Edelweiss Capital Ltd is the sole advisor to the transaction and manager to the open offer.
Aegis was already planning an initial public offering this year. This acquisition, when complete, would also allow Aegis to strengthen the growth of its subsidiary, Aegis Tech. In June 2009, Aegis had announced its foray into infrastructure management by setting up an independent subsidiary. The company had then said it planned to invest $100 million in this venture over the next 12 months and would touch revenue of $100 million in the next 18 months.
Inorganic growth
Aegis has acquired 13 firms in the past three to four years. It had stated in the past that its target was to make four acquisitions a year. On May 19, it signed an agreement to acquire US-based Sallie Mae’s customer services centre in Texas. The company did not disclose the sum of the deal. This agreement is effective from June 4. As part of the deal, Aegis also entered into a multi-year, multi-million dollar deal with Sallie Mae. With this acquisition, Sallie Mae was to transfer 350 employees to Aegis, taking the company’s US headcount to 4,350.
AGC Networks had also undergone several changes in the past year. The company renamed itself. Till a year before, it was the sole subsidiary of Avaya Inc. It also started working with other partners like Polycom, Extreme Networks and others. AGC Networks clocked revenue of Rs 515 crore for 2008-09. For the second quarter ended March 31, it reported net profit of Rs 9.3 crore, exceeding net profit of the previous financial year in six months. Revenue of the company for the quarter touched Rs 138.5 crore.
Aparup Sengupta, managing director and Global CEO, Aegis Ltd, said: “Essar, in a short span, has become a key player in the systems integration (SI) space and would benefit immensely from the depth and width of expertise AGC Networks has. We have a definite plan to grow this business as we aim for bigger chunks of customer spends.”
“AGC Networks provides a great synergy with our SI business,” said S K Jha, president, SI business, Essar, adding the the acquisition would help them gain “deep expertise in the ‘enable’ block of experience management that Essar embarked upon through its worldwide expansion drive. Now, customers will have the ability to have unified communication and experience management under one roof”.
Said Jangoo Dalal, managing director, Abaya India, “The AGC Networks relationship remains key to Avaya’s success in India and Australia, both through the period of this transaction and beyond. In India, we work together to serve some of the country’s leading organisations spanning multiple business sectors and we look forward to continuing to work with AGC Networks as a trusted and well-established business partner.”
The Essar group today said it would acquire US-based Avaya’s entire 59.13 per cent stake in AGC Networks, a company in the area of communications solutions, for $44.5 million (Rs 205 crore) or Rs 245 a share.
Business Standard had, on May 16, reported that Aegis, the business process outsourcing (BPO) arm of the Essar group, was in advanced talks to acquire AGC Networks. This acquisition would make Aegis among the top five information technology solution providers in the country.
The acquisition would be done through Essar Services Holdings Ltd (ESHL). Essar Capital Finance Pvt Ltd, along with ESHL, will announce the mandatory open offer tomorrow for an additional 20 per cent stake at a price determined in accordance with the formula specified in the takeover regulations. Assuming all shares are tendered in the open offer, its size would be Rs 78 crore.
Avaya Inc, the US-based business communication systems provider, owns the 59.13 per cent stake in AGC through Avaya Mauritius (33.63 per cent) and Avaya International LLC (25.50 per cent). Other than the promoters, Reliance Capital Trustee Company Ltd A/c Reliance Growth Fund holds 6.6 per cent stake and SBI Mutual Fund has one per cent holding.
AGC Networks, earlier known as Avaya GlobalConnect Ltd, is a converged communications provider focused on the India and Australia market. It employs around 500 people. The current management is expected to continue and spearhead the business, post-closing. Edelweiss Capital Ltd is the sole advisor to the transaction and manager to the open offer.
Aegis was already planning an initial public offering this year. This acquisition, when complete, would also allow Aegis to strengthen the growth of its subsidiary, Aegis Tech. In June 2009, Aegis had announced its foray into infrastructure management by setting up an independent subsidiary. The company had then said it planned to invest $100 million in this venture over the next 12 months and would touch revenue of $100 million in the next 18 months.
Inorganic growth
Aegis has acquired 13 firms in the past three to four years. It had stated in the past that its target was to make four acquisitions a year. On May 19, it signed an agreement to acquire US-based Sallie Mae’s customer services centre in Texas. The company did not disclose the sum of the deal. This agreement is effective from June 4. As part of the deal, Aegis also entered into a multi-year, multi-million dollar deal with Sallie Mae. With this acquisition, Sallie Mae was to transfer 350 employees to Aegis, taking the company’s US headcount to 4,350.
AGC Networks had also undergone several changes in the past year. The company renamed itself. Till a year before, it was the sole subsidiary of Avaya Inc. It also started working with other partners like Polycom, Extreme Networks and others. AGC Networks clocked revenue of Rs 515 crore for 2008-09. For the second quarter ended March 31, it reported net profit of Rs 9.3 crore, exceeding net profit of the previous financial year in six months. Revenue of the company for the quarter touched Rs 138.5 crore.
Aparup Sengupta, managing director and Global CEO, Aegis Ltd, said: “Essar, in a short span, has become a key player in the systems integration (SI) space and would benefit immensely from the depth and width of expertise AGC Networks has. We have a definite plan to grow this business as we aim for bigger chunks of customer spends.”
“AGC Networks provides a great synergy with our SI business,” said S K Jha, president, SI business, Essar, adding the the acquisition would help them gain “deep expertise in the ‘enable’ block of experience management that Essar embarked upon through its worldwide expansion drive. Now, customers will have the ability to have unified communication and experience management under one roof”.
Said Jangoo Dalal, managing director, Abaya India, “The AGC Networks relationship remains key to Avaya’s success in India and Australia, both through the period of this transaction and beyond. In India, we work together to serve some of the country’s leading organisations spanning multiple business sectors and we look forward to continuing to work with AGC Networks as a trusted and well-established business partner.”
Real estate projects boom in Tier-II and Tier-III cities
New Delhi: Real estate companies are trying to cash in on the demand for residential and office space in Tier-II and Tier-III cities. Most of them have ambitious projects in this financial year.
DLF, the largest realty firm in the country, feels with economic growth faster in the smaller cities, there will be more demand there. Its DLF Garden City project in Indore has been a major success, with the first phase being sold. The company is planning to launch the second phase during the current financial year.
“We have sold 500 plots that we launched in the first phase of our operations and are in the process to start the second phase. The response we got from Indore was really encouraging,” said Rajeev Talwar, Group Executive Director, DLF Ltd.
DLF feels the growth in Tier-II and Tier-III cities is triggered by the fact that prices are comparatively quite low in these cities. “One can buy a property at a reasonably low price (there),” he says.
Ansal Properties also has ongoing residential projects in Jaipur, Jodhpur, Agra, Ajmer, Kundli and Panipat, among others. In this financial year, the company plans to launch a million sq ft area in a commercial project in Lucknow, which will have office buildings and a shopping mall.
“The demand in Tier-II and Tier-III cities has seen an upsurge and this year we will be investing Rs 200 crore on the Lucknow project. Apart from this, our ongoing residential projects in Tier-II and Tier-III cities will keep on developing,” said Pranav Ansal, Vice-Chairman and Managing Director.
Omaxe has 40 residential and integrated township projects in Tier-II and Tier-III cities. These projects are primarily in Haryana, Uttar Pradesh, Rajasthan, Madhya Pradesh and Punjab.
Says Rohtas Goel, Chairman and Managing Director: “In the last fiscal, we sold a total area of 10.44 million sq ft, of which 9.65 million sq ft were sold in Tier-II and Tier-III cities. The total value of sold area is Rs 1,525 crore, of which Rs 1,250 crore was generated from the sale of projects in Tier-II and Tier-III cities.”
In this financial year, it plans to launch a slew of projects in cities such as Allahabad, Patiala, Chandigarh, Indore, Bhiwadi and Lucknow. The company is expecting sales value of Rs 2,000-2,500 crore from these projects in this financial year.
“The availability of land at affordable prices in these cities, backed by the demand for organised realty, is the key to the success of real estate in Tier-II and Tier-III cities,” adds Goel
Industry analysts feel the demand for residential space has shown growth and will keep growing if the prices are right.
“The Tier-II and Tier-III cities are witnessing growth in the residential segment. One can also witness demand in Tier-II cities for office space, primarily from the call centres and Business Process Outsourcing companies,” said Anuj Puri, chairman and country head with the realty consultancy of Jones Lang LaSalle Meghraj. Puri feels developers should be cautious and put the prices of residential properties between Rs 30 lakh and 40 lakh if they want to see the same demand in residential space in Tier-II and Tier-III cities.
DLF, the largest realty firm in the country, feels with economic growth faster in the smaller cities, there will be more demand there. Its DLF Garden City project in Indore has been a major success, with the first phase being sold. The company is planning to launch the second phase during the current financial year.
“We have sold 500 plots that we launched in the first phase of our operations and are in the process to start the second phase. The response we got from Indore was really encouraging,” said Rajeev Talwar, Group Executive Director, DLF Ltd.
DLF feels the growth in Tier-II and Tier-III cities is triggered by the fact that prices are comparatively quite low in these cities. “One can buy a property at a reasonably low price (there),” he says.
Ansal Properties also has ongoing residential projects in Jaipur, Jodhpur, Agra, Ajmer, Kundli and Panipat, among others. In this financial year, the company plans to launch a million sq ft area in a commercial project in Lucknow, which will have office buildings and a shopping mall.
“The demand in Tier-II and Tier-III cities has seen an upsurge and this year we will be investing Rs 200 crore on the Lucknow project. Apart from this, our ongoing residential projects in Tier-II and Tier-III cities will keep on developing,” said Pranav Ansal, Vice-Chairman and Managing Director.
Omaxe has 40 residential and integrated township projects in Tier-II and Tier-III cities. These projects are primarily in Haryana, Uttar Pradesh, Rajasthan, Madhya Pradesh and Punjab.
Says Rohtas Goel, Chairman and Managing Director: “In the last fiscal, we sold a total area of 10.44 million sq ft, of which 9.65 million sq ft were sold in Tier-II and Tier-III cities. The total value of sold area is Rs 1,525 crore, of which Rs 1,250 crore was generated from the sale of projects in Tier-II and Tier-III cities.”
In this financial year, it plans to launch a slew of projects in cities such as Allahabad, Patiala, Chandigarh, Indore, Bhiwadi and Lucknow. The company is expecting sales value of Rs 2,000-2,500 crore from these projects in this financial year.
“The availability of land at affordable prices in these cities, backed by the demand for organised realty, is the key to the success of real estate in Tier-II and Tier-III cities,” adds Goel
Industry analysts feel the demand for residential space has shown growth and will keep growing if the prices are right.
“The Tier-II and Tier-III cities are witnessing growth in the residential segment. One can also witness demand in Tier-II cities for office space, primarily from the call centres and Business Process Outsourcing companies,” said Anuj Puri, chairman and country head with the realty consultancy of Jones Lang LaSalle Meghraj. Puri feels developers should be cautious and put the prices of residential properties between Rs 30 lakh and 40 lakh if they want to see the same demand in residential space in Tier-II and Tier-III cities.
Ashok Leyland plans to invest Rs 2,000 cr
Chennai: Ashok Leyland plans to invest around Rs 2,000 crore over the next two years. The commercial vehicle major said it had earmarked Rs 1,200 crore for capex in addition to investments earmarked for the various joint ventures (JVs) to the tune of Rs 800 crore.
R Seshasayee, managing director, Ashok Leyland, today told reporters that in 2009-10 capex incurred was Rs 810 crore and investments in JVs stood at Rs 142 crore. Going forward, over the next two years planned capex incurred would be Rs 1,200 crore and investments in JVs would be around Rs 800 crore.
He added, the development activities for all joint ventures are on schedule. The first batch of Light Commercial Vehicle products as part of the JV with Nissan Motor Company will roll out by early 2011.
The JV with John Deere for the construction equipment business is also well on track with pilot production set to commence at their new facility at Goomdipoondi, near Chennai, from October 2010 and products are set to roll out by early 2011.
On the prospects for the present year, Seshasayee said, "The future appears promising. On the one hand, macro-economic indicators are positive. On the other, there are issues of rising fuel and raw material prices. Come October, migration to superior emission norms will happen and we are ready with the products and the technology to improve our market share."
“While one may not expect 30 per cent plus growth levels witnessed in 2009-10.
We are optimistic of a healthy growth of over 15 per cent for the commercial vehicle industry this fiscal,” said Seshasayee.
Ashok Leyland is planning to introduce 25 models over the next 18 months, he added.
With the recent inauguration of the manufacturing facility at Pantnagar, Uttarakhand, Ashok Leyland's annual installed capacity will be 150,500 vehicles.
Production at the new chassis and bus assembly plant at Ras Al Khaimah, UAE, has begun and, at full capacity, can roll out 2,000 buses to meet international specifications. These products, which will eventually include trucks, will be manufactured to feed the neighbouring GCC (Gulf Co-operation Council) and African markets.
Commenting on the exports, which reported a 12 per cent drop in 2009-10 to 5,979 units compared to 6,812 units, a year ago, Seshasayee said, "Our focus was on the domestic market since major markets like West Asia had collapsed and had not recovered yet. The Sri lankan market has now Returned," he added.
New markets in Africa and SAARC countries, Latin America -- Peru, CIS - Ukraine and West Asia - Saudi Arabia have now opened up.
Meanwhile, Ashok Leyland's has reported a net profit of Rs 222.66 crore for quarter-ended March 31, 2010 as compared to profit of Rs 53.31 crore. Company's total income rose to Rs 2,939 crore from Rs 1,218 crore.
"The second half of the year was good since customers were advancing purchases due to the anticipated change in emission norms, growth in CV-impacting sectors, funding for NHAI projects and liquidity in the market improved," said Seshasayee. The company has reported 98.8 per cent growth in second half of the year compared to first half of the year.
R Seshasayee, managing director, Ashok Leyland, today told reporters that in 2009-10 capex incurred was Rs 810 crore and investments in JVs stood at Rs 142 crore. Going forward, over the next two years planned capex incurred would be Rs 1,200 crore and investments in JVs would be around Rs 800 crore.
He added, the development activities for all joint ventures are on schedule. The first batch of Light Commercial Vehicle products as part of the JV with Nissan Motor Company will roll out by early 2011.
The JV with John Deere for the construction equipment business is also well on track with pilot production set to commence at their new facility at Goomdipoondi, near Chennai, from October 2010 and products are set to roll out by early 2011.
On the prospects for the present year, Seshasayee said, "The future appears promising. On the one hand, macro-economic indicators are positive. On the other, there are issues of rising fuel and raw material prices. Come October, migration to superior emission norms will happen and we are ready with the products and the technology to improve our market share."
“While one may not expect 30 per cent plus growth levels witnessed in 2009-10.
We are optimistic of a healthy growth of over 15 per cent for the commercial vehicle industry this fiscal,” said Seshasayee.
Ashok Leyland is planning to introduce 25 models over the next 18 months, he added.
With the recent inauguration of the manufacturing facility at Pantnagar, Uttarakhand, Ashok Leyland's annual installed capacity will be 150,500 vehicles.
Production at the new chassis and bus assembly plant at Ras Al Khaimah, UAE, has begun and, at full capacity, can roll out 2,000 buses to meet international specifications. These products, which will eventually include trucks, will be manufactured to feed the neighbouring GCC (Gulf Co-operation Council) and African markets.
Commenting on the exports, which reported a 12 per cent drop in 2009-10 to 5,979 units compared to 6,812 units, a year ago, Seshasayee said, "Our focus was on the domestic market since major markets like West Asia had collapsed and had not recovered yet. The Sri lankan market has now Returned," he added.
New markets in Africa and SAARC countries, Latin America -- Peru, CIS - Ukraine and West Asia - Saudi Arabia have now opened up.
Meanwhile, Ashok Leyland's has reported a net profit of Rs 222.66 crore for quarter-ended March 31, 2010 as compared to profit of Rs 53.31 crore. Company's total income rose to Rs 2,939 crore from Rs 1,218 crore.
"The second half of the year was good since customers were advancing purchases due to the anticipated change in emission norms, growth in CV-impacting sectors, funding for NHAI projects and liquidity in the market improved," said Seshasayee. The company has reported 98.8 per cent growth in second half of the year compared to first half of the year.
Engg R&D firms bet big on domestic market
Chennai/ Bangalore: On the back of its value proposition and infrastructural investments by the government, the domestic market in India for engineering R&D services (ER&D) is expected to witness robust growth. It is estimated that almost 10-15 per cent of India’s total ER&D services market could come from its domestic market by 2020 when the country is expected to capture a revenue of $40-45 billion.
According to a report by Nasscom and Booz and Co, the Indian ER&D services market has shown a compound annual growth rate (CAGR) of more than 45 per cent from $1.5 billion in 2004 to $8.3 billion in 2009.
Sectors such as telecom, semiconductors and automotive have been the biggest revenue generators for the industry with embedded software design contributing almost 40 per cent to the revenue base. An indicator of this growth is the increase in the number of offshore development centres (ODC) that provide dedicated ER&D services, which has gone up significantly since 2006.
Core engineering
“From the demand side, India is becoming an integral part of the value chain and Indian companies are developing many core engineering works for their global customers. So clearly, we see Indian companies are now moving from volume to value-based offerings and developing a lot more IPs now,” said Vikas Sehgal, Partner, Booz & Company, a management consultancy firm.
He said engineering and R&D services providers in India including the captives of global firms, who were primarily catering to the requirement of their global customers are now looking at India as a market in a big way. This is happening as a lot of spending is taking place in infrastructure development, energy, telecommunication and roads and building in the country.
“We are seeing companies like Infosys, HCL, Tata and Mahindra Satyam gearing up their sales force in a big way to focus on the local market,” he added. Honeywell Technology Solutions (HTS), the R&D and innovation division of technology giant Honeywell in India, is now developing products catering to local markets. HTS started focusing on developing products for its Indian customers almost 3-4 years ago.
Experienced professionals
Another key focus area in recent times has been hiring experienced professionals from the US, Europe and within India itself to boost ER&D product development capabilities. “Engineering requires a completely different mindset to address the market. It requires tremendous domain knowledge to service customers,” said BVR Mohan Reddy, chairman and managing director of Infotech Enterprises.
As a result, it is learnt that the total number of engineers with over 10 years of experience increased from 15 per cent in 2006 to 25 per cent in 2009 in India. Overall, India has a base of one million engineers, majority of whom are employed by large Indian conglomerates.
“From our perspective, there is a definite trend where we develop products for the Indian markets. This is not necessarily for Indian companies, but for our global customers who wants to develop products for Indian market,” said GH Rao, corporate vice president, Engineering and R&D services of HCL Technologies. HCL, for example, is developing base stations to be used in rural pockets in India for one of its global customers.
Global footprint
Indian service providers have also invested considerably in expanding their global footprint to service geographically distributed customers. They have established sales teams in North America and Europe and delivery centres in China and Japan for closer interaction with customers in the former and to co-ordinate efforts with existing manufacturing facilities in the latter. Within India, companies have begun to move to Tier-2 cities to take advantage of lower costs of operations and to access a large graduating pool of engineers.
According to a report by Nasscom and Booz and Co, the Indian ER&D services market has shown a compound annual growth rate (CAGR) of more than 45 per cent from $1.5 billion in 2004 to $8.3 billion in 2009.
Sectors such as telecom, semiconductors and automotive have been the biggest revenue generators for the industry with embedded software design contributing almost 40 per cent to the revenue base. An indicator of this growth is the increase in the number of offshore development centres (ODC) that provide dedicated ER&D services, which has gone up significantly since 2006.
Core engineering
“From the demand side, India is becoming an integral part of the value chain and Indian companies are developing many core engineering works for their global customers. So clearly, we see Indian companies are now moving from volume to value-based offerings and developing a lot more IPs now,” said Vikas Sehgal, Partner, Booz & Company, a management consultancy firm.
He said engineering and R&D services providers in India including the captives of global firms, who were primarily catering to the requirement of their global customers are now looking at India as a market in a big way. This is happening as a lot of spending is taking place in infrastructure development, energy, telecommunication and roads and building in the country.
“We are seeing companies like Infosys, HCL, Tata and Mahindra Satyam gearing up their sales force in a big way to focus on the local market,” he added. Honeywell Technology Solutions (HTS), the R&D and innovation division of technology giant Honeywell in India, is now developing products catering to local markets. HTS started focusing on developing products for its Indian customers almost 3-4 years ago.
Experienced professionals
Another key focus area in recent times has been hiring experienced professionals from the US, Europe and within India itself to boost ER&D product development capabilities. “Engineering requires a completely different mindset to address the market. It requires tremendous domain knowledge to service customers,” said BVR Mohan Reddy, chairman and managing director of Infotech Enterprises.
As a result, it is learnt that the total number of engineers with over 10 years of experience increased from 15 per cent in 2006 to 25 per cent in 2009 in India. Overall, India has a base of one million engineers, majority of whom are employed by large Indian conglomerates.
“From our perspective, there is a definite trend where we develop products for the Indian markets. This is not necessarily for Indian companies, but for our global customers who wants to develop products for Indian market,” said GH Rao, corporate vice president, Engineering and R&D services of HCL Technologies. HCL, for example, is developing base stations to be used in rural pockets in India for one of its global customers.
Global footprint
Indian service providers have also invested considerably in expanding their global footprint to service geographically distributed customers. They have established sales teams in North America and Europe and delivery centres in China and Japan for closer interaction with customers in the former and to co-ordinate efforts with existing manufacturing facilities in the latter. Within India, companies have begun to move to Tier-2 cities to take advantage of lower costs of operations and to access a large graduating pool of engineers.
Tuesday, May 18, 2010
'India will be among top-5 civil aviation markets in 5 years'
Mangalore: The Union Minister of State for Civil Aviation, Mr Praful Patel, has said that the country will be in the top-five civil aviation markets in the world in the next five years.
Inaugurating the new integrated terminal building of Mangalore airport here on Saturday, he said that the country's civil aviation sector was not recognised in the world until a few years ago. Today, India is the ninth largest civil aviation market in the world.
“Within the next five years, India will be in the top-five civil aviation markets all across the world. That, I think, is a great achievement in the remarkably short period of time,” he said. Stating that substantial improvements have been made in the civil aviation sector in the country, he said today flying is no more a luxury for the common man.
Mr Patel said that country's infrastructure is undergoing a sea change under the leadership of the Prime Minister, Dr Manmohan Singh.
For the first time there is a Cabinet Committee on Infrastructure headed by the Prime Minister. That is why projects were being monitored and implemented on time, he said.
Runway extension
Later in an informal chat with presspersons, Mr Patel said that the runway of Mangalore airport will be extended by another 1,000 ft, from the existing 8,000 ft.
Asked when the airport will get international status, he said that one of the requirements for declaring Mangalore as an international airport is the 9,000 ft runway. That is why it has been decided to extend the runway by another 1,000 ft. The work for this will be awarded soon, he said.
The extension of runway is essential for handling larger aircraft to international destinations in West Asia and beyond that. The extension will help bring larger cargo aircraft for import and export out of Mangalore, he said.
The Union Government will take a decision on declaring Mangalore as an international airport at the earliest, he added.
Inaugurating the new integrated terminal building of Mangalore airport here on Saturday, he said that the country's civil aviation sector was not recognised in the world until a few years ago. Today, India is the ninth largest civil aviation market in the world.
“Within the next five years, India will be in the top-five civil aviation markets all across the world. That, I think, is a great achievement in the remarkably short period of time,” he said. Stating that substantial improvements have been made in the civil aviation sector in the country, he said today flying is no more a luxury for the common man.
Mr Patel said that country's infrastructure is undergoing a sea change under the leadership of the Prime Minister, Dr Manmohan Singh.
For the first time there is a Cabinet Committee on Infrastructure headed by the Prime Minister. That is why projects were being monitored and implemented on time, he said.
Runway extension
Later in an informal chat with presspersons, Mr Patel said that the runway of Mangalore airport will be extended by another 1,000 ft, from the existing 8,000 ft.
Asked when the airport will get international status, he said that one of the requirements for declaring Mangalore as an international airport is the 9,000 ft runway. That is why it has been decided to extend the runway by another 1,000 ft. The work for this will be awarded soon, he said.
The extension of runway is essential for handling larger aircraft to international destinations in West Asia and beyond that. The extension will help bring larger cargo aircraft for import and export out of Mangalore, he said.
The Union Government will take a decision on declaring Mangalore as an international airport at the earliest, he added.
Wednesday, May 12, 2010
How the $1 trillion euro zone aid affects Asian markets
The relief rally from the $1 trillion bailout package in Europe lost steam in Asia on 11 May as stocks fell, but bonds remained firm and prompted companies to sell debt.
Asian shares dropped, while the euro slipped and was off its Monday high as doubts persisted on the ability of the eurozone countries to cut swelling budget deficits and mounting debt.
The MSCI index of shares outside Japan fell 1.1 per cent, reversing a 3.4 per cent gain on Monday, its biggest single-day rise since May 2009.
Asian currencies, except for the Philippine peso, also retreated. The Korean won and the Singapore dollar gave up earlier gains as the market turned cautious over possible intervention by the central bank.
The peso gained over 1 per cent to 45.005 per dollar after a generally peaceful presidential election on Monday.
Bonds were resilient, as Asian spreads and the cost of insuring debt against default continued to ease on Tuesday from 10-month highs reached last week.
Signs that the debt market was stabilising were further affirmed when Macau casino operator Melco Crown Entertainment released pricing terms for its planned sale of up to $600 million in eight-year bonds.
Melco's debt sale has so far attracted $500 million in orders with US accounts driving the deal, according to IFR Asia.
* Renhe Commercial Holdings was expected to price its 5-year bonds this week after delaying the pricing last Friday. Steelmaker China Oriental and Korea Exchange Bank are also expected to issue bonds.
* The broad Asia ex-Japan iTraxx investment-grade index narrowed 4 bps on Tuesday to 107/109 from Monday's close and as much as 43 bps from Friday's peak of 150 bps, the highest since July 2009.
* The credit default swaps (CDS) of Indonesia and the Philippines, the region's most active issuers in the global debt market, eased after climbing to their highest since July 2009 on Friday.
* Indonesia's five-year CDS was 10 bps tighter at 164/169, while the Philippines' five-year CDS tightened 5 bps at 160/170, traders said.
* Japanese government bond futures erased earlier losses as Tokyo shares slid.
* Indian federal bond yields fell on short covering, with the yield on the most traded 8.20 per cent bond due in 2022 down 4 bps to 7.90 per cent
Asian shares dropped, while the euro slipped and was off its Monday high as doubts persisted on the ability of the eurozone countries to cut swelling budget deficits and mounting debt.
The MSCI index of shares outside Japan fell 1.1 per cent, reversing a 3.4 per cent gain on Monday, its biggest single-day rise since May 2009.
Asian currencies, except for the Philippine peso, also retreated. The Korean won and the Singapore dollar gave up earlier gains as the market turned cautious over possible intervention by the central bank.
The peso gained over 1 per cent to 45.005 per dollar after a generally peaceful presidential election on Monday.
Bonds were resilient, as Asian spreads and the cost of insuring debt against default continued to ease on Tuesday from 10-month highs reached last week.
Signs that the debt market was stabilising were further affirmed when Macau casino operator Melco Crown Entertainment released pricing terms for its planned sale of up to $600 million in eight-year bonds.
Melco's debt sale has so far attracted $500 million in orders with US accounts driving the deal, according to IFR Asia.
* Renhe Commercial Holdings was expected to price its 5-year bonds this week after delaying the pricing last Friday. Steelmaker China Oriental and Korea Exchange Bank are also expected to issue bonds.
* The broad Asia ex-Japan iTraxx investment-grade index narrowed 4 bps on Tuesday to 107/109 from Monday's close and as much as 43 bps from Friday's peak of 150 bps, the highest since July 2009.
* The credit default swaps (CDS) of Indonesia and the Philippines, the region's most active issuers in the global debt market, eased after climbing to their highest since July 2009 on Friday.
* Indonesia's five-year CDS was 10 bps tighter at 164/169, while the Philippines' five-year CDS tightened 5 bps at 160/170, traders said.
* Japanese government bond futures erased earlier losses as Tokyo shares slid.
* Indian federal bond yields fell on short covering, with the yield on the most traded 8.20 per cent bond due in 2022 down 4 bps to 7.90 per cent
Friday, May 7, 2010
Huawei part of Chinese spy network, says R&AW
NEW DELHI: Chinese telecom major Huawei may aggressively deny any link to the China’s People’s Liberation Army, but independent assessments of Indian intelligence agencies so far clearly point out that PLA remains a customer of the company and has become more involved with it. The security concerns of Indian intelligence agencies about Huawei’s close connection with the Chinese security establishment are shared by the US administration and had led the latter to cancel Huawei’s 2008 bid to pick up stake in 3Com.
Even British intelligence agencies have warned that the Chinese could cripple IT-dependent telecom infrastructure and critical services like water, power and food supplies by embedding malware in equipment installed by firms such as Huawei and ZTE.
According to security assessments of Huawei Technologies put together by R&AW, the Chinese firm not only shares ties with the Chinese security establishment but is also suspected to be a part of its intelligence set-up. Not only was it founded by retired PLA officer Ren Zhengfei, a former director of the Information Engineering Academy of the PLA’s general staff department, in 1988, but one of the members on the company’s board was an officer of the PRC ministry of state security.
Huawei, intelligence inputs collected over a period of time point out, is responsible for sweeping and debugging all Chinese embassies and their expertise extends to bugging of the target telecommunication and computer systems. This explains Huawei’s involvement in projects for military purposes in Iraq during the Saddam Hussein regime and also in telecom projects in Afghanistan during the Taliban rule.
Given the adverse reports of Huawei’s alleged role in bugging systems for the benefit of the Chinese security establishment, the communication ministry has warned BSNL to test all equipment supplied by the Chinese firm for “trapdoors, black box, malwares” and check if it is susceptible to remote hacking before it can be allow to be operational.
Though BSNL was allowed to award telecom network contract to Huawei, it was to restrict the orders to southern states as they do not share borders with sensitive countries such as China, Pakistan, Bangladesh and Myanmar. The communications ministry also warned that networks provided by Huawei could go live only after all requisite audits were completed.
Security concerns over Huawei links with PLA are not restricted to Indian agencies alone. The Chinese telecom major’s proposal to purchase stake in 3Com, the US firm manufacturing internet router and networking equipment, was shot down after the US administration questioned the deal’s security implications. A reluctance of approval followed and the lucrative $2.2-billion deal — wherein Huawei had invited Boston-based private equity firm Bain Capital to jointly acquire 3Com — was cancelled in February 2008. The fact that 3Com makes anti-hacking computer software for the military and that Huawei has ties with PLA raised an alarm with the US authorities, leading them to disallow the deal.
According to R&AW reports, the US administration was concerned that Huawei would be able to alter the electronic equipment and computer software sold to the military in a way that would make these less effective in real-time operations.
Adverse security assessments of Huawei have also led British security agencies to warn of China’s attempts to hit telecom infrastructure as well as water, power and food supplies through equipment installed by Huawei through covert modifications to compromise systems in ways that are difficult to detect and could later be disrupted or disabled
Even British intelligence agencies have warned that the Chinese could cripple IT-dependent telecom infrastructure and critical services like water, power and food supplies by embedding malware in equipment installed by firms such as Huawei and ZTE.
According to security assessments of Huawei Technologies put together by R&AW, the Chinese firm not only shares ties with the Chinese security establishment but is also suspected to be a part of its intelligence set-up. Not only was it founded by retired PLA officer Ren Zhengfei, a former director of the Information Engineering Academy of the PLA’s general staff department, in 1988, but one of the members on the company’s board was an officer of the PRC ministry of state security.
Huawei, intelligence inputs collected over a period of time point out, is responsible for sweeping and debugging all Chinese embassies and their expertise extends to bugging of the target telecommunication and computer systems. This explains Huawei’s involvement in projects for military purposes in Iraq during the Saddam Hussein regime and also in telecom projects in Afghanistan during the Taliban rule.
Given the adverse reports of Huawei’s alleged role in bugging systems for the benefit of the Chinese security establishment, the communication ministry has warned BSNL to test all equipment supplied by the Chinese firm for “trapdoors, black box, malwares” and check if it is susceptible to remote hacking before it can be allow to be operational.
Though BSNL was allowed to award telecom network contract to Huawei, it was to restrict the orders to southern states as they do not share borders with sensitive countries such as China, Pakistan, Bangladesh and Myanmar. The communications ministry also warned that networks provided by Huawei could go live only after all requisite audits were completed.
Security concerns over Huawei links with PLA are not restricted to Indian agencies alone. The Chinese telecom major’s proposal to purchase stake in 3Com, the US firm manufacturing internet router and networking equipment, was shot down after the US administration questioned the deal’s security implications. A reluctance of approval followed and the lucrative $2.2-billion deal — wherein Huawei had invited Boston-based private equity firm Bain Capital to jointly acquire 3Com — was cancelled in February 2008. The fact that 3Com makes anti-hacking computer software for the military and that Huawei has ties with PLA raised an alarm with the US authorities, leading them to disallow the deal.
According to R&AW reports, the US administration was concerned that Huawei would be able to alter the electronic equipment and computer software sold to the military in a way that would make these less effective in real-time operations.
Adverse security assessments of Huawei have also led British security agencies to warn of China’s attempts to hit telecom infrastructure as well as water, power and food supplies through equipment installed by Huawei through covert modifications to compromise systems in ways that are difficult to detect and could later be disrupted or disabled
Monday, May 3, 2010
India to produce more MNCs than any other country: PwC
New Delhi: India is expected to produce the highest number of new multinational companies (MNCs), overtaking China as the emerging world’s largest such source. Over 2,200 Indian companies are likely to open operations outside the country over the next 15 years, says a new report by PricewaterhouseCoopers (PwC) on emerging MNCs.
The report says the number of companies from emerging markets choosing to set up operations abroad has increased in the past five years, partly due to the rapid pace of globalisation and the revolution in information and communication technologies. This trend is expected to continue over the next 15 years, as new MNCs from emerging economies rise in prominence on the global economic stage.
Indian and Chinese companies would lead the way in seeking new markets abroad, who will be joined by companies from Singapore, Russia, Malaysia and South Korea, who will continue to produce a large number of new MNCs.
Jairaj Purandare, India Leader for Markets and Industries, PwC, said: “It is encouraging to know that India will replace China as the largest source of new multinationals in the emerging world from 2018 onwards. The key drivers for this are the relative increase in both investment intensity and openness that the Indian economy offers.”
PwC used econometric techniques to project the number of new MNCs that would arise from a representative sample of 15 emerging economies over the next 15 years. The countries were: Argentina, Brazil, Chile, China, Hungary, India, Malaysia, Mexico, Poland, Romania, Russia, Singapore, South Korea, Ukraine and Vietnam.
The report says the number of companies from emerging markets choosing to set up operations abroad has increased in the past five years, partly due to the rapid pace of globalisation and the revolution in information and communication technologies. This trend is expected to continue over the next 15 years, as new MNCs from emerging economies rise in prominence on the global economic stage.
Indian and Chinese companies would lead the way in seeking new markets abroad, who will be joined by companies from Singapore, Russia, Malaysia and South Korea, who will continue to produce a large number of new MNCs.
Jairaj Purandare, India Leader for Markets and Industries, PwC, said: “It is encouraging to know that India will replace China as the largest source of new multinationals in the emerging world from 2018 onwards. The key drivers for this are the relative increase in both investment intensity and openness that the Indian economy offers.”
PwC used econometric techniques to project the number of new MNCs that would arise from a representative sample of 15 emerging economies over the next 15 years. The countries were: Argentina, Brazil, Chile, China, Hungary, India, Malaysia, Mexico, Poland, Romania, Russia, Singapore, South Korea, Ukraine and Vietnam.
GDP growth in FY11 at 8.1 per cent: NCAER
New Delhi: According to the National Council of Applied Economic Research (NCAER), the Indian economy is expected to grow by 8.1 per cent in 2010-11 driven by an anticipated expansion in agriculture, industry and service sectors.
NCAER's agriculture projection for the current fiscal year stands at around four per cent. Shashanka Bhide, Senior Research Counsellor, NCAER said that they have projected an 8.1 per cent GDP growth along with a positive growth in agriculture production.
According to Bhide, the four per cent projected growth in agriculture production will be a big contribution to the change in overall growth.
NCAER's agriculture projection for the current fiscal year stands at around four per cent. Shashanka Bhide, Senior Research Counsellor, NCAER said that they have projected an 8.1 per cent GDP growth along with a positive growth in agriculture production.
According to Bhide, the four per cent projected growth in agriculture production will be a big contribution to the change in overall growth.
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