Global Business Update

[Ankit Shukla Mil ke Bhi Hum Na Mile ...................]

   

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Issue 218     Global Corporate         Honda recalls 313,000 cars on airbag concerns   RIM will swallow Playbook charge   Game designer Zynga plans $9bn stock market flotation   Cairn-Vedanta deal gets Home Ministry approval   German steelmaker posts huge loss   Bank of India buys 51% in Bharti Axa MF   Iomega, Tulip and MindTree tie up for storage solutions   Bajaj Auto Nov bike sales grow 25% at 3,31,967 units       Global Economy         Thousands of new oil and gas jobs expected, says report   Obama promises big push on payroll tax cut   Italy borrowing costs fall on austerity plan   Third-quarter nonfarm productivity growth cut to 2.3 percent   Fed must act now to boost economy, Evans says   Laid off bank workers get blue-collar benefits       Global Outsourcing         Banks OK job outsourcing Polio programme on way to being ‘outsourced’   Outsourcing can fetch $5b every year   Astral awards SA Outsourcing as leading IT supplier   BNP Paribas Cardif and Accenture Sign Eight-Year Insurance Business Process Outsourcing Agreement   CSC Inks IT Outsourcing Contract With UK Healthcare Trust       Global Market         Oil erases most gains on Europe ratings worry   Global stocks, euro rally on joint central bank action   Central bank move pushes short-term rates lower   Mortgage applications tumbled last week: MBA   Nikkei sheds over 1 percent, views on euro zone divided   Gold edges up after U.S. jobs, notches big weekly gain   IMF acting behind the scenes in euro zone crisis   Oil rises on Iran worry, strong gasoline       Global Corporate   Honda recalls 313,000 cars on airbag concerns Honda has said it is recalling 313,000 vehicles globally due to concerns about potentially faulty airbags. The models, all built between 2001 and 2003 and including the Civic and Accord, were found to have airbags that could burst due to defective inflators. Most of the cars recalled are in the US and Canada, Honda said. The recall is an extension of those carried out between 2008 and 2010 for the same problem and brings the number of cars recalled to almost 2 million. Of the latest recall, 280,000 are in the US, 27,000 in Canada and 2,000 in Japan. The carmaker said it was aware of several "incidents" related to this problem. In addition, the carmaker said it would be inspecting a further 603,000 vehicles that may have been fitted with one of 640 faulty airbag parts. The recalls in the US include some Accord, Civic, Odyssey, CR-V, Pilot and Accura models. Carmakers call back cars regularly. Earlier this year, Honda recalled nearly 700,000 vehicles in Asia and North America due to stalling engines. 2nd December 2011, www.bbc.co.uk RIM will swallow Playbook charge Research In Motion (RIM) will account for extra costs of $360m (£229m; 266m euros) in its third quarter after poor sales of its Playbook tablet computers. RIM shares have fallen around 65% this year as Apple's iPhone and Google's Android devices dominate the smartphone market. RIM introduced the tablet in April, 12 months after the launch of Apple's first iPad tablet computer. The firm slashed Playbook prices last month in a bid to boost sales. 3rd December 2011, www.ft.com Game designer Zynga plans $9bn stock market flotation Game designer Zynga, which makes the highly successful FarmVille game for Facebook, has announced plans for a stock market flotation. Reports suggest the firm could raise as much as $925m (£589m) from the listing. The firm plans to sell 100 million shares, or 14.3% of the company, at $8.50 to $10 per share according to a regulatory filing made on Friday. The IPO would value Zynga at as much as $9.04bn - one of the biggest US games companies by stock market value. It would place the firm alongside industry giants Electronic Arts and Activision Blizzard. The valuation is actually 30% less than Zynga's regulatory filing two weeks ago suggested its value would be - $14.05bn - meaning that the games maker cut its price to cope with volatile stock markets. Unlike its competitors, Zynga does not charge for its games but makes money from selling add-ons such as virtual weapons, vehicles or buildings which can be used within the games. Zynga earns over 90% of its revenue through Facebook according to its own figures. 4th December 2011, www.business-standard.com Cairn-Vedanta deal gets Home Ministry approval The Home Ministry has given its approval to London-listed miner Vedanta Resources' buying majority stake in Cairn India for $8.7 billion. The Home Ministry, while giving the security no-objection certificate (NOC), highlighted eight areas of concern, including 64 legal proceedings against Vedanta and its subsidiaries in various courts, sources privy to the development said. The security clearance was one of the conditions that the government had set for Vedanta group buying 40% stake in Cairn India from UK's Cairn Energy Plc. Cairn Energy and Vedanta have already agreed to the other condition of Cairn India paying cess and royalty on crude oil produced from its mainstay Rajasthan oilfields. Cairn India does not pay royalty and cess on its 70% share in the Rajasthan block as per the contract, but its current majority owner, Cairn Energy, and new owner Vedanta forced it to accept the government condition of making royalty cost recoverable and paying Rs 2,500 per tonne cess. 5th December 2011, www.financialexpress.com German steelmaker posts huge loss German steel-maker Thyssen Krupp has reported large losses for the year to the end of November. Its net losses were 1.8bn euros ($2.4bn; £1.5bn) compared with a net profit of 927m euros in the same period last year. The losses were caused by a 2.9bn euro write-down in the firm's US and stainless steel divisions. Although the firm said it would pay a dividend despite the losses, its shares fell 2% in Frankfurt on the news. The firm had previously expected its earnings before interest and tax (EBIT) to be 2bn euros. "In light of the market developments over the summer months, the EBIT projection of 2 billion euros for the completed fiscal year 2010/11 should now only be wishful thinking," said German private bank Bankhaus Lampe. "The current environment is not easy. The two impairment charges show that we are doing the things that need to be done - firmly and openly," said chairman Heinrich Hiesinger. Thyssen Krupp has sought to diversify away from its core steel business by investing in its technology divisions. 30th November 2011, www.reuters.com Bank of India buys 51% in Bharti Axa MF State-run Bank of India (BoI) will pick up a majority 51% stake in Bharti Axa Mutual Fund for an undisclosed amount to run the latter's asset management business. "Bank of India and Axa Investment Managers Asia Holdings (a subsidiary of Axa Investment Managers, part of the Axa Group) have agreed to enter into a joint venture in asset management business carried on by Bharti Axa Investment Managers," a joint statement from the companies said here. Bharti Axa Investment Managers is the asset management arm to Bharti Axa Mutual Fund, which is owned by telecom major Bharti Airtel and French financial services giant Axa Group. Under the proposed joint venture, BoI will acquire 51% equity and the balance will be with the Axa Group," the statement added. Ernst & Young India was the advisor to the transaction. 1st December 2011, www.business-standard.com Iomega, Tulip and MindTree tie up for storage solutions Iomega, an EMC company and an innovator in data storage solutions for small and medium businesses (SMBs), today announced the launch of video surveillance storage management solutions in partnership with Tulip Telecom and MindTree. The partnership looks to provide India's first video surveillance services based on cloud technology. The market, which is estimated to be $225 million in 2011, is largely focused on the enterprise market, and has not fully addressed the needs of SMBs and the Indian consumer. The cloud solution involves Iomega StorCenter network storage devices, Tulip's national broadband network with cloud data centers, and MindTree's video management software. The solution provides superior yet economical local cloud video surveillance solutions for SMBs and distributed enterprises. The solution will be made available on all Iomega StorCenter ix and px series in India. 29th November 2011, www.reuters.com Bajaj Auto Nov bike sales grow 25% at 3,31,967 units The country's second largest two-wheeler maker Bajaj Auto today reported 25% increase in its motorcycle sales at 3,31,967 units in November. The company had sold 2,65,036 units in the corresponding month last year, Bajaj Auto Ltd (BAL) said in a statement. Total vehicle sales of the company during last month stood at 3,74,477 units compared to 2,99,231 units in the same period a year ago, a growth of 25%, it said. Exports during the month stood at 1,29,256 units compared to 90,869 units in November 2010, a growth of 42%. Commercial vehicle sales witnessed a growth of 24% at 42,510 during the month as against 34,195 in November last year, BAL said. 25th November 2011, www.cnn.com     Global Outsourcing   Banks OK job outsourcing Era of legitimate subcontracting jobs arrives in bank, says Labor Secretary Rosalinda Dimapilis-Baldoz. The highly profitable banking sector became the first industry in the Philippines to acknowledge and legitimize labor outsourcing, a significant development in the labor front that will affect thousands of jobs. The Bangko Sentral and the Labor Department approved a resolution by the newly formed Banking Industry Tripartite Council adopting the banking industry voluntary code of good practice on dispute settlement and outsourcing/subcontracting of certain banking functions. Labor Secretary Rosalinda Dimapilis-Baldoz, who together with Bangko Sentral Governor Amando Tetangco Jr. witnessed the signing of the document, said an era of legitimate outsourcing/subcontracting had arrived in the banking sector. 3rd December 2011, www.tutorial-reports.com Polio programme on way to being ‘outsourced’ The government has decided to begin ‘outsourcing’ the implementation component of country’s largest-ever public sector health initiative, the ‘prestigious’ Polio Eradication Programme, to private NGOs as a final strategy to prove that Pakistan is not failing in its struggle against polio — a fight many believe the country may already have lost, ‘The News’ learnt from well-placed sources here on Thursday. Credible sources working for one of the provincial health departments told this scribe that a decision to this effect was taken during a high-level meeting held at the Prime Minister’s Secretariat on November 24. Ironically, while the latest edition of the Polio Journal — a joint newsletter of Unicef and the PM’s Polio Cell — offers detailed information about decisions and recommendations emerging from the meeting, it contains no mention of the decision to “outsource the polio campaign in selected areas of concern where performance remains consistently poor. 2nd December 2011, www.ft.com Outsourcing can fetch $5b every year Bangladesh has the potential to create over 2 lakh direct and 50,000 indirect jobs and earn $5 billion in foreign currency per year in the next decade through outsourcing business. Foreign telecom analysts made the observation yesterday at eAsia 2011, Asia's mega information and communications technology (ICT) programme at the 'eAsia 2011', in the capital yesterday. Outsourcing, also known as business process outsourcing, is a way of doing business through a third party. A number of foreign outsourcing experts, researchers, administrators as well as local policymakers spoke at event at the Bangabandhu International Conference Centre. They invited foreign investors to choose Bangladesh as their offshore destination. Gurujot Singh Khalsa, CEO of US-based WorldBridge Global Inc, said within the next 15 years Bangladesh should look to earn $8 billion per year from outsourcing business. He termed the figure realistic. Countries like India, Philippines, Sri Lanka, Brazil, South Africa and Pakistan are doing good outsourcing business in the US. 1st December 2011, www.thedailystar.net Astral awards SA Outsourcing as leading IT supplier Astral Foods is considered a leading South African integrated poultry producer, and one of SA Outsourcing's premium clients, with whom they are proudly associated. On Tuesday, 29 November 2011, this continuously successful business relationship further progressed, when SA Outsourcing was presented with a 'Certificate of Achievement for Going the Extra Mile within the Astral Foods Group', by Astral Chief Executive Officer CE Schutte. The award was presented to SA Outsourcing at Astral's annual end of year function, held at the Midrand Protea Hotel. Astral commended SA Outsourcing as its finest partner in IT solutions. The company was praised for being a cost-effective IT supplier with service excellence, continuously providing service of the highest standards, and always ensuring utmost customer satisfaction. SA Outsourcing implemented an efficient and secure cloud computing environment for Astral Foods toward the end of 2010, displaying its leading IT capabilities. This implementation, as well as SA Outsourcing's fully managed cloud computing services, presented Astral Foods with a host of new opportunities, including: reduced capital expenditure; minimised operating costs; maximised resources; and virtual business continuity with added redundancy and disaster recovery. 30th November 2011, www.tutorial-reports.com BNP Paribas Cardif and Accenture Sign Eight-Year Insurance Business Process Outsourcing Agreement Accenture ACN +0.43%  and BNP Paribas Cardif have signed an eight-year business process outsourcing (BPO) agreement under which Accenture will manage an important portfolio of BNP Paribas Cardif's group life insurance policies business in France, including the administrative management of the insurer's call centers and ancillary accounting operations. The agreement is designed to enhance the quality and efficiency of services BNP Paribas Cardif is providing to its clients, leveraging an information technology (IT) platform that benefits from Accenture's expertise and competencies. The platform is designed to become an industry standard and to support BNP Paribas Cardif's growth agenda and reinforce its market position in the group life insurance business. 28th November 2011, www.marketwatch.com CSC Inks IT Outsourcing Contract With UK Healthcare Trust Computer Sciences Corp. has signed a seven-year contract with Royal Berkshire NHS Foundation Trust, a medical and surgical services provider, for a new program of work to outsource the trust’s technology services. CSC will be responsible for hosting, developing and managing much of the trust’s information technology and back-office processes. The contract has an option to extend to 10 years. CSC said in a release it will provide IT help desk, networking, infrastructure, desktop engineering, application development and support. The company will also advise and support the trust’s efforts regarding a clinically driven health informatics function. Earlier this summer, the trust completed its transition of service to CSC, including transferring IT staff. A coordinated transformation program will support a scheduled move to a new electronic patient record system, CSC said in the release. 29th November 2011, www.blog.executivebiz.com     Global Economy Thousands of new oil and gas jobs expected, says report Thousands of new jobs are set to be created in the oil and gas industry, according to a new report. The Lloyds Bank Corporate Markets report Oil and Gas: Rising Fortunes said 75% of companies could create new posts in the next two years. And more than a quarter of the 100 sector decision makers questioned said they could recruit more than 500 staff. The report said 87% reported they were on track for growth in the two-year period. The greatest barrier to growth was said to be a the lack of a highly-skilled workforce, with 46% of respondents citing a dearth of industry talent as an impediment to growth. 5th December 2011, www.reuters.com Obama promises big push on payroll tax cut President Barack Obama on Friday pledged an aggressive push to pass an extension to the payroll tax cut for U.S. workers, saying lawmakers must not leave for their holiday break without taking action on it. "We need to get this done. And I expect that it's going to get done before Congress leaves. Otherwise, Congress may not be leaving and we can all spend Christmas here together. Speaking after fresh data showed the U.S. unemployment rate fell to a 2-1/2-year low of 8.6 percent, Obama said it was not the time to "slam the brakes" on the U.S. economy recovery. He also pushed another priority - extending emergency benefits for the unemployed. 27th November 2011, www.marketwatch.com Italy borrowing costs fall on austerity plan Italy's implied cost of borrowing in financial markets has fallen after new Prime Minister Mario Monti unveiled his austerity plans over the weekend. By Monday afternoon, the country's 10-year bond yield had fallen to about 5.95%, from 6.66% at Friday's close. The government has adopted a package of emergency austerity measures aimed at fending off insolvency. Meanwhile, the French and German leaders are meeting ahead of a key eurozone summit on Friday. The Italian austerity measures are part of a broader agreement being put together by France and Germany with other eurozone leaders, which is expected to pave the way for the European Central Bank to finance a bailout of the Italian government. A sharp rise in Italian and Spanish borrowing costs to levels seen as unsustainable in the long run, as well as a broad collapse of market confidence in Europe's banking system, has raised fears that the countries may ultimately be forced to exit the single currency. 5th December 2011, www.ft.com Third-quarter nonfarm productivity growth cut to 2.3 percent The rebound in U.S. nonfarm productivity growth was not as strong as previously estimated in the third quarter, while wages declined for two straight quarters, supporting the Federal Reserve's views of moderate inflation pressures. Productivity increased at a 2.3 percent annual rate, the Labor Department said on Wednesday, a downward revision to its previous estimate of 3.1 percent. Economists polled by Reuters had forecast productivity, which measures hourly output per worker, being revised down to a 2.6 percent growth rate. The revision reflects a much slower gross domestic product growth pace during the July-September period. Productivity fell at a 0.1 percent pace in the second quarter. Compared to the third quarter of last year, productivity increased 0.9 percent instead of 1.1 percent. 26th November 2011, www.reuters.com Fed must act now to boost economy, Evans says The Federal Reserve must take immediate action to inject new life into a moribund U.S. recovery or risk letting the nation settle into a permanently lower growth path, a top Fed official said on Monday. "There is simply too much at stake for us to be excessively complacent while the economy is in such dire shape," Chicago Fed President Charles Evans told the Ball State University Center for Business and Economic Research. "It is imperative to undertake action now. Evans' renewed call for monetary policy easing came even as the U.S. unemployment rate tumbled to a two-and-a-half-year low, and a variety of economic data suggest that U.S. economic growth may rise sharply this quarter, topping a 3 percent annual rate. 29th November 2011, www.ft.com Laid off bank workers get blue-collar benefits When President Barack Obama recently reauthorized benefits for the Trade Adjustment Assistance program, the White House emphasized it would help U.S. factory workers who have lost their jobs to overseas competition. What many don't realize, however, is that Obama's move also helped back-office workers laid off by Wall Street and financial services companies. Obama restored benefits that expired in February and led to months of denied claims for unemployed financial services workers. In the past two years, laid off workers from Bank of America Corp, JP Morgan Chase & Company Inc, UBS AG, Hartford Financial Services Group, Wells Fargo & Co and State Street Corp have filed for benefits under the U.S. Labor Department's Trade Adjustment Assistance program. In many cases, these claims have been approved. 5th December 2011, www.financialtimes.com

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Ankit Shukla

Kanpur
+91-8791530501