Posts Tagged ‘India’
Thursday, July 29th, 2010
It’s ironic that — even in the depths of the Great Recession — the number of millionaires around the world grew by 17 percent to 10 million. Their collective wealth surged 19 percent to $39 trillion, according to the latest world wealth report from Merrill Lynch-Capgemini. “We are already seeing distinct signs of recovery and, in some areas, a complete return to 2007 levels of wealth and growth,” said Bank of America Corporation wealth management chief Sallie Krawcheck.
India, China and Brazil are home to the majority of the world’s newest millionaires, despite the fact that they were some of the hardest hit markets in 2008. Asia now has three million millionaires - meaning it has caught up with Europe - thanks to a 4.5 percent economic expansion rate. Their combined wealth soared 31 percent to $9.7 trillion, outstripping Europe’s $9.5 trillion.
North America’s wealth grew by 18 percent, while the number of individuals considered rich climbed 17 percent; their wealth totals $10.7 trillion. Last year, the United States boasted the most millionaires - 2.87 million. Japan was next with 1.65 million; Germany had 861,000; and China 477,000. Switzerland boasts the highest concentration of millionaires, with approximately 35 for every 1,000 adults.
According to Lyle LaMothe, Merrill Lynch’s U.S. wealth management chief, “The wealthy allocated, as opposed to concentrated, their investments.” In other words, they put their money into fixed-income investments that provided predictable cash flow. The trick now is to convince the wealthy to return to higher risk investments that have a higher income potential. “There is still a hesitancy,” LaMothe notes. “Liquidity is incredibly important and people need cash flow to preserve their lifestyle - but they want to replace that cash flow in a way that does not increase their risk profile. Investors are open to areas they hadn’t thought about before as they try to preserve their ability to be philanthropic, to preserve their lifestyle. To me, the report underscored that clients are involved and they’re not inclined to stay in one percent savings accounts.”
Tags: Asia Pacific, Bank of America Corporation, Brazil, China, Germany, Great Recession, India, Latin America, Merrill Lynch-Capgemini, millionaires, Switzerland, United States, wealth management
Posted in Economics | 1 Comment »
Tuesday, July 13th, 2010
Jones Lang LaSalle and LaSalle Investment Management have noted reasonable improvement in global market transparency, according to their recently released 2010 Commercial Real Estate Transparency Index.
According to the Index, Australia ranks as 2010’s most transparent market. Canada is next in line, and improving markets include China, India, Poland, Portugal, Romania, Greece and Hungary. Market transparency had fallen in Pakistan, Venezuela, Dubai and Bahrain.
“The 2010 Global Real Estate Transparency Index reveals a notable slowdown in the progress of real estate transparency over the past two years,” said Jacques Gordon, LaSalle Investment Management’s global head of strategy. “It suggests that the recent turmoil in global financial, economic and real estate markets has impacted on market behavior, with real estate players focusing on survival rather than market advancement.”
Tags: Australia, Bahrain, Canada, China, Dubai, Greece, Hungary, India, Jones Lang LaSalle, Kuwait, Pakistan, Poland, Portugal, Romania, Venezuela
Posted in Development | No Comments »
Monday, June 21st, 2010
Breakthrough ideas that change industries are increasingly coming from the developing world rather than the United States or Western Europe. Part of this is due to the fact that the West is outsourcing more research and development to emerging markets. Currently, Fortune 500 firms have 98 research-and-development facilities in China and an additional 63 in India. IBM’s staff in emerging nations is larger than its U.S.-based workforce.
According to The Economist, “But it is also because emerging-market firms and consumers are both moving upmarket. Huawei, a Chinese telecoms giant, applied for more international patents than any other firm did in 2008. Chinese 20-somethings spend even more time on the internet than do their American peers. Even more striking is the emerging world’s growing ability to make established products for dramatically lower costs: no-frills $3,000 cars and $300 laptops may not seem as exciting as a new iPad but they promise to change far more people’s lives.”
Dubbed “frugal innovation”, this trend redesigns products and processes to eliminate unnecessary costs. For example, Indian telecom provider Bharti Airtel has dramatically cut the cost of providing mobile phone services by creating unique partnerships with its competitors and suppliers. The firm shares radio towers with competing firms and outsources network construction, operations and support to companies such as Ericsson and IBM.
Tags: BRIC, China, Ericsson, Fortune 500, frugal innovation, Henry Ford, Huawei, IBM, India, internet, iPad, Kenya, The Economist, Toyota, United States
Posted in Development, Economics | No Comments »
Tuesday, February 2nd, 2010
India is expected to grow at 7.5 percent this year, up from 6 percent in 2008 — a rate that is the envy of most of the world. To buoy its economic prospects, the Indian Government has raised more than $100 billion over the last four quarters to finance a stimulus package, pushing the country’s debt to 50 percent of the total GDP. One place that’s feeling the optimism is India’s IT industry. As 2010 gets underway, recruiting will reach a peak with spikes in salary hitting pre-recession levels, according to advisory firm Gartner’s India regional VP, Partha Iyengar.
In terms of outsourcing, this year is likely to be characterized by an inflow of low-end projects off-shored to Indian vendors to achieve cost savings. Speaking in an interview with Financial Express, Iyengar said that 2010 will also reveal consolidation in the software sector along with spiked IT spending by Indian firms.
Off-shoring is likely to witness what Iyengar calls a “back to the future syndrome”. The next year will see industry growth pushed forward by cost savings, which is how the outsourcing sector initially began. Most outsourcing projects are expected to be related to maintenance support and application development.
For global firms, outsourcing often provides 80 percent of a company’s cost savings. Consequently, more low-end work will come in to India. More complex projects are likely to follow in 2011.
Additionally, 2010 is likely to be marked by mergers and acquisitions. Giants in the Indian outsourcing business like Infosys, TCS, and Wipro will make more acquisitions in Europe in order to acquire onsite capacity. They will also expand to near-shore destinations to tap markets in Latin America, Eastern Europe and elsewhere. Meanwhile, global firms, particularly Tier II firms that have not developed off-shore capacities, will make acquisitions in India and other top outsourcing countries.
Jacob Cherian is the India correspondent for AlterNow. His work is featured on SourcingLine, a leading source of data and news about offshoring.
Tags: Gartner's India, India, Infosys, IT industry, outsourcing, Partha Iyengar, TCS, wipro
Posted in Economics | No Comments »
Monday, November 16th, 2009
A report by India’s Economic Times indicates that up to 11 multinational firms including Wells Fargo, Standard Chartered and Ingersoll Rand set up back office facilities in India during the 3rd quarter of 2009.
A research firm, Everest Group, says this bodes well for the overall business momentum in India picking up in 2010. Two of the reasons cited for India’s resurgence are the depreciation of the Indian currency and the reduction in operating costs which have enticed outsourcing operations back.
Although there was movement of outsourcing projects to facilities in Latin America and Southeast Asia, India continues to dominate the scene in the third quarter.
The new numbers signal a shift away from the doldrums of the first part of 2009. Many U.S. firms like GE and CitiGroup put expansion plans and capital projects on hold due to the deteriorating financial ratios.
Jacob Cherian is AlterNow’s India Contributor. He is a business writer for Offshore Advisor.
Tags: Citigroup, GE, India, Latin America, outsourcing, Southeast Asia
Posted in Economics | No Comments »
Thursday, October 1st, 2009
With U.S. unemployment figures approaching 10 percent, it has affected parts of the tech industry with the chip and system design areas among the most affected (unemployment is 8.6 percent among American software engineers although the overall tech sector is faring better with an unemployment rate under five percent). In response, it has led seasoned talent to eschew searching for a new job in favor of offering their services to the highest bidder, according to a new online report.
It’s also been a boon for countries overseas. American companies now have access to highly skilled contract talent across the globe who can collaborate virtually. India, especially, is reaping the benefits since approximately 64 percent of all outsourced computer-design projects went to Indian companies this year, up from 51 percent the previous year. Trailing close behind was China, which raked in 33 percent.
Jacob Cherian is AlterNow’s India Contributor. He is a freelance business writer based in Kerala, India. He has written about business outsourcing for Offshore Advisor.
Tags: China, India, outsourcing, unemployment
Posted in Economics | No Comments »
Tuesday, September 8th, 2009
Much has been made in the world’s press about India’s economy buoyed by its IT sector. And a lot of it is justified. The nation’s IT sector managed to grow some 20 percent in 2008, according to India’s National Association of Software and Services Companies, and IT firms have already extended 100,000 job offers for 2009.
But all is not rosy for India. While the country has surged in the basic and mid-level areas of coding and development, it has struggled in the area of R&D and top-end innovation. India produces about 300,000 computer science graduates a year. Yet it produces only about 100 computer science PhDs, a small fraction of the 1,500 - 2,000 that get awarded in the United States or China every year according to a recent article from Reuters.
“Students here are not exposed to research from an early age, faculties are not exposed to research and there’s no career path for innovation because there’s a lot of pressure to get a ‘real’ job,” said Vidya Natampally, head of strategy at the Microsoft India Research Centre. Rival China has already pulled ahead with more than 1,100 R&D centers compared to less than 800 in India, despite lingering concerns about rule of law and intellectual property rights (IPR). India is also losing out in the patent stakes. In 2006 - 2007, just 7,000 patents were granted in this country of 1.1 billion people, compared to nearly 160,000 in the United States.
India is cheaper than China for R&D. But salaries in India have been rising by about 15 percent every year and may soon reach parity with China. R&D centre costs in Shanghai are currently just 10-15 percent higher than in India.
But this could be changing: Microsoft, for example, has just opened a new facility in Bangalore staffed with about 60 full-time researchers, many of them Indians with PhDs from top universities in the United States. The center “is at the cutting edge of Microsoft’s R&D, covering seven areas of research including mobility and cryptography. Cisco, IBM, Intel, Nokia are among the other companies going beyond low-end coding to bring R&D to India.
Jacob Cherian is AlterNow’s India Contributor. He is a freelance business writer based in Kerala, India. He has written about business outsourcing for Offshore Advisor.
Tags: Bangalore, China, computer science, Development, economy, IBM, India, information technology, Intel, IPR, IT, Kerala, Microsoft, Microsoft India Research Centre, Nokia, patent, Shanghai, United States
Posted in Economics, General | No Comments »
Monday, December 8th, 2008
Wonder where real estate titan Sam Zell’s investment dollars are going during these recessionary times? Despite the global financial crisis, Zell is investing in countries like Brazil, Egypt, Mexico and China - all of which he says have a shortage of affordable housing and lack infrastructure. Zell, the chairman of Chicago-based Equity Group Investments, LLC, likes Brazil for its large pool of skilled professionals, self sufficiency and unlimited resources. As recently as last April, Brazil’s largest mall owner reported that retail sales grow 10 percent every year. “If you look at all of the facts, I don’t think there is a better environment in all the world than Brazil,” according to Zell, who thinks the South American nation could overtake China in economic strength within 30 years. In Brazil and Mexico, the funding to develop housing has not been affected by the credit crunch because their financial markets are well capitalized. Conditions are similar in Egypt, where a serious housing shortage exists, as well as in China where Zell is profiting from his investment in affordable residences.
Zell’s comments draw attention to the BRIC countries - Brazil, Russia, India, China - which continue to give hope to observers worldwide with growth rates still in strong single digits and enormous populations who have gained tremendous buying power in the last decade.
Tags: affordable housing, BRIC countries, buying power, China, Egypt, global financial crisis, housing shortage, India, Mexico, recession, Russia, Sam Zell, South American
Posted in Economics | No Comments »
Wednesday, March 26th, 2008
The current debate about spiralling fuel prices uses the price of gasoline at the pump as the belwether of energy prices. In the real estate industry, the energy metric commonly raised is electricity. But another spike is more striking: Diesel fuel prices soared 26.75 cents, or 7 percent, to an average $4.0630 per gallon from $3.7955 two weeks earlier, according to a report by Reuters, Sunday, March 23, 2008. While gas prices hit us directly, diesel is the fuel of our macroeconomy, driving the global supply chain — from trucks to trains, ships, boats and barges, not to mention farm and construction equipment Worldwide demand has been increasing because of emerging economies like China and India, as well as Europe — all of which has tightened global refining capacity. Also, the Federal excise tax on diesel fuel is 24.4 cents per gallon — a full nickel higher than the tax on gasoline. Time will tell what impact this will have on the industrial real estate sector which remains strong — in part because manufacturing output in the U.S. has never been higher and continues to expand, helped by the weakening dollar which has buoyed a good deal of outbound trade. Also, retail remains solid, particularly the indy grocers and big-box retail which fuel so much of the warehouse/distribution construction in our country. Will the rising cost of fuel cause a shift in the supply chain? Perhaps the most compelling proofs of the impact of diesel prices may be anecdotal and personal. Take trucker Charles Monroe, a driver for more than 30 years. During an interview with WDEF in Chattanooga, TN, Monroe said, “Since I’ve been driving fuel prices have tripled at least. It’s about $600 to fill this one up if she’s empty.” With diesel prices at almost $4 per gallon, many drivers are cutting back. Independent trucker Jessie Smith says , “If they got three or four trucks they’re parking them and running just one and doing short hauls. The rate of the freight is not going up with the fuel prices. I’m doing mostly short hauls. They pay a little bit more per load and per mile and that helps with my fuel bill.”
Tags: big box, Chattanooga, China, diesel fuel, Federal excise tax, India, industrial real estate, retail, Reuters, Tennessee, warehouse distribution, WDEF
Posted in Financing, Industrial | No Comments »