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Growth pegged at 6-7.2%
for Financial Year 06
In a distinctly upbeat review of macroeconomic
and monetary developments during the first quarter of 2005-06, the Reserve Bank
of India (RBI) projected economic growth in the range of 6-7.2% for the
current fiscal. The central bank, in its first quarterly review for the
current year also confirmed its advance estimates of real GDP growth for the
year 2004-05 at 6.9% on the back of positive developments in agriculture,
industry and the services sector.
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Manufacturers prefer India to US in FDI stakes
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India has displaced the US to become the
second-most attractive destination for foreign direct investment (FDI)
among manufacturing investors, as per A T Kearney's latest FDI Confidence
Index rankings. The rankings are based on an annual survey of chief
executive officers, chief financial officers and other top executives of
Global 1000 companies, conducted by the Global Business Policy Council of A
T Kearney. Telecom and utility investors, for instance, upgraded
India from the fifth place to second. At the same time, the US was
displaced from the top-most position down to the fourth place, just after
Hong Kong. China gained immense ground and swapped places with the US, up
from fourth to the first, the survey stated. Overall, India has moved up
three notches from the sixth place last year to the third as the most
attractive FDI destination. The perception gap between the US and India is,
however, fast closing.
India becomes third largest Asian equity market
India now becomes the third
largest Asian market (excluding Japan and Australia) after having overtaken
Korea, China and Singapore that have 80, 50 and 47 such firms
respectively. Bangalore contributes 50 per cent to India’s IT exports
and more than 100 companies, including 50 of the world’s top Information
Technology(IT) firms.
Europe's a major destination for Indian
technology exports
Europe has emerged as a promising destination
for Indian software exports, with almost all top tier companies announcing
good growth from this region during the quarter ended June 30, 2005. For
instance, Infosys Technologies, which posted a
36.5% year-on-year growth in topline to Rs 2,0715.9 million, had 23.9% of its revenues from the
European region in the first quarter of Financial Year 06. This is as
compared to a 22.2% contribution to revenues in the corresponding quarter
of the previous fiscal and 23.3% in the fourth quarter of fiscal 2005. IT
revenues of Wipro also showed similar trends with
contribution from Europe as a percentage of the total revenues showing a rise,
and contribution from the US as a percentage of revenue registering a
marginal decline.
Organised retail will grow
to US$ 300 billion by 2010
The organised
retail business in India is expected to double every year for the next five
years. By the end of ’10, the sector is expected to emerge as a $300
billion industry, from around $7.5 billion currently. In the past five
years, the cumulative growth in the sector has been 133%, according to a
report prepared by McKinsey and the Confederation of Indian Industry
(CII).
It's raining dollars as VCs rush to
India
The year 2005 may see the biggest harvest on
deal street. With an estimated $2 billion this year, private equity firms
and venture capitalists are set to top the previous best of a billion
dollar investment in year 2000. "During 2000 prior to the dot-com
burst venture capitalists and private equity investors invested close to a
$1 billion." According to market information, Chryscap
has around $300 million, Barings' $175 million, GW Fund (Gary Wendt, part
of the Jack Welch investments) has $150 million, Actis
(formerly known as CDC) is ready with $300 million to $350 million, Hendersen Partners has $300 million for investments in
Asia, of which it is believed that $100 million would be for India.
OVL bags 300 million barrel oilfield in
Qatar
Oil and Natural Gas Corporation (ONGC) won a
300 million barrels oilfield in Qatar, the 12th country,
the company has forayed in search for oil security for the country. ONGC’s foreign arm (OVL) won the rights to develop and
produce oil from Nijwat Oil in Qatar. The
field is estimated to hold 300 million barrels of oil reserves. ONGC
has stakes in projects in Russia, Vietnam, Sudan, Libya, Syria, Iran, Iraq,
Ivory Coast, Egypt, Myanmar and Australia and hopes to produce 400,000
barrels a day from overseas assets by 2010-11.
GAIL forms joint venture with China Gas
GAIL(India) Ltd and the China Gas Holdings
Ltd have agreed to forge a strategic cooperative partnership by forming a 50:50
joint venture to undertake projects in China. The joint venture
between GAIL and China Gas Holdings will undertake the operation and
management of city gas pipeline networks, including purchase, sale and
distribution of natural gas through these networks. The joint venture
will also work for the construction, management and/or operation of
long-distance natural as and/or other energy fuel pipeline and purchase,
import, produce, sell and distribute LPG, LNG, CNG and/or other energy
fuel.
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Global R&D moves
towards integration across US, India, China
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That Indians make great software and Chinese
manufacture everything on a grand scale is old hat. Now, US firms are bringing
their “customer-facing people” together with Indian software makers and
Chinese manufacturers to create a new R&D and business model that will
outdo all outsourcing that has happened so far, say experts with a ringside
view of the trends. China and India are fast becoming “export bases for
innovative products”: US firms are moving into a phase where co-location of
R&D with either the consumer or the manufacturing facility is no longer
necessary. Instead, they are “driving greater integration of R&D across
the US, China and India,” which is the beginning of the next big wave of offshoring, said Vice President (research) with analyst
firm Forrester. In this model, which Forrester calls Innovation Networks,
US firms will “source not simply low-cost talent, but ‘invention services’
(R&D services) in India and ‘transformation services’ (manufacturing
services) in China, to build products for a global economy” Radjou said.
70 per cent foreign companies in India
are making profits: Study
Around 70 per cent of the foreign companies
operating in India are reportedly making profits and 84 per cent have a
“positive” assessment of India. However, investors have highlighted the
need of building brand India so as to attract more investors riding on its
brand equity, stated a study by Federation of Indian Chambers of Commerce
and Industry (FICCI).
India emerges third-most profitable
equity mart
The BSE Sensex beat
almost all its peers in Asia and Europe to stay on top, resulting in 56 per
cent gains from August last year. The continuous inflow from foreign
institutional investors (FIIs) seems to have
worked wonders for the domestic capital market. While the Sensex is climbing new peaks every day, the Indian
capital market has emerged as the third most profitable market in the
world, posting 56 per cent gains from its yearly low hit in August
2004. In the past one year, the Sensex hit
an all-time high of 7843.77 points, rising from a low of 5022.29. The 2821
points swing resulted in a 56 per cent gain.
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Foreign Institutional
Investorss pour US$ 1.9 billion into India in
July
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The rains or foreign money, its a deluge.
Foreign institutional investors (FII) have pumped in $1.9 billion in
July, the highest ever in any calendar year. The total net FII investment
in current year 05 is now more than $6.7 billion. “The India growth
story still holds true and this is evident from the increase in the
number of FIIs. Many Japanese and European
funds have also started eyeing India with an aim to cash in on the rising
equity markets,” said a head of a foreign brokerage. The current calendar
saw a rise in the number of FIIs registered
with Sebi. According to Sebi,
102 new FIIs registered in current year 05. The
total number of registered FIIs as on August 2
was 739, much higher than 637 as on December 31, 2004.
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Indian firms set to
dominate global bandwidth business
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The balance of power in the ownership of global
undersea cable networks is decidedly shifting towards India. With over
six major undersea cable network now owned by Indian telecom players,
VSNL, Reliance Infocomm, Bharti
Tele-Ventures and BSNL are slated to become the new bandwidth barons
taking over from American companies such as AT&T, MCI and Sprint.
Lucas-TVS to set up assembly plant in Iran
Lucas-TVS, part of the $ 2-billion TVS
Group, has finalized plans to set up an assembly plant in Iran through
a joint venture with a local company. The plant will start
assembling starters for cars, and is scheduled to be ready by this
end-year.
L&T bags Rs.1300 million order from Kuwait Olefins
Larsen & Toubro
has won an order worth Rs.1300 million from Kuwait Olefins Company
KSC. The order is for supply of a tubular reactor system.
It will be executed by L&T’s Heavy
Engineering Division. This equipment, weighing 1,500 mt, will be one of the largest such systems in the
world.
Indian at MIT develops anti-cancer drug
The Massachusetts Institute of Technology
(MIT) has engineered what it calls an “anti-cancer smart bomb”, thanks
to some pioneering work by a team of researchers, led by an Indian
professor. A nanocell, designed by Prof
Ram Sasisekharan and his team, has opened the
way for a new, effective way to administer existing anti-cancer drugs.
The new therapy, successfully tried out on mice, has been found to be
safe and potent against the widely prevalent lung and skin (melanoma)
cancers.
IT exports to touch US$60 billion
by 2008: ESC
Total IT exports, including hardware,
software and IT-enabled services, are expected to touch the $60-billion
mark by 2008, having increased by 164 per cent between 2000-01 and
2004-05, according to the Electronics and Computer Software Export
Promotion Council (ESC). In absolute terms, IT exports have grown from Rs 322880 million in 2000-01 to Rs
853000 million in 2004-05.
M&M enters Middle East through Joint Venture with Nippon
Tractors and utility vehicles major, Mahindra & Mahindra
(M&M) has entered the manufacturing business in the Middle East
through a joint venture with the world’s largets
electrical steel maker Nippon Steel Corporation (NSC). The $ 28
billion NSC will hold a 10 per cent stake in the joint venture and
supply the necessary raw material.
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