Monday, September 2, 2013


​Economists cut growth estimates, manufacturing shrinks


NEW DELHI: The manufacturing sector continued to remain in distress. A survey showed the sector contracted for the first time since March 2009, adding to the woes of the Indian economy, which is battling a sharp slowdown and a volatile currency. Several economists and brokerages slashed their growth estimates for the current financial year, piling fresh pressure on policymakers. Top US bank JPMorgan cut the growth estimate from 5.1% to 4.1%, while global financial services firm Nomura expects the economy to grow 4.2% in 2013-14 . Bank of America Merrill Lynch said growth was estimated to be 4% "in a stress case scenario ." Emerging markets have been hit hard by financial market turmoil after the US Fedindicated that it may taper off its fiscal stimulus.

The wave of downgrades in growth estimates follow Friday's data, which showed the economy slowed to a fouryear low of 4.4% in the June quarter dragged by the manufacturing and mining sectors. According to the PMI survey, business conditions in the manufacturing sector deteriorated during August for the first time in over four years, with both output and new orders falling at faster rates. Export orders also declined, ending an 11-month sequence of growth. The PMI fell from 50.1 to 48.5 in August, indicating a moderate deterioration in business conditions. The latest index reading was the lowest in four-and-a-half years and the first sub-50 .0 reading since March 2009. The 50 point mark divides growth from contraction.

"Manufacturing activity contracted in August for the first time since March 2009. This was led by a decline in new orders, especially export orders. Together with a drawdown in finished goods inventories , this led to a drop in output ," Leif Esekesen, chief economist for India andAsean at HSBC said. "Notwithstanding the weak growth backdrop , RBI will likely keep its liquidity tightening measures in place for a while to help contain the depreciation of the currency. Combined with the heightened macroeconomic uncertainty, this will continue to weigh on growth in coming months," Eseksen said
 
RANJAY KUMAR
PGDM
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Top 5 And

With a limited budget of Rs 20,000 check out some of the best value for money Android smartphones you can buy.

Since the rupee has been falling even mobile phone prices have taken a bit of a hit. Thankfully, not all brands have decided to hike prices and users can still look out for a decent, value for money smartphone within a limited budget.
Android-based smartphones flood the market and the variety is enough to drive anyone nuts. That is why we have chosen some of the best Google Android phones for a limited budget of Rs 20,000. Here is our list of five Android phones within that budget.
Xolo launched the X1000 in association with Intel earlier this year for Rs 19,999 but is now selling the phone for around Rs 14,000. The Xolo X1000 features a 4.7 inch Sharp HD 2.5D display with 1280 x 720 pixel resolution. This smartphone is powered by a 2 GHz Intel Atom Z2480 processor and PowerVR SGX540 graphics chip. Xolo X1000 comes packed with 1 GB RAM and 8 GB storage space. At its rear, the X1000 has an 8 megapixel camera for recording HD video and a 1.3 megapixel camera in the front for video calling.
top five handset

The smartphone packs Bluetooth and WiFi, and supports 3G networks for faster data connection. By default, it runs Android 4.0 ICS but it recently got the Android 4.1.2 Jelly Bean update. Xolo X1000 has a 1900 mAh battery.roid phones under Rs 20,000


PRAVEEN SHARMA
PGDM IST
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Ronald Coase, Nobel Prize-winning economist, dies at 102


Ronald Coase (1910-2013). Photo: AFP
Washington: Ronald Coase, the British-born University of Chicago economist whose Nobel Prize-winning work on the role of corporations stemmed from visits in the early 1930s to American companies including Ford Motor Co. and Union Carbide, has died. He was 102.
He died on Monday at St. Joseph Hospital in Chicago, according to a news release from the University of Chicago. No cause was given.
The Royal Swedish Academy of Science awarded Coase the 1991 Nobel in economics for his discovery and clarification of the significance of transaction costs and property rights for the institutional structure and functioning of the economy.
Unusual for an economist, Coase had concluded early in life that mathematics was not to my taste. So he built his career offering insights on the legal precepts and institutions, such as the corporation, on which the field is built. He was one of the first economists to treat the size and function of companies as a subject worthy of more than incidental attention.
Coase is one of the most influential economists of his day, Oliver Williamson and Sidney Winter wrote in a 1993 book on his work. His seminal thinking has pushed economics to reconsider its primitives. Williamson, a student of Coase, won the Nobel in economics in 2009.
Coase’s 1937 article, The Nature of the Firm, explained how the costs of economic transactions—including time, fees, and what became known generally as overhead—determine the size of the companies that arise to carry out the transactions.
New ideas
The Nobel committee wrote that Coase showed that traditional basic microeconomic theory was incomplete because it only included production and transport costs and neglected the costs of entering into and executing contracts and managing organizations. This new way of thinking had implications for corporate and contract law as well as for the structure of the financial system.
 
 
Coase further explored transaction costs in a 1960 paper, The Problem of Social Cost, which examined how to address harm caused by business, such as pollution from a factory. Holding the company liable and ordering it to pay money to an affected property holder is less likely to yield an optimal result than having the parties negotiate, he wrote.
 
 
“All it says is that the people will use resources in the way that produces the most value, that’s all,” Coase said of the theorem in an interview with Reason magazine published in 1997. “I still think it’s an obvious point. You wouldn’t think there was a need for a Coase Theorem, really.”
 
 
 
AKANKSHA SHANU
PGDM 1st sem.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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Points of View: In-film branding: Why is it booming?


Who needs commercial breaks when the whole movie is your play-ground? afaqs! looks at the recent spurt in in-film brand placements.

In 2008, afaqs! carried a POV titled 'Why hasn't in-film placement taken off?' So much has changed since then. Besides the spurt in volumes of brand appearances in films of late, one can even make a case for how in-film branding has become cruder than before. Sure, the insipid product pack still appears almost as an apology, in the background of the occasional movie scene but we also have a Shah Rukh Khan rattling off the product features of Nokia in Chennai Express. Not to mention the barrage of brands that have integrated with the recently released political drama Satyagraha -- Sahara Q Shop, Ultratech Cement, Rupa, India Gate Basmati Rice and Wishtel India, to name a few.
And, in-film placements have gone beyond product appearances and superstar testimonials. Today, brand names appear in song lyrics (Fevicol) and film titles (Mere Dad Ki Maruti). Of course, there's still no way to measure ROI on in-film branding. But one can always look for a weak connection. After Mere Dad Ki Maruti released, the Ertiga saw a 30 per cent spike in test drives and enquiries. And around that time, there was no other advertising for the brand on air.
Measurable or not, subliminal or shameless, the fact is, in-film brand placements are on the rise. So what makes the present times so conducive to in-film branding? There are several reasons.
For one, given the exorbitant endorsement fees charged by leading actors today, brand tie-ups with films starring them seem like a cheaper way to get access to the rub-off effect of these stars.
Secondly, many professional managers have come into this business. A lot of in-film placements take place through media barters - in exchange for getting placed in a film the brand gives the producer media space worth X amount, say Rs 2 crore. Which means, instead of the usual brand campaign, co-branded content is used in the brand's ads. This content typically comprises scenes of the movie in which the brand is visible, like in the case of Tourism Ireland and Ek Tha Tiger. Besides this, brands get a lot of ancillary visibility around the films, such as X number of tickets/CDs/merchandise from the film and meet-and-greet opportunities with the cast as contest giveaways.

Tanay Tapas
PGDM 1st
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FIIs turn net buyers, snap 11-day selling streak




Overseas investors have pulled out about $2.5 bn from the Indian capital markets in August alone - the lowest outflows in three months.












NEW DELHI: Foreign institutional investors (FIIs) were net buyers on Monday after having turned cautious on the Indian market thanks to twin-deficit concerns, depreciating rupee, policy flip-flop amid a slowing economy and volatile global markets.

FIIs turned net buyers in the secondary share market after 11 consecutive sessions of selling a total of about $1 billion, according to a Reuters report.

"An oversold market after three consecutive months of decline until August is making traders hopeful of some market-friendly measures like a hike in fuel prices," added the report.

This follows the passage of the Land Acquisition Bill and the Food Security Bill by the parliament, seen as populist.

Apart from the domestic factors, concerns over US Federal Reserve's tapering down its QE program led to heavy outflows from emerging market economies including India.

There has been turmoil in the global markets after the US Federal Reserve said it may taper the $85-billion-a-month bond purchase programme as early as September.

In the past, the Fed's ultra-loose monetary policy has driven asset prices higher, including those in emerging markets including India. This hot-money was mainly used by most of the economies including India to finance their current account deficit.

And with the trend showing signs of reversal, India faces the burgeoning problem of financing current account deficit which the government wants to bring down to USD 70 billion in the current fiscal, from USD 88.2 billion last year. However, the rising cost of crude oil import will continue to put pressure on the CAD.

According to a recent data released over the weekend showed that overseas investors have pulled out nearly Rs 16,000 crore (about $2.5 billion) from the Indian capital markets in August alone - the lowest outflow in three months - amid concerns over the depreciating rupee which has plunged nearly 20%.

The outflows were about Rs 9,773 crore ($1.55 billion) from the debt market and Rs 5,922 crore ($902 million) from equities translating into a net outflows of Rs 15,695 crore ($2.5 billion), as per latest data available with market regulator Sebi.

What spooked FIIs?

According to analysts, India faces stiff economic challenges or twin-deficit concerns and with economic growth coming at sub-5 per cent level is definitely not an encouraging sign.

Several foreign brokerages including CLSA, Nomura, JPMorgan, and HSBC have cut growth estimates for India by up to 2% due to tightening financial conditions, slowing industrial production and increasing economic uncertainty.

"When FIIs look at these macro variables with uncertainty in the global environment, they will not be enthused to bring in capital soon," said Nirmal Jain, Chairman, India InfolineBSE 0.81 % Limited.

"The fact of the matter is that the global environment is negative and we will have to live with those constraints and find the best solution for the problems," he added.

Jain is of the view that with a little longer term horizon, it is for a fact that India growth can come back and it will again be a good investment destination.

Steep depreciation of nearly 20 per cent so far in the year 2013 of rupee is one such factor which has kept foreign institutional investors at bay.

"Currency depreciation is a very big issue for FIIs. For example - if somebody has portfolios of $10 billion exposure to India, it has become what 7, 7.5, 8 and so there is a nightmare in terms of 20-25% overnight decline in dollar terms," said Raamdeo Agrawal, Jt Managing Director & Co-Founder, Motilal Oswal Financial ServicesBSE -0.28 % in an interview with ET Now.

"However, the currency risk will tend to come down as the rupee hits 67-68. So clearly should be again start looking at some kind of fresh inflow into India," he added.

The rupee slumped to a lifetime low of 68.85 (intra-day) against the US dollar on August 28. The currency is not trading close to sub-67 levels against the dollar on Tuesday. 
 
RAHUL KUMAR GUPTA
PGDM
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Sunday, September 1, 2013



Delhi BJP protests fuel price hike by holding a 100-bike rally



New Delhi: The workers of Delhi unit of the Bharatiya Janata Party (BJP) on Sunday took out a motorbike rally against the fuel price hike announced by the government yesterday.

Delhi BJP president Vijay Goel and party leader Vijender Gupta led the 100-bike rally to Chief Minister Sheila Dikshit's residence. After it reached Ms Dikshit's residence, a few BJP workers along with Mr Goel, were detained as they tried to break security barricades. Police also used water cannon to control the protesters.

In their nearly four-km march, the BJP workers also violated traffic rules by not wearing helmets.

The BJP workers also demanded that Ms Dikshit should resign within 24 hours for misusing public funds during the 2008 Assembly elections.

"The chief minister must resign and if she is not ready to do so, the Congress must sack her. Her continuation is against the basic norms of governance," said Mr Goel after the rally.

"Sheila Sikshit has been clearly indicted by the Lokayukta for misuse of public funds and then the court has put a stamp of approval on this by ordering registration of an FIR," he added.

A trial court yesterday ordered filing of an FIR against Ms Dikshit for allegedly misusing government funds for an advertising campaign ahead of the 2008 assembly elections.

Former BJP state unit chief Vijender Gupta had filed the petition against Ms Dikshit for the alleged misuse of Rs. 22.6 crore from public funds.

"If Delhi Police doesn't file an FIR against the Delhi CM, then we will take the matter to the President," said Mr Goel.

AARTI
PGDM III
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