With domestic interest rates hardening even as fixed income returns fall globally , there is a sudden spurt in remittances from non-resident Indians (NRIs) seeking to arbitrage between local and international rates. Indians are borrowing overseas at low rates and are remitting funds in India for investments. As on June 30, total NRI deposits on various banks was pegged at $53 billion. With the rupee depreciating over 18% in the last six months, non-residents are getting more for the dollar than ever before. Avijit Nanda, president Times of Money, told TOI, "NRIs are seen borrowing overseas at Libor minus rates and invest in
Indian equities, mutual funds and real estate sectors. The FCNR rate for NRI deposits has increased by 125 basis points (Libor+125 basis points) effective from November 23, 2011, thus encouraging NRIs to open deposits in India. Our estimates are that the remittance flows into India have gone up 20-25 % when compared to the same period last year. NRIs are making the most of better interest rates in India."
Private sector banks like Kotak Mahindra Bank and Federal Banks have witnessed over 40% and 30% surge in remittances respectively from the year ago period. According to World Bank estimates, India received $55 billion in remittances in 2010 and Gulf region accounts for almost half of that.
Indian equities, mutual funds and real estate sectors. The FCNR rate for NRI deposits has increased by 125 basis points (Libor+125 basis points) effective from November 23, 2011, thus encouraging NRIs to open deposits in India. Our estimates are that the remittance flows into India have gone up 20-25 % when compared to the same period last year. NRIs are making the most of better interest rates in India."
Private sector banks like Kotak Mahindra Bank and Federal Banks have witnessed over 40% and 30% surge in remittances respectively from the year ago period. According to World Bank estimates, India received $55 billion in remittances in 2010 and Gulf region accounts for almost half of that.
UAE, with two million Indians alone contributed around $6 billion last year. This year, remittances from Gulf are likely to break last year record. "We are also seeing trend where by NRIs are retiring the mortgage loans in India by remitting more out of own funds or out of overseas borrowings. Coupled with the weak rupee they enjoy the interest differential as well, since interest rates are low overseas as compared to India," said, Sudhir Kumar Shetty, chief operating officer, global operations, UAE Exchange, whose global remittance volumes in 2010 were $17 billion. "During the last couple of weeks, we have witnessed a 30% increase in remittance. These are from people who send money for investments rather than domestic commitments," adds Shetty.
"I took a personal loan of 300,000 dirhams (Rs 42 lakh) from a local bank in Dubai at 8% interest rate and bought a flat in Noida. Indian banks were asking me to pay 12% interest rate along with processing fees. The best part is that I don't have to keep the house mortgaged and I will repay the loan in 5 years. Besides, I save interest of 4% annually, translating to overall saving of Rs 13.5 lakhs," said S Pathak, who works with a local media firm based in Dubai.
Although official figures are not available, banking sources say that many Indian are seeking fresh personal loans and office advances in UAE to invest in India.
"I took a personal loan of 300,000 dirhams (Rs 42 lakh) from a local bank in Dubai at 8% interest rate and bought a flat in Noida. Indian banks were asking me to pay 12% interest rate along with processing fees. The best part is that I don't have to keep the house mortgaged and I will repay the loan in 5 years. Besides, I save interest of 4% annually, translating to overall saving of Rs 13.5 lakhs," said S Pathak, who works with a local media firm based in Dubai.
Although official figures are not available, banking sources say that many Indian are seeking fresh personal loans and office advances in UAE to invest in India.
For the last year, Pfizer has been laying the groundwork to combat the looming competition against Lipitor, forging deals with insurers, pharmacy benefit managers and patients to meet or beat the price of its generic replacements.
As it loses its patent for Lipitor, the top-selling cholesterol drug, on Wednesday, Pfizer is completing relationships and shoring up discounts — like a reduced co-payment of $4 a month versus the $10 customers would pay for many generic prescriptions.
Some deals require pharmacies to reject prescriptions for low-cost generics, starting Thursday, and substitute a discounted name-brand Lipitor. Some deals have blocked generic makers from mail-order services that account for an estimated 40 percent of all Lipitor prescriptions.
The company’s aggressive strategy may offer lessons for drug makers facing similar losses of patent protection for other blockbuster drugs over the next few years, and may chart a new path for shifts between the big pharmaceutical companies and generic rivals.
Lipitor was the first drug to exceed $10 billion a year in sales, and accounted for almost one-quarter of Pfizer’s revenue in the last decade.
With Pfizer’s plans to try to maintain brand loyalty for the next six months becoming public, industry analysts have raised the company’s earnings outlook by 2 to 4 percent, and now estimate that it could retain 40 percent of the market through next year. Pfizer officials declined to comment on that estimate.
Aiding its chances is a stumbling start-up by generic competitors. Ranbaxy Laboratories, the Indian subsidiary of the Japanese drug company Daiichi Sankyo, won the right to bring the first generic version to market. But Ranbaxy has disclosed it is under federal investigation. It has not yet received Food and Drug Administration approval. Ranbaxy’s president has said it will be ready by Thursday.
Watson Pharmaceuticals of Parsippany, N.J., is a second competitor with a generic version of the drug authorized and manufactured by Pfizer. But Watson has to give about 70 percent of its profits to Pfizer, according to the investment house Sanford C. Bernstein & Company. And Pfizer’s own deals are undercutting both Watson and Ranbaxy on price.
“Pfizer’s tactic of dressing up as a generics company is pulling the rug under the incentive system created to foster the development of generic drugs,” David A. Balto, a lawyer for some generic makers and a former policy director for the Federal Trade Commission, said Tuesday.
Pfizer’s strategy so far is limited to the first 180 days after Lipitor goes off patent. During that period, under law, generic competition is limited and the first entries have historically charged fairly high prices to recoup their costs. After the first six months, any company can enter the generic market, and prices plunge.
Although Ranbaxy and Watson have not yet announced their prices, one top Pfizer official said on Tuesday that its new discounts could be adjusted to beat any tit-for-tat reduction in the expected generic pricing.
“They are a set contract but they could change,” said David S. Simmons, president and general manager of Pfizer’s established products unit. “I mean, it’s at the discretion of two parties. They could change.”
Mr. Simmons said the intention of Pfizer’s discount was to keep Lipitor “at or below generics’ cost to the health care system.”
The discount is also extending to many Medicare prescription drug plans that will dispense Lipitor even if patients ask for generics, according to a memo released by an advocacy group called Pharmacists United for Truth and Transparency.
The memo, from CVS/Caremark, a pharmacy benefit management company, and dated Monday, notified pharmacies that the generic form of Lipitor would not be covered for 29 prescription drug plans it managed for Medicare Part D. Instead, any prescription claims for generic atorvastatin will be rejected with a notice saying: “Brand Lipitor will pay at generic co-pay.”
The company’s memo did not disclose the financial terms.
The government may receive the rebates that drug manufacturers pay to benefit managers and insurers if they are fully disclosed and characterized as rebates, not fees, according to a March report by the Office of the Inspector General for the Department of Health and Human Services. But benefit managers’ records may not be accessible or auditable, it added.
Express Scripts, another large pharmacy benefit manager, is recommending that its clients not accept Pfizer’s deals under the reasoning that it could cost more in the long run, according to F. Everett Neville, vice president for pharmaceutical strategy. “They’re 180-day deals but no one knows what the price of the generic may be if they lower their prices in a month or two,” he said.
Medco Health Solutions, another giant benefit manager, is also recommending that customers switch to the generic version of Lipitor. Medco is sending faxes to tens of thousands of physicians and letters to some of the million people who buy Lipitor through the company, saying they should use generic atorvastatin to save money, said Timothy C. Wentworth, Medco’s group president for employer and key accounts.
At the same time, both Express Scripts and Medco say their own mail-order services will use Lipitor as a “house generic” because Pfizer has guaranteed to match the price and assured a supply.
With mail order increasingly dominant — accounting for an estimated 30 percent of Lipitor sales — those deals are important. Timothy Anderson of Bernstein Research estimated that Pfizer would maintain 90 percent of the mail order market.
Aetna is not taking Pfizer’s offer. “We decided not to participate in the rebate program because it doesn’t support our generic-first philosophy,” an Aetna spokesman, Matt Wiggin, said.
Kevin Hooks, managing partner of the Virtuous Group, a benefits consultant in Las Vegas, also said: “We don’t know what the generic is going to be priced yet. He added, “Right now we think it’ll be a better deal for members to get Lipitor for the first six months, with discount, and then kill the deals.”
Consumers will certainly benefit from generic prices. And Pfizer is making sure of that with a program called Lipitor for You, offering the $4 co-payment card and direct delivery of Lipitor. The program is limited to privately insured people, though, because government programs like Medicare say such discounts could violate antikickback laws and lead to higher health spending.
It’s unclear how taxpayers will fare through the Medicare Part D drug benefits program, administered by private companies. Tony Salters, a spokesman for Medicare, said he could not comment.
Christine K. Cramer, a spokeswoman for CVS/Caremark, said its drug plans had already included the Lipitor rebates in its 2012 Medicare bids, thus lowering premiums for the government and Lipitor users.
Even at the lower price, Pfizer has a huge margin because of the relatively low cost of materials for Lipitor, Bernstein Research estimated. Pfizer, the benefit managers and some insurers insist all of the new discount will be passed along to consumers, companies and other payers.
“Who knows who it’s good for?” said Dr. John Santa, director of health ratings for the independent nonprofit Consumer Reports. With all the companies involved, “and they say consumers are going to be good here, I’d be skeptical,” he added.
Adam J. Fein, a pharmaceutical consultant and blogger, said: “It’s kind of a forerunner of what’s going to happen over the next two years as everyone battles for the incremental profit in the generic wave.” He added: “You have over $80 billion in drugs that are going to go generic. Say $80 billion settles to $10 billion eventually. That’s $70 billion savings. But during that period going from 80 to 10 there’s going to be a lot of money made by the various channel intermediaries, and they all want a piece of that pie.”
This story originally appeared in The New York Times
We all know the iPhone has had its fair share of battery issues. And even some death grip problems. But this is one for the record books: On November 25, a passenger on an Australian flight, traveling between the city of Lismore and the city of Sydney, looked down to find his iPhone 4 had exploded, and was currently emitting plumes of "dense smoke."
So say the folks at Regional Express, a major Australian airline. In a press release with the completely wonderful title of "Mobile Phone Self Combustion," Regional Express said the situation was quickly brought under control by a flight attendant.
"Regional Express flight ZL319 operating from Lismore to Sydney today had an occurrence after landing, when a passenger’s mobile phone started emitting a significant amount of dense smoke, accompanied by a red glow," the release read. "In accordance with company standard safety procedures, the flight attendant carried out recovery actions immediately and the red glow was extinguished successfully. All passengers and crew on board were unharmed."
As the team over at ABC News points out, this isn't the first time Apple has had trouble with exploding gadgets. In 2009, the European Union looked into allegations that various Apple mobile devices had caught fire. More recently, Apple recalled the original Nano music player, which were reportedly at risk of overheating.
No word yet from Apple on the Great Australian Airplane Apple iPhone Combustion of 2011.
American Airlines filed for bankruptcy protection on Tuesday to cut labor costs in the face of high fuel prices and dampened travel demand, capping a prolonged descent for what was once the largest U.S. carrier.
AMR Corp, the parent of American Airlines, also filed for bankruptcy and replaced its chief executive.
The company, which employs about 88,000, has been mired for years in fruitless union negotiations, complaining that it shoulders higher labor costs than rival domestic and foreign carriers that have already restructured in bankruptcy.
United Continental Holdings Inc's United Airlines and Delta Air Lines Inc, both of which used Chapter 11 to cut costs and later found merger partners, are now the largest U.S. carriers. American ranks third.
"The world changed around us," incoming Chief Executive Tom Horton told reporters on a conference call. "It became increasingly clear that the cost gap between us and our competitors was untenable."
AMR named Horton as chairman and chief executive, replacing Gerard Arpey, who retired.
American plans to operate normally while in bankruptcy, but the Chapter 11 filing could punch a hole in the pensions of roughly 130,000 workers and retirees.
AMR pension plans are $10 billion short of what the carrier owes, and any default could be the largest in U.S. history, government pension insurers estimated.
Ray Neidl, aerospace analyst at Maxim Group, said a lack of progress in contract talks with pilots tipped the carrier into Chapter 11, though it has enough cash to operate. The carrier's passenger planes average 3,000 daily U.S. departures.
"They were proactive," Neidl said. "They should have adequate cash reserves to get through this."
PROBLEMS TO ADDRESS
Bankruptcy gives AMR a chance to pare less profitable operations, and could result in the sale of flight routes. The process also gives AMR more flexibility, according to Jack Williams, a professor of law at Georgia State University.
"There are considerable tax benefits that they will be able to use in a bankruptcy case, and they will be able to more aggressively manage their liabilities," Williams said.
But analysts question whether the bankruptcy will address operational shortcomings that have eroded revenue.
"Bankruptcy is not necessarily the be-all, end-all," said Helane Becker, an analyst with Dahlman Rose & Co. "They've got more problems to address in addition to the cost problem."
Shares of AMR closed Tuesday down $1.36, or 84 percent, at 26 cents, down from a 52-week high of $8.89 on January 7. Stock typically is wiped out in bankruptcy.
Shares of rival airlines rallied on expectations that reduced competition could boost fares. AMR had kept a lid on industrywide fares in its effort to keep its airplanes full.
United Continental shares closed up 6.3 percent at $17.63, Delta rose 5 percent to $7.80 and US Airways Group Inc climbed 4.4 percent to $4.46.
AMR shares were halted 28 times on the NYSE on Tuesday for triggering a circuit breaker rule, activated when a stock moves up or down at least 10 percent within five minutes.
SLIMMED-DOWN AMR
In its bankruptcy petition filed in Manhattan, AMR reported assets of $24.72 billion and liabilities of $29.55 billion. The company has $4.1 billion in cash.
One bankruptcy rule is "don't wait too long," Harvey Miller, a partner at Weil, Gotshal & Manges representing AMR, said at a court hearing. "Don't wait until the course is irreversible. That is what American Airlines is doing today."
AMR's bankruptcy filing showed few details about how the company would proceed, said Stephen Selbst, a bankruptcy attorney with Herrick Feinstein in New York.
"It's possible they are still in negotiations and don't want to put something on paper that might prejudice those negotiations," he said.
Experts believe AMR stands to save billions by restructuring its obligations in bankruptcy.
"AMR will no longer have its defined benefit pension plan, helping absorb nearly $7 billion in debt," Morningstar equity analyst Basili Alukos said.
"I imagine the company can save between $1.2 billion to $1.5 billion in labor costs, in addition to savings on repair and maintenance and better fuel burn," he said.
MERGER IN THE OFFING?
AMR said the bankruptcy has no direct legal impact on non-U.S. operations. It also said it was not considering debtor-in-possession financing.
But it could susceptible to unsolicited takeover bids from rival carriers. AMR has long said it could thrive on its own.
Robert Herbst, an analyst with AirlineFinancials.com and a former American pilot, said there was a "95 percent" chance American would join up with another carrier within two years.
"US Airways is probably toward the top of the list but it wouldn't be the only (potential merger partner)," he said.
A US Airways representative did not immediately return a phone call seeking comment.
Most large U.S. carriers are the products of mergers.
United Continental combined the former United Airlines and Continental Airlines, while Delta bought the former Northwest Airlines. US Airways was formed from a 2005 merger with America West Airlines.
US Airways and United Airlines filed for bankruptcy protection in 2002, and Delta and Northwest in 2005. US Airways had tried to buy Delta out of bankruptcy.
Japan Airlines Co, one of American Airlines' alliance partners, filed for bankruptcy last year.
American Airlines said it would remain an active member of the oneworld global airline alliance.
LABOR PAIN
American struggled with labor costs despite massive concessions from unionized workers in 2003, which enabled it to avoid Chapter 11 at the time.
"That deal wasn't good enough," former American chief Robert Crandall told Reuters. "The other airlines that went bankrupt cut their costs much deeper than American.
"If you look at all of the elements of the problem, they all stem back to costs," he said. "It hasn't cut capacity effectively given the constraints" that labor placed.
Contract talks with pilots hit a wall in recent weeks over wages, benefits and work rules. Talks with unionized flight attendants have also flagged.
"While today's news was not entirely unexpected, it is nevertheless disappointing that we find ourselves working for an airline that has lost its way," David Bates, president of the Allied Pilots Association, said in a statement.
A wave of pilot retirements this year prompted speculation of a Chapter 11 filing, given that the retirements could preserve pensions that might be at risk of being terminated.
"The 18-month timeline allotted for restructuring will almost certainly involve significant changes to the airline's business plan and to our contract," Bates said.
CLSA
Sensex Likely To Drop Another 15 to 20 per cent
-The absence of the RBI from the FX market has resulted in a 20 per cent devaluation of the Rupee since August 2011. This is the biggest devaluation undertaken by the country since 1990-91.
-While the devaluation is the most aggressive amongst emerging markets it opens the country to sizeable imported inflation, making it unlikely that the country has seen the last of the interest rate hikes from the RBI.
-Higher interest rates are eating up nearly 60 per cent of the EBITDA of Sensex companies in the First Half of FY12.
-While CLSA has let out a FY12 revised earnings growth forecast of a mere 9 per cent, it still maintains a 18-19 per cent growth in earnings for FY13.
-However, the FY13 Earnings estimate are likely to contract sizeably leading to a review of the forecast earnings for FY13.
-If earnings decline continue, then a 15 per cent drop in Earnings and a 15XFY13 Earnings could result into a 20 per cent fall of the Sensex to 14000.
Fitch Ratings gave the United States until 2013 to come up with a "credible plan" to tackle its ballooning budget deficit or risk a downgrade of the country's coveted AAA rating.
The ratings agency on Monday revised to negative from stable the outlook on the U.S. credit rating after a special congressional committee failed last week to agree on at least $1.2 trillion in deficit-reduction measures.
The committee failure made it unlikely that any meaningful deficit plan will be adopted next year, increasing the fiscal burden on the next administration that will be elected in late 2012, Fitch said.
"The negative outlook reflects Fitch's declining confidence that timely fiscal measures necessary to place U.S. public finances on a sustainable path and secure the U.S. AAA sovereign rating will be forthcoming," the ratings agency said in a statement, adding that the chance of a downgrade is "slightly greater than 50 percent" now.
The news had little market impact, as a negative outlook from Fitch was widely expected.
"What it shows is that Fitch is putting the U.S. on warning that this cannot go on forever," said Michael Yoshikami, chief investment strategist at YCMNET Advisors in Walnut Creek, California.
"The markets already assumed this was going to happen. It would be different if it was a downgrade but a negative outlook is not the end of the world."
Like Moody's Investors Service, which also has a negative outlook on the U.S. Aaa rating, Fitch does not expect meaningful deficit-reduction measures in 2012, when presidential elections should exacerbate political divisions in Washington.
Rival agency Standard & Poor's cut the U.S. rating to AA-plus in an unprecedented decision on Aug. 5, citing concerns about the government's budget deficit and rising debt burden. It maintains a negative outlook on the credit.
KICKING THE CAN
The so-called "Super Committee" of six Democrats and six Republicans was seen by Fitch as the last chance of an agreement before elections.
Last week, however, its members announced they were unable to agree on a deficit reduction plan, setting in motion automatic cuts worth $1.2 trillion over 10 years. The cuts are designed to be split evenly between domestic and military programs.
Both S&P and Moody's said on Nov. 21 the committee's failure would have no immediate impact on their ratings.
However, Moody's on Nov. 23 warned the United States that its rating could be in jeopardy if lawmakers backtrack on the automatic cuts of $1.2 trillion due to take effect starting in 2013.
In a statement issued after Fitch's decision, the U.S. Treasury said "Fitch's action is a reminder of the need for Congress to reduce the country's long-term deficit in a balanced manner and to avoid efforts that would undo the $1.2 trillion in automatic cuts negotiated last summer."
Fitch is now willing to give the new government that will take office in January 2013 several months to come up with a "sound" deficit reduction plan, top credit analyst David Riley told Reuters in an interview.
"Once we move to the second half (of 2013) and it looks as if a deal can't be done, then the (negative) outlook would likely result in a downgrade," Riley said.
Until then, there is little change of a "material adverse shock" that would trigger an early downgrade of the U.S. rating, he said, playing down concerns about the economic impact of the euro-zone debt crisis.
"If we had a relatively short downturn because, for example, the crisis in Europe got much worse and there was a spillover effect to the U.S. but we thought that it ultimately would prove to be temporary for the U.S. ... then that wouldn't necessarily lead us to change the rating."
Global - Economy and Market
Euro split scenarios risk becoming self-fulfilling
Even as global markets rallied on Monday on talk that a grand plan to save the euro was finally taking shape, more and more researchers are squarely broaching the alternative outcome of the currency's disintegration.
Jean Pisani-Ferry, director of Bruegel, a respected Brussels think tank, noted that market participants and real businesses were increasingly pricing in such a break-up scenario. "It is still hard to think the unthinkable, let alone to work out the details of it, but any rational player has to consider the possibility of it. If disaster expectations build up and a growing number of players start positioning themselves to protect themselves from it, the consequences could become overwhelming," he said in a report.
Fund-raising push speeds European banks' retreat
Europe's banks stepped up efforts to raise funds and offload business in far-flung places on Monday as Bank of Ireland (BKIR.I) sold a parcel of project finance loans and Credit Agricole (CAGR.PA) said it will quit South Africa.
European lenders are expected to ditch up to 3 trillion euros of loans to meet new capital rules, ease funding strains and become more profitable, and a flurry of deals showed efforts to "deleverage" are intensifying.
Fitch revises U.S. rating outlook to negative
Fitch Ratings on Monday revised to negative the outlook on the United States' AAA credit rating after a Congress committee failed last week to agree on at least $1.2 trillion in deficit-reduction measures.
Russia: The central bank left all policy rates unchanged at its meeting on Friday, in line with market
Wall Street ends 7-day slide
Stocks rebounded from seven days of losses on Monday as investors used the latest effort from European leaders to resolve the region's debt crisis as an opportunity to cover short positions.
Japan's Nikkei average rose almost 1 percent on Tuesday, climbing for a second straight session on hopes for more drastic steps to deal with the euro zone debt crisis and a robust start to the U.S. holiday shopping season.
India - Economy and Market
FDI in retail: Government U-turns, says foreign retailers must shop locally
The government on Monday said foreign retailers wanting to set up shop in India must source 30% of their inputs from domestic micro and small enterprises, backtracking from "anywhere in the world" announced last week under political pressure.
Icra lowers GDP forecast to 7.5%; sees Q2 growth at 7%
Rating agency Icra today joined rest of the forecasters to peg down economic growth to 7.3-7.5% from 7.5-7.7% projected earlier, besides pegging Q2 GDP numbers at 7%, following the overall contraction in growth indicators. This is the lowest projections so far from leading agencies as the forecasts from the Government, RBI, Crisil and CMIE are all above or at 7.6%.Icra has also warned that Government will not be able to meet fiscal deficit target of 4.6% and said it will shoot up to 5.5%.
An ET survey shows - economy will grow at an average 7% in the three months to September, according to a poll of 11 leading economists. The economy grew at 7.7% in the April-June quarter. The government is due to announce the GDP growth rate for the second quarter on Wednesday. Economists said the rising costs of funds and policy paralysis in government are weighing heavy on growth. These and the escalating debt crisis in Europe are likely to push growth below the trend, they said, adding that the coming months will be crucial in determining the growth trajectory.
Petrol prices may be cut by about one rupee: Source
The state refiners could cut petrol prices by about one rupee a litre or 1.5% as softening Singapore spot gasoline prices have offset the impact of a declining rupee, an industry source said on Monday
India wants more market access in China to bridge trade gap
The government said it is pursuing market access issues with China for Indian products, a move which will help in bridging the rising trade deficit.
In 2010-11, India's exports to China stood at $19.61 billion, while imports were $43.47 billion, leaving a trade deficit of $23.86 billion.
Indian shares to start lower, Reliance watched
MUMBAI, Nov 29 - Indian shares are set to open lower on Tuesday, weighed down mounting opposition to reforms and as investors await definite moves by European policymakers to address the euro zone debt
Technology News –
Facebook plans IPO between April and June - report
REUTERS - Facebook Inc is looking to go public between April and June 2012 with a valuation of over $100 billion, the Wall Street Journal reported, citing people familiar with the matter.
Twitter acquires mobile security start-up company
REUTERS - Twitter has acquired a start-up company that makes software to improve security and privacy for smartphones and other mobile devices.
Apple beats Android in Britain in Oct-researcher
The long-awaited iPhone 4S launch helped Apple Inc take top spot in the British smartphone market in October, overtaking phones using Google Inc's Android platform, data from research firm Kantar Worldpanel ComTech showed on Monday.
Akaash tablets fuels global interests in the low-cost machine
Panama has approached the Indian Embassy there to buy one lakh units of Akaash. Even Philadelphia has shown interest.
Philippines overtakes India as hub of call centers
MANILA, Philippines: Americans calling the customer service lines of their airlines, phone companies and banks are now more likely to speak to agents named Mark in Manila than people named Bharat in Bangalore.
More Filipinos - about 400,000 - than Indians now spend their nights talking to mostly U.S. consumers, according to industry officials, as companies like AT&T, JPMorgan Chase and Expedia have hired call centers here, or even built their own.
India, where offshore call centers first took off in a big way, fields as many as 350,000 call center agents, according to some industry estimates. The Philippines, which has a population one-tenth as big as India's, overtook India this year, according to Jojo Uligan, executive director of the Contact Center Association of the Philippines.
Facebook, the world's largest Internet social network, is preparing for a initial public stock offering next year, according to a source familiar with the matter.
Facebook is exploring raising $10 billion, the Wall Street Journal said on Monday. It hopes the offering will value the company at more than $100 billion, according to WSJ, which first reported the story.
Facebook's Chief Financial Officer, David Ebersman, had discussed a public float with Silicon Valley bankers but founder and Chief Executive Officer Mark Zuckerberg had not decided on any terms and his plans could change, the Journal said.
The social network, which now claims more than 800 million members after seven years of explosive growth, has not selected bankers to manage what would be a very closely watched IPO. But it had drafted an internal prospectus and was ready at any moment to pull the IPO trigger, the Journal cited people familiar with the matter as saying.
At $100 billion valuation, the company started by Zuckerberg in a Harvard dorm room would have double the valuation of Hewlett-Packard, the Journal said.
A formal S-1 filing could come before the end of the year, though nothing was decided, the newspaper added.
A Facebook representative declined to comment.
Silicon Valley start-ups have this year begun to test investor appetite for a new wave of dotcoms. If it does debut in 2012, Facebook's IPO would dwarf that of any other dotcom waiting to go public.
"Farmville" creator Zynga has filed for an IPO of up to $1 billion. In November, daily deals service Groupon debuted with much fanfare, only to plunge below its IPO price within weeks.
LinkedIn and Pandora are now also trading significantly below the levels their stocks reached during their public debuts earlier this year.
Facebook has become one of the world's most popular Web destinations, challenging established companies such as Google and Yahoo for consumers' online time and for advertising dollars.
Facebook does not disclose its financial results, but a source familiar with the situation told Reuters earlier this year that the company's revenue in the first six months of 2011 doubled year-on-year to $1.6 billion.
Eric Feng, a former partner at venture capital firm Kleiner Perkins Caufield & Byers who now runs social-networking site Erly.com, said that the cash Facebook will get in an IPO would allow them to make more acquisitions and refine or work on new projects, such as a rumored-Facebook phone or a netbook.
Having tradable stock will also allow Facebook to attract more engineering talent who might have been more attracted to the company in earlier days when it was growing faster but now perhaps might be attracted to other companies. "It'll be a powerful bullet for them," said Feng.
Investors have been increasingly eager to buy shares of Facebook and other fast-growing but privately-held Internet social networking companies on special, secondary-market exchanges.
Facebook said in January that it will exceed 500 shareholders this year, and that in accordance with SEC regulations, it will file public financial reports no later than April 30, 2012.
