Daily Markets, Economy and Tech. Sector - 28 Nov 2011 [1 Attachment]


 
Global - Economy and Market 
Italy's Monti in austerity race as IMF role eyed 

ROME - Prime Minister Mario Monti faces a testing week seeking to shore up Italy's strained public finances, with an IMF mission expected in Rome and market pressure building to a point where outside help may be needed to stem a full-scale debt emergency. 
China factory unrest flares as global economy slows 

DONGGUAN, China - In factory towns across China's export powerhouse in the Pearl River Delta, a vicious cycle of slowing orders from the West and increasing wage pressures has led to a series of major strikes that could reverberate through the economy. 
Europe's banks plan accounting tricks to look stronger 

European banks are planning to change how they calculate risk-weighted assets to make it look like they have improved their financial conditions. Such a change could allow banks to avoid selling assets or new shares to meet new capital requirements. 
China kicks off yuan trading vs Aussie, Canadian dollar 

SHANGHAI - China's yuan started trading against the Australian dollar and Canadian dollar in the country's onshore forex market on Monday, the latest currency pairs to be introduced as part of Beijing's efforts to promote the use of its currency. 

8:33am IST 
China on track to be world's biggest online market by 2015 

China will replace the U.S. as the world's biggest online market by 2015, a Boston Consulting Group report says. China will have more than $314 billion in online sales by that year, the report says. China Daily (Beijing) (23 Nov.)      
Hungary: Moody's downgraded Hungary's government bond rating by one notch to Ba1, below investment grade, and the kept its outlook negative yesterday 

Asian shares jump, euro firms amid Italy aid 

TOKYO - Asian shares jumped and the euro firmed on Monday on hopes Europe will come up with some concrete steps this week toward activating a crucial euro zone bail-out fund and reports that the International Monetary Fund is considering helping Italy. 

MSCI's broadest index of Asia Pacific shares outside Japan .MIAPJ0000PUS rose 1.6 percent, after slumping to its lowest level since early October on Friday to mark a fourth consecutive week of declines. 

Japan's Nikkei .N225 gained 1.9 percent after hitting its lowest in two and a half years on Friday. 

India - Economy and Market 
RBI: opening up retail to help growth, curb inflation 

CHANDIGARH - India's growth story is still "credible" and the move to open up the economy to global supermarket chains will help growth and control inflation, RBI governor Duvvuri Subbarao said on Friday. 

Rules stipulating that foreign supermarkets will have to source 30 percent of produce from smaller industries cannot be restricted to the Indian market, as this would violate World Trade Organisation guidelines, a senior official said. 

India opens retail sector to foreign investment 

The specific conditions linked to the approval are yet to be announced.However, citing an unnamed government official, Bloomberg has reported that these will 

likely include two conditions: 1) large overseas retailers would be required to invest a minimum of USD100mn million in India; and 2) the stores would be allowed only in cities with at least 1 million inhabitants. The government will apparently also allow 100% foreign ownership of single brand retail operations, up from 51% earlier. 
This is a major and welcome change that could have important implications for inflation going forward. 

We think the liberalization measures could spur investment in food storage and transportation facilities that would reduce wastage and therefore frequent supply shortages that drive food price volatility. It is believed that 

about 40% of India's fruit and vegetables rot before they are sold, for example. This has been a structural driver of food inflation that has partly kept WPI inflation elevated. 

Therefore, if the move successfully results in improved storage facilities, this should provide some relief for the RBI in the future. 

FX reserves at $308.624 bln as on Nov 18 

MUMBAI - India's foreign exchange reserves fell to $308.624 billion on Nov. 18, from $314.339 billion in the previous week, the RBI said in its weekly statistical supplement on Friday. 
Cabinet note on PSU cross-holdings soon 

The finance ministry will move a cabinet proposal to allow government companies to acquire equity in other public sector units. 
Foodgrain productivity up 8% at 1,921 kg/hectare in 2010-11 

Foodgrain productivity rose by 8 per cent to 1,921 kg per hectare in 2010-11 crop year, Parliament was informed today. 
The average growth in Gross Domestic Product (GDP) of agriculture and allied sectors suffered a setback due to severe drought in many parts of the country during 2009-10 and drought/deficient rainfall in some states namely Bihar, West Bengal, Jharkhand and East Uttar Pradesh in 2010-11 

However, the GDP growth for agriculture sector touched 6.6 per cent in 2010-11 -- the highest growth rate achieved in last six years -- on account of the corrective actions taken by the government 
Indian shares to open up; retailers, Reliance eyed 

MUMBAI, Nov 28 - Indian shares are expected to start higher on Monday, supported by firmer Asian markets and hopes the government will push more reforms after liberalising foreign investment in the retail sector. 

Technology News – 

Mid-sized IT cos go for buyouts 

Mumbai-based software products and services provider Infrasoft Technologies has mandated three investment banks including Avendus Capital to look for acquisitions in the US in the range on $10-15 million. This comes on the heels of Infrasoft's acquisition of the financial services business of KPIT Cummins in October this year. 

Cloud technology for instance has been a focus of many acquisitions in recent times with companies like Aditi Technologies and Vembu Technologies making acquisitions in the space. 

Internet startup Flipkart and BPOs like EXL and Hinduja Global Solutions (HGS) have also bought companies over the last few months. HGS in August acquired Canada-based customer relationship management company Online Support (OLS) for $78 million. 

Dion Global Solutions, a software solutions provider for financial markets, today said it has acquired UK-based wealth management and stock broking software provider Investmaster Group for an undisclosed amount. 
TK Kurien cleans up Wipro with elbow grease, puts it back on growth path 

Its operational metrics show that vitality is returning, helped in no small part by TK Kurien, the man who took over as chief executive of the Bangalore based company nine months ago. 

Volumes - a measure of the number of hours billed by software engineers - have jumped 6% in the three months to September compared with the well under 2% quarterly growth when Kurien took over. That was marginally behind larger rival TCS (6.3%) and ahead of Infosys (4.6%). 
HTC CFO says plans to launch competitive phones in Feb 

TAIPEI - Taiwanese smartphone company HTC Corp said it has confidence that new products to be launched at the Barcelona Mobile Conference next February would be more competititive and achieve better sales. 
AT&T to offer bigger asset sale to save T-Mobile deal - Bloomberg 

REUTERS - AT&T Inc is considering an offer to divest a significantly larger portion of assets than it had initially expected, in order to salvage its $39 billion deal to buy T-Mobile USA, Bloomberg reported citing a person familiar with the plan.
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