Thursday, October 04, 2012
BULL MARKETS: Rakesh Jhunjhunwala
In an interview with Punita Kumar Sinha, Founder & Managing Partner, Pacific Paradigm Advisors on ET Now, Rakesh Jhunjhunwala of RARE Enterprises talks about why he is bullish on the Indian equities and economic growth story.
Tuesday, October 02, 2012
$10 trn COMSUMER SPACE- MARKET OPPERTUNITY
| THOSE WHO FOLLOW "MARKET OPPORTUNITY" NEWS, THE REGULAR STOCK MARKET FOLLOW-UP- CAN THINK AND RELATE THIS OPPORTUNITY TO DTH & DIGITAL SERVICES.....STARTED IN EARLY 2000...EVEN NOW WE FIND TIME TO SPEAK ON THE IMPORTANCE AND "MARKET OPPORTUNITY"... BUT WILL SERVE THE DEEPPOCKET HUGE INVESTMENT MODELS..... ....................................................... India, China consumer market to touch $10 trn: BCG |
| The number of billionaires in India grew to 55 from 4 in 2001 |
| Pradeesh Chandran / Bangalore Oct 02, 2012, 09:39 IST China and India combined will add up to a $10 trillion consumer market by 2020, says 'The $10 Trillion Prize', a book by Boston Consulting Group (BCG). The book further says that consumer spending in China and India will triple by the end of the decade.
According to Boston Consulting by 2020, Chinese consumers will spend $6.2 trillion annually on consumer goods while Indian consumers spend would be around $3.6 trillion. It also said that the newly affluent group and the growth in the middle and upper classes will act as a catalyst for the consumer boom.
The book also finds that China which had only one billionaire in 2001 witnessed a tremendous growth and the number grew to 115 by 2012. Similarly, the number of billionaires in India grew to 55 in India from 4 in the year 2001.
The book written by BCG consultants Michael J Silverstein, Abheek Singhi, Carol Liao, David Michael also said that China already has three of the world’s top 10 companies by market value. According to the authors, China and India represent both a $10 trillion prize in themselves, and the gateway to global success. In 2000, there were eight Chinese companies and one Indian company in the Fortune 500. By 2010, there were 46 Chinese companies and eight Indian companies. Further, it said by 2015, around one billion people in the country would have cell phones. Around to $350 billion in payment and banking transactions will flow through those phones – more than the total Indian credit- and debit-card market today. According to the BCG global consumer survey, 36% of Chinese and 19% of Indians expect to increase their discretionary spending over next 12 months. |
ITC-DEVESWAR- TRAINEE TO CHAIRMAN
HALF OF ITC MANAGERS HAVE BEEN WITH THE COMPANY FOR MORE THAN 25 YEARS, THE LAST TIME ITC HIRED WAS 23 YEARS AGO WHEN IT ROPED IN S SIVAKUMAR, CHAIRMAN YC DEVESWAR JOINED IN 1968 AS A TRAINEE, COMPANY DRIVEN BY PROFESSIONALS - NOT PROMOTERS- THROWS UP OPPORTUNITIES FOR ENTREPRENEURSHIP.
ITC:
Zero attrition at senior management since 15 years; remuneration & reward
strategy cited as main reasons
Writankar
Mukherjee, ET Bureau Jan 18, 2012, 03.44PM IST
KOLKATA:
Half of ITC's 7,000-odd managers have been with the tobacco, hotels and
consumer products enterprise for more than a quarter of century. Attrition at senior management levels - from
chief executive officer to business heads - has been zero for at least 15 years
now.
The last time ITC hired to fill up the top deck was 23
years ago when it roped in S Sivakumar from a
farmers' co-operative to conceptualise the path-breaking e-Choupal model. And
perhaps fittingly, Anand Nayak, chief of human resources, has been with the
Kolkata-headquartered consumer goods giant for almost four decades.
Meet the lifers at perhaps the only
corporation amongst the top tier of India Inc that has so many managers who
dedicate their entire professional life to a single company. Hindustan Unilever
(HUL) is the only other sizeable Indian operation that comes close to matching
ITC's ability to keep the brass together in such huge numbers for as long a
time. Half of HUL's 1,500 managers are lifers. At senior
management levels, it goes up to 60% although if you combine mid- and
senior-level managers, it comes down to a third. HUL's overall attrition rate
is 5% and of late it has lost senior managers to rivals. The Unilever
subsidiary has also displayed a new-found willingness to hire for top positions
- for instance, former PepsiCo ED Geetu Verma recently came on board as head of
foods.
In financial services, organisations such as ICICI Bank , HDFC and Kotak Mahindra have had
closely-knit teams over decades. Yet, these companies can't hold a candle to
ITC for two reasons. One, while ICICI has not felt the need to headhunt for
core positions, it has lost people in the top deck after they didn't win the
race to succeed former chief executive officer KV Kamath.
And, two,
while the core team at companies such as Kotak Mahindra has remained more or
less intact, the difference at ITC is that it does not have lifers only in the
top management but at the second- and third-rung levels, too.
Chairman YC Deveshwar joined as a management pupil (or
trainee) way back in 1968, and even though he worked as the chairman and
managing director of Air India
Among the three executive directors on the
board, Nakul Anand (hospitality, travel and tourism) and PV Dhobale
(paperboards, speciality papers and packaging) are lifers; Kurush Grant
(cigarettes and FMCG) joined after spending less than a year as a management
trainee at DCM.
The EDs
have been identified as potential successors to Deveshwar. At the
divisional chief executive and functional head level in ITC, the heads of
tobacco, foods, lifestyle retail, personal care, paperboards and speciality
papers, education and stationery products, hotels and R&D are all lifers. Clearly,
ITC believes there are business benefits with such a structure. HR chief Nayak
says the lifer workforce has become its DNA.
One major reason for such low attrition is a compensation structure that rewards retention handsomely, although Nayak does point
out that "we don't pay what Unilever or P&G does". "The remuneration and reward strategy is uniquely
designed to attract and retain talent. Remuneration is competitive and
contemporary, with unique elements that encourage long-term careers," adds
the HR head. Any manager who completes six years in ITC becomes eligible
for employee stock options. At last count, over 900 managers had subscribed to
the scheme. Nayak,
however, stresses that it is the intangible benefits at ITC that outweigh
remuneration - the spirit of entrepreneurship, opportunity to build brands, and
to start new businesses from scratch.
The unique
advantage of ITC is that it is driven by professionals and not by a promoter
(as of December 2011, British-American Tobacco owned just under 31% stake in
the company with financial institutions holding 32.67%). This allows for a
structure that gives full freedom to business heads to lead a segment almost as
if they own it.
Many of
these lifers have played an important role in powering the new engines of
growth that has made ITC a diversified enterprise spanningsoaps to hotels.
"Given the pace at which we are growing, it is always better to nurture
lifers since we can blindly trust them with investments," Nayak says.
As Hemant
Malik, ITC's chief operating officer (trade marketing and distribution - FMCG),
a lifer himself, says: "ITC instills a sense of ownership and encourages
you to perform with independence and freedom. People move on and change jobs in
the quest for new experiences; we get that here." E Balaji , CEO at HR firm Ma Foi Randstad, says the battle to grow
lifers in HUL and ITC is something to watch out for. "Ultimately, the
number of lifers will depend on hiring plans, continued growth and expansion
plans. And both the companies are equally aggressive in these areas," says
Balaji.
Larsen & Toubro Ltd & A.M. Naik, ‘TIME WILL TELL’
NEW DELHI, OCT. 1:
He was originally supposed to retire. Instead, he took over on Monday as Executive Chairman of infrastructure giant Larsen & Toubro Ltd. But the man who is today synonymous with L&T, A.M. Naik, could not even appear for the company’s job interview, because he didn’t meet a basic requisite — he was not an IITian. Decades later, this question — ‘which illustrious corridors he walked through to gain his expertise’ — still haunts him, especially when quizzed by his peers. “So, are you from Wharton or Harvard?” On hearing a “No”, they just assume he must be from one of the IITs. Naik, however, doesn’t tire of correcting this misconception and takes pride in talking about his learning ground — his Gujarati-medium school in a village, where he learnt valuable lessons, squatting on an untiled floor. At 70, Naik, popularly known as ‘AMN’, sheds his Chairman’s cloak and dons that of Executive Chairman at Larsen and Toubro, for five years from October 1.
NOT A DAY’S LEAVE
This Gujarati non-IITian did not take a single day’s leave for the first 21 years of his career. And when asked about work-life balance, Naik replied with a sheepish chuckle: “No balance! Only now will I try to do some balancing…” AMN’s earthy zeal to learn was evident while addressing students of Jaiprakash Institute of Technology (of the JP Group) recently at their convocation. “When I saw this hall, I asked Jaiprakashji (Jaiprakash Gaur, Founder of power to real estate conglomerate Jaypee Group): “How have you built such a large hall without a single pillar? Even L&T cannot build such a hall without pillars!,” AMN remarked, displaying his sense of observation.
AMN’s early schooling was based in Gujarat. He had to shift to a Gujarati-medium school when his father who, Naik says, was a true Gandhian, decided to move from his teaching job in a Bombay school to one of the first set of village schools that were opened in Gujarat.
‘TIME WILL TELL’
Many years later, he worked on honing his linguistic skills in English. “I listened to cassettes to learn spoken English,” he said. Lack of proficiency in English affected his grade and salary when he entered L&T. When he appeared for an interview for L&T, based on experience, one question among the many asked was how many people reported to Naik. “When I said about 400, the interviewer said, “Young man, it will take you a long time to acquire such a responsibility at L&T.”
“Who knows? Time will tell,” was AMN’s sharp retort to the manager.
The startled interviewer found him “overconfident” and he was offered the job “as junior engineer, not assistant engineer, in the unionised category, not the supervisory category, and with a lower salary.”
But AMN agreed as he wanted to work for L&T. He admits that if anybody were to agree to such a drop in salary, the human resources people usually do a reference check. But there are always exceptions. For AMN, his father was a huge inspiration. “After joining the village school, I just followed whatever he said. He asked me to study higher maths instead of lower maths. In the SSC exam, he asked me to take 11 subjects instead of seven,” he recalled.
50-YEAR JOURNEY
Of course, his father had the usual parental pangs. He was afraid that once AMN went to the city, he would watch movies and not focus on studies. “He had already had seen early signs. When I went to the city to take the SSC exams, I watched a movie every night,” Naik recalls.
AMN started his career in a “small boiler workshop”.
“The day I joined the firm, I told myself (that) student life is over, it is now time for serious business. And the person who was rarely seen in class never took a single day’s leave in the next 21 years of professional life,” he said, stressing that it was a total turnaround from his student to professional life.
Once inducted in the company, he rose fast. “Soon, I reached higher ranks and about 400 people reported to me through various levels (referring to the boiler company he worked for). But the new management that had come into the company did not espouse the ideals followed by me and my father. They did not treat workers like human beings.” That led AMN to look for a job outside, and he found L&T — where he is all set to complete 50 years.
With this, the man who counts linguistic skills among his few weaknesses, is set to surmount another perceived block — by writing a book. “When I get time, I would like to write a book – ‘the journey of a village boy’.”
http://www.thehindubusinessline.com/companies/article3955818.ece?homepage=true
http://www.thehindubusinessline.com/companies/article3955818.ece?homepage=true
Sunday, September 30, 2012
Bank of America...SETTLES .Lawsuit...
Bank of America settles Merrill lawsuit for $2.43 billion
@CNNMoneyInvest September 28, 2012: 10:31 AM ETIndex Outlook: NIFTY AND SENSEX
Index Outlook: Stocks atop wall of worry
It has been a lovely start to autumn for the Indian stock market. The Sensex is up 1,333 points in September and the Nifty 445 points. Stocks have managed to scale the wall of worry built on high inflation, pressure on corporate top-lines, slowing industrial output et al. Investors need to thank the Indian government for its changed stance on policy implementation and the largesse of the Federal Reserve and the European Commercial Bank for powering this autumn rally. Greece cast a pall of gloom on the global equity markets again last week. But the $58-billion liquidity injection by the Chinese Central Bank helped assuage sentiments. Indian equities began the week on a slack note but they picked up towards the weekend to close slightly in the green.
Derivative expiry on Thursday did not cause undue turbulence though derivative volumes reached record levels on Thursday. Cash volumes on the NSE also continued to be strong implying that retail investors were returning to stock markets on the sustained price rise.With not too many events to look forward to in the week ahead, stocks could spend some more time vacillating at higher levels.Negative divergence in momentum indicators in the daily chart implies that there could be some retraction in the short-term. Weekly oscillators are holding in the bullish zone implying that the rally could continue in the medium-term.
Sensex (18,762.7)
The Sensex hit the peak at 18,869 on Friday before giving up the gains to close with mere nine points weekly gain. The doji formation in the weekly chart denotes indecisiveness and the possibility of break in either direction.We continue to adhere to our medium-term count. The up-move from 15,748 low appears to be the C wave of an irregular flat formation. This wave has the next target at 19,136. Since this also occurs close to the critical 61.8 per cent Fibonacci retracement of the decline from 21,108 peak, investors cannot rest easy as long as the index trades below this band (between 18,826 to 19,136).
The medium-term trend will, however, remain positive as long as the index trades above 17,700. It is possible that the index consolidates in the zone between 17,000 and 19,000 for a few months before making a dash for the 20K level.The short-term trend is sideways in the range of 18,550 and 18,900. Sharp move beyond the upper boundary will take the index to 19,136 and 19,473. Short-term supports for the index will be at 18,240 and 17,860. Traders can stay sanguine as long as the index trades above the first support.
Nifty (5,703.3)
The Nifty too slackened in the first four sessions of the week to move up sharply towards the weekend. Our medium-term view remains the same. Target of the third wave from 4,531 trough gives us the next target of 5,870. But on breaking down the minor waves of the up-move from 4,770 gives us a confluence of targets around 5,600. Since this also coincides with significant Fibonacci resistance, traders and investors ought to stay cautious as long as the index hovers above this level. Strong break above 5,750 will mean that the index can then go to the next target zone between 5,850 to 5,900.
The index is stuck in a sideways range of 5,640 to 5,720 in the short-term. Strong move beyond this range will take the index to 5,870 or 5,888. Short-term supports are at 5,527 and 5,406. Traders can hold their long positions as long as the index trades above the first support.
Global cues
Global benchmarks took another step lower last week. With the euphoria generated by the quantitative easing by Federal Reserve and the bond buy-back announcement by ECB fading, equity markets once again began fretting about the state of affairs in Greece. The evening star in the weekly candlestick chart of DJ Euro STOXX 50 implies that the medium-term trend in this region could be reversing lower. As stocks retracted from higher levels, nervousness among investors increased sending the CBOE volatility rising to 17 during the week. The index will, however, have to close above 19 to indicate that the short-term trend has reversed lower.
The Dow has stepped back from the resistance zone around 13,600. Immediate supports for the index are at 13,240 and then at 13,000. Close below the second support will indicate a reversal in the medium-term uptrend. On the other hand, reversal above 13,240 will keep open the possibility of a rally to 13,778 or above. Gold is keeping everyone guessing by hovering at the key medium-term resistance zone between $1,750 and $1,800. The metal formed a hanging man doji in the weekly candlestick chart that does not bode well for this uptrend. The short-term trend will, however, reverse lower only when the metal closes below $1,700.
http://www.thehindubusinessline.com/features/investment-world/article3949037.ece?homepage=true
Obama Cabinet Flunks Disclosure........
Obama Cabinet Flunks Disclosure Test With 19 in 20 Ignoring Law On his first full day in office, President Barack Obama ordered federal officials to “usher in a new era of open government” and “act promptly” to make information public. As Obama nears the end of his term, his administration hasn’t met those goals, failing to follow the requirements of the Freedom of Information Act, according to an analysis of open-government requests filed by Bloomberg News.Nineteen of 20 cabinet-level agencies disobeyed the law requiring the disclosure of public information: The cost of travel by top officials. In all, just eight of the 57 federal agencies met Bloomberg’s request for those documents within the 20-day window required by the Act. “When it comes to implementation of Obama’s wonderful transparency policy goals, especially FOIA policy in particular, there has been far more ‘talk the talk’ rather than ‘walk the walk,’” said Daniel Metcalfe, director of the Department of Justice’s office monitoring the government’s compliance with FOIA requests from 1981 to 2007. The Bloomberg survey was designed in part to gauge the timeliness of responses, which Attorney General Eric Holder called “an essential component of transparency” in a March 2009 memo. About half of the 57 agencies eventually disclosed the out-of-town travel expenses generated by their top official by Sept. 14, most of them well past the legal deadline.
Public Interest Bloomberg reporters in June filed FOIA requests for fiscal year 2011 taxpayer-supported travel for Cabinet secretaries and top officials of major departments. Justice Department official Melanie Ann Pustay said in an interview that disclosure of those records is in the public interest. Even agency heads who publicly announce their events -- including Holder, Secretary of State Hillary Clinton and Health and Human Services Secretary Kathleen Sebelius -- didn’t provide the costs of their out-of-town trips more than three months after the initial request. “It’s ironic that the demands in the presidential campaign for Mitt Romney’s tax returns are unrelenting, but when it comes time to release the schedules for senior appointees there’s the same denial of access,” said Paul Light, a New York University professor who studies the federal bureaucracy. “Over the past four years, federal agencies have gone to great efforts to make government more transparent and more accessible than ever, to provide people with information that they can use in their daily lives,” said White House spokesman Eric Schultz, who noted that Obama received an award for his commitment to open government. The March 2011 presentation of that award was closed to the press. ....
http://www.bloomberg.com/news/2012-09-28/obama-cabinet-flunks-disclosure-test-with-19-in-20-ignoring-law.html
LSE & DAX..PRESSURE FROM TOP..
LSE Tumbles Most in Three Years on EU Clearinghouse Rules By Andrew Rummer - Sep 28, 2012 9:33 PM GMT+0530 London Stock Exchange Group Plc (LSE) sank the most in three years after saying European Union regulations will cut income at its Italian central counter party and may require LCH.Clearnet Group Ltd. to boost capital. Europe’s oldest independent bourse tumbled 8 percent to 943 pence at the close in London, the biggest retreat since April 2009. The decline trimmed this year’s gain to 19 percent. Recommendations published yesterday by the European Securities and Markets Authority proposed that 95 percent of a clearinghouse’s cash deposits placed with financial institutions must be collateralized with debt instruments meeting certain conditions regarding liquidity as well as credit and market risk, LSE said in a statement today. The rules, if implemented, will cut treasury income in fiscal 2014 while having no “material impact” in 2013 the London-based company said....http://www.bloomberg.com/news/2012-09-28/lse-tumbles-most-in-three-years-on-eu-clearinghouse-rules.html
German Stocks Drop Before Spanish Banks Stress Tests By Tom Stoukas - Sep 28, 2012 9:23 PM GMT+0530 German stocks declined, their biggest weekly drop since June, as investors awaited the results of stress tests of Spain’s banks. HeidelbergCement AG (HEI) fell 2.2 percent after the stock was downgraded by CA Cheuvreux.Deutsche Lufthansa AG (LHA) dropped 1.7 percent after the airline’s chief executive officer said its cost-cutting program will fail to improve earnings this year. ThyssenKrupp AG (TKA) rose 0.8 percent after selling its tailored blanks unit for an undisclosed price.The DAX Index (DAX) lost 1 percent to 7,216.15 at the close in Frankfurt, having earlier climbed as much as 0.7 percent. The equity benchmark retreated 3.2 percent this week, its biggest retreat since the beginning of June. The gauge has still rallied 12 percent this quarter as theEuropean Central Bank and the Federal Reserve announced plans to buy bonds. The broader HDAX Index fell 0.9 percent today.“Most European markets have reached their highs and definitely need some good news in order to keep their upside momentum,” said Theodore Krintas, who helps manage 80 million euros ($103 million) as the managing director of Attica Wealth Management in Athens. Markets are now looking forward to the next European summit on Oct. 18, he said.Spanish 10-year government bonds erased their decline on speculation the nation will request a bailout, enabling the ECB to buy its debt on the secondary market...http://www.bloomberg.com/news/2012-09-28/german-stocks-decline-eon-bayer-allianz-lead-losses.html
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