Happenings in india inc....

Dear Shanthi,
The much talked topic in India as of now..

My inputs to this thread regarding pink slips in IT companies.Asusual the media is hype is too much on job cuts,pink slips etc.
Yes, there are job cuts and pink slips are issued to employees who are not into any particular project and in "bench"(non productive resource) are sent home.
That too, the IT companies have given enough and more chance for these people in "bench" to attend atleast 5 client interviews for a project, and still if a person is not through..then they are sent out.

Some IT majors have cut down on allowances given to employees, but its not that severe.

 

Dear Shanvy

Good thread and thanks for starting it. Pls keep it going with many updates. I will also contribute whenever i get some news.

I got some news today on Diamond exports and i would like to share with you all.

The Bling Loses Sparkle-Association Asks Members To Cut Imports
Price of diamonds, generically speaking falls 15 per cent. Shrenuj, Flawless, Suashish, Suraj and Classic may show Q4 losses.

"A diamond is forever," they say, but it may not be affordable for all times to come, as is the case now.
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In what can be described as a positive aspect of the global meltdown, following the credit crunch the world over, prices of all metals across the board have seen a dip due to a steep fall in demand. And so did it happen in case of diamonds - one of the costly desires of women - as well.

With the economic meltdown dimming hopes of investors in equities, commodities as well as precious metals, diamond remained a good investment option, as its prices fell by nearly 15 per cent in the last three days.

"After a weakening trend in precious metals, now diamond prices fell between 10 and 15 per cent as both investors and retailers lost confidence amid this economic turmoil," Delhi- based diamond dealer Suresh Verma said.

In response to the economic turmoil impacting businesses worldwide, the Gems and Jewellery Export Promotion Council (GJEPC) has urged its members to curtail import of rough diamonds for a month, beginning November 25.

"The stoppage was expected to help diamond industry cope with challenges stemming from the global crisis, which was causing a strain on the players throughout the diamond value chain," GJEPC Chairman Vasant Mehta said in a statement.

Meanwhile, according to reports, around 50,000 artisans employed in the gems and jewellery sector have lost their jobs as a fallout of the global economic meltdown, GJEPC said.

"Over 3-4 per cent people in the sector, which employs over 1.3 million, have lost their jobs due to recession in the US and Europe, the two big high-end markets for Indian exporters," Mehta said.

After logging a healthy 18 per cent growth in the first half of the current fiscal, exports of gems and jewelleries declined in October as reduction in US consumer spending started impacting the global suppliers.

The US accounts for 35 per cent of India's 21.88 billion dollar exports of gems and jewellery. Other major markets include European Union, Hong Kong and the UAE.

Demanding fiscal and monetary help from the Centre, Chairman of the All India Gems and Jewellery Association Ashok Minawala warned if the situation deteriorates, "Mumbai will be worst affected" as over 90 per cent of exports are done from the western metropolis.

Exporters are seeking sops that include cut in bank interest rates and specific interest subsidy for the export sector.
As the industry developed a weak trend, diamond polishing, export and import business in Belgium, a hub of trade, fell sharply in October month, marketmen said.

International Dimond Exchange Online reported that trade of polished diamonds declined substantially in the month of October.

 

Shanthi ,

A very good thread to be abreast of the events associated and affected with the economic meltdown.

I have heard from my Indian counterparts that lay offs are not that severe in India and the crisis is not that far-flung but can't say the same about US/UK.With Bearn Sterns and Lehman going down,Merrill's merger with BOA and GS,Morgan Stanley becoming banks we are talking of unprecendented events which no one has witnessed and likened to the Great Depression.If the ground zero had been banks then the ripple effect is like a black hole sucking in everything in its path.

When Lehman went down , Satyam Wipro and TCS assured us that Lehman was not a major account for them and the same holds good for Merrill.With JP Morgan and CITI pruning employees in their cost costing strategies the same cannot be said.

I have seen in the news yesterday that Jet airways employees have been asked to take 25% salary cut.

 

Dear Ilites,

Here is a news that did not make it to the headlines: Land at Mumbai's
Bandra-Kurla Complex was sold 50 percent lower than March 2008. Thus
comes hardcore evidence of the Mumbai real estate market having slid
in to a cold freeze, despite the bravado of developers. On thing is
now certain: real estate companies are going to die a slow death over
the next year.

The said plot of land was picked for Rs 92 core at Rs 1.55 lakh per
square metre—half the price from the previous auction in March.
Ahmedabad-based Talim Research Foundation, a venture of Subhash
Chandra's Essel Group of Industries, was the sole bidder, paid just Rs
2 crore over the minimum sale price. This in face of the deal five
months ago, when Jet Airways (India) Ltd picked up a plot in the same
area at Rs 3.52 lakh per sq metre.

Mumbai Metropolitan Region Development Authority, or MMRDA, had no
choice but to award the 5,900 sq. m to the lone bidder in Talim. The
plot would be used for an educational facility by the nine-year old
foundation which does social science research with a focus on health,
communication, micro-economics, social audit and poll studies.
In March, only three out of five plots were sold in a land auction by
MMRDA when Jet Airways picked up a plot and Starlite Systems bought
two residential plots at the same price. Land sales have been down
since this year's beginning compared to 2007, when city-based Wadhwa
Group had bought a commercial plot in the complex at a staggering Rs
5.04 lakh per sq metre for a 16,500 sq metre plot.

Even Starlite and Jet Airways that bid for the plots in March have
requested MMRDA to give them an extension of six months to pay the
premium. "Developers are not willing to pay astronomical prices for a
piece of land and are waiting and watching for some correction to
happen," he said. "Many developers are also under a liquidity crunch
which is why they are staying away from land purchase."

Developers are not interested in purchasing land according to Hemant
Shah, chairman of city-based builder Akruti City. The general view is
that those who have purchased land last year are unable to launch
projects, due to the slowdown, but land owners are not willing to
lower the rates, leading to a crunch.

 

Dear ILites,

25 years is a long-long time...especially if you are talking of the 25 years of 1929 to 1954. In this period, the Second World War started and ended killing 50 m worldwide, the first nuclear bomb was detonated as mankind developed the means to destroy itself, and Communist China was founded as a single territorial unit with a common administration. 25 years is certainly a long time for even long term investors. This is because it took these 25 years for the US stock markets to come back to their previous high of the pre-Great Depression levels - August 1929 to November 1954 to be exact. And many are comparing the current financial turmoil with the Great Depression and the crisis period following it.
So is the current crisis a repeat of 1929? Are you, as an investor, staring at another 25 years to get your money back from stocks? We believe not really.
The 1929 stock market crisis was built on immense speculation in stocks. And banks were a key party to this mania. They (banks) aggressively expanded their loans given out to buy stocks. Investors could easily borrow up to 75% of the value of a stock purchase. In fact, by 1929, when the bubble reached its peak, almost 40% of US banks' loans were lent to buy stocks.
Auto majors like GM and Chrysler who are staring at bankruptcy now, were making tens of billions of dollars available to their employees as stock purchase loans. And as the Wall Street Journal reports, a company called Cities Service issued new shares, collected cash and used this to make loans for people to buy stocks. Such was the mania!
And when the bubble burst, the already weak banking system was crushed under its own weight. Over the next two years, almost 1,300 banks had closed. And since there was nothing like a Federal Deposit Insurance Corp. (which provides deposit insurance which currently guarantees the safety of deposits up to US$ 250,000 per depositor per bank), depositors lost everything.
During the depths of the depression, around 25% of US population was out of work. The Dow Jones Industrial Index had fallen almost 90%. The entire US banking system was shut for four days by presidential order.
Now you may wonder, aren't we facing a similar situation today? Banks are failing worldwide, markets are panicky and unemployment is rising.
Before arriving at any conclusions, it is important to understand the big differences between the crisis of today and the Great Depression and what would not make the latter repeat itself. The biggest difference is the massive intervention by the world's central banks. The US Fed, for instance, is now doing what it was intended to do when it was formed - not to prevent recessions, but to prevent the implosion of the financial system.
And they are trying to do just the same, by infusing liquidity in the system and by cutting interest rates to spur growth (the Fed has cut interest rates nine times since the credit crisis began in September 2007). The US$ 700 bn bailout bill and the fiscal stimulus measures that have been enacted this year, although controversial, also show that the US government is willing to intervene in the financial system to keep it afloat. Similar measures are being taken by policymakers across the world, including India.
Contrast this with what the Fed was doing post the crash of 1929 - it raised interest rates, thereby draining liquidity from the system, deciding that it was best to stamp out speculation. Although economists still debate the exact causes of the Great Depression, the Fed's moves are often considered one of the prime reasons the economy tumbled so hard.
Another difference between 1929's and today's crisis is that this time around banks made loans against houses, assets that should continue to have at least some value.
So, while we remain unsure as to where the stocks markets will head over the next few months, we believe that the wait to respite won't be 25 years ahead. Central banks' actions, though controversial at times, have raised some hopes.
Specifically for India, we believe that the economy is going through an absolutely critical point in its own transition, and see a lot of opportunity for companies across sectors like financial services, information technology, manufacturing, materials or energy.
India is a market, a story, a country and an economy domestic and international investors need to take seriously. The transformation in India has always been in fits and starts, meaning one step forward and one step back. But we now see more steps forward than we see steps backward and that encourages us a lot. And in the long run, the country is surely going to pull it off. You as an investor need to stay the course. Live within your means. Reduce your debt. Keep saving...and investing. When the cycle turns, and it will, you will be glad you pulled the trigger.