BANGALORE: The last time Kumar, a sales executive working with IBM India, visited his company's registered office in Bangalore was some six months ago to get his broken attendance card replaced. Kumar, 35, is among nearly 50,000 IBM India employees who are working from anywhere, but the office.
"I do not have to show my face to my boss anymore, well at least for a few weeks or months at a stretch," says Kumar, who requested that his first name not be revealed. "I used to miss catching up with other colleagues at office, but now there are hundreds of us on the road for the company," he adds.
For nearly 50,000 employees at IBM India and some 15,000 tech workers at HP's India operations, work-fromhome is no more an HR incentive meant for women going for early maternity leave, or a privilege for few - it's now an integral part of their work life.
While over 40% of IBM staff does not have any space in office, a quarter of HP India employees across the functions of sales, marketing and customer support do not have to mark their attendance or swipe employment cards.
Rising real estate costs and travel time, apart from other complexities of maintaining office space for a growing base of staff, are making a real business case for multinational tech firms like IBM, HP, Cisco and Microsoft.
What was once an option taken by those with personal problems or medical predicaments has now become a norm in some companies with the option of working from home finding more takers than ever before. Employees at IBM even receive Rs 15,000 more a month for this. This is because they save the company walloping infrastructure costs, one of the perils of rapid expansion.
This way the company can also drive home the point that it truly promotes work-life balance. The company says it also increases the productivity of employees. "We know that if we can successfully address the challenges of work-life balance, IBM will certainly gain a competitive edge in the war for talent," a company spokesperson said.
The company, however, denied paying these employees extra. At HP, the number is anywhere between 10,000 and 15,000, and the company, which did not confirm the figure as it does not share its India headcount, says it leads to better employee engagement.
Not to be outdone, Microsoft last year formalised the policy which had been practised in the company for a few years. It reimburses the broadband and telephone costs but does not throw in any extra amount to keep employees at home. Microsoft gives employees a choice of various flexible work options, and they can pick what best suits their needs.
"Not only does this lead to a better work-life balance for existing employees, and a cause for retention, it is also an attractive aspect for potential employees," said Joji Gill, HR director of Microsoft India. The software firm provides three options to work from home which include flexible scheduling, teleworking and part-time basis. Flexible scheduling is when an employee has the option of working from home for a few of his business hours on a recurring basis.
Teleworking lets him choose a schedule of days where he would work only from home. Part-time is when an employee clocks in only a few hours for work. Networking equipment maker Cisco says employee location is increasingly losing meaning in an interconnected world. The company even helps its employees set up home offices. It creates an office with email and intranet-enabled smartphones, provides Cisco Virtual Office equipment, laptops and data cards for employees who do not wish to be within the office walls.
"IP solutions from Cisco and emerging technologies are making location irrelevant, making remote working feasible. Companies can also reduce office space, thereby reducing operational costs associated with real estate and facility management," said Seema Nair, co-lead for India HR operations, Cisco. Companies say it is not just women but even men who take up this option very often.
At IBM, the percentage of employees working from home is 40% while at HP it is 25%. Microsoft's India headcount is not very large when compared to companies like IBM and HP. Domestic firms also offer this option but it is more needbased and not as rampant as their global counterparts. However, to allow employees to work permanently from home requires a company to have precise job description and agenda.
"There can not be any flab in the KRAs and the managers have to craft the jobs carefully where everything is templatised," said Saundarya, founder-member of Flexi Career in Chennai. She said problems creep in when companies look at it as a work-life balance initiative and not as an option that could help in their business goals. While most companies say they trust their employees to do a good job, there are several checks and balances like managers and the employees working closely with a set of deliverables.
Thursday, June 23, 2011
India to West: Want food security? Give us technology
NEW DELHI: India will leverage the global concerns over food security to seek technological assistance from the developed world to raise farm productivity in the developing countries at the ongoing meeting of agriculture ministers of G-20 nations in Paris.
The G20 meet in Paris will focus on various hedges against price instability in food articles and will also consider the use of emergency buffer stocks and regulation of the commodity trading markets. "India will seek all forms of support from the developed world to enhance agricultural productivity," a government official told ET.
A recent report by OECD and FAO highlighted the problems of high and volatile commodity prices over the last year, and warned of steep price rise in the next decade. This will be particularly painful for the developing countries where a large proportion of the populations are spending most of their earnings on food.
A rise in productivity in the developing countries can help rein in prices. "The technology for improving agricultural productivity in developed countries is with the private sector, it is difficult to access such technologies," said Ashok Gulati, Chairman, CACP. "This meeting is a good platform for acquiring advanced technology," he said.
The developed world is sure to demand less restrictive farm sector policies in return, especially from India and China. "China and India in particular keep excessive stocks that push prices up. Hence, over issues of export control, India will come under scrutiny," added Gulati.
This will make a consensus difficult, as singed by high food inflation India is not likely to relent on export restrictions any time soon. India and China will also argue that policies in the developed world were responsible for price rise. "Excess liquidity created by loose monetary policies is being parked in commodity markets. India should raise its voice against such synchronized orchestrated policies," said Gulati.
In this context the discussion on regulation of the commodity trading markets will become crucial. Abheek Barua, HDFC Bank , Chief Economist cautions controls on commodity trading can be counter productive. "Unless regulation on commodity trading is adopted by all nations, it will result in arbitrage opportunities. What is required is a smoother trading system among partners," he said.
The G20 meet in Paris will focus on various hedges against price instability in food articles and will also consider the use of emergency buffer stocks and regulation of the commodity trading markets. "India will seek all forms of support from the developed world to enhance agricultural productivity," a government official told ET.
A recent report by OECD and FAO highlighted the problems of high and volatile commodity prices over the last year, and warned of steep price rise in the next decade. This will be particularly painful for the developing countries where a large proportion of the populations are spending most of their earnings on food.
A rise in productivity in the developing countries can help rein in prices. "The technology for improving agricultural productivity in developed countries is with the private sector, it is difficult to access such technologies," said Ashok Gulati, Chairman, CACP. "This meeting is a good platform for acquiring advanced technology," he said.
The developed world is sure to demand less restrictive farm sector policies in return, especially from India and China. "China and India in particular keep excessive stocks that push prices up. Hence, over issues of export control, India will come under scrutiny," added Gulati.
This will make a consensus difficult, as singed by high food inflation India is not likely to relent on export restrictions any time soon. India and China will also argue that policies in the developed world were responsible for price rise. "Excess liquidity created by loose monetary policies is being parked in commodity markets. India should raise its voice against such synchronized orchestrated policies," said Gulati.
In this context the discussion on regulation of the commodity trading markets will become crucial. Abheek Barua, HDFC Bank , Chief Economist cautions controls on commodity trading can be counter productive. "Unless regulation on commodity trading is adopted by all nations, it will result in arbitrage opportunities. What is required is a smoother trading system among partners," he said.
'Suspicious' Huawei to help set up telecom lab in India
NEW DELHI: Rather like letting the fox to guard the henhouse, India plans to entrust a Chinese company with a crucial role in helping ferret out spy software hidden in imported telecom gear.
Huawei Technologies , a major supplier to Indian mobile phone firms and the object of the Indian government's suspicion, has been enlisted to provide knowhow and equipment for a facility that will be a clearing house for all imported telecom gear, the draft of an agreement shows.
Huawei and the Indian Institute of Science in Bangalore, where the testing lab will be housed, will soon sign a memorandum of understanding under which the Chinese company will provide "documentation, expertise, methods and standards for studying telecom equipment," a government official said.
India was compelled to take the help of the Chinese company because no Indian firm makes telecom gear and no other foreign company was willing to assist because of worries about intellectual property rights, the official said.
Huawei is the world's second-largest telecom gearmaker after Ericsson, with 2010 revenues of $28 billion (Rs 1.27 lakh crore). The government has been suspicious that it and another Chinese company, ZTE, could use the telecom equipment they supply to snoop on India and even launch cyber attacks.
The lab at IISc is being built solely to address the concerns of intelligence and security agencies about the Chinese vendors. "In order for IISc to perform certain studies in respect of telecom equipments, IISc shall be requiring detailed understanding about various features, standards and related documentation. Huawei...agrees to share some information, knowledge, software, hardware and equipments with IISc for its studies," says the MoU, seen by ET.
It also says that both of them can visit each other's facilities, including Huawei's manufacturing plants and logistics centres. The IISc centre was given funding by finance minister Pranab Mukherjee in the 2010-11 budget. It is being modelled after the China Information Technology Certification Centre that operates and maintains a national evaluation and certification scheme for that country's IT and telecom security.
A pilot lab has started functioning in Bangalore and a fullfledged centre is likely to be established in next three years after the approval of the Cabinet Committee on Economic Affairs, minister of state for communications and IT Gurudas Kamat told Parliament in May 2010. Just a year ago, Huawei and ZTE were battling to avoid being banned from the world's largest market for telecom equipment.
Beginning February 2010 for six months, the home ministry refused to clear telecom equipment contracts worth hundreds of millions of dollars allotted to Chinese firms on fears that these companies had the capabilities of installing spyware and malware that could monitor voice and data traffic and disable networks. This delay disrupted the expansion plans of several mobile service providers.
Imports from Chinese vendors resumed only in August 2010 after Huawei and ZTE agreed to comply with new rules that make it necessary for foreign equipment companies to put their software in the equivalent of a sealed envelope to be opened by Indian authorities only in the event of a security threat.
In the same month, Huawei, founded by Chinese army veteran Ren Zhengfei, revealed details of its shareholding to the Indian government in what it said was an unprecedented disclosure.
India is the world's largest market for international vendors. Sales of telecom equipment are expected to increase from $12.5 billion in 2009-10 to $40 billion in 2020, according to telecom regulator Trai. On Wednesday, telecom journal Voice & Data said revenues of Huawei and ZTE in India fell by 23.5% and 12.8%, respectively, for the twelve months to March 2011 after they were barred for several months last year from supplying equipment to companies here.
Huawei's India sales were Rs 5,688 crore while for ZTE it was Rs 4,118 crore. Nokia Siemens overtook Ericsson with annual revenues of Rs 6,117 crore to be the largest equipment vendor in India.
A Huawei spokesperson declined to comment on the pact, but an executive close to the company confirmed that a deal had been struck. The person added that the move to share IPR and commercially sensitive information with a statefunded research agency here would go a long way in bridging the trust deficit.
Huawei Technologies , a major supplier to Indian mobile phone firms and the object of the Indian government's suspicion, has been enlisted to provide knowhow and equipment for a facility that will be a clearing house for all imported telecom gear, the draft of an agreement shows.
Huawei and the Indian Institute of Science in Bangalore, where the testing lab will be housed, will soon sign a memorandum of understanding under which the Chinese company will provide "documentation, expertise, methods and standards for studying telecom equipment," a government official said.
India was compelled to take the help of the Chinese company because no Indian firm makes telecom gear and no other foreign company was willing to assist because of worries about intellectual property rights, the official said.
Huawei is the world's second-largest telecom gearmaker after Ericsson, with 2010 revenues of $28 billion (Rs 1.27 lakh crore). The government has been suspicious that it and another Chinese company, ZTE, could use the telecom equipment they supply to snoop on India and even launch cyber attacks.
The lab at IISc is being built solely to address the concerns of intelligence and security agencies about the Chinese vendors. "In order for IISc to perform certain studies in respect of telecom equipments, IISc shall be requiring detailed understanding about various features, standards and related documentation. Huawei...agrees to share some information, knowledge, software, hardware and equipments with IISc for its studies," says the MoU, seen by ET.
It also says that both of them can visit each other's facilities, including Huawei's manufacturing plants and logistics centres. The IISc centre was given funding by finance minister Pranab Mukherjee in the 2010-11 budget. It is being modelled after the China Information Technology Certification Centre that operates and maintains a national evaluation and certification scheme for that country's IT and telecom security.
A pilot lab has started functioning in Bangalore and a fullfledged centre is likely to be established in next three years after the approval of the Cabinet Committee on Economic Affairs, minister of state for communications and IT Gurudas Kamat told Parliament in May 2010. Just a year ago, Huawei and ZTE were battling to avoid being banned from the world's largest market for telecom equipment.
Beginning February 2010 for six months, the home ministry refused to clear telecom equipment contracts worth hundreds of millions of dollars allotted to Chinese firms on fears that these companies had the capabilities of installing spyware and malware that could monitor voice and data traffic and disable networks. This delay disrupted the expansion plans of several mobile service providers.
Imports from Chinese vendors resumed only in August 2010 after Huawei and ZTE agreed to comply with new rules that make it necessary for foreign equipment companies to put their software in the equivalent of a sealed envelope to be opened by Indian authorities only in the event of a security threat.
In the same month, Huawei, founded by Chinese army veteran Ren Zhengfei, revealed details of its shareholding to the Indian government in what it said was an unprecedented disclosure.
India is the world's largest market for international vendors. Sales of telecom equipment are expected to increase from $12.5 billion in 2009-10 to $40 billion in 2020, according to telecom regulator Trai. On Wednesday, telecom journal Voice & Data said revenues of Huawei and ZTE in India fell by 23.5% and 12.8%, respectively, for the twelve months to March 2011 after they were barred for several months last year from supplying equipment to companies here.
Huawei's India sales were Rs 5,688 crore while for ZTE it was Rs 4,118 crore. Nokia Siemens overtook Ericsson with annual revenues of Rs 6,117 crore to be the largest equipment vendor in India.
A Huawei spokesperson declined to comment on the pact, but an executive close to the company confirmed that a deal had been struck. The person added that the move to share IPR and commercially sensitive information with a statefunded research agency here would go a long way in bridging the trust deficit.
Diesel, kerosene & LPG price hike coming in July
NEW DELHI: The government will raise diesel, cooking gas and kerosene prices next month after a gap of one year as cash-strapped state firms say their borrowings have risen alarmingly and they will be forced to cut fuel supplies, starting with cooking gas.
State-run refiners are facing acute liquidity crunch as their market borrowings have soared to Rs 1,20,000 crore from Rs 97,000 crore in March. They will now be forced to cut imports leading to shortage of fuel, two government officials with direct knowledge of the matter said.
The empowered group of ministers, which is authorised to raise fuel prices, is expected to meet early next month to decide partial price hike on individual products against companies' demand to increase diesel rates by Rs 15.44 per litre, kerosene by Rs 27.47 per litre and cooking gas by Rs 381 per cylinder, an official said requesting anonymity.
The government had frozen the prices of diesel, cooking gas and kerosene for a year fearing voter backlash against the inflationary move ahead of crucial assembly elections. The government last raised prices of politically sensitive fuel on June 25, 2010 when kerosene became costlier by Rs 3 a litre, diesel by Rs 2 a litre and cooking gas by Rs 35 per cylinder. Crude prices have risen from about $75 per barrel then to $110 a barrel.
Oil companies, that enjoy a pricing freedom for petrol since June 25, are expected to raise its price also. "They want to raise petrol price by Rs 2 a litre, but it will be done simultaneously," one official said.
Oil companies have so far revised pump prices of petrol 10 times since it was deregulated last year. Oil ministry officials said that state-run oil companies - IOC, BPCL and HPCL - were suffering a revenue loss of Rs 450 crore every day on sale of controlled fuel and a price hike was imminent.
Ministry officials said that they would place facts before the empowered group of ministers (EGoM) along with impact of a unit price increase of individual fuel on companies' revenues. "Final decision would be taken by the EGoM," an oil ministry official said.
At a press conference earlier this week, Oil Minister Jaipal Reddy had also indicated that a fuel price hike was imminent but he had declined to give specific details. "We are still exchanging notes, there are no specific suggestions by the oil ministry to EGoM," he had said. Reddy had met Prime Minister Manmohan Singh last week to explain financial condition of state-run oil firms and a pressing need to revise fuel prices.
State-run refiners are facing acute liquidity crunch as their market borrowings have soared to Rs 1,20,000 crore from Rs 97,000 crore in March. They will now be forced to cut imports leading to shortage of fuel, two government officials with direct knowledge of the matter said.
The empowered group of ministers, which is authorised to raise fuel prices, is expected to meet early next month to decide partial price hike on individual products against companies' demand to increase diesel rates by Rs 15.44 per litre, kerosene by Rs 27.47 per litre and cooking gas by Rs 381 per cylinder, an official said requesting anonymity.
The government had frozen the prices of diesel, cooking gas and kerosene for a year fearing voter backlash against the inflationary move ahead of crucial assembly elections. The government last raised prices of politically sensitive fuel on June 25, 2010 when kerosene became costlier by Rs 3 a litre, diesel by Rs 2 a litre and cooking gas by Rs 35 per cylinder. Crude prices have risen from about $75 per barrel then to $110 a barrel.
Oil companies, that enjoy a pricing freedom for petrol since June 25, are expected to raise its price also. "They want to raise petrol price by Rs 2 a litre, but it will be done simultaneously," one official said.
Oil companies have so far revised pump prices of petrol 10 times since it was deregulated last year. Oil ministry officials said that state-run oil companies - IOC, BPCL and HPCL - were suffering a revenue loss of Rs 450 crore every day on sale of controlled fuel and a price hike was imminent.
Ministry officials said that they would place facts before the empowered group of ministers (EGoM) along with impact of a unit price increase of individual fuel on companies' revenues. "Final decision would be taken by the EGoM," an oil ministry official said.
At a press conference earlier this week, Oil Minister Jaipal Reddy had also indicated that a fuel price hike was imminent but he had declined to give specific details. "We are still exchanging notes, there are no specific suggestions by the oil ministry to EGoM," he had said. Reddy had met Prime Minister Manmohan Singh last week to explain financial condition of state-run oil firms and a pressing need to revise fuel prices.
Reliance Industries' Andhra offshore gas fields costs rose $3 billion in 2 years: CAG draft
NEW DELHI: Reliance Industries Ltd's investment plan for bringing its showcase Andhra offshore gas fields to production increased by almost $3 billion, a comparison between the cost of major elements of the company's initial and revised estimates shows.
Comparison of 13 elements of the two plans for D1 and D3 fields in the Comptroller and Auditor General's draft report shows estimates increasing from $2.39 billion to $5.19 billion. The comparison, carried as 'Annexure 4.3' in the report, a copy of which is available with TOI, points to "abnormal upward" revisions "without providing basis of such estimations".
Reliance discovered the field in 2002 and submitted the initial plan in 2004, envisaging a production of 40 mcmd (million cubic metres per day) of gas. It revised the plan in 2006, with an output of 80 mcmd.
Higher capex reduces government's returns from a field since companies are allowed to recover their costs before calculating profit. The annexure clearly puts a figure to the actual increase in Reliance's capex estimate. But the CAG report itself - first reported by TOI on June 13 - merely said the auditor is "unable to quantify" the government's loss which could be "huge".
Reliance did not respond to queries from TOI. Senior company executives, while maintaining they hadn't received the CAG report from the oil ministry, said the substantial rise in global rates for hiring drilling rigs, oilfield services and installations besides ships and helicopters contributed to the higher capex.
"The daily rate for a rig shot up to $500,000-550,000 around 2006 from $110,000-120,000 in 2004. Similarly, services cost of $125,000 per day in 2004 and rose to $150,000. With such a cost escalation, which is beyond RIL's control, obviously price of drilling a well would go up," an executive familiar with the fields planning said on condition of anonymity.
He said the company had one development concept in 2003, just a year after the "frontier discovery". But with subsequent inputs - data and domain knowledge from international experts - a new design concept was required in tune with the higher potential.
"This too may have contributed to the higher cost... CA or any auditor should have an understanding of the intrinsic characteristics of an industry before taking a critical view in isolation. There has been no wrong doing (in Andhra offshore field). Once we have a copy from the government, we will put all doubts to rest."
But the annexure points out delays in Reliance's tendering process and execution of contracts for engineering, design etc - activities that were under the company's direct control and may have contributed to the cost escalation.
Some of the major elements that saw substantial increase in costs are, development wells (from $944 million in initial plan to $1.16 billion in revised plan), production facilities ($1.34 billion-$2 billion), subsea control systems ($358 million-$722 million), deepwater pipeline ($142 million-$323 million), onshore terminal and site grading ($192 million-$550 million), control-cum-riser platform ($0-$446 million).
On development wells, CAG observed, "There was reduction in the number of wells from 34 to 22 in the revised FDP (field development plan) but cost per well was increased from $27.78 million to $52.94 million. Further, 18 wells were actually drilled till June 2009 with average cost per well of $56.8 million, ie actual cost more than double from FDP cost levels."
"Audit identified that one of the factors responsible for higher cost was non-finalisation of tenders, after bids invitation, for charter hire of deep drilling rigs... and piecemeal hiring," the annexure says on Reliance's project implementation.
Comparison of 13 elements of the two plans for D1 and D3 fields in the Comptroller and Auditor General's draft report shows estimates increasing from $2.39 billion to $5.19 billion. The comparison, carried as 'Annexure 4.3' in the report, a copy of which is available with TOI, points to "abnormal upward" revisions "without providing basis of such estimations".
Reliance discovered the field in 2002 and submitted the initial plan in 2004, envisaging a production of 40 mcmd (million cubic metres per day) of gas. It revised the plan in 2006, with an output of 80 mcmd.
Higher capex reduces government's returns from a field since companies are allowed to recover their costs before calculating profit. The annexure clearly puts a figure to the actual increase in Reliance's capex estimate. But the CAG report itself - first reported by TOI on June 13 - merely said the auditor is "unable to quantify" the government's loss which could be "huge".
Reliance did not respond to queries from TOI. Senior company executives, while maintaining they hadn't received the CAG report from the oil ministry, said the substantial rise in global rates for hiring drilling rigs, oilfield services and installations besides ships and helicopters contributed to the higher capex.
"The daily rate for a rig shot up to $500,000-550,000 around 2006 from $110,000-120,000 in 2004. Similarly, services cost of $125,000 per day in 2004 and rose to $150,000. With such a cost escalation, which is beyond RIL's control, obviously price of drilling a well would go up," an executive familiar with the fields planning said on condition of anonymity.
He said the company had one development concept in 2003, just a year after the "frontier discovery". But with subsequent inputs - data and domain knowledge from international experts - a new design concept was required in tune with the higher potential.
"This too may have contributed to the higher cost... CA or any auditor should have an understanding of the intrinsic characteristics of an industry before taking a critical view in isolation. There has been no wrong doing (in Andhra offshore field). Once we have a copy from the government, we will put all doubts to rest."
But the annexure points out delays in Reliance's tendering process and execution of contracts for engineering, design etc - activities that were under the company's direct control and may have contributed to the cost escalation.
Some of the major elements that saw substantial increase in costs are, development wells (from $944 million in initial plan to $1.16 billion in revised plan), production facilities ($1.34 billion-$2 billion), subsea control systems ($358 million-$722 million), deepwater pipeline ($142 million-$323 million), onshore terminal and site grading ($192 million-$550 million), control-cum-riser platform ($0-$446 million).
On development wells, CAG observed, "There was reduction in the number of wells from 34 to 22 in the revised FDP (field development plan) but cost per well was increased from $27.78 million to $52.94 million. Further, 18 wells were actually drilled till June 2009 with average cost per well of $56.8 million, ie actual cost more than double from FDP cost levels."
"Audit identified that one of the factors responsible for higher cost was non-finalisation of tenders, after bids invitation, for charter hire of deep drilling rigs... and piecemeal hiring," the annexure says on Reliance's project implementation.
Nokia N9: New flagship smartphone gets mixed reviews
SINGAPORE: Nokia's latest attempt to win back market share with its N9 phone received mixed reviews Wednesday but analysts said the real test will come when it releases new models using the Windows Phone 7 operating system.
Fans lauded the N9's ease of use without any "home" button -- a feature of the iPhone and other rivals -- while detractors mocked what they saw as its outdated Meego operating system.
Unveiled by Nokia chief executive Stephen Elop at the CommunicAsia telecoms fair in Singapore this week, fans crowded around the company's booth to try out the device.
The N9 has a 99-millimetre (less than four inches), 854 x 480 pixel display and weighs 135 grams (less than five ounces), putting it clearly in iPhone territory.
Its most distinctive feature is an "all-screen" display, with users swiping the screen to switch between applications.
The device also has a function that allows users to link it to dedicated accessories such as a headset or speakers by simply touching the phone against them.
"Being a user of Apple, an iPhone, this is light years ahead of what iPhone 3G does," declared Paul Krzystoszek, operations and marketing manager for Australian Satellite Communications.
"The ease of use... the intuitive nature of swiping across the screen instead of using a button, there's no button on it, the plastic casing, I think they're all things that make it a lot better than what we have already," he told AFP after trying the phone at the Nokia booth.
"Awesome" was how Shahiran Jaafar, chief executive officer of Malaysian firm Microtel Systems and user of an iPhone 3G, described the N9.
"The fact that you can just swipe it and it goes back to whatever screen that you need it to go back to, the fact that it can show all the open tasks that's available, that's fantastic," he said.
"It just dwarfs the iPhone, the iPhone is nothing now."
However, some were unimpressed by the fact that the N9 was still operating on Nokia's MeeGo platform despite the company's impending adoption of the Windows Phone 7 platform later this year.
"I have a problem with... the operating system ," said Phoosith Ratpiyasoontorn, a Thai systems integration engineer, lamenting that MeeGo lacked user volume and compatibility with many applications.
Fans lauded the N9's ease of use without any "home" button -- a feature of the iPhone and other rivals -- while detractors mocked what they saw as its outdated Meego operating system.
Unveiled by Nokia chief executive Stephen Elop at the CommunicAsia telecoms fair in Singapore this week, fans crowded around the company's booth to try out the device.
The N9 has a 99-millimetre (less than four inches), 854 x 480 pixel display and weighs 135 grams (less than five ounces), putting it clearly in iPhone territory.
Its most distinctive feature is an "all-screen" display, with users swiping the screen to switch between applications.
The device also has a function that allows users to link it to dedicated accessories such as a headset or speakers by simply touching the phone against them.
"Being a user of Apple, an iPhone, this is light years ahead of what iPhone 3G does," declared Paul Krzystoszek, operations and marketing manager for Australian Satellite Communications.
"The ease of use... the intuitive nature of swiping across the screen instead of using a button, there's no button on it, the plastic casing, I think they're all things that make it a lot better than what we have already," he told AFP after trying the phone at the Nokia booth.
"Awesome" was how Shahiran Jaafar, chief executive officer of Malaysian firm Microtel Systems and user of an iPhone 3G, described the N9.
"The fact that you can just swipe it and it goes back to whatever screen that you need it to go back to, the fact that it can show all the open tasks that's available, that's fantastic," he said.
"It just dwarfs the iPhone, the iPhone is nothing now."
However, some were unimpressed by the fact that the N9 was still operating on Nokia's MeeGo platform despite the company's impending adoption of the Windows Phone 7 platform later this year.
"I have a problem with... the operating system ," said Phoosith Ratpiyasoontorn, a Thai systems integration engineer, lamenting that MeeGo lacked user volume and compatibility with many applications.
Tuesday, June 21, 2011
Stocks Cheapest in 26 Years as S&P 500 Falls, Earnings Rise 18%
For the second time since the bull market began, profits are surging and stocks are falling.
Standard & Poor’s 500 Index companies will earn 18 percent more this year than in 2010, according to the average estimate of more than 9,000 analysts compiled by Bloomberg. Higher profits haven’t stopped the gauge from falling 6.8 percent since April 29, pushing valuations to the cheapest levels in 26 years. Even if companies posted no growth, price-earnings ratios would be lower than on 96 percent of days in the past two decades.
The combination of China raising interest rates, concerns about a Greek default and the end of the Federal Reserve’s $600 billion stimulus program have almost wiped out this year’s gains. The divergence between profit forecasts and economic indicators shows the challenge to investors after the S&P 500 gained 88 percent from a 12-year low in March 2009.
“The market is not willing to pay for future growth,” said Nigel Holland, who helps oversee $516 billion at Legal & General Group Plc in London. “Provided there is better data, it will stabilize,” he said. “The market probably has room to rise 10 percent by year-end.”
The S&P 500 climbed less than 0.1 percent to 1,271.50 last week, snapping its longest retreat since 2008, after reports on jobless claims, retail sales and Chinese industrial production exceeded economists’ forecasts and German Chancellor Angela Merkel retreated from demands that bondholders be forced to swallow losses in a Greek rescue.
The S&P 500 advanced 0.5 percent to 1,278.36 at 4 p.m. in New York today.
At 34 days, the decrease is the second longest since the bull market began. The 16 percent tumble from April to July 2010 lasted 49 days, Bloomberg data show. This year’s retreat has coincided with a decline in predictions for 2011 gross domestic product growth to 2.6 percent from 3.2 percent, according to the median estimate of 83 economists surveyed by Bloomberg.
Losses since April have pushed the price of the S&P 500 to 14.5 times the past year’s earnings, compared with the average of 20.5 since June 1991, according to Bloomberg data. The gauge is valued at 8.7 times cash flow, cheaper than in 81 percent of occasions since 1998. The gauge is priced at 2.1 times book value, or assets minus liabilities, lower than it has traded 90 percent of the time since 1995.
Disappointing reports since May on housing, employment and manufacturing have heightened concerns that $600 billion in Treasury purchases by the Fed have failed to bolster growth. The S&P 500 posted its biggest weekly decline since August in the period that ended June 3 after the U.S. jobless rate unexpectedly climbed to 9.1 percent and payrolls expanded at the slowest pace in eight months. A report from the Institute for Supply Management on June 1 showed that manufacturing expanded at the lowest rate in more than a year.
Credit-default swaps on Greece soared as much as 459 basis points to 2,237 on June 16, according to CMA prices, meaning it cost more than 2 million euros ($2.9 million) a year to insure 10 million euros worth of the nation’s debt.
They traded at 1,932.75 basis points as of 4:30 p.m. in London on June 17 as Merkel backed down from her demands and said she’d work with the European Central Bank to avoid market disruptions.
Investors are concerned about slowing growth in the U.S. and Europe’s sovereign debt crisis at the same time policy makers in China, the world’s second-largest economy, are trying to cool expansion. The country’s central bank has raised the reserve-requirement ratio for lenders 11 times and boosted interest rates four times since the start of 2010 to keep inflation in check.
Should stocks stay at current prices and the analyst prediction come true, the S&P 500 would trade at 12.8 times income on Dec. 31, the lowest level since 1985 except for the six months after Lehman Brothers Holdings Inc.’s bankruptcy in September 2008 and nine months in the late 1980s, according to Bloomberg data. Companies in the S&P 500 are forecast to earn $24.31 this quarter, up from $24.16 at the start of April.
Concern the slowdown will lead to another recession will weigh on stocks even as companies report higher income, said Doug Cliggott, Boston-based equity strategist at Credit Suisse Group AG. He said the S&P 500 will be little changed through year-end.
Stocks may also have to do without more stimulus from the Fed, which will complete its second round of Treasury purchases this month. While Fed Chairman Ben S. Bernanke said during a June 7 speech in Atlanta that record monetary stimulus is still needed to boost the “frustratingly slow” U.S. economic recovery, he gave no indication that the central bank will start a third round of so-called quantitative easing.
Retreats in the S&P 500 that exceed 5 percent are common during bull markets, according to data from Birinyi Associates Inc., the Westport, Connecticut-based money manager and research firm. During the nine rallies between 1962 and 2007, the S&P 500 fell that much an average of seven times, the data show. The index has posted nine such retreats during the current advance.
“Valuation is a strong backbone,” ABN Amro Private Banking Chief Investment Officer Didier Duret, who manages about $200 billion in Geneva, said in a telephone interview. “It’s more or less a reflection of how reluctant investors have been to get back into the equity market.”
Kroger in Cincinnati rose 4.5 percent, the most since October 2009, to $23.99 on June 16. The largest U.S. grocery chain increased its fiscal 2012 earnings forecast to as much as $1.95 a share from $1.92. Analysts, on average, estimated $1.90.
Best Buy, the world’s biggest consumer-electronics retailer, rallied 4.6 percent two days earlier after reporting profit that exceeded analysts’ forecasts, helped by rising demand for smartphones. The Richfield, Minnesota-based company reiterated its full-year projection for earnings per share of $3.30 to $3.55, excluding restructuring costs. Analysts predicted $3.47.
To Alison Porter at Ignis Asset Management, stocks have priced in prospects for a Greek default and the end of the Fed’s bond-buying program.
“We are seeing stable growth, but it is not a strong cyclical recovery,” said Porter, who as U.S. equities fund manager in Glasgow helps oversee $123 billion. Still, “valuations in the market should provide some support,” she said. “Equities are reasonably well positioned from here.”
Standard & Poor’s 500 Index companies will earn 18 percent more this year than in 2010, according to the average estimate of more than 9,000 analysts compiled by Bloomberg. Higher profits haven’t stopped the gauge from falling 6.8 percent since April 29, pushing valuations to the cheapest levels in 26 years. Even if companies posted no growth, price-earnings ratios would be lower than on 96 percent of days in the past two decades.
The combination of China raising interest rates, concerns about a Greek default and the end of the Federal Reserve’s $600 billion stimulus program have almost wiped out this year’s gains. The divergence between profit forecasts and economic indicators shows the challenge to investors after the S&P 500 gained 88 percent from a 12-year low in March 2009.
“The market is not willing to pay for future growth,” said Nigel Holland, who helps oversee $516 billion at Legal & General Group Plc in London. “Provided there is better data, it will stabilize,” he said. “The market probably has room to rise 10 percent by year-end.”
The S&P 500 climbed less than 0.1 percent to 1,271.50 last week, snapping its longest retreat since 2008, after reports on jobless claims, retail sales and Chinese industrial production exceeded economists’ forecasts and German Chancellor Angela Merkel retreated from demands that bondholders be forced to swallow losses in a Greek rescue.
The S&P 500 advanced 0.5 percent to 1,278.36 at 4 p.m. in New York today.
Longest Streaks
Equities also got a boost as retailers Best Buy Co. and Kroger Co. (KR) said they would match or exceed predictions for 2011 income. The advance pared the S&P 500’s loss from its 2011 peak of 1,363.61 on April 29 to 92.11 points.At 34 days, the decrease is the second longest since the bull market began. The 16 percent tumble from April to July 2010 lasted 49 days, Bloomberg data show. This year’s retreat has coincided with a decline in predictions for 2011 gross domestic product growth to 2.6 percent from 3.2 percent, according to the median estimate of 83 economists surveyed by Bloomberg.
Losses since April have pushed the price of the S&P 500 to 14.5 times the past year’s earnings, compared with the average of 20.5 since June 1991, according to Bloomberg data. The gauge is valued at 8.7 times cash flow, cheaper than in 81 percent of occasions since 1998. The gauge is priced at 2.1 times book value, or assets minus liabilities, lower than it has traded 90 percent of the time since 1995.
Not Excessive
“Even in the assumption that earnings growth is zero, valuations would not be excessively high,” said Patrick Moonen, who helps manage $537 billion at ING Investment Management in The Hague, Netherlands. “We are below consensus in the estimated earnings growth, and still think the corporate momentum is very strong.”Disappointing reports since May on housing, employment and manufacturing have heightened concerns that $600 billion in Treasury purchases by the Fed have failed to bolster growth. The S&P 500 posted its biggest weekly decline since August in the period that ended June 3 after the U.S. jobless rate unexpectedly climbed to 9.1 percent and payrolls expanded at the slowest pace in eight months. A report from the Institute for Supply Management on June 1 showed that manufacturing expanded at the lowest rate in more than a year.
Greek Swaps Soar
The cost of insuring against defaults on Greek, Irish and Portuguese government debt surged to records last week on concern governments will fail to impose spending cuts needed for a European Union debt restructuring.Credit-default swaps on Greece soared as much as 459 basis points to 2,237 on June 16, according to CMA prices, meaning it cost more than 2 million euros ($2.9 million) a year to insure 10 million euros worth of the nation’s debt.
They traded at 1,932.75 basis points as of 4:30 p.m. in London on June 17 as Merkel backed down from her demands and said she’d work with the European Central Bank to avoid market disruptions.
Investors are concerned about slowing growth in the U.S. and Europe’s sovereign debt crisis at the same time policy makers in China, the world’s second-largest economy, are trying to cool expansion. The country’s central bank has raised the reserve-requirement ratio for lenders 11 times and boosted interest rates four times since the start of 2010 to keep inflation in check.
Lehman, 1980s
Analysts are boosting profit forecasts even with the global economy showing signs of weakness. S&P 500 earnings may rise to $99.61 a share in 2011 from $84.58 last year and $61.52 in 2009, according to data compiled by Bloomberg. That’s an increase from the forecast of $95.37 on Jan. 3 and $98.70 on April 29, the data show.Should stocks stay at current prices and the analyst prediction come true, the S&P 500 would trade at 12.8 times income on Dec. 31, the lowest level since 1985 except for the six months after Lehman Brothers Holdings Inc.’s bankruptcy in September 2008 and nine months in the late 1980s, according to Bloomberg data. Companies in the S&P 500 are forecast to earn $24.31 this quarter, up from $24.16 at the start of April.
Concern the slowdown will lead to another recession will weigh on stocks even as companies report higher income, said Doug Cliggott, Boston-based equity strategist at Credit Suisse Group AG. He said the S&P 500 will be little changed through year-end.
Not Extreme
“We wouldn’t put the market now as extremely rich or in a sense extremely attractively valued,” Cliggott said in an interview on Bloomberg Television’s “InsideTrack” with Deirdre Bolton on June 13. “Price-earnings multiples will be at or below their historical averages because of all the uncertainties on future growth.”Stocks may also have to do without more stimulus from the Fed, which will complete its second round of Treasury purchases this month. While Fed Chairman Ben S. Bernanke said during a June 7 speech in Atlanta that record monetary stimulus is still needed to boost the “frustratingly slow” U.S. economic recovery, he gave no indication that the central bank will start a third round of so-called quantitative easing.
Retreats in the S&P 500 that exceed 5 percent are common during bull markets, according to data from Birinyi Associates Inc., the Westport, Connecticut-based money manager and research firm. During the nine rallies between 1962 and 2007, the S&P 500 fell that much an average of seven times, the data show. The index has posted nine such retreats during the current advance.
‘Strong Backbone’
Global investors increased their cash holdings to the highest level in a year this month as hedge funds slashed the amount of borrowed money invested in stocks, a survey from Bank of America Corp. (BAC)’s Merrill Lynch unit showed on June 14.“Valuation is a strong backbone,” ABN Amro Private Banking Chief Investment Officer Didier Duret, who manages about $200 billion in Geneva, said in a telephone interview. “It’s more or less a reflection of how reluctant investors have been to get back into the equity market.”
Kroger in Cincinnati rose 4.5 percent, the most since October 2009, to $23.99 on June 16. The largest U.S. grocery chain increased its fiscal 2012 earnings forecast to as much as $1.95 a share from $1.92. Analysts, on average, estimated $1.90.
Best Buy, the world’s biggest consumer-electronics retailer, rallied 4.6 percent two days earlier after reporting profit that exceeded analysts’ forecasts, helped by rising demand for smartphones. The Richfield, Minnesota-based company reiterated its full-year projection for earnings per share of $3.30 to $3.55, excluding restructuring costs. Analysts predicted $3.47.
To Alison Porter at Ignis Asset Management, stocks have priced in prospects for a Greek default and the end of the Fed’s bond-buying program.
“We are seeing stable growth, but it is not a strong cyclical recovery,” said Porter, who as U.S. equities fund manager in Glasgow helps oversee $123 billion. Still, “valuations in the market should provide some support,” she said. “Equities are reasonably well positioned from here.”
Stocks in U.S. Rise, Euro Recovers as Juncker Eases Concern on Debt Crisis
U.S. equities climbed for a third day, while the euro erased losses and European stocks pared declines, amid European assurances that a solution will be found to spare Greece from default. Treasuries reversed gains.
The Standard & Poor’s 500 Index increased 0.5 percent to 1,278.36 at 4 p.m. in New York and the Stoxx Europe 600 Index lost 0.5 percent, recovering more than half of a 1.1 percent slide. The 10-year Treasury note yield was up one basis point at 2.95 after sinking as much as six points. The S&P GSCI Index of commodities fell for a fourth day, with wheat, heating oil and coffee leading declines. The euro was little changed at $1.4301 after earlier sinking as much as 0.8 percent.
The 17-nation shared euro currency also erased its decline versus the yen as Luxembourg’s Jean-Claude Juncker said Italy was not in danger from the debt crisis. Juncker said Greek Prime Minister George Papandreou had assured him the government would do everything to ensure financial aid from the European Union and International Monetary Fund before the Greek parliament resumes debating a motion of confidence in the government.
“We may be past the point of maximum pessimism,” said Madelynn Matlock, who helps oversee $14.8 billion at Huntington Asset Advisors in Cincinnati. “Looking at the consequences of not funding Greece, they will do it,” she said. “The goal is making sure that the global financial system stays operating. The market is a whole lot cheaper than it was. Still, we’re going to have ups and downs on a daily basis. It’s not going to be calm and smooth sailing for the next several months.”
Assurances by Luxembourg’s Juncker, who leads the group of euro-area finance ministers, helped reverse the market declines. Juncker said private investors will be “present” in any second rescue package for Greece, though he said he doesn’t know if they’ll be “enthusiastic.”
The IMF is focused on getting Greece’s first bailout program on track, Acting Managing Director John Lipsky told reporters in Luxembourg today. Greece hasn’t approached the agency to ask for additional aid, he said.
Caterpillar Inc. (CAT) rose 2.3 percent for the top gain in the Dow Jones Industrial Average after being raised to “strong buy” at Raymond James & Associates. DuPont Co. and Microsoft Corp. (MSFT) also climbed more than 0.8 percent to help lead gains in 25 of 30 Dow stocks.
Goldman Sachs Group Inc. reduced its second-quarter growth forecast for the world’s largest economy to 2 percent from 3 percent. Reports this week will probably show home sales dropped in May to the lowest level of the year, while orders placed with factories increased, according to economists surveyed by Bloomberg.
Bank shares were the biggest drag of 19 industry groups in Europe’s Stoxx 600, with Banca Popolare di Milano Scrl plunging 7.4 percent and Banca Monte dei Paschi di Siena SpA tumbling 2.6 percent.
The Swiss franc strengthened against its 16 major peers. The Australian dollar fell versus all of its biggest counterparts, losing 0.5 percent against the U.S. currency.
The U.S. currency rose against higher yielding counterparts such as the Australian and New Zealand dollars as strategists speculated that the Federal Reserve won’t signal a third round of quantitative easing after a meeting on June 22. The Federal Open Market Committee has kept its benchmark rate unchanged between zero and 0.25 percent since December 2008.
Greek 10-year bonds slid, driving the yield up 40 basis points to 17.34 percent. The extra yield, or spread, investors demand to hold the securities instead of benchmark German bunds increased 40 basis points to 1,438 basis points.
The Markit iTraxx SovX Western Europe Index of credit- default swaps erased earlier gains, dropping 1.3 basis point to a mid-price of 221.
The MSCI Emerging Markets Index slid 0.4 percent, falling for a fourth day. The Bombay Stock Exchange Sensitive Index sank 2 percent after a report that the government sought to tax gains on investments routed through Mauritius. Turkey’s ISE National 100 Index lost 1.2 percent after regulators increased provisions that lenders must make against some consumer loans. Russia’s Micex Index slipped 1.2 percent on lower oil.
The MSCI Asia Pacific Index slid 0.4 percent as energy and raw-material producers led losses. BHP Billiton Ltd., Australia’s biggest oil producer, sank 1.4 percent in Sydney. Sun Hung Kai Properties Ltd., the world’s biggest developer by market value, lost 2 percent in Hong Kong after Walter Kwok, a former chairman, said the city’s property prices may fall as much as 15 percent by the end of the year.
Japanese power companies advanced after the government said it may allow atomic reactors to restart following the worst nuclear accident in 25 years.
The Standard & Poor’s 500 Index increased 0.5 percent to 1,278.36 at 4 p.m. in New York and the Stoxx Europe 600 Index lost 0.5 percent, recovering more than half of a 1.1 percent slide. The 10-year Treasury note yield was up one basis point at 2.95 after sinking as much as six points. The S&P GSCI Index of commodities fell for a fourth day, with wheat, heating oil and coffee leading declines. The euro was little changed at $1.4301 after earlier sinking as much as 0.8 percent.
The 17-nation shared euro currency also erased its decline versus the yen as Luxembourg’s Jean-Claude Juncker said Italy was not in danger from the debt crisis. Juncker said Greek Prime Minister George Papandreou had assured him the government would do everything to ensure financial aid from the European Union and International Monetary Fund before the Greek parliament resumes debating a motion of confidence in the government.
“We may be past the point of maximum pessimism,” said Madelynn Matlock, who helps oversee $14.8 billion at Huntington Asset Advisors in Cincinnati. “Looking at the consequences of not funding Greece, they will do it,” she said. “The goal is making sure that the global financial system stays operating. The market is a whole lot cheaper than it was. Still, we’re going to have ups and downs on a daily basis. It’s not going to be calm and smooth sailing for the next several months.”
Greece Negotiations
Earlier losses in stocks and the euro were triggered by European officials’ failure to agree on a Greek loan payout. Euro-area finance ministers who met yesterday in Luxembourg put off a decision on whether Greece will get the full 12 billion euros ($17 billion) promised for July and pushed for the nation to press ahead with budget cuts. Prime Minister Papandreou faces a confidence vote this week.Assurances by Luxembourg’s Juncker, who leads the group of euro-area finance ministers, helped reverse the market declines. Juncker said private investors will be “present” in any second rescue package for Greece, though he said he doesn’t know if they’ll be “enthusiastic.”
The IMF is focused on getting Greece’s first bailout program on track, Acting Managing Director John Lipsky told reporters in Luxembourg today. Greece hasn’t approached the agency to ask for additional aid, he said.
Third Straight Gain
The S&P 500 rose for a third straight day after snapping a streak of six weekly losses on June 17. The index is down 6.3 percent from an almost three-year high at the end of April, trimming its 2011 gain to less than 2 percent, as lower-than- forecast data on jobs growth and manufacturing spurred concern the economic expansion is slowing.Caterpillar Inc. (CAT) rose 2.3 percent for the top gain in the Dow Jones Industrial Average after being raised to “strong buy” at Raymond James & Associates. DuPont Co. and Microsoft Corp. (MSFT) also climbed more than 0.8 percent to help lead gains in 25 of 30 Dow stocks.
Goldman Sachs Group Inc. reduced its second-quarter growth forecast for the world’s largest economy to 2 percent from 3 percent. Reports this week will probably show home sales dropped in May to the lowest level of the year, while orders placed with factories increased, according to economists surveyed by Bloomberg.
Falling Commodities
The S&P GSCI index of 24 commodities fell 0.3 percent for a fourth straight decline, the longest selloff since May 6, as wheat, heating oil and coffee fell at least 1.7 percent. New York-traded oil rose 25 cents, or 0.3 percent, to settle at $93.26 a barrel after sliding as much as 2 percent earlier. Copper fell 0.5 percent.Bank shares were the biggest drag of 19 industry groups in Europe’s Stoxx 600, with Banca Popolare di Milano Scrl plunging 7.4 percent and Banca Monte dei Paschi di Siena SpA tumbling 2.6 percent.
The Swiss franc strengthened against its 16 major peers. The Australian dollar fell versus all of its biggest counterparts, losing 0.5 percent against the U.S. currency.
The U.S. currency rose against higher yielding counterparts such as the Australian and New Zealand dollars as strategists speculated that the Federal Reserve won’t signal a third round of quantitative easing after a meeting on June 22. The Federal Open Market Committee has kept its benchmark rate unchanged between zero and 0.25 percent since December 2008.
Greek 10-year bonds slid, driving the yield up 40 basis points to 17.34 percent. The extra yield, or spread, investors demand to hold the securities instead of benchmark German bunds increased 40 basis points to 1,438 basis points.
Italian-German Spread
The Italian-German spread widened three basis points after Moody’s put Italy’s Aa2 rating on review for a downgrade June 17, citing economic growth challenges, risks associated with efforts to reduce debt and the potential for higher borrowing costs.The Markit iTraxx SovX Western Europe Index of credit- default swaps erased earlier gains, dropping 1.3 basis point to a mid-price of 221.
The MSCI Emerging Markets Index slid 0.4 percent, falling for a fourth day. The Bombay Stock Exchange Sensitive Index sank 2 percent after a report that the government sought to tax gains on investments routed through Mauritius. Turkey’s ISE National 100 Index lost 1.2 percent after regulators increased provisions that lenders must make against some consumer loans. Russia’s Micex Index slipped 1.2 percent on lower oil.
The MSCI Asia Pacific Index slid 0.4 percent as energy and raw-material producers led losses. BHP Billiton Ltd., Australia’s biggest oil producer, sank 1.4 percent in Sydney. Sun Hung Kai Properties Ltd., the world’s biggest developer by market value, lost 2 percent in Hong Kong after Walter Kwok, a former chairman, said the city’s property prices may fall as much as 15 percent by the end of the year.
Japanese power companies advanced after the government said it may allow atomic reactors to restart following the worst nuclear accident in 25 years.
Subscribe to:
Posts (Atom)