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MOTLEY COLLECTION OF BUSINESS AND ECONOMIC NEWS |
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E C O N O M Y
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 India tops consumer confidence index
Consumer confidence is softening across the world but Indians remain the most upbeat.
That is the finding of the AC Nielsen Consumer Confidence and Opinions Survey for the first half of 2007.
While all three indices (India’s, Asia Pacific’s and the global index) have dropped two points, with 135 points, India is in the lead of both the 47-nation global survey (97 points) and the 14-country Asia Pacific study (96). The country’s 137 score in the October 2006 round of the survey was an all-time high.
Conducted in April 2007, the survey covered over 26,000 people, including more than 500 people from India. Indians remain confident of the job market and personal finance: 94 per cent are optimistic about employment prospects, compared with the regional and global averages of 50 and 52 per cent, respectively.
Indian consumers’ perceptions of the state of their personal finances is also encouraging: 90 per cent rate it as excellent or good (region: 54 per cent).
The survey also polled consumers on their major concerns. Compared with the last round, there is a sharp rise in Indians’ concern over the economy, with 46 per cent citing it as a major worry.
But fears of terrorism appear to have abated: last time India was the most worried in the world about terrorism, with 31 per cent mentioning it as a major concern.
There is a 15 percentage point drop this time and India is not on the top 10 list of worriers anymore. Across Asia, 41 per cent are concerned about the economy, compared with 37 per cent worried about health and 30 per cent about job security, lower than the global averages.
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 Rel Comm snaps up US firm Yipes for $300 million
Reliance Communications Ltd., India’s second-biggest mobile services provider is acquiring US-based Yipes Enterprise Services Inc for $300 million.
Yipes, a provider of managed ethernet and application delivery services, offered Reliance an opportunity to tap a fast-growing market, Chairman Anil Ambani told a news conference.
“Yipes will accelerate Reliance’s entry into the $90 billion global market for enterprise and institutional data services,” he said after announcing the all-cash deal.
The ethernet market alone was valued at $10 billion, Ambani said, adding it was forecast to grow at a compounded annual rate of about 30 percent to more than $25 billion by 2010.
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B A N K I
N G N E W S |
 India Inc sits on cash pile of $86.62 billion
Corporate India has tripled its cash mountain. India Inc (excluding financial services companies) is sitting on a cash mountain of Rs 3,50,000 crore, nearly three times higher than Rs 1,25,000 crore at the end of March 2006.
In 2006-07, industry has declared a total dividend of Rs 40,000 crore and declarations are still coming in. In 2005-06, the dividend payout was Rs 42,300 crore. The cash surplus figure has been swelled by cash profit of Rs 2,15,000 crore in the 12 months ended March this year, a whopping Rs 30,000 crore raised through public issues and no less than Rs 20,000 crore mobilised through foreign currency convertible bonds. Cash profit is the sum of net profit and depreciation.
Listed public sector undertakings alone have Rs 1,25,000 crore of cash profit and bank balance. The list is headed by oil giant ONGC, which declared a cash profit of over Rs 25,000 crore in the last financial year.
Then there are acquisitions. Tata Steel’s recent purchase of European steel maker Corus was funded by Tata Sons, the holding company of the group, which has received over Rs 1,400 crore in dividend over the last three years.
Tata Steel itself made a cash profit of over Rs 5,000 crore in 2006-07. Its software sibling, TCS, declared a cash profit of Rs 4,100 crore.
TCS has been declaring dividends every quarter. Besides, it is funding nearly all its acquisitions, mostly small ones, through internal accrual. Money is also being used for capital expenditure. The rest is parked as liquid funds, such as in the money market.
Most of the other cash-rich companies are using the money to expand capacity or diversify. For instance, Reliance Industries, Bharti Airtel, Aditya Birla Group and RPG Group are making large investments in retail.
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 Nine Indian companies in Wal-Mart’s honour list
Nine Indian companies are among the 53 winners of the global retail chain Wal-Mart’s International Supplier of the Year’ award for 2006.
Among them, Welspun won the trophy for sustainability, a new initiative of the US giant for taking environment protection to new levels, besides adhering to the general requirements of quality and on-time delivery.
The other eight companies are Leela Scottish Lace, The Richa Group, JJ Mills and Kaytee Corp, all for apparel, Elegant for diamond jewellery and Abhishek Industries, Abhitex and JVS for towels and home textiles.
In the fifth year of the awards, around 100 suppliers globally were nominated of which 53 suppliers were ultimately recognised, a press release said.
“The award is based on the performance of companies on a number of parameters like quality of goods, on-time delivery, ethical standards compliance, business growth, price performance and adherence to Wal-Mart’s philosophy and beliefs.”
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FOREIGN INSTITUTIONAL INVESTORS
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August 2007
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