Steve Jobs, who co-founded Apple Inc together with Steve Wozniak, recently resigned from the position of Chief Executive Officer (CEO) of the company. Having spearheaded Apple to the height of success, Jobs has been fighting a rare form of cancer, for at least the last six years.

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Standard and Poor, the global credit rating agency, recently downgraded the United States (US) debt from a ‘premium’ to a ‘second tier’ rating, highlighting the risk of potential default to lenders on the monies lent to the US. This event sparked widespread reactions from across the world economy, significantly slowing down growth. Read on to know more about the key issues post the US debt downgrade.

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K V Kamath, recently took over as the Non-executive Chairman of Infosys from Narayana Murthy. Over the last few months TCS and CTS (Cognizant) have moved ahead of Infosys and Wipro. For the quarter ended June 2011, TCS and Cognizant grew revenues between 7 percent and 9 percent while Infosys recorded a mere 5 percent. Is this problem due to global economic slow down or is it something else? So, what are the challenges faced by Infosys? Why is it showing signs of underperformance? Is Kamath the right choice to lead Infosys at this point in time? What decisions Kamath needs to take in order to fix the issues?

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With only a $ 2.4 trillion expenditure cut and a poor budgeting process, S&P, perceived a major risk and hence, for the first time in the history, it downgraded US’ long-term debt from AAA to AA+. Now, with this downgrade, US joins the band of ‘second rated’ countries like China, Japan and Kuwait. Negative reaction from markets all over the world has been widespread; followed by the steepest fall in the US stock prices in the last three years. So, what are the implications of the S&P downgrade?

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The Cabinet of Secretaries (CoS) recently recommended opening up foreign direct investment (FDI) in the ‘multi-brand’ retail sector. This move allows many of the global retailers like Wal-Mart and Carrefour to enter the Indian market, in partnership with other Indian companies. An insight……

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The Indian government has recently unveiled a draft legislation, ‘The Draft National Land Acquisition and Rehabilitation & Resettlement Bill, 2011’ that is expected to provide a transparent legal framework, offering adequate compensation to land owners and ensuring rehabilitation of those displaced.

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For how long can rich countries keep throwing around monies behind inefficiently run countries like Greece? Why has Greece got itself into such a position? Is it blackmailing the EU? Or, contrarily can the EU expel Greece from the EU to make things simple? How can Greece correct this position, if it is sincere? To know more, read on…

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Recently, prices of diesel, kerosene and liquid petroleum gas (LPG) were raised across India. Diesel price was increased by Rs 3, which will now cost Rs 43.06 per litre in Mumbai. Kerosene price was increased by Rs 2 resulting in a price of Rs 14.27 per litre. LPG price was increased by Rs 50 per cylinder. Petrol price was increased a couple of months ago resulting in the current price of Rs 68.3 per litre. This article offers an insight into the impact of the price hike.

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The existing IMF Managing Director (MD) Dominique Strauss-Kahn was recently forced to resign due to allegation of public misconduct, for which he is undergoing trial in a New York Court. The IMF is now in the process of selecting its next Chief, which is likely to be finalised by June 30, 2011.  

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Research on the issue of ‘managerial productivity’ confirms that acquisition of appropriate ‘skill sets’ by managers is a prerequisite to achieve a higher ROCE and thereby be more managerially productive! Managers from Western and other developed countries deploy an array of scientific and modern management practices that help them better use the resources ‘on hand’. To know more, read on…

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The year 2011 has seen the Indian stock markets underperforming; overall, the markets dipped by more than 10 percent during the current year, making it one of the worst performing markets as compared to other Asian stock markets. An insight into the March 2011 quarterly results…

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The Competition Commission of India (CCI) recently announced new merger and acquisition norms. This will make it mandatory for companies proposing to merge with other companies to secure CCI approval ahead of the merger transaction. So, what is CCI’s role? What has it got to do with mergers and what implications does merging for two companies have with competition?

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The latest data on India’s industrial and manufacturing sector performance has been discouraging; the sector has slowed down to less than 4 percent during Feb 2011, as compared to 15 percent a year ago. An insight…

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Japan recently encountered its worst crisis in its history, an unprecedented earthquake followed by a devastating Tsunami hitting its northeastern coast, and to top it all, a nuclear disaster! Analysts initially pegged the damage to around $ 150 to $ 200 billion. So, what are the economic implications of these gruesome developments? How deep is the damage to the Japanese economy? What will be its impact on the global economy? Will it have a bearing on the Indian economy? These are some of the issues discussed in this article.

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BP has agreed to acquire 30 percent shares in 23 oil and gas blocks owned by Reliance Industries for around $ 7 billion (equivalent to Rs 32,000 crore). The two companies would also form an equal joint venture that would focus on deep-water oil exploration, sourcing and marketing oil and gas. This deal is being touted as one of the largest foreign direct investments into India. What is this deal likely to achieve for Reliance and BP? What are the implications of this deal on the Indian oil and gas scenario? These are some of the issues that this article focuses on.

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The Union Budget for the year 2011-12 was tabled in the Parliament by the Finance Minister last month. This article will help understand the nuances of the Budget and also appreciate the impact of key proposals.

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The World Economic Forum (WEF) brings together world leaders, corporate honchos, politicians, international personalities and academicians to discuss critical issues facing the globe. The 2011 meeting was recently held in Davos, Switzerland during the last week of January where more than 3,000 delegates across the world, attended the meet. This year’s meeting commenced in the backdrop of the Egyptian political crises, increasing oil prices, financial uncertainty in the European Union countries, slower than expected recovery of the global economy, high inflation in many emerging economies, including India and disclosures relating to the widespread corruption in the Indian subcontinent. This article analyses some of the issues that pose significant threat to the global economy in the short- to medium-term.

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McKinsey and Bain have put together a new structure for L&T, which provides the company the scope to scale up five to ten times over the next two decades. It could also be a front runner for many other Indian companies which are diversified conglomerates struggling to focus on niche segments. Adopting this model could help them achieve larger level of growth.

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India’s No. 3 software services exporter, Wipro, replaced the chiefs of its key outsourcing business and reported third-quarter profit growth that lagged behind its main rivals. An analysis...

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The RBI in August released a discussion paper on issuing a limited number of new bank licenses-a move keenly being watched by India’s top corporates.This article reviews the key issues that are considered important for the issue of new banking licenses, the current practice in the country vis-à-vis international best practices and the recommendations received from the public domain on each of these specific issues.

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The price of oil has been ruling at almost around $ 70 to $ 75 range for the last 20-24 months. The global oil prices have now started to steadily increase on the back of the United States (US) economic recovery, growth in consumption from emerging economies like China and India, as well as peak winter months in the US and Europe. With a ruling price of around $ 90 plus, a barrel, the scenario threatens to spark further inflationary pressures slowing down demand and the delaying global economic recovery. An analysis…

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Going by the main agenda of the last SAARC meeting held in Bhutan, the member countries should engage themselves in greater trading activities, and should also make sure that industrialisation in South Asian region does not come at the cost of polluting environment. However, if the current state of affairs is any indication then one has to say that the policymakers in the region have not done their share of the work by a long shot.

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After the high-voltage drama between Hero Group and Honda, the joint venture company Hero Honda is likely to be ended soon. Why did the two companies, in the first instance, come together in the form of a Joint Venture? Why did the two companies decide to part ways? These are some of the issues that have been reviewed in this article

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All the investments made by LIC over the last three years have now been put under the government scanner. Especially, since investments from LIC have flown into many private limited companies, for want of higher returns, which reportedly is contrary to investment rules of insurance companies as provided by IRDA, the government feels that an investigation would be appropriate to justify LIC’s professional judgment. An insight…

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Equipping the nation’s population with appropriate ‘skill sets’ is one of the key requirements for achieving economic growth and social development, especially for an emerging economy like India which needs to consistently achieve high growth rates for many more years to come. Read on to know the implications of the gap in ‘skill sets’ and the initiatives undertaken by the government to bridge these.

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The central board of trustees of the Employees’ Provident Fund Organisation (EPFO) has declared an interest rate of 9.5 percent for FY11. What led to the increase in the interest rate? Read on to find out.

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The central board of trustees of the Employees’ Provident Fund Organisation (EPFO) has declared an interest rate of 9.5 percent for FY11. What led to the increase in the interest rate? Read on to find out.

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India and Japan will soon sign an in-principle agreement which would facilitate wrapping up negotiations between the two countries to have a Comprehensive Economic Partnership Agreement. Among other concerns, one of the main stumbling blocks in the deal is India’s demand to obtain greater access in Japan’s pharmaceuticals and services markets. An insight.

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The income-tax department will, for the first time, formally levy a tax estimated to be a little more than Rs 12,000 crore, inclusive of interest for belated payment, on Vodafone International Holdings BV as it failed to deduct tax on the money it paid Hutchison Telecommunications International Ltd in 2007 to buy the latter’s majority stake in Indian telecom company Hutchison Essar Ltd. An insight…

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HP and Dell have become major forces to reckon with in today’s personal computer industry, aggressively fighting to gain marketshare. To know more, read on…

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These are uncertain times to say the least. And now to top it, a growing and vocal minority of economists believes that there will be a double-dip recession primarily because of high unemployment and the rapidly faltering housing market. Read on…

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Many global nuclear corporations are keen to work with Indian companies to set up nuclear power generating facilities in India. General Electric and Westinghouse Electric have expressed their intention to spend a combined $ 10 billion to build two nuclear reactors in India. An insight into the nuclear power sector in the country…

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The Securities and Exchange Board of India (SEBI) governs the acquisition transactions in the country; that is when a company acquires shares in another, it is the responsibility of SEBI to ensure that the interests of the minority shareholders, in both the acquired and the target company are taken care of. With this primary objective, SEBI had set up a panel headed by C Achuthan to review the current existing takeover guidelines and propose recommendations where ever appropriate. An insight…

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Malaysian state investor Khazanah trumped India's Fortis Healthcare in a takeover battle for Singapore's Parkway with an offer that values Asia's biggest listed hospital operator at $ 3.3 billion. Today, with windows of opportunities opening up only for the determined few, it would not be surprising to see Fortis entering the Singapore market in a big way, very soon!

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Air India, post-merger, has witnessed a steady rise in passenger traffic (around 20 percent) over the last few months. Though this is a welcome sign, the damage - in the form of financial losses over the last few years - has occurred. The objective of this article is to understand the current financial position of Air India, with specific focus on understanding each element that drives any company's financial position. It also reviews the turnaround plan and helps understand how exactly each element of the turnaround plan is intended to impact the improvement in the airline's financial position. Read on…

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The Manmohan Singh-led Congress government has been following the reformist agenda with a vengeance; after oil price deregulation, it is now time for foreign direct investment (FDI). FDI is a ‘cross border investment’ made by the resident of a foreign country, which grants the direct investor significant powers in the managerial issues of the investment enterprise into multi-brand retail, for augmenting domestic technology and capital. The Department of Industrial Policy and Promotion (DIPP) have released a discussion paper on the same, for public review, in July 2010.

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The Chinese government formally announced its move to allow its currency, the Renminbi, also known as the Yuan, to appreciate against the United States (US) Dollar, a few days ahead of the G-20 meeting in Toronto.

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The last month has witnessed some very interesting global developments that have an impact on the Indian business and economy. The American economy is limping out of the recession with a large part of the stimulus package still being spent out, in order to catapult the economy out of recession.

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Kalanithi Maran of the Sun TV Network, a South India based media baron, acquired close to 38 percent of the SpiceJet's equity shares, spending close to Rs.750 crore. This means, SpiceJet as a whole is valued at around Rs.2,000 crore (Rs.750 crore divided by 38 percent in order to arrive at a 100 percent value for the company).

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The Reliance Group has been in the news for a number of positive developments, some of them being very significant from the Indian corporate sector perspective. Latest developments include dismantling the non-compete clause between the Ambani brothers and the diversification of Mukesh Ambani controlled companies into telecom and other sectors, new long-term agreements signed between the Ambani brothers for Mukesh Ambani controlled companies to supply gas to Anil Ambani controlled companies and the restructure of some of the Anil Ambani group companies.

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Human wants are unlimited and the resources to fulfill these wants are scarce, this basic economic principle gives rise to the idea of optimization of resources for the maximization of benefits or utility. In other words, all of us have different goals in life such as pursuing higher education, marriage, buying a larger house, going on a holiday abroad etc.

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Mahindra and Mahindra is an iconic company that truly reflects the ethos of the Indian entrepreneurial spirit! The leadership, more specifically Anand Mahindra, has played a key role in crafting this strategy to success and the story is worth influencing millions of young minds.

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Outward Foreign Direct Investment (FDI) flows from developing countries especially from the large companies in China and India have of late generated significant international interest. As per the Boston Consulting Group (BCG) study, considering the top hundred companies from the developing world involved in outward FDI, more than sixty are from India and China. Predominantly, Foreign Direct Investments are made for acquiring assets outside the country.

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Over the years, the Indian government has been subsidizing the prices of oil products of mass consumption, specifically diesel, petrol, kerosene and Liquid Petroleum Gas (LPG). As a result of this subsidy, the common man ends up paying significantly less for these products, as the government absorbs the difference.

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Recently, the Securities and Exchange Commission (SEC), the securities market regulator of the United States (a body similar to that of the Securities and Exchange Board of India) has initiated civil investigations against Goldman Sachs, one of the largest banks in the world. This came as a shock of sorts, given that the reputation and brand value of Goldman Sachs has been impeccable, over decades. More alarmingly, the subsequent civil proceedings seem to have moved into criminal investigation on not only Goldman Sachs, but also other major global banks, such as UBS AG, Morgan Stanley, JPMorgan, Deutsche Bank and UBS. So, what is the central issue in the Goldman Sachs controversy? Who are the parties to this issue and how is the issue perceived differently from their individual perspectives? Is Goldman Sachs guilty? Before we seek answers to such key questions that will allow us to appreciate the issue better, we need to gain a clear understanding of what Goldman Sachs stands for. We will also explore a few other issues - What is a Collateral Debt Obligation (CDO)? What is market intermediation? What are the roles and responsibilities of a market intermediary? How important is business ethics in this context?

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Post the subprime crisis of 2007-08 and the worldwide financial crisis that followed, the global economy had just begun to gain back its lost vigour over the last few months. Investor confidence had improved, the banking and the financial services industry around the world gained back the confidence it had lost in the preceding couple of years and liquidity positions in economies in general were seen to be steadily improving.

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For any developing country, reliance on foreign direct investment (FDI) is fairly high; countries ensure they do all that they can in order to attract the largest FDI possible. India, no doubt is far behind China in attracting FDI, and is striving to encourage developed nations to increase their investments into India. Currently India's FDI policy regime is quite regulated as compared to its counterparts. The country has been 'tight-rope walking' while liberalizing this policy framework, cautiously balancing the interests of the 'foreign investors' with that of the 'domestic industry'; on one side, it wants more foreign investment, but not at the cost of damaging the domestic industry as the foreign players once allowed to operate in the Indian market can destroy the nascent Indian local players. On this basis, Indian FDI laws specifically disallowed foreign investment in certain specific sectors such as 'multi format' retail trading and agriculture, as well as in other activities like gambling, betting, lottery business and atomic energy.

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A Nation's economic performance is indicated by macro factors such as GDP (Gross Domestic Product), Inflation, Forex Reserves, Level of Employment, Balance of Payment, Money Supply etc. In addition to these, the depth and efficiency of financial markets, as represented by Banking, Payment and Settlement Systems and Stock Exchanges, is also a key barometer. Financial Markets help in establishing price of financial assets, raising capital and also enable transfer of risk. Over the years, these markets have witnessed huge developments in terms of the technology (online trading, algorithmic systems) they use for trading, innovative products, number of participants, regulations and increasing cross border investment.

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The ongoing auction for Indian 3G services is an important milestone for telecom companies, in more ways than one. Not surprisingly, the specifics of the auctions, the interest shown by the companies and the potential revenue streams expected to be raised by the Government through this auction have been extensively discussed in the public domain. In this article, we will look at the specifics of this auction and the implications of the same for telecom companies in general.

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India's recent economic performance has been commendable on many counts; the Indian economy has been growing at around 9 percent year over year; however there was certainly a set back during the year 2008, due to the global economic melt down, which was the case with all other developed and developing economies.

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The global economic crisis witnessed during late 2008 and early 2009 affected both large Indian corporations as well as smaller companies alike. Retail investors were also equally impacted. The BSE Sensex, which had crossed the 20000 mark during early 2008, plummeted and lost more than 70percent of its value during 2009.

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The Future Group, primarily operates in the retail space catering to the Indian consumer market, and has over the years diversified into various areas. The flagship company of the Future Group, Pantaloon Retail, is the largest retail store in the country which operates in more than seventy major cities, and an equal number of rural centers, employing more than twenty thousand staff and serving more than a thousand retail stores.

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The Fortis Acquisition of Parkway Hospitals in Singapore

Fortis has recently acquired around 24% equity in Parkway Hospitals, a Singapore based regional healthcare service provider. Fortis is reported to have paid around Rs.3,200 crore to effect this transaction.

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One cannot disregard the fact that the epicenter of the global financial crisis, recently witnessed, was the American banking system. Once-sound and well-run financial institutions like Goldman Sachs, J.P. Morgan Chase and AIG collapsed overnight. One of the major reasons behind the failure of many American financial institutions and their near-bankruptcy situations was extensive 'high risk' speculative hedge fund and derivative operations, moving away from traditional lending to investors.

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The Reserve Bank of India (RBI) recently assessed the current health of the Indian economy as a part of its quarterly economic review exercise, and identified the key challenges, future prospects and the policy interventions that are required to steer the economy to good health. This article provides a broad overview of RBI's quarterly economic review and evaluates the implications of a few other developments (such as freeing-up the oil pricing policy, inflation etc.) on the health of the Indian economy.

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During 2007, resulting from a proposal mooted by the Ministry of Civil Aviation and with the approval of the cabinet, Air India and Indian Airlines were merged into a single legal entity, National Aviation Company of India Limited (NACIL); the combined operations were branded as Air India. In spite of the proposal attracting stiff opposition from all quarters, the merger went through, but it was widely opined that the merger stopped with mere announcements and no operational integration was implemented in order to reap the synergies (reduce duplications in facilities and resources owned by the two airlines and thereby reduce costs) of the merger.

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During the presentation of the Union Budget 2007-08, erstwhile Finance Minister P. Chidambaram indicated that an integrated Goods and Services Tax (GST) would be implemented by April 1, 2010. Since then, the Finance Ministry and the Government of India have taken significant steps to keep to their commitment. However, come 2010 it seems unlikely that this could be effected by the proposed date. Not just that, but there also appears to be uncertainty as to when this GST legislation will precisely be implemented.

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The global financial crisis and the recession that followed had seriously dented the growth of the Indian economy, including that of the auto industry, over the last fifteen to eighteen months. Indian car and two wheeler sales plummeted and the Original Equipment Manufacturers (OEM) like Tata Motors, Maruti Suzuki, Ashok Leyland, Bajaj Auto, Hero Honda, etc. cut down their working week to less than two to three days, in sync with the reduced demand.

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The Fiscal Responsibility and Budget Management (FRBM) Act legislated by the government contains a set of guidelines and targets, within which the government should restrict the economy's fiscal deficit. The act had earlier prescribed that the country's fiscal deficit should be reduced and capped at 2.5 percent of the Gross Domestic Product (GDP) by 2008-09.

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Recently, two of the largest companies in Dubai, Dubai World and Nakheel have found themselves at the centre of a financial storm that has plunged Dubai into a serious credit crisis. Dubai World, owned by the Dubai government, is the largest port operator in the world through its subsidiary company, DP World. This company operates around 50 ports around the world. Nakheel develops commercial and residential real estate properties in Dubai, including the famous palm shaped man made islands in Dubai, which have almost become an emblem for the state. In the latter part of November 2009, these two companies requested its bankers to accept a delay in repayment of certain components of loans owed and freeze payments due until May 2010.

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We have often heard that the Chinese economy is largely externally oriented, built as an ‘export intensive’ model. Domestic consumption has always been secondary in China. A large part of China’s exports are directed towards consumption in the West, and the United States (US) in particular. With the US economy in shambles and its consumers having severely cut back on consumption, how can China keep growing at more than 8% plus? With the US and the China being so closely interlinked in terms of trade and economics, is it possible that the US remains in recession while China grows in leaps and bounds? As trends show, even with US and Western consumption levels tapering off, Chinese investments in assets are still growing steeply! The question, of course, is whether these assets are in fact generating acceptable levels of goods and services.

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With the global economy slowly creeping out of the recession, activity on the mergers and acquisition front is steadily picking up. Two prominent acquisition deals have recently started to take shape - Kraft Foods’ bid for Britain’s Cadbury plc and India’s Reliance Industries’ bid for LyondellBassell. We take an analytical look at these emerging deals in this article.

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The recently concluded India Economic Summit 2009 discussed a wide range of issues that are perceived ‘bottlenecks’ in India’s growth. The central theme running across the summit has been the fact that India not only needs to achieve a high growth rate in a short span of time, but the same has to be sustainable over the medium to long term; more importantly, such growth needs to be ‘inclusive’ as well, i.e., citizens below the poverty line should also be benefited. The summit had a conglomeration of Indian business leaders, politicians, ministers, bureaucrats, academicians, regulators and international corporate heads discussing key issues of national importance ranging from the pace of Indian economic recovery, reforms agenda, lack of physical and social infrastructure, need for technology and innovation, stumbling blocks in education and climate change policies. The objective of this article is to bring out the summary of critical issues that were discussed, which could in the final analysis serve as a good ‘snap-shot’ of the challenges India is facing.

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The global recession and its aftermath have changed the perspectives of investors about how they view different currencies. More so due to the fact that there is now a clearly visible trend that global wealth is shifting from the developed economies to the developing ones. In spite of the fact that the United States has been one of the worst hit during the current recession, the dominance of the United States Dollar (US$) in the global arena is still unquestioned. Close to 70% of global reserves are still maintained in the US$ by the central banks of various countries. It is expected that China is also holding around 70% of its reserves in the form of US$, and US$ designated assets. Russia, also a holder of large foreign currency reserves, is reasonably diversified in terms of its currency portfolio. It holds around US$400 billion worth of reserves, around 50% of which is in US$ and around 40% in Euros. By all standards, US$ holdings seem to be still very dominant. Although there is a perception that the US$ would weaken over the medium to long term, any large scale efforts by the central banks to sell or move away from dollar reserves, overnight, would trigger off panic and could bring down the value of the US$; this could eventually destroy the value of central bank portfolios.

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Berkshire Hathaway Incorporated, one of the largest US companies, is primarily owned by Warren Buffett, who is acknowledged as the most successful investor of all times. Berkshire Hathaway already holds around 22% shares in 56 (BNSF), the second-largest railroad company in the United States (US). Recently, Berkshire Hathaway announced that it would acquire the balance 88% of shares for US$ 26 billion, valuing BNSF at close to $34 billion; this will make Berkshire a 100% shareholder in BNSF. Berkshire Hathaway has agreed to pay $100 per share, in a combination of cash and stock (for 88% of the company). This price translates to a 30% premium on the BNSF share price as on the day of the deal announcement. This is, by far, the largest acquisition in the history of Berkshire Hathaway.

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The Indian telecom industry is very special, for more than one reason! On one side it is a fact that India is the fastest growing telecom market in the world. India enjoys a subscriber base of close to forty five crores; which means close to 40% to 45% of the Indian population have telecommunication connectivity. More importantly, the growth in the subscriber numbers has been astonishing over the last twelve months, between 2008 and 2009. During this period, the country’s subscriber base increased by around twelve to fifteen crore subscribers, translating to a 50% ‘year over year’ growth! It is incredible when we compare India to China, where the subscriber growth rate is already tapering down, and is currently around eight lakh subscribers per annum only.

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Bharti Airtel, formed during the nineties, is India’s largest mobile telecom operator. With around 11 crore subscribers, Airtel accounts for close to 25% of the Indian telecom market, which is rated as the fastest growing telecom market in the world. Sunil Bharti Mittal has been largely responsible for spearheading Airtel as one of the most respected brands in the country, which has helped the company garner the huge subscriber base, and a high market share, in the shortest possible time. He has put in place seamless systems where by the company will continue to accumulate thirty lakh new subscribers every month. While at the same time, Mittal had guided his company’s strategy, effectively, in achieving ‘best of the class’ quality and customer service through intelligent outsourcing of even certain core operations like network, and other routine operations like call centers and information technology, to world renowned experts.

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In a recent statement, as more of an advice to the Indian corporate sector, India’s Corporate Affairs Minister Salman Khurshid conveyed the message that Chief Executive Officers (CEO’s) and top managers of Indian companies need to show restraint when it comes to paying themselves salaries and perquisites. He observed that certain senior executives were in fact drawing unreasonable salaries which he termed as ‘vulgar’.

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As reports indicate, US consumer confidence and manufacturing indices have started recovering with more consumers now willing to spend. Global stock markets, across continents, have also started to move to levels higher than what we have seen at any point during the current year. Recently, the American billionaire and iconic investor Warren Buffett also stated that he has started to buy American stocks! Do all of these give some kind of a signal that the American economy is slowly inching up from the deep recession it had plunged into? More importantly, US being the largest consumer economy, any recovery therein is expected to have a positive impact on the global economy as a whole! Thus we can even reframe the above question and ask, is there a clear signal that the global recession is nearing to a close? Well, it seems so. Ben Bernanke, the Fed Chairman, recently stated that the recession in the US seems to have come to an end. The Indian Prime Minister Manmohan Singh also stated that we are more or less out of the global recession and India is slowly returning to normalcy.

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Healthcare is one of the world’s largest service sectors, almost $4,000 billion in size. The industry is predominantly driven by developed, high-income countries that account for more than 90% of the industry, although they have less than 20% of the world’s population. The major countries that are large consumers of healthcare services are the United States, the European countries and Japan. On the flip side, ‘low-income’ continents and countries, which account for over 80% of the world’s population, account for less than 20% of global healthcare industry spend.

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The Indian economy has traditionally been dependent on internal consumption with foreign trade constituting less than 20% of the country’s Gross Domestic Product (GDP). This has always been the case, and understandably, we have had serious ‘balance of trade’ issues’ in the past, especially due to the fact that India is predominantly an oil importing country. Imports have always far exceeded our exports. Primary Indian imports are traditionally crude oil, machinery, fertilizers and chemicals, while exports are predominantly textile, gems, jewelry, leather goods, handicrafts etc. More than 15% of our exports are focused on the United States (US). Due to this import – export mismatch, the year 1991 saw India getting virtually close to bankruptcy. However, since the late 1990s, we have seen the emergence of large Indian software companies that have relentlessly earned foreign currency for the country through software exports. This has, to a large extent, cushioned our balance of trade position.

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India is estimated to have around 38 trillion cubic feet of confirmed natural gas reserves, as of January 2007. A large component of India’s existing natural gas production flows out of the western regions in the country including the Bombay High complex. Other onshore fields are located in Gujarat, Andhra Pradesh, and Assam, which also produce natural gas. Around 80% to 90% of natural gas produced in the country is used for production of power in gas based plants, as well as in the manufacture of fertilizers. Since demand significantly outstrips supply, the petroleum ministry judiciously rations the gas to various users.

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The Union Budget of 2009-10 was unveiled by the Honourable Finance Minister, Mr Pranab Mukherjee on the 6th of July 2009. Inclusive growth, enhanced social security spending for issues such as poverty eradication (both rural and urban), employment generation, illiteracy reduction along with infrastructure building, tax rationalization and improvement of delivery mechanisms have been the cornerstones of the current budgetary exercise.

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As the various written management entrance exams draw nearer, here’s a quick test of your knowledge of business and associated disciplines. Find out how many of the answers you know… and discover a lot more in the process.

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The Union Budget of 2009-10 was unveiled by the Honourable Finance Minister, Mr Pranab Mukherjee on the 6th of July 2009. Inclusive growth, enhanced social security spending for issues such as poverty eradication (both rural and urban), employment generation, illiteracy reduction along with infrastructure building, tax rationalization and improvement of delivery mechanisms have been the cornerstones of the current budgetary exercise.

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The Tata group is the biggest family run business in the country comprising close to 100 companies with a turnover of close to Rs.120,000 crore, and employing around 300,000 staff. Tata, as a Group, and more specifically its group companies Tata Steel and Tata Motors, have been on an acquisition spree over the last couple of years. More acquisitions mean more cash requirements, which in turn lead to more borrowings!

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After the merger of Air India and Indian Airlines, The National Aviation Company of India Limited (NACIL) runs the operations of the combined entity. Earlier, consulting firm Accenture was instrumental in recommending a merger between the two carriers and creating one large entity that would benefit from the synergies and elimination of duplication in operations between the two carriers.

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It is widely known that the 9/11 (September 11) attack in the US had pushed the airline industry into an unprecedented period of low demand and mounting loss, but it now seems that the current global recession has given a bigger blow to the airline industry than any other event in history to date. Analysts agree that there is no modern precedent for today’s economic meltdown and describe it as the most difficult situation that the industry has ever faced.

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It was not so long ago that Bharti called off its merger talks with MTN. The two companies reached a deadlock, a year ago, as neither group were happy about the other taking a significant controlling interest in their company. Sunil Bharti Mittal was not open to the idea that his long cherished company would become a subsidiary of South Africa's flagship cellular company MTN. Subsequent to Bharti pulling out, Anil Ambani-led Reliance Communications initiated talks with MTN towards a similar merger, but had to call off the merger talks due to the litigation filed by Mukesh Ambani claiming first rights on Reliance Communications shares, and thereby blocking MTN from entering into a merger deal with the Indian company.

But a year from then, things have changed and Bharti and MTN are back at the negotiating table. The world definitely looks different today than a year ago with one of history’s worst economic slowdowns affecting it. This has undoubtedly taught serious lessons to corporate entities on ‘demand – supply’ scenarios, which may also explain the re-negotiations between Bharti and MTN.

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Britannia Industries has decided to acquire the 49% shares of Fonterra Cooperative Group in Britannia New Zealand Foods Pvt. Ltd. Britannia New Zealand Foods Pvt. Ltd, which is engaged in the dairy business, has been a Joint Venture Company (JV) between Britannia Industries and Fonterra Cooperative Group, New Zealand. In this article we will review the basis on which Britannia initially entered into this joint venture with Fonterra Cooperative Group in 2002. We will also review the rationale behind Britannia and Fonterra subsequently parting ways, and Britannia buying out the entire stake from Fonterra during 2009.

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It has been established beyond doubt that the economic conduct of the United States (US), its policies and the conduct of its business leaders, and more specifically the strategies followed by the heads of the top US financial institutions over the last decade have been primarily responsible for the current global financial crisis. Researchers and analysts question whether the US financial services industry and its regulators could have diligently averted this catastrophe, had they attempted to learn from the past mistakes of countries like Japan, which had gone through a very similar path resulting in a decade-long recession?

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The fourth quarter results ended 31 March 2009 have been flowing in for sometime now and Indian companies have demonstrated mixed performances. Certain industries have published positive results, whereas others have reported steep losses. Given the subdued economic conditions, it seems that companies, in general, have resorted to cost containment measures in one form or the other, which has resulted in cost savings across the board. Many companies, especially the Information Technology majors, have resorted to lay-offs, or freezes in recruitment, resulting in a sharp decline in their employee costs. Selling and administrative expenses have also been largely contained as compared to traditional benchmarks. Commodity prices have not, however, helped the Indian manufacturing sector to cut costs. Revenue streams have significantly dropped due to reduced demand conditions; this has resulted in reduced net profits in spite of a successful containment in costs. In this article, we will review the performance of major companies in some of the critical sectors such as Banking, Auto, Auto Components, Fast Moving Consumer Goods (FMCG) and Information Technology.

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Fiat SPA of Italy recently commenced talks with Chrysler, one of the ‘US Big-three’ automakers and one which has recently filed for bankruptcy, for a 35% stake acquisition. Chrysler has set out ambitious restructuring plans seeking cash aid of close to $5bn, proposing large scale job cuts and reduction in shifts and production, and potentially selling a part of its ownership to strategic partners like Fiat. Under the US laws, ‘Chapter 11’ bankruptcy allows Chrysler to carry on its day to day operations under court supervision, but signals to, and cautions, creditors and suppliers that the company has problems in honoring its day to day commitments. If the transaction is not working out, it is most likely that Chrysler will be liquidated, its plants sold off and the staff retrenched.

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Fiat SPA of Italy recently commenced talks with Chrysler, one of the ‘US Big-three’ automakers and one which has recently filed for bankruptcy, for a 35% stake acquisition. Chrysler has set out ambitious restructuring plans seeking cash aid of close to $5bn, proposing large scale job cuts and reduction in shifts and production, and potentially selling a part of its ownership to strategic partners like Fiat. Under the US laws, ‘Chapter 11’ bankruptcy allows Chrysler to carry on its day to day operations under court supervision, but signals to, and cautions, creditors and suppliers that the company has problems in honoring its day to day commitments. If the transaction is not working out, it is most likely that Chrysler will be liquidated, its plants sold off and the staff retrenched.

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As you may be aware, Foreign Direct Investment (FDI) signifies the investments made by foreign companies into a host country, say India, that result in creation of primary assets in the economy. Such FDI investments take the form of investments in factories, retail outlets and establishments, and investments in other services related sectors. FDI is distinctively different from Foreign Institutional Investment (FII), which comprises mere passive investments by foreign companies into the equity shares of Indian companies; for example, when Citibank invests in the shares of ICICI. In case of FII, the foreign investors can pull their funds out of the Indian system without any restriction, by selling their shares and repatriating monies out of the country. But FDI (for example, Nokia investing in a handset manufacturing plant in Chennai) is considered to be of longer term in nature as it often includes ‘technology transfer’ into Indian companies. FDI also has procedural formalities to be fulfilled before such investments can be withdrawn out of the country. Thus FDI is generally considered to be more beneficial for the Indian economy than FII inflows. However, there are restrictions on the level of shareholding which the FDI investors can have in Indian companies and this varies from one sector to the other.

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One of the major issues around which Barack Obama’s electoral campaign had revolved and his stance on which possibly got him significant electoral votes in the 2008 American presidential elections was the state of the economy. He squarely blamed eight years of Republican rule for leading the American economy to its current disastrous state. He had also promised during the campaign that a ‘bail out’ package would be initiated by the Democrats, which would be the only hope for the economy to recover and sustain the turnaround. Well, here was a politician who kept his promise - having gained control, Obama not only announced an Economic Stimulus Plan within thirty days of assuming office, but also got the stimulus package approved by the House of Representatives and the Senate. The bill was also eventually signed into law - the American Recovery and Reinvestment Act, 2009.

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How the Troubled Firm’s Case Triggered an Amendment of SEBI Regulations

The Satyam episode had highlighted a number of issues wherein our country needs improvement. This includes corporate governance practices, independence of the independent directors, external auditor practices, transparency and disclosures in the functioning of the Board of Directors of the Company.

Now, the government appointed board of directors of Satyam has accomplished its mission in getting the details of the company together, retaining a large component of the company’s high profile clientele, securing the company’s staff from leaving the company and has thereby preserved the company’s value and going-concern status. As a next logical step, the board has started the process of searching for a buyer who will take over Satyam for a price. There are a number of buyers who have shown interest in buying Satyam, including the Information Technology arm of construction giant Larsen and Toubro, Mahindra Infotech and Spice. However, buyers would be extremely cautious about the price they pay, as the element of uncertainty is very high in Satyam’s case, with unquantifiable liabilities on account of claims made by overseas petitioners estimated at somewhere between Rs.2,000 to Rs.2,500 crores. As a result of the risk they are exposed to, there is a definite limit to the extent to which such parties would stretch themselves in terms of the price they pay for Satyam.

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The current United Progressive Front (UPA) government has only a few months of its tenure left before the general elections, scheduled to happen over the next couple of months. In such a situation the legislations of the country call for the ruling government to present an ‘interim’ budget rather than a full fledged budget for the year 2009-10, as it is possible that a new government could come into power and any commitments made by the current government in the form of budgetary projections for the next year (2009-10) may unduly bind the new government, which is inappropriate.

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