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AV Birla to ramp up fabric business
26 Feb, 2008, 0241 hrs IST,Boby Kurian, TNN

BANGALORE: Kumar Mangalam Birla is reposing faith in the fabric play. AV Birla Group company Grasim Bhiwani Textiles is unleashing a combination of aggressive retail expansion and a manufacturing joint venture with a European giant to ramp up the fabric business. Notwithstanding the invasion of ready-made garments, the company, a polyester viscose fabric player, is projecting robust growth for formal wear synthetic fabrics.

“Over the next three years, we are gearing up for an aggressive retail play across tier-II and tier-III towns under Grasim and Graviera brands. The group is also evaluating possibility of JV with a European major to manufacture value added fabrics,” Kumar Mangalam Birla, chairman, AV Birla Group, said. “Through the JV, the company will acquire intellectual competencies, technological know-how as well as direct access to overseas market, which will accelerate growth in domestic and international markets,” Mr Birla said.

Grasim Bhiwani Textiles may be nearly doubling its turnover to Rs 450-500 crore over the next three to four years on the back of retail expansion, foray into womenswear fabrics and tapping of international markets through JV. The company’s current topline is estimated at around Rs 250 crore, with 60% of the fabric business coming in from the domestic market, and the rest through exports to overseas clients like Marks & Spencer and Dockers.

At a time when fabric retailing is a declining business globally, the Birla company has outlined plans to show up with 300 exclusive business outlets, up from roughly 50 stores at present. However, this will not be signaling a shift in focus from wholesale trade, which is the mainstay of the current operations. Grasim and Graviera brands find its way to 25,000 multi-brand retailers across the country through 150 wholesalers.

The two brands occupy the Rs 125 to Rs 400 per metre price bracket in the polyester viscose fabric market, with Grasim being a player at the upper end of this band. Grasim and Graviera together hold around 16-17% share of the above-mentioned mid-market price band, with plans of pushing it over 20% in the next three years.

More NTC mills set for makeover
18 Mar, 2008, 0415 hrs IST, TNN


NEW DELHI: The government said 12 more mills of the National Textile Corporation, including five in Maharashtra and two in West Bengal, will be modernised through JV with private partners.

The mills include Dhule and Nanded mills in Maharashtra, Sodepaur and Luxminarayan cotton mills in West Bengal and Tirupathi mills in Andhra, minister of state for textiles EVKS Elangovan said in a written reply to the Lok Sabha.

Earlier, private partners were identified for modernisation of five NTC mills. Pantaloon Retail has been identified for reviving Mumbai-based Apollo Textile mills and Goldmohur Textile mills and Alok Industries is the private partner for Aurangabad Textile mills and New City of Bombay Manufacturing mills, he added.

Replying to another question, he said the Apparel Export Promotion Council would open 70 new apparel training and design centres (ATDCs) across the country in the first phase during the 11th Plan period. The centres are likely to be operationalised in the academic session of 2008.

Currently, the council runs 39 ATDCs and has trained 33,314 persons in its centres till December last year. Elangovan further said the government has allocated about Rs 1,257 crore for implementing six schemes for promotion and development of handicrafts during the 11th Plan period.

Ford India to launch small car in India in 2010
Bangalore, March 19: Auto major Ford India will be launching its small car in 2010, a top company official said in Bangalore on Wednesday.

"We are working on the small car programme and will be launching it in 2010", Scott McCormack, Vice-President, Marketing, Sales and Service, Ford India said in Bangalore.

The firm plans to increase the installed capacity of its manufacturing facility in Chennai from the present one lakh units to 2.5 lakh units by 2010. "We are investing USD 500 million for the expansion initiative, which includes the small car programme and engine plan", he said.

McCormack said there is some softness in the passenger car segment. "In response to this we are making a few changes in the line-up to stay relevant. Ford Endeavour has done exceedingly well this year," he said.

He said Ford India has begun an experiment in Chennai on the lines of pilot projects by the company in South Africa and Brazil to provide integrated transport solutions to facilitate urban mobility.

Changing jobs frequently can leave you with lower pay cheques
22 Mar, 2008, 1229 hrs IST.............................
WASHINGTON: Job-hopping might be a common career strategy for modern day young professionals, but the trend results in lower pay cheques for the workers, according to a new study.

Researchers at the University of British Columbia have shown that workers who frequently change employers end up earning less than their more stable counterparts.

To find out the effect of career mobility on worker's wages, sociologist Sylvia Fuller of the University of British Columbia looked at data from the 1979 National Longitudinal Survey of Youth, following almost 6,000 workers during their first 12 years in the labour market.

"The past 30 years have seen the erosion of long-term employment, and young people are increasingly told to expect ongoing employer changes throughout their careers," said Fuller.

"However, this research examines the cumulative changes workers make, or are forced to make, and demonstrates that these career moves may not always result in higher earnings," she added.

The researchers showed that by and large any benefits of job mobility accrue mainly in a worker's early career.

Fuller and colleagues found that both men and women typically experience considerable mobility during their early careers, although women change employers somewhat less frequently than men.

The study also indicated that mobility can be a wage asset when it is concentrated in the early years of employment and not coupled with layoffs, discharges, employment gaps or family-related leave.

In this case, moderate or even high levels of mobility can lead to equal or better wage outcomes than stability.

Aside from this exception, Fuller found that wage outcomes worsen as mobility rises.

She said that one reason for lower wage trajectories among high-mobility workers is their failure to amass valuable early tenure associated with staying up to five years with an employer. In the first five years of a job, each year of tenure is associated with approximately 2.4 percent higher wages for men and 2.9 percent higher wages for women. However, after five years with an employer, women's gains from tenure plateau and men's begin to erode.

Fuller also found that high-mobility workers tend to spend a greater proportion of time not employed and, all else being equal, a greater proportion of their job changes are the result of layoffs.

The team also discovered that men are laid off or discharged more frequently than women, yet they leave jobs for family reasons less often.

In addition to the negative consequences of unemployment, Fuller noted stigmas associated with discharges for both genders, and for family-related job separations for women.

The study is published in the February issue of the American Sociological Review, the flagship journal of the American Sociological Association.

ITC achieves carbon and water positive status
20 Mar, 2008, 1801 hrs IST, PTI

KOLKATA: Diversified conglomerate ITC Limited has achieved the milestones of a carbon positive, water positive and close to zero solid waste discharge company as per the Sustainability Report for the year 2007.

The report, published for the fourth consecutive year, was in accordance with the stringent G3 guidelines of the Global Reporting Initiative.

Commenting on the report, ITC chairman Y C Deveshwar said it was a matter of great pride as it was the only enterprise in the world of its size and diversity to achieve the milestone.

The report, prepared by PriceWaterHouseCoopers, was a transparent disclosure of ITC's economic, social and environmental performance.

Deveshwar said over the last three years, total shareholder returns, measured in terms of market capitalisation and dividends, grew at a compound rate of 32 per cent per annum.

In this regard, ITC was aiming to sustain its premier market standing and leadership position in each of the business segments where it was operating.

Deveshwar said the report was a pointer of the company's endeavour to achieve the triple bottomline objectives of contributing to building economic, social and ecological capital for the nation

Bear Stearns sells local stocks worth Rs 1k cr
18 Mar, 2008, 0540 hrs IST,Gaurav Pai.............


MUMBAI: The fiasco at Bear Stearns is having its repercussions on Indian bourses. The troubled firm, now taken over by JP Morgan, has gone on an overdrive selling shares in various Indian companies, as per information released by NSE and BSE. But whether these shares were those of its PN clients or a part of its own investments is not clear.

Bulk deals data on NSE indicate that BSMA (the FII arm of Bear Stearns that is registered with Sebi) sold shares worth more than Rs 1,000 crore on Friday and Monday to different entities, including Deutsche Securities, Citigroup, Merrill Lynch and Goldman Sachs Investments.
Some of the deals were fairly large, for instance, the JSW Steel counter saw shares worth Rs 130 crore changing hands while the number for Monnet Ispat was over Rs 83 crore. Other prominent shares include Madhucon Projects, Usha Martin, KS Oils and S Kumars.

Some dealers with foreign brokerages suggest that these deals were basically “shifting of clients between FIIs.” It’s like Bear Stearns has transferred all its PN clients to another FII (say Citi).

Crisis hit Bear Stearns after clients, alarmed over fears of cash shortage, withdrew $17 billion in two days last week. On Sunday, JPMorgan Chase agreed to buy the beleaguered firm for $240 million, about 90% less than its value last week.

“The shares sold by Bear Stearns could be those in the proprietary account, or those bought for clients through participatory notes or investments made through several funds. It’s very difficult to figure out on the basis of information we have,” says Biranchi Sahu, head of institutional equity at Khandwala Securities.

“But one thing is certain, if such large quantities of shares were sold at the rates mentioned, there may be a prior understanding between the participants,” he said.

Bear Stearns holds tiny stakes in close to 120 listed Indian companies, with the largest holding in JP Associates (at $150 million) and significant stakes in Jindal Steel & Power ($88 million). It also holds shares worth $28 million in Opto Circuits and Madhucon Projects. This data was sourced from Bloomberg.

“Considering the severe redemption that Bear Stearns has been facing, there is a good chance that all these shares sold were either proprietary investments or those in its many funds,” says the head of equities at a foreign brokerage.

Life may never be the same for investors
18 Mar, 2008, 0329 hrs IST,Shailesh Menon.........................


MUMBAI: A few friends would cease to be friends. Invitations for rave parties would stop. And some will prefer moving into smaller homes. Exotic holidays or a second car will have to wait for better days.

The near 30% fall in the market, erasing about two years of investments of an average investor, in plain 47 trading sessions will change the lives of many who have made their fortunes in the market. From what it appears, life will not be easy below 15,000 points.

“It’s already a financial mess for people who bought shares on borrowed money. From what we see, there could be some heavy sell-off of accumulated assets to repay debts. It might take years for these people to recover their losses,” says Mumbai-based financial planner Gaurav Mashruwala.

But what better could investors have done all the while when their equity portfolios were rushing downhill? Not that investment analysts knew about it, investors in silver and metal commodities (in that order) would have made more money than investors in any other prominent asset.

The return profile (for the period between January and March 2008) of various investible assets show that silver has managed to show the maximum return at 28%. Gold, ranked third, returned 22% while investments in arts (paintings) have logged a 6% returns.

Investors who have invested in the MCX metal, energy or agri indices would have logged 24%, 20% and 8% returns, respectively, while currency traders would have been better off pocketing 3% more than what they did in the new year.

“We are already seeing a shift in asset class, that’s from equities to commodities. But I’d still say, there is value left in equities; it’s so hazy, no one can see it,” says Motilal Oswal Securities vice-president (equities) Manish Sonthalia.

“It is safe to invest in equities at these levels. There couldn’t be a deeper fall than the one we are experiencing now,” adds KRIS Securities director Arun Kejriwal.

One positive about the current market, according to experts, is that mutual fund investors have not begun redeeming their portfolios. The expert view is that investors should hang-on to their investments, as fund managers would have adopted measures to support NAVs.

Retail investors are advised to buy index funds or index stocks at this point to time. Stay away from mid-caps and small-caps for now is the general warning.

As a result of abysmally low trading volumes and the consequential widening of buyer-seller (bid-ask) spreads, the impact cost of trading in securities has been rising immensely over the past one month. This is keeping arbitrageurs and day tr

Fed's Moves to Stabilize Economy Bring Praise, but Also New Scrutiny to Central Bank


WASHINGTON Saturday March 22, 7:42 pm ET -- The Federal Reserve has taken its boldest action since the Great Depression, invoking rarely used powers in an effort to contain a panic threatening to undermine the economy. The central bank acted with speed the White House and Congress only could envy.The Fed is largely free from many constraints that bog down other policymakers. Also, it is the only U.S. institution with the authority and ability to create money out of thin air.

For now, the steps orchestrated by Chairman Ben Bernanke, in the first critical test of his leadership since succeeding Alan Greenspan in early 2006, are earning praise from the Bush administration, Congress and presidential contenders Barack Obama, Hillary Rodham Clinton and John McCain.

But the Fed's moves are raising questions about whether its regulatory powers, established in the early 20th century, need overhauling and whether it took on some responsibilities that Congress and the administration should have shouldered.

In a remarkable week, the Fed:

--engineered the fire sale of bankruptcy-headed Bear Stearns Cos. to J.P. Morgan Chase & Co. with a $30 billion loan.

--offered emergency loans to other securities dealers under terms normally reserved for regulated banks.

--slashed a key short-term interest rate by three quarters of a percentage point, to 2.25 percent. The cut was sixth since September.

These steps followed moves to lend $100 billion in cash to banks and $200 billion in Treasury bonds to cash-strapped investment banks. The goal was to keep the financial system from seizing up.

"I spent 35 years on Wall Street, have been a Fed watcher for a long time and I have never seen the potential for a more severe credit crisis than this one," said David Jones, chief economist at DMJ Advisors and a former Wall Street economist. "It looks like we turned the corner precisely because of what the Fed did."

Was this the first look at a more activist Fed or just a targeted response to a looming economic meltdown?

Either way, the financial sector and its regulators are expected to come under congressional scrutiny in the days ahead.

Lawmakers from both parties are coming up with suggestions for restructuring the regulation of financial markets. The Treasury Department is working on its own blueprint for change.

Rep. Barney Frank, chairman of the House Financial Services Committee, is proposing new regulations on investment banks similar to those that apply to regular banks. That includes mandatory requirements for cash reserves to cushion losses.

Frank, D-Mass., said the Fed or other government entity should be designated as a "financial services regulator" with the power to limit risky practices.

White House spokeswoman Dana Perino said the administration would study the concept and other ideas "as we consider if there's additional things that we need to do."

Bear Stearns' unraveling and the credit woes facing other financial companies brought new attention to the Fed, which is part of the government and part of the commercial banking system.

Congress created the Fed in 1913 to prevent financial panics such as runs on banks and set it up as an independent entity. Its powers grew in 1933 and 1935. Although the Fed is subject to congressional oversight, its decisions do not have to be ratified by the president or Congress. Fed officials are not paid with money appropriated by Congress.

It has a seven-member board of governors, led now by Bernanke, and headquarters in Washington. Fed members are nominated by the president and confirmed by the Senate. There are two vacancies currently.

The system includes 12 Reserve Banks in major cities. These banks have their own boards of directors, two-thirds of whom are elected by commercial banks in the region and one-third by the Fed board in Washington.

With this combined government-financial industry heritage, the Fed serves as the nation's central bank. It manages the money supply, sets or influences certain key short-term interest rates, engages in open market buys and sales of government securities, and oversees and provides financial services to banks.

Because of the Fed's direct influence over interest rates, the money supply, and the larger economy, some have called the Fed chairman the second most powerful job in Washington after the president.

Economist Lawrence Chimerine, president of Radnor Consulting in Philadelphia, faults the Fed, particularly under Greenspan, for not paying more attention to what was happening in mortgage markets and to the rise in subprime lending. He said Bernanke's Fed complicated the situation by "raising rates too much and being too slow to start reducing them."

Still, Chimerine said, "I don't think there's any question Bernanke did the right thing" with the recent moves. "If Bear Stearns had gone bankrupt and if this credit crunch continued to spread, we would have had a real mess."

Alice Rivlin, a former Fed vice chairman, said she does not think Bernanke exceeded his authority, even though he acted under creaky legal provisions not used since the 1930s. "The Fed has been very aggressive and imaginative, and has taken very strong actions to get the credit markets functioning again," she said. "And that's good."

Anthony Ryan, assistant treasury secretary for financial markets, said the current framework for regulating financial institutions "is a reflection of literally decades of evolution. And we have a very fragmented regulatory structure."

Before addressing any changes, "we need to continue to make sure we work through the current challenges in the markets. This has to be job one," he said in an interview with C-SPAN to air Sunday. "And the actions by the Federal Reserve to help facilitate orderliness and stability is very, very important."

Gilani is PPP's choice for Pak PM's post ISLAMABAD:........................ The party of assassinated former Pakistani prime minister Benazir Bhutto nominated on Saturday former National Assembly speaker Yousaf Raza Gilani as its candidate for prime minister.

President Pervez Musharraf has asked the National Assembly to reconvene on Monday to elect the prime minister.

Gilani, a vice chairman of Bhutto's Pakistan People's Party, is all but guaranteed to win the vote with the support of his party, which won the most seats in a Feb. 18 parliamentary election, and its coalition allies.

The PPP is led by Bhutto's widower, Asif Ali Zardari, but he is ineligible to stand for prime minister because he is not a member of parliament.

"At this point, I only urge the nation and you all to pray for me, that we take on such a big challenge and do something for the nation, practically," Gilani told Geo Television shortly after the announcement.

Announcing Gilani would be the party's candidate, PPP spokesman Farhatullah Babar told reporters a consensus had been reached within the party and with its coalition partners.

Party officials said earlier the chairman of the party, the son of Bhutto and Zardari, Bilawal Bhutto Zardari, had been due to announce the candidate but they later said he was feeling unwell.

The 19-year-old was appointed after his mother's assassination on Dec. 27 but has said he will complete his studies at Oxford University before entering politics.

There had been speculation the PPP would nominate a stop-gap prime minister and Zardari would take over the post after entering parliament via a by-election.

Analysts said the appointment of Gilani, a low-key Bhutto loyalist, was likely to add to speculation Zardari would seek to become prime minister.

"It's not a nomination you'd expect for a five-year term," said political analyst Masooda Bano.

"He's proved his loyalty but even in the public mind he doesn't have that strong a presence."

The small pro-Musharraf Muttahida Qaumi Movement said it was withdrawing its candidate for prime minister and would vote for the PPP candidate to show goodwill.

But the main pro-Musharraf party, the Pakistan Muslim League (PML), which came a poor third in the election, said it would be fielding a candidate whose name would be announced on Sunday.

Musharraf, an important US ally, will swear in the prime minister on Tuesday and the government is expected to be sworn in later in the week.

The president, who came to power as a general in a 1999 coup, appears increasingly isolated and there is intense speculation over how long he will be able to hold on to power.

The incoming government has pledged to pass a resolution to reinstate Supreme Court judges whom Musharraf dismissed in November out of fear they could rule unconstitutional his own re-election in October by the previous assembly.

If reinstated, the judges are expected to take up legal challenges to the president. Gilani, from the central province of Punjab, was National Assembly speaker from 1993 to 1997 during Bhutto's second term as prime minister.

He later spent four years in prison on charges of making illegal government appointments, charges he said were politically motivated.

The PPP emerged with the most seats in the 342-member National Assembly after last month's election but not enough to rule alone.

The PPP's main coalition partner, the party of former prime minister Nawaz Sharif, came second. Sharif, the prime minister Musharraf deposed in 1999, and Zardari have agreed to form a coalition with a small regional party and a religious party.

Textiles sector expected to throw up 45 mn jobs in 11th Plan
New Delhi, March 19: The textile industry is expected to provide employment to 45.19 million people during the Eleventh Plan period, Parliament was informed on Wednesday.

“As per the report of the Working Group on Textile and Jute Industry for the Eleventh Five Year Plan, the estimated employment in the textile industry is expected to increase from 33.17 million persons as on March 31, 2006 to 45.19 million by the terminal year of the Eleventh Plan,” Minister of State for Textiles E V K S Elangovan said in a written reply to Rajya Sabha.

In another reply, he said the Scheme for Integrated Textiles Park (SITP) has been continued in the Eleventh Plan to sanction additional 10 textiles parks.

During the Tenth Plan period, the target of developing 25 textile parks was increased to 30, he said.

To a separate question, Elangovan said various schemes including Technology Upgradation Fund Scheme, SITP, Marketing Support and Services Scheme, among others have been introduced by the government for providing assistance to the industry.

Under the Marketing Support and Services Scheme, about Rs 98 lakh have been sanctioned to Orissa to provide more marketing outlets