Neeraj claims the first three months in China were torture. �I could not understand a word. I thought I made a mistake by coming here,� he says passing around cups of Indian tea in his office-cum-guest house.

Neeraj is a textiles trader based in the bustling city of Shaoxing. The apartment is packed with fabric samples on hangers. �And then,� he says, �it began making sense.� Evidently, as he asks the cook to include dal in the menu for lunch, in fluent Chinese.

Neeraj is one of some 1,200 Indians living and working in Shaoxing, located three hours south of Shanghai and on the southern wing of the Yangtze delta. Shaoxing is popularly known as the textiles capital of China and even Asia. What is perhaps not popularly known is the fact that it has the highest concentration of Indians for any city or town in China, more than Beijing and Shanghai combined.

Like Neeraj, most of the Indians here are textile traders. And yet, very few actually have come from India. Instead, in a fascinating tale of economic migration, they have been drawn over the last five years from Dubai, Hong Kong, Taiwan and even South Korea. Following the manufacturing trail, so to speak. And the Chinese miracle of scale and costs.

Sitting in Shaoxing, Neeraj and his associates source and supply mostly wholesale fabric to markets the world over, including West Asia, Africa, Iran, Iraq and East Europe. India for them is one of many markets.

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LONDON (Reuters) - Trading across European financial markets is expected to slow next month when investors take their eyes off the ball and instead watch the soccer World Cup.

Ronaldinho will replace European Central Bank President Jean Claude-Trichet as the main topic of conversation across dealing rooms and 4-4-2 will mean more than a bond yield or a profit figure.

"Trading volumes did fall four years ago, I expect it will be worse this time," said Simon Denham, chief operating officer at financial spreadbetting firm Capital Spreads.

Financial activity is also set to be hit because so many investment bankers are going to matches in Germany as part of corporate hospitality packages.

"Very few organisations, either in the Frankfurt or London financial communities, did not buy tickets," said Peter Csanadi, director of communications for iSE Hospitality, which has sold executive seats and boxes for the month-long tournament, which begins on June 9.

London banks had bought about 20,000 of the 350,000 hospitality tickets available, Csanadi added.

SALES DOWN

Concerns that football will overshadow new deals has already compelled some companies to bring forward sales of equity or debt to beat the start of the tournament.

Data from French bank Societe Generale shows sales of investment-grade European corporate bonds during the Japan and South Korea tournament in June 2002 made up just 8.8 percent of the year’s total.

This was a smaller proportion than in any other year between 2001 and 2005.

However, some analysts believe the effect on financial markets will be more limited this time if investment banks play ball.

"It comes in the summer as well when it all slows down anyway and on a day-to-day basis it will depend on who is playing," said Henk Potts, investment manager at Barclays Stockbrokers.

This tournament has a more work-friendly timetable than the last showpiece in 2002 which featured morning matches for European viewers because it was held in Asia.

However, key group games which take place during European afternoon trading hours include Argentina against Serbia on June 16 and Czech Republic versus Italy on June 22.

"If the banks want to maintain trading volumes they should let the traders view the games from their desks instead of them wandering down to local hostelries," Potts said.

SORE HEADS

Staff levels could even be reduced on mornings following big evening games if traders are nursing sore heads after frequenting bars for too long, either drowning their sorrows after a defeat or celebrating a famous victory.

Rivalry between different nationalities across financial institutions is also expected with the tournament seen as wide open if favourites Brazil fail to retain their crown.

One Scottish debt banker said he had bet more than 100 pounds ($186) on England to win, joking that the punt was an "emotional hedge" to offset the pain of any English victory.

Striker Wayne Rooney’s broken foot may hamper England’s chances but a good run from Sven-Goran Eriksson’s team could have a positive influence on Britain’s FTSE 100 top share index.

"If England are knocked out early it will have no effect at all but if England win or get to the semi-final it could have a profound effect. It could add 50-100 points on to the FTSE," said David Buik at Cantor Index.

Source: http://business.scotsman.com/latest.cfm?id=699612006

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In recent times, we have been reading a lot about foreign investments in Bangladesh. Few economists, who possibly command better influence on the media and known to a section of the society for their `populist’ approach, have expressed their mixed feeling about the foreign investments and its so called ‘ ill effects’. While it is perfectly healthy to have a debate about any key economic policies and very much in line with the democratic values upheld by our constitution, a narrow view ignoring the wider horizon can be misleading as well as harmful to our greater national cause. As foreign investment is of vital importance to our economy, I somehow feel compelled to express my views to place the bigger picture in perspective.

Let us start with the very basic question, why do we need foreign investment? Any body with some common sense would reply in affirmative. We need foreign investment, because we do not have adequate domestic savings for investments, which will create incremental economic activities, bolster the growth rate of the economy and will provide structural support to our balance of payment. While this is the fundamental rationale for welcoming foreign investment, the actual implication of foreign investment goes far beyond that. Foreign investments not only transfer capital, but also more importantly can transfer technology, capacity, entrepreneurship and good governance. In Bangladesh, local private sector is relatively new and do not have adequate management capacity to compete globally. Foreign investments bring in management capacity in the form organizational structure and culture, which helps in developing our human resources. This enables the over all market along with the local entrepreneurs to get exposed to superior management practices. With the introduction of superior management expertise, local entrepreneurs get compelled to upgrade themselves to compete globally. They get themselves exposed to modern technology, which changes the way they do business to meet the competition. Not only the private sector, also our regulators and policy makers benefit by the transfer of technology and management expertise. Foreign investors bring in globally accepted practices to adhere to well constructed law. Regulators and policy makers can learn about international policy and practices and implement them in the local market to bring in increased efficiency and transparency. Foreign investments would also bring in better governance in the form of proper financial statement disclosures and tax payment. The superior governance practices of the foreign investors would persuade the local entrepreneurs to upgrade their practices and prepare themselves to compete globally. One of the arguments often voiced is that local industries and entrepreneurs require protection at least for some initial period to compete with global companies. While we should be eager to help local industries and entrepreneurs and extend policy support for their development, we must remain shy of offering anything that encourages `protection of the inefficient’. All policy level drive should be aimed at pushing everyone to become efficient at any cost. Bringing in foreign investments can be a key instrument in that initiative. A great example of that can be our neighbor, India who since its liberation pursued closed economic policies, which made most of its industries incompetent and inefficient. Since early 1990’s, they have started to liberalize the economy and made its private sector exposed to global competition. Most of the companies who were reigning in the closed economic period collapsed or squeezed as a result of increased competition. Only those companies who have been able to become nimbler and efficient could survive this changed environment. One and half decade later, we observe a completely changed Indian private sector who themselves are becoming truly global companies. With huge foreign investments- both direct and portfolio, India now boasts of its ever-increasing fx reserve of USD 150 billion.

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Are you really tired of watching the IPO ads that appear probably everyday in the newspapers? Have patience, this is just the beginning. I still remember those days of early 90s when I was a college student and the market was flooded with IPOs. Everybody in the college, right from principal to peon were seen carrying IPO forms along with them. In fact, one of our professors even went to the extent of conducting classes for students interested in knowing about IPOs. Some of my friends got so much carried away that the moment they used to get some spare time, they would lay their hands on a prospectus, discuss about company�s future prospects, predict the listing price etc. They seemed to have lost their interest in the routine day-to-day college life. Moreover, every 8 out of 10 student was interested in taking up a job in the stock market and surprisingly quite a few even managed to do so. I being the odd man out, as usual, failed to understand the excitement of my friends then. Six years later I am in a position to understand what would have been the situation then.

This time it is the tech fever

Six years down the line - things are almost the same, except for the sector in limelight. Then it was Finance and steel and now its IT, the cash cow that has made people rich overnight. Never before has the market witnessed such a boom in Technology IPOs as it has been witnessing now. Such is the scenario that even unscrupulous companies, hiding in this herd of genuine software companies, are changing their names overnight and are still getting good responses from the primary market. Investors, some of whom have made quick gains from premium listings of IT companies, are grabbing such offers with great excitement. Even companies, which have added words like software or infotech to their names, have billions to their market cap. The IT sector seems to be following the famous Boyzone number which goes, "Its only words and words are all I have to take your heart away".

Tech IPOs are on a roll this year

During April 99 and September 99, 11 companies raised funds from the Indian primary market, as compared to 0 for the whole of 1997-98. According to Prime database, funds tapped by the IT sector from the primary markets went up nearly 40 times to touch Rs14.9bn, compared to a mere Rs0.38bn during 98-99. Infosys ADR, which was the first company to tap the US market last year, garnered a demand of $1.2bn, thus setting a benchmark for others. However, some of the recent Tech IPOs, especially the ones which hit the market during the later half of 1999 or the first half of 2000, have generated huge amount of demand, in the domestic market itself. Hughes Software garnered a demand of around Rs60bn from its Rs2.5bn IPO. Similarly, HCL Technologies mopped up a huge amount its IPO. Pune based software company Kale Consultants, which garnered around Rs7.5bn on application, made a record with the highest oversubcription rate in the past five years. One would argue that these companies are backed by strong management, quality clientele, quality services etc. But what about those companies with no such qualities? Let�s consider the case of Compucom Software, Sibar Software, Helios & Matheson, Vishesh Infosystems etc. Not much people knew about these companies until they came out with their IPOs. But even these IPOs were oversubscribed by atleast 50 times. For example smaller software companies like Sibar got oversubscribed 248 times, Pentagon 144 times, Visu Cybertech 96 times and Tyche Peripherals 51 times.

The poor retail investor

Yet another new development that has taken place in the primary market is the allotment procedure. If one takes a close look at the allotment procedures of these new breeds of IPO, one will find a gamut of changes happening. The newly emerged concept of book building and private placements have resulted into allotments that are skewed in favour of �strategic� investors, thereby leaving the retail investors virtually unnoticed.
Financial intermediaries like Birla Capital and Kotak Mahindra Finance are aiming to provide some succour (and make cool returns) by giving IPO finance business to retail investors. This is because any retail investor, like you and me, will have to apply at least for 1000 shares to get a 100 shares. And if the issue is a much awaited one like HCL, Hughes or Cinevista, even an application for 1000 shares may be straight away rejected. However, all these factors have added to the public euphoria for infotech IPOs.

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INTERNATIONAL venture capital groups are increasingly shifting focus from China to India after years of reduced exposure to the subcontinent, a move that underlines the pull of India’s fast-growing market for internet and consumer wireless applications.

It also marks a return of international venture capital groups, most of which pulled out after the bursting of the technology stock bubble in 2000.

The head of the venture capital advisory practice at Ernst & Young, Gil Forer, said: "Since many of the Silicon Valley firms concluded their China strategy development last year, they will be able to devote more time to their India strategy. (US) east coast and European funds that have been more conservative about China than their Silicon Valley counterparts will likely initiate investment activity in India."

According to E&Y, international venture capital investors are likely to step up investments in India during the next year to 18 months as technology companies such as Microsoft, Intel and Cisco Systems continue to expand research and development capacity in the country.

A partner at US-based WestBridge Capital Partners, Sumir Chadha, said: "A lot of core technology development has shifted to India in the last three or four years and the natural progression is to see teams of engineers leave the big firms to start their own product and IT-based companies focused predominantly on the Indian market."

While India has seen a surge in the number of private equity deals and buyouts in recent years, the country is only slowly becoming a hunting ground for venture capital investors, who focus on early-stage companies with little or no profits.

Deals announced last year include a $US12 million ($15.8 million) investment by Nokia Growth Partners and New Enterprise Associates in Sasken, the Indian telecommunications company; and a $US10 million investment in the travel website Makemytrip.com by Softbank Asia Infrastructure Fund.

E&Y suggests investment and deal activity will also pick up in China.

However, some industry experts believe India could benefit from China’s patchy record on protecting intellectual property.

JPMorgan Asset Management’s Mark Wiseman said: "I think China will do well on the service and manufacturing side but will have trouble with the areas that involve research and development and intellectual property."

Source: http://www.theaustralian.news.com.au/story/0,20867,19005802-36375,00.html

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India’s economic performance translated into a whopping $150-billion opportunity but its biggest weakness was infrastructure deficit, Planning Commission Deputy Chairman Montek Singh Ahluwalia said.

Addressing a seminar on �Infrastructure challenges in India� at the ADB annual meeting here today, he said highways held the largest investment potential in the infrastructure sector. 

An extent of 40,000 km, including the six-laning of the Golden Quadrilateral and four-laning of the East-West and North-South corridors, would be developed by 2012, he added. 

To make these projects viable for investors, the government was extending a 40 per cent capital subsidy, subject to competitive bidding, the Planning Commission deputy chairman said. 

Saying that ports needed to add 54 new berths to double their present traffic handling capacity of 400 million tonnes by 2012, he added that though perspective and action plans were being prepared, the estimated investment was around $12 billion. 

He further said the railways were setting up dedicated freight corridors with an investment of around $5 billion. 

Saying that competition in container train movement had been introduced and 14 licences had been granted to private players, he added, �They hope to operate the first services by 2007.� 

On airports, Ahluwalia said $9 billion would be needed. The modernisation of the Kolkata and Chennai airports would commence soon, while that of the Delhi and Mumbai airports was on and two greenfield airports were coming up at Hyderabad and Bangalore.

A decision on modernisation of other airports would be taken soon, he said, adding, an airport economic regulatory authority would also be set up.

Source : http://www.business-standard.com/

Investment In India

Investment In India

Investment In India