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Daily News Digest- 13th Nov'13

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Thought of the Day:

“Eagles come in all shapes and sizes, but you will recognize them chiefly by their attitudes”
~E.F. Schumacher

Did you know?

“According to scientific studies, a rat's performance in a maze can be improved by playing music written by Mozart”

Following made the Headlines:

India:


  • Retail Inflation Puts a Spoke in Factory Wheels: Industrial production growth picked up in September but came in below expectations as retail inflation climbed to double digits in October, strengthening the possibility of a further rise in interest rates to tame prices, which in turn could weaken prospects for an economic recovery. Astrong increase in industrial production was widely expected to herald an improved second-half performance as a good monsoon delivers robust rural demand, the effects of an export recovery ripple through the economy and sentiment perks up as elections approach. The numbers, released after the markets closed, are likely to further dampen already weak sentiment. Growth in factory output as measured by the Index of Industrial Production (IIP) rose 2% in September, from a year ago, data released on Tuesday showed.



  • Will Tendulkar Have A Bombay Duck? Bet on It!: Betting on Sachin Tendulkar? Are you also adventurous and have a sense of cricket history? Then maybe, just maybe, you can earn double of what you wager. There’s a huge rush of bets on Tendulkar’s last Test, starting November 14 in Mumbai, and most bets are on him scoring a zero. India’s biggest bookies are saying hundreds of crores have been wagered on the master’s last Test outing. The reason: Don Bradman had got out for a duck in his last Test innings. Bookies are offering double the money you bet on either a century or a duck. These are considered the most risky bets, one major bookie said, and therefore the high payoff. Bookies say bets worth hundreds of crores have already been wagered on Sachin’s last test. Most bets are on Sachin scoring a duck. The reason? Don Bradman scored a duck in his last test. Punters are betting on history repeating itself.



  • French Co Lactalis Set to Buy Tirumala: Lactalis Group, the world’s largest food product company with sales of € 15 billion (1.27 lakh crore), is close to signing an agreement with shareholders of Hyderabad-based Tirumala Milk Products to buy a majority stake in the dairy company, two people close to the development said. The French company could pay up to $300 million, valuing south India’s second-largest maker of dairy products at over 1,895 crore at Tuesday’s exchange rate, said another person aware of the impending transaction. Bolla Bramha Naidu, one of the four founders, who had earlier said there was no consensus among the promoters on the extent of dilution, told ET: “Majority of promoters is now in favour of selling their stake to the French company though I am not keen on divesting stake. But I have no other option than to go by the majority decision.”



  • Milkha Signs First Endorsement Deal with Emami: Milkha Singh, India’s most revered Olympian, has signed his first brand endorsement deal almost five decades after his last race for the country, with Emami roping in the Flying Sikh to endorse its premium health supplement, Zandu Kesari Jivan. Harsha V Agarwal, director of the Kolkata-based consumer products maker, said Milkha Singh is a symbol of youthfulness and vigour even at 84, and a perfect fit for Zandu Kesari Jivan, which promotes good health, youthful vigour and energy. A television commercial of the brand featuring Milkha Singh is scheduled to go on air this month. It is created by Scarecrow Communications. Chyawanprash is a growing health supplement category in India worth 400 crore. The Zandu Kesari Jivan is also endorsed by Kathak exponent Pandit Birju Maharaj.



  • Future Lifestyle Sells Biba, AND Stakes for 450 cr: Future Lifestyle Fashion (FLFL), part of Kishore Biyani-led Future Group, on Tuesday said it has divested minority stakes in ethnic wear firm Biba Apparels and designer Anita Dongre-owned AND for 450 crore. “We are exiting mature investments. Both the investments were made more than five years ago. We exit investments when they become large. Total receipts from divestment of Biba and AND was 450 crore,” Future Group founder Kishore Biyani said. While Biyani refused to give the breakup of valuations of investments in Biba Apparels and AND Designs, in an investors’ update the company has stated that it made a profit of 190 crore from sale of stake in Biba. FLFL had 22.9% stake in AND Designs and 25.8% stake in BIBA Apparels. The Future Group had first acquired a 6.5% stake in Biba in 2007, which was gradually increased to 25.8% in 2011. While FLFL has exited from two investments, it has also picked up minority stakes in three companies. These are footwear firms Tresmode and Famozi shoes, and Mineral, a designer label from Priyadarshini Rao.



  • US Luxury Handbag Maker Judith Leiber Plans Mumbai Entry by ’15: US luxury handbag maker Judith Leiber will expand its India operations to Mumbai by 2015, says Sangeeta Assomull, CEO of Marigold Group, which brought the brand to India. After opening its flagship store in DLF Emporio Mall, Delhi six years ago, the purveyor says the company is seeing a steady growth of 17% this year. The group has decided to invest approximately half a million dollars for their second store in Mumbai. “We are hopeful that Palladium mall there would accommodate us by 2014-2015. I wouldn’t like to look into private equity, but may find a local partner in Mumbai when we go there,” she says. Today, however, she’s confident about the future. “GDP projections mean absolutely nothing to me. We are projecting 22% growth for the coming year,” she says. Assomull is aggressively going after a new client base in smaller cities and they will continue to have trunk shows in Ludhiana, Chandigarh, Hyderabad and Indore. But they wouldn’t like to explore the Kolkata market any time soon. Recently, India even slipped in the ‘Ease of Doing Business’ list of World Bank from 131st position in 2013 to 134th in 2014. But that’s not stopping the parent company. Judith Leiber’s global creative director Jana Matheson told ET that India still is in the top five countries they want to do business with. “The culture in India is perfect. For our evening bags are all about dressing up and partying. A lot of the countries like China aren’t like that,” said Matheson.



  • Time to Raise the Tag on India’s E-Counters: Solitaire earrings for 3.5 crore. A special edition Volkswagen Passat signed by IPL team captains for 30 lakh. A 1936 Austin Ruby vintage car for 7 lakh. A Harley Davidson Night Rod motorcycle for 15 lakh…These are all rare and expensive purchases. What makes them rarer is that they have all been made virtually, on Indian e-commerce websites, and it says a lot about how the mindset and habits of the Indian consumer shopping online is evolving. ET asked 10 leading e-tailers for the most expensive sold by them till date. It’s a fascinating list that contains items of new technology (Led TV) and old vintage (car), spans a price range of 26,000 (bar counter) to 3.5 crore (earrings), includes the predictable (smartphone) and the eclectic (drum kit), and has buyers from not just the metros but also from Belgaum and Bulandshahar. “It’s trust and selection,” says Kunal Bahl, co-founder & CEO of Snapdeal. Several patterns are evident: the bar for transaction size is being raised, even non-metro shoppers have the appetite to buy big, the market for rare items is growing, the basket of goods is expanding and more physical barriers are being broken.  Aditya Vij, a Delhi-based business collector of vintage cars, bought an Austin Ruby 1936 vintage for 7 lakh on olx. “There’s no market place for vintage cars in India,” says Vij. “The traditional way was checking out with scrap dealers in old Delhi. The Austin was posted on olx by a seller in Meerut. You get to see the images, and the claims made by sellers online are more trustworthy than offline.” Images and specs of solitaire earrings worth 3.5 crore on jewellery site Carat-Lane were the first point of contact for a person in a metro who would go on to buy them. This person, whom the website declined to name for reasons of confidentiality, then contacted a customer representative in CaratLane and asked to see the earrings. The company took them to the buyer’s house, and a deal was sealed. Payments for such expensive items are often made partly by credit card and partly by cheque, says Calvin John, vice president, marketing, CaratLane. This transaction invoked paperwork — an e-copy of PAN card and address proof — and rules that kick in for high-value transactions. “For gold purchases above 2 lakh, a PAN card is needed; for other kinds of jewellery, above 5 lakh,” says John. CaratLane also gives a buyer the option to pay in cash, but charges a 1% fee to meet the government tax on cash transactions. What it does throw in along with such high-value items are gifts like wine, champagne, chocolates and customised stationery, the idea being to build relationships.



  • Myntra Stitches Pact with UK Apparel Co: Online retailer Myntra has forged an exclusive partnership with UK-based apparel manufacturer, Raised on Denim, one of a growing number of such tie-ups between international brands and Indian portals. The UK brand will manufacture its premium youth apparel range, Stanley Kane, locally and sell it on Myntra, aiming to reach the fashion-conscious clientele who are increasingly shopping online. “Our statistics show that the chances of a customer repeating a purchase are 30-40% more when he has come to buy an exclusive brand on our site,” said Ganesh Subrahmanian, chief operating officer at Myntra, who estimates that his company can build an online-only fashion brand worth 100 crore in the next three to four years. “Young Indian guys are becoming more discerning about what they wear and are hungry for the latest international trends,” said Chris Page, a director at Raised on Denim. The company is launching this line of premium youth wear simultaneously in the UK and India but prices in India will be about 30% cheaper. “Our products will go directly from our manufacturing facility in Bangalore to the Myntra warehouse. So there are no international shipping costs or duties,” said Kamal Kedia, a director at Raised on Denim. The company aims to invest over 10 crore in its first year of operations in India. A number of foreign brands have entered into similar agreements with online retailers. Footwear brands New Balance and Supra are available only on Myntra in India. Online fashion retailer Jabong has an exclusive partnership with Spanish casual clothing brand Desigual. Many offline brands are also launching new products first on the online portals as in the case of Lee Cooper which placed its Originals Frames and Sunglasses range on online marketplace Snapdeal earlier this year. 



  • From tomorrow, you can take Metro to Cyber City: The last mile was always a hurdle in Gurgaon. From Thursday, the Rapid Metro will put an end to that, connecting Delhi Metro commuters to six key places within the city, among them the office hub, Cyber City, where over a lakh people either work or visit every day. The Rapid Metro is a private public partnership project between IL&FS Rail Ltd and the Haryana Urban Development Authority and built at a cost of Rs 1,100 crore. The drivers were trained by Delhi Metro Rail Corporation staff. On Thursday, the first phase will get operational, and will cover a distance of 5.1 km. Two more phases are planned. Rapid Metro timings will be in sync with that of Delhi Metro, so you won’t have to wait for the local loop train. The connecting station is Sikanderpur, which will have a 90-metre walkway between the platforms. Your Delhi Metro card or token will work for the Rapid Metro as well, which charges a flat fare of Rs 12. A clearinghouse system will automatically separate the revenue of Rapid Metro and DMRC at the end of the day. While there are a total of six stations in the network, the one at Shankar Chowk will become operational later as work is still not complete there. The Rapid Metro was to have been launched in January this year, but got delayed by over 10 months. 



  • Black Dog is world’s fastest growing scotch: Diageo acquired India’s largest drinks company United Spirits (USL) to push its vaunted single malts and blended scotch to a rising middle class. However, it may soon be lapping up USL brand Black Dog which, according to International Wine & Spirit Research (IWSR), is the world’s fastest growing scotch whiskey in the past five years. Black Dog — which came into the USL portfolio through Carew Phipson, a company the late Vittal Mallya acquired in 1964 — reported a 48.9% rise in sales to figure among the top three scotch brands in India, often touted as the world’s last frontier for whiskeys. Black Dog’s scorching growth contrasts with overall blended scotch sales coming under pressure globally, and within India, for different reasons. The only other blended scotch brands to report fiveyear double-digit growth are Black & White (19.8%), Old Parr (14.8%), Passport (13.7%) and VAT 69 (10%) among a list of the world’s 50 top scotch brands complied by IWSR. Volumes of Black & White and VAT 69 were also buoyed by their India sales underscoring the domestic market’s clout in shaping up the global growth charts of the drinks business. USL started local bottling of Black Dog in the early ’90s as the market started opening up in a post-liberalized India. But the brand received a big boost when the Indian parent acquired Scottish major Whyte & Mackay, with one of the largest inventories of aged malts and grain whiskey reserves. The acquisition saw USL bolstering Black Dog with better aged variants to prop up premium appeal. “Today, it’s a neck-to-neck race between Black Dog, Teacher’s and 100 Pipers in the domestic market. It’s now more interesting with all the three brands being owned by cash-rich MNCs,” said Sanjay Jain, director at Taj Capital, a New Delhi-based boutique investment advisory.



  • Yash Raj Films signs big licensing deals with Mattel, PepsiCo, etc. for Dhoom 3: Dhoom 3 will mark possibly the most-ambitious licensing merchandise programme yet mounted on an Indian film as Yash Raj Films plans to bet big on the licensing market with the third instalment of the popular Dhoom series. Yash Raj Films (YRF) has signed licensing deals with a number of companies including Mattel Toys and PepsiCo for Dhoom 3 and more than 100 items ranging from games and toys to gadgets and apparel are set to hit the markets in time for the year-end release of the film. "Licensing is on the cusp of experiencing a major breakthrough in the Indian market," Danny Simon, consultant to YRF and a 'guru' in this field, having headed Fox Licensing and managed licensing programmes of Hollywood franchises such as Rambo and Terminator, said. "There is an increase of disposable income, the growing influence of media and the development of multiple-store chains," he told ET, speaking from Los Angeles. YRF has developed of a fullservice licensing division to maximize the financial and marketing returns that can be derived not only from their own properties, but also through the representation of third-party intellectual material. "Dhoom 3 has a list of licensees that include companies such as Mattel Toys (D3 Barbie, Hot Wheels toy products), Pepsi (D3 Drink) to name a few," Simon said. The merchandise would include biker games partnered with Microsoft, funky fashion accessories for men, Ice X Electronics' Dhoom branded phones and tablets with content from the movie, Mattel's collector's edition dolls of Aamir and Katrina, Hot Wheel bikes, race track sets, UNO cards and kids apparel. This is the first time Mattel has signed a licensing deal for a Bollywood movie. The worldwide licensing merchandise market is estimated at $123 billion, although it has yet to take off in a big way in India.



  • Ambani to bring cash & carry to Punjab: Mukesh Ambani- led Reliance Industries is set to enter the Punjab market with its cash and carry or wholesale business, taking on international majors such as Walmart and Metro, it is learnt. The group’s first cash and carry store, Reliance Market, was launched in September 2011 in Ahmedabad, and it has six others across Anand, Bangalore, Chennai, Guntur, Mumbai and Faridabad. Reliance Retail refused to comment on the specifics of its cash and carry business. But sources in the sector say that Reliance Market is likely to be set up in at least four locations in Punjab — Ludhiana, Mohali, Jalandhar and Bathinda — soon. Reliance’s Punjab foray is significant because it has traditionally been a stronghold of Bharti- Walmart’s Best Price Modern Wholesale Store which began operations in 2009. Experts say that it was Bharti group chairman Sunil Mittal’s familiarity with the state that prompted the JV with Walmart to launch the first Best Price store in Amritsar (Punjab) and then expand aggressively in this region. Even as Walmart and Bharti cash and carry JV broke up recently, leaving the business 100 per cent to the Bentonville- based chain, the Punjab domination continues. Best Price operates five stores in Punjab — Amritsar, Zirakpur, Jalandhar, Ludhiana and Bathinda.

International:


  • Amazon starts Sunday deliveries, taps US Post: The US Postal Service has entered a partnership with online retail giant Amazon to deliver its packages on Sundays for the first time. Amazon said Sunday deliveries will be an option for all its orders without an extra charge. Subscribers to "Amazon Prime" who pay a yearly fee for free delivery can also get Sunday delivery. The first deliveries will be in large US metropolitan areas starting in New York and Los Angeles, Amazon said in a statement on Monday. Sunday deliveries will expand "to a large portion of the US population in 2014," including Dallas, Houston, New Orleans and Phoenix, the statement read. The move is welcome for the US Postal Service, which has been hemorrhaging money for years. It currently delivers mail Monday through Saturday, and some packages for an extra fee on Sunday.



  • Alibaba breaks sales record amid China Singles’ Day rebate: Alibaba Group Holding Ltd, China’s largest e- commerce company, broke its one- day sales record by more than 80 per cent as it heads toward an initial public offering that may be valued higher than Facebook Inc. Taobao and Tmall, Alibaba’s two main platforms, topped 35 billion yuan ($ 5.75 billion) in the 24- hour period, surpassing last year’s sales of 19.1 billion yuan, the company said on its official Twitter Inc account. Monday was China’s Singles’ Day, a local twist on Valentine’s Day, and ecommerce firms marked the occasion by flooding the Internet with promotions and fuelling demand on China’s biggest online shopping day “The spectacular growth rate shows the potential for online shopping,” said Ronald Wan, chief China advisor at Asian Capital Holdings Ltd, which has about $ 100 million of assets under management. “This will boost momentum for Alibaba, give its potential investors confidence and prompt traditional retailers to think hard how to cope with challenges from ecommerce.” The Hangzhou- based company provides an online marketplace for consumers and businesses to buy and sell everything from Fuji apples to Boeing Co 737s. Alibaba, which is considering aUS listing after talks with Hong Kong’s stock exchange fell apart, has been valued by analysts at as much as $190 billion, compared with Facebook’s $ 104 billion valuation after its market debut. The company is moving toward an IPO in the US after talks for a Hong Kong listing broke down following management’s proposal to keep control in a share sale, two people familiar with the matter said in September. Employees and journalists take pictures and videos of a giant electronic board showing the online transaction value on Alipay, an online payment system of China’s leading e- commerce retailers Taobao. comand Tmall. com, on Monday.



  • Starbucks to pay $3bn in row over packaged coffee: An independent US arbitrator has told Starbucks to pay $2.76bn (£1.74bn) in damages and other costs to Kraft Foods in a dispute over packaged coffee. Kraft began selling bags of Starbucks branded coffee in 1998 under a deal that was due to run until March 2014. But the US coffee chain ended the contract in 2010, accusing Kraft of breaking the terms of their deal. Kraft challenged that move by starting arbitration proceedings saying it had built a business worth $500m a year. On Tuesday the arbitrator ruled that Starbucks must $2.23bn in damages plus $527m in interest and legal costs.



  • China Leadership Releases Guiding Principles: China’s top leadership, ending a pivotal summit on Tuesday to establish overarching plans for the government in the next 10 years, revealed broad-stroke plans for governance but offered few specifics on economic reform. At the conclusion of the four-day meeting of the country’s Communist Party Central Committee, the party released a lengthy statement of guiding principles, but few clues to actual plans for the coming years. This is the first meeting of its kind for President Xi Jinping’s leadership team. Analysts have closely watched Xi over the past year for signals of how he will manage China’s economy going forward through potential pitfalls and certain slowdowns. The statement released Tuesday night indicates no massive changes are on the way, but more likely ongoing efforts to continue the market-oriented reforms steps China has implemented over 30 years. The party’s plenary session, in the document released by state-run media, said China will engage in more of the same, on a “deeper” level. It said delegates agreed that “economic structural reform is the focus point for comprehensively deepening reform,” and China will continue to adjust the relationship between government and market forces. In a related note, the document said, China will undertake land reform and adopt measures intended to help farmers and rural residents. The issue is important for a country on the brink of tipping from primarily rural residents to a majority who live in cities.



  • Big Discounts Key to Strong Holiday: For a winning holiday, retailers must pull off a strong Black Friday and offer big, storewide discounts throughout the season, according to a consumer survey conducted by America’s Research Group and the Inmar technology firm. ARG and Inmar said retailers can expect sales to be up 2.5 percent or higher if shoppers see big discounts early. The study also found that the number of Americans feeling heavily pressured from debt is down, to 16.5 percent in 2013 from 21.4 percent in 2012. On the negative side, higher food and gas prices will cut into how much consumers spend on holiday gifts, and Amazon.com could see fewer shoppers. The ARG-Inmar research consisted of 1,000 telephone interviews conducted from Nov. 1 to 4.



  • Kering Reveals La Redoute Investment: Kering, which is in the final stages of selling La Redoute, has in the past five years invested more than 400 million euros, or $535 million at current exchange rates, in the struggling French catalogue retailer. Kering president and chief executive officer Francois-Henri Pinault shared that figure on Tuesday during a meeting with Lille mayor Martine Aubry. He also assured Aubry and other elected officials that Kering is studying offers from three potential buyers with a view to minimizing the impact on employment. Kering’s recent disclosure that it expects the transaction to have a "significant" impact on jobs ignited a maelstrom of criticism in the French media, with Aubry accusing Kering of being "irresponsible” in an interview published in the Journal du Dimanche. Union officials claim that as many as 700 positions are at stake. Kering, formerly PPR, said Aubry was reminded that plans to dispose of Redcats – part of a broader plan to exit retail to focus on fashion and accessories in the luxury and sport/lifestyle segments – was first made public in 2009. The prospect of job losses at the firm based in Roubaix has become a hot political topic amidst a backdrop of high unemployment and economic stagnation in France. Facing a steady decline in its mail-order business, La Redoute in 2008 announced a plan to shed up to 672 jobs over a four-year period, at the time representing about 13 percent of its total workforce.


Currency:

·         1 USD=   63.7651

·         1 EUR=   85.7218

·         1 GBP=   101.317

·         1 AUD= 59.3482


Glitter Meter: India


Gold (INR/10g)
Silver (INR/kg)
City
Current
Change
Current
Change
Chennai
30530.00
0
48460.00
-125
Mumbai
29500.00
0
48460.00
-125
Delhi
29820.00
0
48460.00
-125
Kolkata
29790.00
0
48460.00
-125


World Indices:

Exchange
Last
Change
DJIA
15750.67
-32.43
FTSE 100
6726.79
-1.58
CAC 40
4263.78
-26.36
DAX
9076.48
-31.38
Nikkei
14537.74
-50.94
Hang Seng
22591.95
-309.46
Sensex
20317.38
35.47
NASDAQ
3919.92
0.13

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