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PR industry to double its size to USD 6bn by 2010: Assocham

New Delhi, March 10: The Public Relation (PR) industry is likely to double its size to over 6 billion dollars by 2010 as corporates are relying more on pr professionals to improve their brand image, industry body Assocham said.

"Corporates are opting to rope in public relation agencies for their increased sales turnover as one of finest marketing strategies. Since demand for pr is rising, the industry has shown a growth of about 22-25 percent in last couple of years," Assocham President Venugopal Dhoot said in a statement, while releasing the survey on "attrition vs PR and its future prospects".

As per the survey due to the economic boom, a huge competition has emerged for brand building as result of which PR agencies are in demand, the chamber said.

There are more than 100 big agencies with 10-15 branches across India like Perfect Relations and Vaishnavi. Many of these agencies are affiliated or are Indian subsidiaries of global PR companies, the Assocham said.

"As the market environment is becoming more complex, skilled people are in need and PR professionals are the best to deal with such complex environment," PR agency Weber Shandwick Regional Head (North India) Atul Ahluwalia said while commenting on the increasing demand of PR professionals.

Commenting on the attrition rate of the industry, Assocham said the attrition rate now has seized PR industry with its rate exceeding 40 percent even if its growing at an annual rate of 32 percent.

Due to the increasing pace of growth, these agencies are facing an acute shortage of trained manpower. This is reflected in the 30-35 percent hike in top-level salaries the sector has seen in the last one year. To compound the problem, attrition rates have touched 30-40 percent, it added.

Egypt imposes dumping duty on Indian tyres

Cairo, March08: The Egyptian government has imposed a dumping duty for the next five years on new bus and truck tyres imported of Indian or Chinese origin, the state news agency MENA said on Saturday.

Trade and Industry Minister Rachid Mohamed Rachid imposed the duty to encourage investment in Egyptian production of tyres of this type and to create new jobs in the sector, it added.

It did not say how much the duty would be and ministry officials were not immediately available to comment.

Rachid said that within 12 or 18 months a joint Egyptian-Chinese industrial area west of Cairo would start producing all kinds of components for the vehicle industry.

Has the stock market bottomed out?
11 Mar, 2008, 0000 hrs IST.......................International credit markets are in a crisis and the stock markets have been shaky. Nobody is in a position to react to the big macro issues such as where the dollar is going, what is the likely GDP growth of US or China, and so on. For every smart person on one side of the question, there is another smart person on the other side.

The Indian financial markets have also been witnessing sustained volatility and clearly global cues are the deciding factor, in the absence of any strong domestic positive news. The US economy and its future course will be a critical factor in assessing the FII mood and market sentiments, going ahead.

As far as the valuations are concerned although the Indian markets are now trading at 14-15x FY09E, and a large part of the froth generated is now out of the system, the sustainability of any upward move in the market clearly depends on global factors.

I feel that the markets are trading closer to fair fundamental value but a minor down-move is not ruled out in the short term. One key deciding factor for the Indian markets will be FII liquidity, which seems to have completely dried up and unless this revives substantially way, we may continue to see volatile and choppy markets for another 3-4 months, followed by a noticeable recovery that could start from September ’08 onwards. However, even this will be subject to the forthcoming general elections, which now look scheduled early.

As mentioned earlier, the full effects of a global meltdown are not yet fully factored in by the markets. Any fresh adverse news on subprime crisis, and slower US economic growth will continue to have a negative impact and will be a cause of concern for emerging markets like India, where one could see redemption pressure from FIIs to fund their subprime losses in other markets.

Clearly, retail investors should look at the SIPs (systematic investment plans) of mutual funds as the right investment option if they do not have the ability and the capacity to take risk directly. Equity as an asset class will definitely bounce back and offer significantly better returns over the next two-to-three year horizon. With elections looming near the corner, the markets will continue to remain choppy and volatile and this may keep investors away from the markets.

Nevertheless, this is an excellent time for an investor to build a quality portfolio of stocks because prices of almost all blue chip stocks have come off by almost 50% and hence returns from these levels over the next two to three years will be a significant for any retail investors. However, they will have to be patient and have the conviction in their investment decisions and take a long-term call on the markets without looking at the short-term aspects. It should be very clearly understood that the India story continues to remain strong but sentiment has taken a beating due to unfavourable global developments.

Retail investors should never try and time the market; they should be in the market for a time. Other than equity, traditionally, retail investors have been investing in instruments like National Savings Certificates (NSCs), RBI bonds, post office, etc., and all these investments are for five years or more.

However, unfortunately, while investing in equity, retail investors tend to take a short-term view and look for almost instant gains. This short-term approach needs to be curbed and equity, as an asset class, needs to be considered by the investors for long-term deployment. If this approach to investment is followed, the current market scenario is ripe for retail investors to enter for making substantial long-term gains.

Equity markets are down by more than 25% from their top, to the shock of many. Certain unanticipated events have resulted in this fall, contrary to the expectation at the beginning of the year. The subprime crisis in the United States has resulted in the drying of liquidity chasing momentum around the world. The Indian market is not an exception.

While central banks around the world, led by US Federal Reserve, are cutting interest rates or providing liquidity to avert a major credit crunch, it has not yielded the desired impact till now. India is the least impacted by subprime related issues due to our low exports-to-GDP ratio and conservative financial regulation. Global investors will surely notice this once the dust settles down on the subprime crisis.

India’s economic fundamentals are in place. The Budget has given a boost to the consumption sector by cutting taxes and writing off farm loans. The ongoing capacity expansion cycle is also likely to sustain through domestic savings and investment rate of more than 35% plus.

The Reserve Bank of India (RBI) has very wisely created a liquidity buffer of more than $100 billion in MSS, CRR and WMA balances to fund credit requirement to sustain rapid economic growth. Interest rates are stable and inflation, though a bit of a concern are well managed by the RBI. Corporate profitability growth will, however, certainly slow down in FY 2009 but that is already priced in equity markets to a reasonable extent.

The equity market is volatile due to the event-risks rather than fundamental concerns; the stress in the global financial system is putting pressure on FIIs who influence our market to a great extent. Uncertainty on the farm debt write off is also adversely impacting the markets. In April ’08 all eyes will be fixed on the credit policy. If the RBI cuts interest rates (which we do not think is likely after the growth oriented budget) then the market will get supported.

In May, the focus will be on the Monsoon forecast. In June - July, may be the talks of election and subsequent impact on economic policies will keep the market guessing. All these unpredictable events are pushing sellers to sell aggressively and buyers to trade cautiously in the market resulting in a sharp fall. The market is facing a crisis of confidence rather than shortage of cash.

We estimate sensex EPS to be Rs 1,000 for FY09 and about Rs 1,200 plus for FY10. By January 09, when we will be ready to discount FY10 earnings, the sensex could be trading at under 12 times one year forward earning taking 2,000 points for embedded value for the insurance business and gas reserves in the sensex companies. That shows the kind of potential the market has from current levels once we disengage ourselves from the current turmoil.

I will recommend investors who have invested into the market to hold tight and bear the pain. For fresh investment I will recommend investors to grab opportunities that may be available in the market around current levels in the next few months. Investors should also not expect recovery to be fast and V shape. That kind of fairy tale would happen only if all the events turn positive. While investing also do not put all the money at one go.

The markets are volatile and short on confidence right now. There are going to be some events on the way whose outcome can impact the market significantly. It is equally important that investors do not chase prices on their way up. Expect market oscillation to give you an opportunity to enter at appropriate levels. Most importantly have faith in Indian growth story which has lot of way to go notwithstanding current turmoil.


Given the volatility and recent declines witnessed in the Indian equity markets, this is surely a question on most investors’ minds. When attempting to arrive at an answer, one must assess what factors have driven the correction, and evaluate what aspects may, going forward, benefit or hinder the market.

From a fundamental perspective, the market is underpinned by strong growth expectations. Domestic demand continues to prove robust across several sectors, while the Indian economy, as is widely recognised, is less export driven than many of its emerging market peers, thus arguably making it less susceptible to a global slowdown. In addition, given that many Indian companies are in fact in the business of reducing costs for their foreign clients, an argument can be made that a global slowdown may in fact prove a boon for India’s export-oriented firms.

From a technical perspective the picture is somewhat different. A significant amount of capital invested in the Indian market was driven not by fundamental drivers, but rather to take advantage of strategies such as cash/futures arbitrage.

These strategies have come under pressure as the upward momentum has waned and the rupee has weakened against currencies such as the yen. The reduction in profitability of such strategies has led to an unwinding of trades by the participants and a wholesale reduction of leverage in the system. If one examines the current open interest in the derivative market the levels are fairly similar to those of May 2006 when the market also corrected by approximately 14%.

There is one difference though. The market did take a couple of months to recover after the May 2006 drawdown, but it was against a backdrop of a strengthening rupee which undoubtedly played a role in attracting technically-driven monies back into the market. Today, the case for a strong rupee is much more tenuous, with the currency in fact poised for further weakening depending on the actions of the RBI. As such, the impact of this technically-driven capital on valuations is likely to be far more muted, at least in the near term.

From a political standpoint, there is a growing belief that despite this being an election year, any changes should not derail the economic reform processes in place nor negatively impact the markets. The probability of a coalition government extending its tenure is almost assured. If the Left is absent in the new structure, the market will regard this as a positive; if the Left is present this has already been priced in. So, it looks unlikely that there will be negative surprises on the political front.

In the recent Budget there were quite a few “populist” measures such as the $15 billion debt waiver package for farmers. The FM is also proposing about $10 billion in salary revisions for certain public sector employees. The last time when pay revisions occurred in 1997, there was a significant positive impact to GDP. Whilst growth may not have been the primary motivation behind measures such as these unveiled in the recent Budget, there is no reason to believe that they will not have a similarly positive impact as they have had in the past.

Where does it leave one with respect to calling a bottom in the market? In essence, a lot of the negative sentiment has been priced in and the overvaluation corrected. This does not mean that we will not witness further declines, especially if global sentiment continues to deteriorate and risk aversion becomes more acute. However, the risk-reward trade-off is increasingly looking skewed in the investors’ favour.

The impact of positive news on the market should outweigh that of further negative news given where the market is currently trading. The market could very well end up trading in a range for several months, but further declines of the magnitude we have witnessed are unlikely. What is clear is that for the foreseeable future any price appreciation will likely be driven by earnings growth as opposed to P/E expansion.

is it start of a good bullish era...........hope so.........

RPT-GLOBAL MARKETS-Asian stocks, dollar gain on Fed speculation
HONG KONG, March 11 (Reuters) - Asian stocks posted their first gains in three sessions on Tuesday, while the ailing dollar edged up against the yen on speculation that the U.S. Federal Reserve will cut interest rates ahead of its meeting next week.

But the outlook for Asian stocks, which are at seven-week lows, still remains weak as a looming U.S. recession is expected to slow economies worldwide and deepen credit-related problems in the financial sector.

Signs of spiraling inflation are nagging across Asia as well. China, a top export destination for much of the region, said its consumer inflation jumped to an 11-year high last month.

Oil, seen as a hedge against inflation and a weak dollar, was little changed after hitting a record above $108 a barrel on Monday, while gold edged below $975 an ounce.

"Concerns about inflation are very strong. Hedge funds are selling stocks and buying commodities, especially in oil and gold, because the U.S. dollar is weakening," said Takeda Makoto, an analyst at Bansei Securities in Japan.

The MSCI index of Asian stocks outside Japan .MIAPJ0000PUS was up 0.4 percent by 0720 GMT, after earlier in the day falling as much as 1.4 percent to its lowest since Jan. 23.

News Corp dashes ***** hopes
11 Mar, 2008, 1140 hrs IST...............

NEW YORK: Rupert Murdoch has said that his News Corp would not get into a fight with Microsoft Corp over ***** Inc, confirming what most industry and Wall Street observers suspected.

Murdoch's company has been in talks with ***** over a transaction to combine News Corp's MySpace Internet social network and other Internet assets with *****, a source familiar with the talks said earlier.

"We're not going to get into a fight with Microsoft, which has a lot more money than us," Murdoch told investors at the annual Bear Stearns media conference.

Microsoft has made an unsolicited $41.4 billion bid to buy *****.

Time Warner Inc has also held talks to combine its AOL Internet division with *****, another source said last week.

Bajaj emerges as leading motorbike in Lanka

Colombo, March 11: Indian auto giant Bajaj is emerging as the leading motorcycle player in Sri Lanka amidst fierce competition from other global players, according to auto experts.

"Bajaj may be competing more fiercely in maintaining its supremacy in the motorbike segments in India than in Sri Lanka, where it is selling like hot cakes due to fuel efficiency and other factors", the experts said.

"Bajaj Motorcycles, which is catering to all segments of the Sri Lankan market is emerging as a favourite amongst buyers due to its powerful and stylist range of models vis-a-vis other global players", they added.

Total exports of Bajaj two wheelers to various countries during the first nine months of 2007-08 financial year stood at 3,58,136 vehicles, Bajaj said in a statement.

Bajaj Motorcycles are feature-driven to maximise on power and comfort and are specialising in fuel-efficient performance, the auto experts said.

Designed with state-of-the-art technology and manufactured to perfectly handle local conditions, Bajaj bikes are emerging as the natural choice of Sri Lankans for affordability, fuel-economy and performance and "have grown to become an integral part of Sri Lankan lifestyles", they added.

The improved performance of the Indian auto giant has also been attributed to timely introduction of the latest models of Bajaj motorcycles.

Inflation at record high in China in nearly 12 yrs

Beijing, March 11: Soaring food costs drove China`s inflation to its highest level in nearly 12 years in February, according to data reported on Tuesday, raising the risk of unrest as communist leaders prepare for the Beijing Olympics.

The 8.7 per cent price rise over last February exceeded forecasts and raised the likelihood of interest rate hikes or emergency steps by Chinese leaders, who already have imposed price controls on food.

Communist leaders worry about a political backlash if soaring prices erode rising living standards. Bouts of high inflation in the 1980s and `90s sparked protests, a scenario they want to avoid amid global scrutiny of China ahead of August`s Summer Games.

Inflation was driven by a 23.3 per cent jump in food costs, according to the National Statistics Bureau. Such rises are especially worrisome to Chinese leaders because they hit the country`s poor majority hard.

``I`m concerned that there will be demonstrations. The government must recognise this,`` said Robert Broadfoot, managing director of Political and Economic Risk Consultancy Ltd. in Hong Kong.

Food price inflation ``hits poor Chinese a lot harder than Chinese who have benefited from the economic boom,`` Broadfoot said. ``When people already are marginal and just can`t pay, they`re going to demonstrate.``

Economists say inflation should stay high possibly as late as May before it begins to ebb.

``China will find it difficult to meet the target inflation rate of 4.8 percent for the full year,`` Jing Ulrich, JP Morgan`s chairwoman of China equities, said in a report to clients.

February inflation was China`s highest since May 1996, when prices rose by 8.9 per cent, according to Goldman Sachs.

Overall inflation was up sharply from January`s per cent 7.1 percent rate. Economists expected a rise in February but forecast a rate closer to 8 per cent.

Beijing has raised interest rates repeatedly and is trying to boost food production to ease inflation pressure amid a boom that saw economic growth rise to 11.4 per cent last year.

Rel shares moved by upto 37% pre-IPO: Govt

New Delhi, March 11: Share prices of Reliance Group companies moved up by up to 37 per cent in about a month before the opening of Reliance Power IPO, but subsequent examination of trading of these shares on exchanges did not reveal any foul play, government said on Tuesday.

"The prices of shares of Reliance Group companies have moved up within the range of 8.1 per cent to 36.94 per cent during December 17, 2007-January 14, 2008," Minister of State for Finance Pawan Kumar Bansal informed Rajya Sabha today.

The IPO had opened on January 15 and closed on January 18.

Bansal was replying to a question from Rajya Sabha MP M V Mysura Reddy (TDP), who had asked whether the share prices of Reliance Group companies exorbitantly increased before the public issue of Reliance Power, and whether the government has taken up any investigation in the matter.

In his written reply, the minister said SEBI initiates investigation when there is a suspicion that price may have been manipulated.

"The examination of trading on exchanges in these shares did not reveal any significant concentration among the market participants," he said.

"The increase in prices of shares of Reliance Group companies indicates notional gain for all investors including small investors," Bansal said on possible losses to small investors.

In reply to another query, the minister said SEBI has received 2,261 grievances from investors against the company relating to non-receipt and delay of refund, credit of shares and non-receipt of interest till March 3, which have been transmitted to the company for necessary action.

Preity pins hope on Hopes; Mallya scoops Misbah & Virat
Mumbai, March 11: The latest leg of the players bidding in the IPL saw the Bangalore team picking up Under 19 World Cup winning captain Virat Kohli. His inclusion was followed by the roping in of Shreevats Goswami and Pakistan superstars Misbah-ul-Haq and Abdul Razzak. Dimitri Masceranhas became the first English batsman to sign the million dollar contract.

Australian all-rounder James Hopes and Pakistan batsman Misbah-ul Haq led the list of 14 players signed up to play in a second `auction` for the lucrative Indian Premier League (IPL) on Tuesday.

The Mohali team owned by Preity Zinta managed to buy the services of Tanmay Shrivastav, Ajitesh Argal and Australian all-rounder James Hopes.

Dmitri Masceranhas became the first England player to join the IPL after attracting a bid of USD100,000 (50,000 pounds), double the basic price set for the second and final phase of bidding for the Twenty20 league which was held in Mumbai. England players were absent from last month`s initial multi-million dollar auction, where 75 cricketers, including many household names, were picked by the eight franchises.

However, the 30-year-old Hampshire all rounder was able to sign up because he was not centrally contracted with the England board, an IPL official said.

Australia`s Hopes walked away with the highest bid of the day after he was snapped up for USD300,000 by Mohali.

Misbah was bid for USD125,000 to play for Bangalore, owned by Indian billionaire Vijay Mallya. The team also picked New Zealand batsman Ross Taylor for USD100,000.

The team owners, ranging from India`s premier industrialists to a leading Bollywood actor, completed their signings ahead of the deadline for submitting teams, 30 days before the 44-day tournament kicks off on April 18.

Tuesday`s auction was a scaled-down version of the initial phase when Indian limited overs captain Mahendra Dhoni and Australian all rounder Andrew Symonds attracted the highest bids of USD1.5 million and USD1.3m respectively.

Pakistan`s premier batsman Mohammad Yousuf did not find takers but will get a retainership being paid for all contracted players with the Board of Control for Cricket in India (BCCI).

South African batsman Ashwell Prince was bid for USD175,000 to play for Mumbai while Mohali coughed up USD150,000 to get New Zealand fast bowler Kyle Mills.

Australian fast bowler Shaun Tait, one of 12 other players who had shown interest in the league, was not considered because his offer came in too late, organisers said.

Talented Australian all-rounder Watson, who has endured a stop-start career after struggling with injuries, was secured for USD125,000 by the Jaipur team, who will be captained by retired Australian spinner Shane Warne.

All but two players from India`s under-19 World Cup winning squad found takers, paying a fixed player fee of USD30,000, with the franchises allowed to choose them on an NBA-style `draft` format.