May 2006 - Page 4 of 4 -

FDI

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India is at an all time high as far as growth is concerned, with growth being targeted at about 7-8% for the fiscal year. We need to see the environment, and if it is conducive for attracting FDI in India. India has reduced its tariff barrier and has made the International Property Rights stringent, while many MNC are of the opinion that the IPR must be relaxed a little to increase the inflow of traffic. But according to my earlier articles, we must bear in mind that Intellectual Property Rights not only safeguards the indigenous products but also of those companies who are willing to set up their R&D facilities here. India has been ranked one of the most sought after place for investments. The returns to the Investments seem to be high. With inflation under control at 5.5%, it is only apparent that there has been an increase in the purchasing power parity and hence demands. In order to meet the ever-increasing demand, with increase in the lifestyle, it is a necessity that India attract all the foreign investment that it can. Already India is practicing a FDI friendly environment.

With the introduction of VAT, there seems to be a positive attitude on the investment as far as the domestic side is concerned, this optimism is spreading through to Foreign Direct Investments too. With the relaxation of trade barriers, more foreign goods are finding its way into India. Given the conducive environment, India is all set to welcome the Foreign Investors.

But what is lacking? One major setback seems to be Infrastructure facility. The government policies must be to improve the various amenities. Any foreign Investment depends on strong Infrastructure facilities. This is a Government call, and only a strong and a long-term policy can rectify the situation. But we need to look at the improvement made at this front too, take for example Hyderabad. Chennai with the various improvements in roadways and other infrastructure facilities in the last few years is setting an example too. So as Mr. P. Chidambaram has said, India is all set to walk on the path of developed economies in less than fourteen years.

Investors not impressed with ebay

Posted by | Management | No Comments

In spite of a powerful presentation by MegWhitman and assuring that ebay is all poised to increase by 31%, the executive presentations and talks did not make good impact and the NASDAQ shares fell. The three powerful pillar of ebay being ebay auction house, shopping, Pay Pal and skype. Pay Pal and skype (internet call facility) being the major revenue earners. Pay pal alone accounts for 44% increase in revenue. Ebay is foreseeing an increase of 35%-40% in the long run and about 20-25% increase in its new entrants. At present ebay seems to make an annual increase of 20%. Therefore we cannot expect an immediate improvement, in the long run there definitely seems to be a positive growth for ebay . With its ebay online shopping and auction getting as many hits as that of the search engine google, we need to wait and watch the growth curve of this industry.

GOOD NEWS FOR US MARKET

Posted by | World | No Comments

With the crude oil prices falling for the second consecutive day to about 3%, with a resulting price at $70 per barrel, shares of General Electrical and Exxon Mobil Corporation were on the rise, star bucks helped NASDAQ to increase by 27%

As far as IT is concerned this seems to be a good opportunity to buy Microsoft shares according to analysts. According to my earlier articles, the long time earnings of Microsoft might increase, given its present spending strategy.Source: REUTERS and www.news.com

Market

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US Market

Due to mixed report dominating the market, Dow fell down to 16 points. NASDAQ fell by 6 points when the markets closed on May 3rd.

Indian Market.

Indian sensex seems to be strong, Nify gained 0.3%. Leading the pack was TATA Motors, Bharti, Airtel, Bajaj Auto, ITC limited, and Reliance industries are key gainers. The industries which should be watched out are Gujarat Ambuja Cement, HDFC, ICICI, HDFC bank, and ONGC.

Sources: NDTVprofit.com and www.news.com

Microsoft and Yahoo!

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Microsoft might want to buy a stake in Yahoo, (wall street journal) to enable to compete against Google. Though according to Reuters the talk between yahoo and Microsoft do not seem to very active on this front, Microsoft might want to join hands with Yahoo to fight its competitor Google. As we can remember there were talks between Microsoft and AOL to enter into partnership over AOL’s search engine, but the talks fell through when Google had decided to invest about 5% in AOL. According to sources if Microsoft and Yahoo hold talks then Microsoft might try to sell its MSN and have a minority stake in the Internet Portal.

As you might be well aware and according to my articles written earlier, Microsoft’s share fell, when it had announced further increase in its investment expenditures. But we will have to see what the partnership might do to Microsoft, as a stake in the Yahoo Internet portal would definitely give a boost to Microsoft’s profile. Microsoft’s new stand is ‘more expenditure towards the Internet’. Though the results may not be immediate, Microsoft might gain in the long run, given its string of investments plan for the next fiscal year starting from July 1. Let’s wait and watch folks!

India asked to Reform FDI AND IPR:

Posted by | World | No Comments

According to Economic Times, India was asked to look into its Foreign Direct Investments and Intellectual Property Rights, to get more US investments US under secretary of commerce for International Trade Franklin L. Lavin has asked India to reduce its trade barriers such that America can invest more here. The present FDI from US is $5.9 billion. It was further added that India should reduce its IPR on certain areas like pharma and agriculture. India can be a world leader in Pharma, provided that the present barrier is reduced. Also Investments in agriculture is another area, which should be looked into. US accounts for only 1% of its exports to India, this situation should be changed and the barriers relaxed.

Looking into the report above, it can only be said, that India might have its own reason for high trade barriers. For one India might want to retain its indigenous methods in agriculture, and not all investment from foreign countries can suit Indian agricultural economy. As far as the Pharma industry is concerned, Indian herbs and products have such value all over the world, and it is only logical for India to safeguard its property rights and not divulge it all over, lest it lose its market.Courtesy: www.economictimes.indiatimes.com

INTEL TO HELP INDIA

Posted by | Technology | No Comments

Intel is planning to invest around $1 billion towards development (IT) of emerging nations. It is mostly in the form of PC’s and Internet; Intel will be responsible for providing equipment and teachers training for the same. The main focus for Intel is India and China. Intel is already into manufacturing specialised PC’s to suite the particular nation example; it has already bought out a PC, which is encased (for India) so that it can keep out the dust.

Intel might be looking at the growing potential of the two countries. Intel entered into china during the 80’s and was able to tap the huge potential that was available. India though a growing IT powerhouse had only 14 computers per 1000 people last year and still has a good potential to be tapped.

Source: cnet news.com

More spending by Microsoft

Posted by | Technology | No Comments

According to Reuters Microsoft is all set to spend $2 billion dollar more on technology next year. Microsoft new strategy is to provide software solutions through web and it is clearly making waves through its new strategy. This has caused shares to go down by 11 percent on Friday. Microsoft’s new strategy is to harness untapped potential on the internet (same as the platform of yahoo and google). There has been mixed reactions to Microsoft’s expenditures.

Yahoo in a new avatar!

Posted by | Technology | No Comments

Yahoo is entering a new domain, which was dominated Cnet Networks. Yes it is offering a whole array of gadgets, accompanied by plain English advice by experts. According to Reuters, Yahoo is expanding into other areas like finance, travel and automobiles. These various strategies will be under a brand name Yahoo tech! What is new about the shopping network is that unlike others it comes with expert’s advice in simple English, and not technical jargons which is difficult for everyone to comprehend.

WATCH OUT FOR JET!

Posted by | Management | No Comments

Jet Airways, which has started its overseas operation recently has experienced loss in its operations, though tides are expected to turn in the current year. The marginal earnings from its domestic flights are also eroding. Though the company has seen an increase of 15% of profit, earning around 452 crores. The profit is due to the sale and buys back schemes of Jet Airways, which it plans to do so every year and this would sustain the company for the time being. Of the fleet of 53 aircrafts, it owns 19 of them and intends to buy some more. So the market has to watch for Jet, according to officials there it might break even in eighteen months.

Sourcehttp://www.economic times. India times.com

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