January 2008 -

January 2008 -

Googling in UK

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Looks like ‘the search engine’ giant is looking at UK, probably the recession in U.S is forcing companies like Google to look at other continents. Inspired by Justin Moresco’s blog in Red Herring, I decided to take a look at the Google Finance site. I should agree with Moresco that everything except the news screams that it is for ‘Europe finance community’ especially that of UK. We get FTSE Index and the top movers are UK companies. Conversion rates of GBP to other important currencies are in the front page. It has the usual features of the Google Finance page but this one is serving the UK Finance community exclusively. The page does proclaim to serve both the UK and the French community though.

One more thing, looks like lots of travelling are scheduled in my Tarrot card for the months ahead, would catch you at the earliest. And of course would post all my experience on my travelling just for you!

Fed’s Decision.

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While the entire U.S. economy (and also the rest of the world)waits in bated breath for the Fed. to decide on the rate cut, let us take a look on the economy and the various measures undertaken to bring the economy. back to its feet. The various policy and decision does have an important implication as the crisis felt in the U.S. economy is actually spreading like a flu and might have a global implications.

The coming wednesday rate cut might not actually be a big one as the ‘Stimulus measures’ being implemented by the U.S. Government seems to bring about some positive effect in the economy with the consumer goods and durable goods showing some positive results. Also Gold paused at $933 and oil prices at $92.42. The rate cut might be lesser that a 50 basis point cut that traders previously expected. The biggest rate cut seems be the one that was implemenented on January 22 ’08 with the Federal Funds Rate down by 3 quarters to 3.5%.

Strong data’s can bee attributed to the ‘Stimulus plan’ as the House of Representative passed the $146 billion stimulus data to the senate. The Federal Reserve Rate committee began a two day meeting whose outcome can have a very important implication for the economy.

IMF says that U.S might face a slow growth which could be at 1.5% this year. This might result in the world wide growth to decline to 4.1% from 4.9% in 2007. These various policy measures should bring about some positive results though for a short term and this inturn can decide the global growth rate!

Are you the Boss?

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There is a huge transition from how ‘Bosses’ were expected to be about a generation ago and now. In the 50’s and 60’s he was expected to be a ‘Predominant’ force in the workplace; for that matter even corporal punishments were common in schools. In his article love and fear in the modern Boss’ by Scott. A Snook, analyses the transition that the definition of ‘Boss’ has undergone. I agree with Snook when he says that leaders in the present day are expected to show their softer side. This being the case many feel that fear is a necessary factor, as they would be more successful with a stronger boos, who has the ability to stretch them to their limit. Probably the saying ‘performance under stress’ holds good for such genre of people.
As rightly put leading the team by force and harshness has its own downsides and might not work eventually and similar is the case of Boss who are ‘too soft’ on the team. A right leader has to “read signals and adopt themselves accordingly”.

Saying that, we need to accept the fact that good leaders are born anywhere and can be molded, the leader need not always be from the ‘elite school’ and only from the ‘developed’ nations; globally many have expanded their search for an able leader and I should say they have been quite successful in their search. Leadership qualities might be evident from birth and for some just the right opportunity and molding is necessary to reach the pinnacle.

‘Leadership and Strategy’-Panel discussion by Don Moyer in ‘Harvard Business Review’ has observed that “when leaders fail to share their thoughts it leads to turmoil” open communication is the need for the day. Leaders should not feel restrained to communicate with their team; this is something I follow stringently with my team. Leaders should not feel that they are giving too much of unnecessary detail or content’. He also says that “A leader who can convey what he is thinking or feeling stands the best stand of all”
Another quote which I completely adhere to and encourage for others to follow are by Jim Collins and Jerry Parras in ‘building your Company’s vision’ – “Passion, emotion and conviction are the essential parts of the vivid description that move people to action”
These are some ideologies and some facts that could turn the ordinary to extraordinary

Source: Harvard Business Review

Blackberry Rules

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With 26th January spent in watching the parade and working through my Blackberry, which has become an integral part of my life as it is both a necessity and one of the platform on which marketsmplified works, made me wonder what a great device it was. Surprise was that Reuters also carried an article on the device and on its ‘evolution’.

Reinventing itself as the device with multi features and for everyone; Blackberry deviated from being the device of Government officials,politicians and Lawyers. Now about one third of Blackberry users belong to the non-Government and non-corporate category. Blackberry has now come into foray with the introduction of pink blackberry pearl, a candy bar shaped phone which includes many a feature like that of email, multimedia, music player and camera are aimed to non coporates and non government who are looking for a multifaceted device.

Point to note is that this versatile device made a record on Black Friday (the official start of the christmas holiday season in United States) as it made more additions to its subscribers base. But the present looks ‘not so rosy’ for Blackberry as the recession seems to have hit Blackberry too with as its share had dipped by15%. But analysts feel that it is no concern for worry as the situation is expected to have only limited negative effect on RIM.

Probably people can do away with other items of luxury but not their device of necessity like their Blackberry.

The Sun shines

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Whilst many industries are struggling due to the ‘not so bright’ scenario in United States, the one company that seems to shines it way through is the ‘Sun Microsystem’. According to reports from ‘Cnet news’, quarterly profits doubled with growth in the emerging markets. Sun in fact had a double digit growth in markets like India, China and middle east; this seems to have overshadowed the 8% decrease of revenue in the United States.

Sun’s strategy lay in adopting various methods like that of cutting jobs, selling of server computers installed with AMD and Intel chips. Another major contribution to this quarter growth was the agreement with Dell to sell computers with Sun Solaris Operating systems.

Airlines Shares surge

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The surge might be result of drop in oil prices over the last two days. The price which had touched $100 per barrel was down by $88. Earlier the airline industry was quite concerned about the economic ‘slumpiness’ and the never yieling high oil prices. Airlines have announced their fourth quarter earnings, Wednesday saw UAL corp. share 15% higher at $36.65 this might be due to the fact that Goldman Sachs reitereated its buying rate of the company and as a result AMEX was up by around 9.6%

Another piece of news is that UAL is at the center of merger and it believed that it is talks with Delta and North West Airlines. Therefore the past two days has given a very valid opportunity for the airlines shares to kind of makeup for its concern on increased oil prices.

All the best Jet Airways

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In what can be considered as one of the most important move in the history of Aviation, Jet Airways has approached BMI (British Midland Airways Ltd.), Chairman Michel Bishop for a potential buy of his stake in the company. Sir Michel Bishop owns 50 percent plus one share of the company. The other Airline which has shown interest is that of Virgin. As most of us know Jet Airways has recently added ‘London’ on its destination list and this deal does have a great significance to the company. Another piece of news is that on winning the stake, Jet Airways not only gets slots in the ‘Heathrow’ but is also in line for Staralliance.

I do wish all the very best to Mr. Naresh Goyal and his team on this pursuit. This deal would definitely put the ‘fastest growing passenger carrier’ once again on the Global Map.

Changes

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Yahoo has decided to take the call and has agreed to layoff employees. Sources close to Yahoo says that it would layoff about 1,500 to 2,500 employees in the next week or two. The Business house is expected to focus the layoff on the areas that do not fit the ‘main strategies’ of Yahoo. According to some analysts this is one of the strategies which could revive the stock. Another piece of news from reuters estimates is that Analysts expect’ revenue from the recent 4th quarter to grow to 15%.

In what can be termed as an era, eBay’s present CEO Meg Whitman would retire some time soon. Ms. Whitman was responsible for shaping the company to what it is today. By retiring soon she will abide by her own belief that ‘NO CEO shouldbe in the same job for more than a decade’. It is believed that John Donahue would take over the reins as soon as steps down. Donahue is resposible for “marketplace” business. One of the major task before Donahue is to gain the confidence of the shareholders.

That pretty much sums up some major news of the day with two major business houses undergoing chages, Yahoo giving in to demand for some stragtegic changes and ending of an era with the stepping down of Meg Whitman of eBay.

The SLUMP!

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All I could see in today’s paper was RED and so was condition in most of the countries. Yes trading as you all know was held for about an hour. It was the talk in Dalal Street to my office and I bet no different in your too. Here is the picture, according to U.S Stock Index futures fell around 4.5% showing a very sharp sell. In U.S many are expecting a huge futures writedown due to the risk mortgages. In an comment released by IMF MD Dominique Strauss Kahn, all developed countries are suffering from U.S. slowdown!

News poured in that the Japanese treasures surged actually as many petrified investors shifted from equities to a more safer haven, Government bonds. The Bank of Japan kept interest rates at 0.5%

Many of you know the situation back home in India, the stocks hit at an all time low of 15,332.42. Our FM has assured us and has asked to be calm about the entire situation . While some are speculating that the Market would rise, some foresee an extension of the day spilling over to the rest of the week. I agree with our FM when he says India’s economy is really fundamentally strong .

Hong Kong and Korea also took the hit with the economies being dependent on U.S.A for many of its exports. Need to see how the market performs rest of the week

An overiview of the market

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Measures taken by U.S to lift the economy has been splashing all over the internet and on the press, so I cannot be left farbehind. Taking stocks of things, it looks like Bush’s proposed ‘Shot in the arm’ policy in the form of injecting $140 billion in the economy through various measures like that of tax rebates, extenstion of unemployment benefits and ofcourse investment benefits is bringing about confidence in a large section of people, especially those associated with ‘retail market’. This action is to be brought about immediately, the S&P retail index did register surge up a little but overall in the broader sense the S&P 500 faced red. The package is a little more than 1% of the GDP of U.S.A and the tax rebate offered was welcomed by retail outlets like that of Walmart, Dollar stores and Macy’s were the majority of middle income do their shopping.

Many analyst feel that the real revival can bought about by Fed. rate cut. But the outcome of such a cut can be felt only after six months when the rate cut boils down to lower mortgage rate to buyer. The real problem actually lies in the ‘home sales’ and in mortgage crisis that the buyers face; this ‘shot in the arm’ as the Bush administration calls will surely lead to immediate relief to the retail sales. This whole package is intended to bring about tax rebate to the middle class family and hence a revival of the ecnomy on the whole. January end would be the likely time when the package could come into effect.

Source: Reuters

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