Sunday 3 March 2013

Weekly Report



US BANKRUPTCY ACTION ADDS TO ESSAR WORRIES

At a time when the oil-to-outsourcing Essar Group is looking to raise fresh money to refinance debt and bring down interest costs, it is faced with a bankruptcy action against one of its US units with creditors alleging mismanagement. Essar isaddled with huge debt on its books across companies and its plans to refinance debt, through the issue of bonds on external commercial borrowings haven’t materialized yet.  Essar has overall term debt in the range of $ 14 bn across firms. The latest challenge for Essar is a plea for bankruptcy filed against Trinity Coal which the group acquired in 2010.

US ECONOMY : CURRENT SCENARIO

Wal-Mart, the largest retailer in the US has given a subdued forecast for its sales. The country has been gripped by the slowdown since the outbreak of the crisis.  Inflation and tax rate have been going up. The picture does not look too bright for 2013 either. The US Fed and policymakers have been printing money through their numerous QE programs.  The reason given  by them has always been that the money will stimulate the economy. But all it has done is to stoke inflation and asset prices. 

Federal Reserve chairman Ben Bernanke strongly defended the US central bank’s bond buying stimulus before Congress, recently – saying its benefits clearly exceed possible costs.

JP MORGAN TO CUT 19000 JOBS BY NEXT YEAR

J P Morgan Chase and Co., the biggest US bank, expects headcount to decline by as much as 19000 jobs in its mortgage and community banking businesses by the end of next year.

HELICOPTER DEAL : CORRUPTION CHARGES

The Central Bureau of Investigations registered a preliminary enquiry against former Indian Air Force Chief S P Tyagi, his three cousins and 11 others over allegations of kickbacks in the purchase of 12 helicopters from Anglo-Italian defence company AgustaWestland, a unit of Finnmeccanica SpA.

Rs 36000 mn for 12 helicopters is quite a large outlay at Rs 3000 mn per helicopter ! It is 17.3 % of Government expenditure of Rs 207840 mn for all social services including education, health, broadcasting, etc.

H.J.HEINZ COMPANY

Legendary investor’s latest move, the ace investor has teamed up with Brazil’s richest man Jorge Lemann and cracked the biggest ever acquisition deal in the food industry. The name is H J Heinz Co., the famous ketchup maker. It was announced that Berkshire Hathaway Inc and 3G Capital Management LLC have agreed to acquire the company for US $ 23.3 bn. Heinz has been in existence since 144 years ! It is one of the most familiar brands in the US and enjoys bestselling status in over 50 countries. Heinz has an impressive track record of steady growth. The company pays out more than US $ 600 m as annual dividends.

PHILIPS TO DROP ‘ELECTRONICS’ FROM NAME

Dutch manufacturing giant Koninklijke Philips Electronics NV said, it intends to drop the word ‘Electronics” from its name as it shifts away from consumer based entertainment towards health, well being and lighting products.

ENTRY OF FOREIGN RETAILING COMPANIES IN INDIA

It seems that the real estate sector is on the verge of a revival due to entry of foreign retailing companies.  Starbucks and IKEA, a Swedish furniture company are set to expand into major Indian cities.  Other foreign chains like Hennes & Mauritz, Hamleys, Lacoste and others have geared up to expand their India presence. Expansion by these firms is likely to increase the demand for commercial real estate. It appears that 2013 could well witness a turnaround in the commercial real estate market.

UK’S ECONOMY

First it was US, then came countries like France and now the UK. UK is the latest to face the axe on the credit ratings. UK’s economy is showing hardly any signs of a full blown recovery.  Any further loosening and it could face a fresh round of downgrades.  If it tightens more, the economy will slide further into the danger zone.

FINANCIAL HEALTH OF INDIAN COMPANIES

It is believed that the financial health of Indian companies is not as vunerable as that of their Western counterparts. But it is not true. Take interst coverage ratio, a measure of a company’s ability to pay interest on outstanding debt. As per data from Mint, for the 3500 companies listed on Stock Exchange, this ratio has dropped from 5.9  times in December 2007 to 2.7 times in the quarter ended December 2012.

SAVINGS IN INDIA : CURRENT SCENARIO

Financial savings as a percent of total household savings have come down dramatically in India over the past few decades.  Households have increasingly preferred to invest in physical assets such as real estate and gold rather than financial instruments like mutual funds and equities.

INSPIRATIONAL

John Mason :  Don’t be afraid to take small steps. There’s something powerful about momentum… no matter how small. Many times the impossible is simply the untried. I can remember a time in my life when I was immobilized with fear, consumed with what I was supposed to do. It seemed so huge a task, I was unable to bring myself to face it. A friend came to me and spoke two words that broke the paralysis in my life. He said, “Do something!” I’ll never forget day… taking some small, seemingly insignificant steps. Momentum began to come into my life. If you are a point of paralysis in your life because of what you feel you’re supposed to do, the words today are, “Do something!” Don’t worry about the long-term goal right now, just take the steps that take you past starting point. Soon you’ll get to a point of no return. As you climb higher, you’ll be able to see much farther.

J O K E

A young businessman had just started his own firm. He rented a beautiful office and had it furnished with antiques. Sitting there, he saw a man come into the outer office. Wishing to appear the hot shot, the businessman picked up phone and started to pretend he had a big deal working. He threw huge figures around and made giant commitments. Finally he hung up and asked the visitor, “Can I help you?”  The man said, “Yeah, I’ve come to activate your phone lines.”

THIRTY INSPIRING YEARS !!!

Dear friend  :

Greetings !

On the 2nd March 2013, MIRA INFORM completed 30 years. During this period, MIRA INFORM produced millions of Business Information Reports on businesses and carried out various kinds of Background Check on individuals from most of the major countries for international clients. As we commemorate this special occasion, I would like to convey my deepest gratitude to you, our valued clients for your unstinted faith and support through this memorable journey. Your continuous trust has indeed significantly strengthened our shared aspiration of creating one of Asia’s respected Business Information Company. Mira Inform Japan Limited, Tokyo was born on 12th February, 2013 !

The journey of excellence is undoubtedly a tribute to our clients, partners, associates and our dedicated employees of today and yesterday – who have steadfastly stood by us through this  voyage of change and challenge. These 30 inspiring years have been marked by overarching VISION to serve a larger national purpose, to live up by the strong VALUES and to nourish internal VITALITY to create superior value for all our stakeholders and important place in Business Information Market in India and overseas. As we look back on the historic journey, we feel deeply touched that our Paid up Capital was just Rs 300 in 1983 against Rs 17 mn now ! We started with Rs 1800 priced Remington baby typewriter from residence when today our aggregate offices, company, database, brand and others are valued at huge sum ! I have proud to have had the opportunity to lead MIRA INFORM since its’ inception.

                                                                                                              With warm personal regards,

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