Another Indian clinical research organisation, Quest Life Sciences of Chennai, is in trouble over defective trials work, according to a warning issued by the World Health Organization. The action by the United Nations health agency follows an earlier scandal over drug testing at GVK Biosciences, which resulted in approvals for hundreds of generic drugs being withdrawn in Europe. India's drug industry, a source of cheap generic medicines to countries worldwide, has been tarnished in recent years by a series of quality problems at various companies, including manufacturing and clinical data shortfalls. In the case of Quest, the World Health Organization (WHO) said there had been "critical" lapses in a trial of HIV drugs, including the fact that two-thirds of patients' electrocardiograms (ECGs) turned out to be duplicates. "Subject details ... and dates had been changed by the company, in the majority of cases, to make the ECGs appear as if they were from each of the different subjects," it said. The WHO inspectors also criticised the standard of record-keeping in the trial, including apparent attempts to hide documents from inspectors. The WHO, which checks on medicines used by UN agencies like UNAIDS and UNICEF, issued a "notice of concern" to Quest last week. Joseph Kamlesh, Quest's head of operations, told Reuters the issue was isolated and could not be compared with the problems at GVK, which concerned multiple regulators. "We expect this issue will be resolved in six months. We have not lost any contracts or clients, we have a very good relationship with them," he said. Quest has around 100 clients that it serves on and off, but for the past two to three years it has been working for 25 companies, he added. Its work has been used to support drug applications in Europe, the United States, Australia, Russia, South Africa and the Philippines, according to its website. Kamlesh said that since the WHO's surprise audit of its facilities last October, it had also been visited by US, British and Spanish regulators. "The FDA (US Food and Drug Administration) has cleared our plant after making some initial observations, while the Spanish and UK authorities are yet to issue a final response," he said. Quest's trial of HIV drugs was carried for India's Micro Labs, which was itself the subject of a WHO "notice of concern" in 2014. Micro Labs officials were not immediately available. The Indian pharmaceutical contract research market is expected to reach $1 billion in 2016, from $485 million in 2012, according to consultants Frost & Sullivan. But some executives fear it could be undermined by reputational issues.(Reuters)
Read More
India Inc may register a disappointing 3 per cent growth in the just ended April-June quarter, market research agency Crisil says.The Crisil Research report on corporate profitability for the first quarter of 2015-16 attributes sluggish growth to soft commodity prices, weak growth in investment-linked sectors, and subdued rural demand restrict earnings. The analysis covers 600 companies (excluding financials and oil & gas), which account for 70 per cent of overall market capitalization. “We believe continued weak performance of investment-linked sectors, and companies impacted by low global commodity prices will curb even the moderate growth anticipated in export-oriented and consumer-driven sectors. Earnings before interest, taxes, depreciation, and amortisation (EBITDA) margins are seen dipping 70 bps on a year-on-year basis”, a CRISIL statement says. Revenue growth for petrochemicals, steel, sugar and manmade fibre sectors will be the most impacted because of low commodity prices. Cement makers are also likely to see yet another weak quarter with volumes for large players remaining flattish. Construction companies should see a mild 2-4 percent revenue growth after being flat in the three quarters preceding, it adds. The outperformers among the lot are expected to be the export-oriented sectors and some domestic consumption-driven sectors such as retail, FMCG, and media. “But here, too, there are headwinds –stuttering merchandise exports growth and weakness in rural demand, respectively. Going forward, revenue growth will be influenced by the progress of monsoon in July and August, and pick-up in the pace of public investments and project execution. Developments in China and the European Union will impact the fortunes of companies that have significant revenues accruing from overseas subsidiaries, apart from exports.” Prasad Koparkar, Senior Director, Crisil Research, states. The fragile state of rural consumption is reflected in volume and topline growth of companies heavily dependent on hinterland such as FMCG, tractors, and motorcycles. The FMCG sector reported just over 7 per cent top line growth in the fourth quarter ended March 31, 2015. Crisil does not foresee growth outpacing in the quarter ended June 30, 2015. Instead, it expects tractor manufacturers to witness a 20 percent decline in sales volumes. Ajay Srinivasan, Director, Crisil Research, said, “Fall in realisations will squeeze the EBITDA margins of steel, sugar, and pharmaceutical companies. For IT service providers, it could fall 90 bps as utilisation levels fall and pressure on realisations increase. For cement manufacturers, it will be a mixed bag -- margins of large companies could increase by 170 bps due to better pricing flexibility and operating efficiency, while that for mid-sized players are likely to slip 400 bps because of inability to pass on increase in freight cost amid timid volume growth.” On the positive side, surge in data revenues and control over operating expenses will boost EBITDA margins of telecom companies by ~120 bps. Margins of petrochemical players will increase over 400 bps following an improvement in polyester feedstock spreads, while those of road developers are likely to jump up 350-400 bps following an increase in operational BOT (build operate transfer) projects, the statement says. Last fiscal had started well with India Inc registering double-digit topline growth in the first quarter ended June 30, 2014. However, there was a near-stalling since then because of which, revenue growth for the whole of last fiscal came in at just 6.4 per cent.
Read More
Govt wants to open up the economy to foreign chains at our expense, says Kishore BiyaniRetailers and brick-and-mortar chains are up in arms against what they believe is a ‘soft’ policy favouring e-commerce players. They perceive the BJP government intends to create a separate category of e-commerce or electronic retailing which will allow for 100 per cent foreign direct investment (FDI). This will not only mean disturbing the level playing field between retailers and e-commerce, but will also kill the multi-billion organised and unorganised retail industry, it is feared. A strong delegation of retailers led by Future Group, Shoppers Stop and others will be meeting Commerce & Industries minister Nirmala Sitharaman on Wednesday (8 July) in Delhi, where they expect to mount a strident opposition to these new FDI proposals.“It is very clear that the government is determined to bring in 100 per cent FDI for e-tailers. They are just not listening. They want to open up the economy to all these foreign chains at our expense,” Kishore Biyani, CEO of the Rs 22,000-crore retailer Future Group told BW in an exclusive interview. “The government has shut its ears. It is going to be a long-term fight. It seems they have ears only for white skins,” Biyani thundered striding around his large Sobo Central office in Mumbai.He described the differentiation being made for e-Commerce as ‘ridiculous’. “The government wants to create a special category of e-commerce defined as those who use electronic technology for trading. Don’t retailers like us use electronic technology to sell goods as well? Or, don’t e-tailing chains have a huge brick-and-mortar backend? So on what basis is the government favouring e-commerce as a special category?” Biyani asks rhetorically.The Commerce Minister, under pressure from free-trade partner countries to open up e-commerce, has called for a fresh round of consultations on Wednesday with stakeholders representing both e-commerce companies as well as with high street sellers and other retailing chains. Industry bodies such as Ficci and CII are expected to attend, as well as big e-tailers such as Flipkart, Snapdeal and Amazon. The first round of consultations in May proved inconclusive as both traders’ organisations and the Retailers Association of India had boycotted the meeting.Kishore Biyani, however, insists that the meeting called on Wednesday by Sitharaman is only in deference to a Delhi High Court order that has directed the government to give a hearing to the stakeholders, including the retailers who will be adversely affected if the law on FDI is changed. The current norms allow 100 per cent FDI in business-to-business or B2B e-commerce, but not in business-to-consumer or B2C companies that sell directly to consumers. On the other hand, brick-and-mortar retailing is allowed 51 per cent FDI.“The court has taken a dim view of the government’s intent. We will fight it out if we are not given a proper hearing by the government,” Biyani said.He said the e-tailing volumes of the likes of Flipkart and Snapdeal were currently based entirely on heavy discounting. “The thumb rule is: their losses are 30 to 40 per cent of their sale costs.” He said the current e-tailing model was based on the next round of investment, and if that did not come, the promoters would have to pack up.“It is already happening. The promoters of Fab Furnishers have called it a day, leaving the private equity (PE) investors to run the company. That is the next big e-commerce story: the PEs taking over and running companies after the promoters have quit,” Biyani said, adding: “Only the top 2-3 in each category are going to survive.”Giving a parting shot, the Future Group chief said: “The only model that will survive is one that does not sell at a discount. We do both-eTailing and retailing, but we don’t discount. Our costs are 16 percent of sales. The big eTailers cost model is 53 percent of sales. Their only disruption is the money coming in.”The government is under huge pressure to open up the entire e-commerce sector to foreign investment in the free trade pacts it is negotiating with different countries, but the huge community of traders and retailers who have a mass base, are unlikely to keep quiet as they perceive 100 percent FDI as detrimental to their interests.
Read More
What does not kill you makes you stronger. It’s true. After battling cancer, Shripal Morakhia is back to chasing his dreamsby K. Yatish RajawatOn 21 May 2015, inside an office block on the ground floor of Cyberhub in Gurgaon, chaos reigned. The staff was only halfway to installing a bowling alley, a cricket pitch, an SUV on a pedestal, a hang glider and an F1 car replica; tools were everywhere and wires hung from the top as the false ceiling was yet to go up; the furniture was missing as the delivery truck had met with an accident; and the imported LED lights were stuck at the customs. This was the scene at Smaaash Entertainment’s second under-construction reality game facility, after Mumbai, just days before the launch.Things were clearly behind schedule. Outside the venue, a team of officials stood in a huddle discussing the options — they could either postpone the launch date from 28 May or could do a limited, soft launch. And while they racked their brains, a bearded, bespectacled, professorial looking man — Shripal Morakhia, founder of Smaaash — walked in. His hands shook uncontrollably but his voice was steady and demeanour steely. He looked at the chaos and his team’s crestfallen faces, and he knew a miracle or two were needed.The team was running against a deadline; Sachin Tendulkar, a shareholder in the company, was scheduled to inaugurate the venue on 28 May. He would not be available after that as he was going on a two-month holiday.Morakhia did not want to postpone the launch for two months and nor was he willing to dispense with Tendulkar’s brand value. So, the first thing he did was get his shipment released from the customs. He pleaded, cajoled and screamed when necessary to ensure that work picked up pace. Fabrication contractors agreed to open their factory at seven in the morning and keep delivering until two at night. His staff worked non-stop for 48 hours. Morakhia handed out cash bonus every day to keep the work going.Ashok Cherian, chief marketing officer of Smaaash, describes it best:“Most people look at the soft spoken Shripal and do not realise the pent up energy, but he unleashed it fully. Everyone was surprised at the results, when we launched on time.”A Park Of A Different KindHe wanted to start a children’s amusement park, but high real estate prices didn’t allow that. So he created something differentMorakhia, The BrokerThe city had never seen or experienced F1 racing cars or hang gliders using augmented reality headsets. The experience of entertainment will not be the same again; those arcade games just won’t do anymore.This is not the first time, and it may not be the last that Morakhia has played the disruptionist. The serial entrepreneur has been disrupting business sectors for a long time. As a 20-year-old, he first took over his family business of stock broking — SS Kantilal Ishwarlal (SSKI) — and created history by becoming the first broker to be suspended by the Bombay Stock Exchange in the early 90s for keeping inadequate margins with the exchange. It was a tough time — a true blue Gujarati stock broking business running for generations closed down overnight.Morakhia, being who he is, decided to reinvent stock broking. Indian broking firms in those days did not rely on research. By the mid-90s and after the Harshad Mehta scam, foreign broking firms were allowed to set up offices in India, and they came with fancy research and even fancier salaries. SSKI became one of the first Indian stock broking firms to give foreign salaries and a share in the pool of trading profits. SSKI broke the mould and forced almost every Indian stock broking firm to reinvent. SSKI also ventured into merchant banking and facilitated quite a few public issues, some of them questionable. Those were heady days when every public issue would get oversubscribed many times. Merchant banking fees were high; 4-5 per cent more than stock broking.Morakhia wants to take Smaaash to five new cities. He is also in talks with developers in Pune to build a theme park“It was a period in my life when I chased wealth and I’m not particularly proud of it. We shared profits with our employees; gave stock options much before Infosys made them popular.” Infrastructure Development Finance Corporation (IDFC) first acquired 33.33 per cent in SSKI in 2006. It eventually bought out the other investors by 2010, paying out approximately Rs 1,450 crore in all.Morakhia was also instrumental in creating the first e-broking outfit in the early 2000s. Sharekhan.com allowed investors to trade directly on the stock exchange without the assistance of brokers. Several companies entered the e-broking business after him but soon closed down. Sharekhan continues and has outlived them. The Morakhias sold Sharehkhan to Citigroup Venture Capital and are effectively out of the broking business.The Disney DreamAfter the first deal with IDFC in 2006, Morakhia was flush with funds and started exploring new avenues. He got into film production with his company iDreams and produced the raging hit Bend it Like Beckham and Monsoon Wedding, among other titles. He also began investing in entertainment technology and dreamt of creating a Disney World.“More than Disney World, I was inspired by a children’s park in Amsterdam; but real estate being so expensive in India, it was just not possible. However, I continued to be obsessed with some of the new technology emerging from the entertainment world,” he says. The search for content to create augmented reality for children led him to comic maker Amar Chitra Katha.Morakhia bought out Amar Chitra Katha (ACK), an iconic brand that was struggling in the digital world. Inspired by the founder of ACK, Anant Pai, he pumped in Rs 45 crore into it along with another entrepreneur Samir Patil. But the experiment to turn ACK into another Disney failed. Says Patil, “The thing about Shripal is his enormous enthusiasm and a childlike curiosity about things.”The Stuff of DreamsIn 2009, Morakhia started Smaaash Entertainment with Sachin Tendulkar, and launched the first reality game facility in MumbaiBut by 2007, Morakhia’s energy was flagging — he was diagnosed with cancer. He started exiting his businesses one by one, including iDreams and ACK, by selling them to his existing partners.It was a tough period for him. “I was really hit hard by my illness. I think it was part of my karma that came back to me. I was never happy when I would do some of the public issues in SSKI and some old pensioners lost their money,” he says. “In all these years, I developed a keen business sense, but I think I never developed the maturity that comes from a high emotional quotient,” he adds.A Brush With CancerCancer is curable, but it can drain one out completely. But Morakhia didn’t let the disease get to him. After he recovered, he went back to his dreams. He started Smaaash Entertainment in 2009 with Tendulkar. He also wanted to build a go-karting track. But the real estate prices in Mumbai were very high, so he did the next best thing. He built it on the roof of Kamala Mills and called it Sky-Karting!Since 2008, he has been primarily focusing on two businesses, Smaaash Entertainment and Yoboho, a digital media company that makes videos for children aged 4-8 years under the Hooplakidz brand. He sold off Yoboho to German media conglomerate Bertelsmann for $20 million (Rs 120 crore) early this year to focus on Smaaash. CAREER MOVESPOINT OF ENTRY: Joined the family broking firm SSKI in the early 80s. Launched e-broking firm Sharekhan.com in 2000.Started a film production company iDreams Production in 2002BIG MOMENTS: Sold SSKI to IDFC for Rs 1,450 crore. Also sold Sharekhan.com to Citigroup Venture CapitalNEW CHAPTER: Started Smaaash Entertainment in 2009. FY15 revenues: Rs 400 million; FY 16 (projected revenues): Rs 850 millionMorakhia is again flush with funds and is hell bent on realising his dreams; he wants to expand Smaaash and take it to five new cities. He has been working on taking it to Dubai for a long time. He is also in talks with real estate developers in Pune to build a theme park; the Disney World dream has still not died.Like any entrepreneur, Morakhia lives in the future, and though he is not young at 59 years and has Parkinson’s, it is the passion to reinvent that keeps him going. If there were more entrepreneurs like him who worried less about wealth creation and more about legacy, the BSE Sensex might look different.The author is a senior journalist, based in Delhi. @yatishrajawat (This story was published in BW | Businessworld Issue Dated 27-07-2015)
Read More
Three years after it was wracked by severe labour unrest and violence that led to a tragic death and a murder case, it looks as if old ghosts have come back to haunt the Maruti Suzuki factory at Manesar in Gurgaon. A statement issued by the company late last night (July 5) said that Kuldeep Jhangu, the General Secretary of the Maruti Employees Union, was suspended after he allegedly slapped an officer in the afternoon. Jhangu has denied the charges and insists that it is the concerned officer Sharad Kumar who misbehaved with a casual worker Amod Kumar and abused him. Representatives of both the union and the management must be keeping their fingers crossed that this issue does not escalate into a larger confrontation. Over the last many years, the Gurgaon factory of Maruti had become notorious for festering labor trouble that often erupted in violence. The most shocking such incident happened in July, 2012 when agitating workers had attacked an HR manager Avinesh Dev and burnt him to death. A total of 145 workers were arrested and arson and murder charges. Three years after the arrest, only 79 workers have managed to obtain bail, two given by the Supreme Court of India. This incident had left deep scars in the company, and auto industry experts say that persistent labor unrest was one reason why the company had taken a strategic decision to locate new manufacturing facilities in Gujarat. In recent years, Gurgaon has acquired a notorious reputation for labor unrest and violence. Last month, workers at the Orient Craft factory in Udyog Vihar went on a rampage after rumors were spread that a fellow worker had been electrocuted in the factory lift and had died. A large for up of workers had destroyed more than half a dozen cars, scores of two wheelers and other equipment before a 200 strong contingent of police managed to quell the violence. It seems the worker had not died. Strangely, like in the case of Maruti, even Orient Craft had witnessed severe labor unrest and violence in 2012. Management representatives contend that political ambitions of "outsiders" is the real cause behind these troubles. On the other hand, activists fighting for workers rights contend that the tendency to do away with permanent employment and hire only "contract" workers under exploitative conditions is leading to resentment and unrest. For the Make in India campaign launched by Narendra Modi to be successful, manufacturing will have to play a key role. And for manufacturing to work, industrial relations need to improve.
Read More
The luxury car market in India is undergoing a sea change, and Mercedes-Benz is doing what it takes to be at the top of the gameBy C. H. UnnikrishnanGerman luxury-car maker Mercedes-Benz recently celebrated an ‘express’ clearance for its new, expanded Pune factory. The event has given a new meaning to the Modi government’s Make in India campaign. An environmental clearance, required before the plant could go on stream, had been pending for long since the days of the UPA government. The Germans brought it up with a visiting Maharashtra government delegation led by chief minister Devendra Fadnavis, who had casually asked them if they had problems doing business in India.Before anyone could say Jack Robinson, the delegation in Germany galvanised the babu machinery in India into action. Fadnavis radioed Delhi; the central ministry of environment was lobbied, a minor rule was changed, red tape was cut; and it all happened in a day!“A surprised Mercedes India chief Eberhard Kern could not believe it, and said: ‘It does not happen this fast even in Germany’ when he was handed over the emailed clearance certificate at the Stuttgart Mercedes-Benz HQ,” recalled state industry minister Subhash Desai, while delivering the inaugural address at the Mercedes-Benz’s new plant in Chakan near Pune on 11 June.The approval for the expansion was historic. In one of the first such moves, the NDA government did away with the requirement for ‘green clearance’ for industrial units, schools, colleges and hostels measuring 1.5 lakh sq. metres or more.World-class PlantWith the addition of the latest plant, the total manufacturing capacity of Mercedes-Benz India will go up to 20,000 cars a year. According to the company, it is the largest for any luxury-car brand in India at present. The Rs 1,000-crore facility is now a part of the German car maker’s global assembly network for sedans and SUVs. The India unit now assembles six of its nine brands, including popular sport utility vehicle GLA.The capacity ramp up by Mercedes in India signifies the high-growth potential of the country’s luxury car market, which had grown at a CAGR of about 25 per cent in the last eight years. It is predicted to touch at least $14.72 billion by the end of 2015 with the country becoming a prime destination for top global brands. The world’s top luxury automakers, including Mercedes, Audi (Volkswagen) and BMW — the German Big 3— have established their strong presence in India and the competition is white hot.Established in 1994, Mercedes-Benz India was a pioneer in India’s luxury car market. Its local manufacturing unit, originally set up in 2009, is spread over 100 acres in Chakan, Maharashtra, and is rated among the top completely knock-down kit assembly plants of Mercedes-Benz globally.The competition in India’s 33,000-unit luxury car market became fiercer last year as the gap between the top two — Audi and Mercedes — narrowed to razor-thin levels. In 2014, Audi sold 11,292 units, compared with Mercedes’ 11,213, while the global leader BMW lagged behind. However, in the first quarter of 2015, Mercedes-Benz pulled ahead with a 40 per cent growth, selling 3,566 units. The company, which has some 73 outlets across 39 Indian cities at present, plans to expand the network to 80 cities this year.Changing DynamicsIndia’s luxury car marketing dynamics are rapidly changing. Auto majors that focused on the big city elite club are now expanding their reach to tier-2 and tier-3 cities to tap the rural rich. For instance, Neelkant Shirsat, a medium-scale farmer in Nashik, is a go-getter and owns two utility vehicles — a compact car and an SUV — and adds a trendy brand every harvest season. He, however, never thought of a luxury car until an Audi dealer approached him and offered a glistening model along with an attractive finance scheme. Shirsat was hooked!The trend has changed as the new rich have changed their tastes. The sales of luxury car brands in the country have almost doubled in the last four to five years, growing at a rate of 25 per cent a year.“Luxury cars are no more a taboo in the semi-urban markets, where many could afford them earlier but didn’t buy due to the so-called elite- class-only perception,” says Y. Bijoy Kumar, a motoring expert and former editor of auto magazine BS Motoring.Another new area that is catching up in India’s luxury car market is the sales of pre-owned cars through authorised outlets. Mercedes India head says that his company has recently introduced this segment in its sales offering and it is picking up fast.GLA RolloutMercedes-Benz’s latest addition to the new local assembly unit — the GLA SUV brands — has set another milestone in the changing dynamics of the luxury car market in the country. This new generation luxury SUV, which almost redefined the segment and created a whole new customer group in the Indian market, has witnessed good consumer demand since its launch last September.“Rolling out our first ever locally-manufactured GLA and commencing production from India’s largest installed luxury car production facility are two very significant accomplishments for Mercedes-Benz in India,” says managing director and chief executive officer Kern.Localisation of the brand helps buyers save about Rs 1.5 to 2.5 lakh on the two varients, company officials say.The locally assembled GLA 200 CDI Style is priced at Rs 31.31 lakh and GLA 200 CDI Sport at Rs 34.25 lakh in India now. “The GLA would be the first of the new generation cars to be rolling out of our plant. The local manufacturing of the GLA and the commencement of production from our new facility, not only makes us ‘future ready’ but also gives us a competitive advantage in the dynamic Indian luxury car market,” says Kern.“Our local production facility has been the backbone of our growth in India,” says Piyush Arora, executive director, Operations, Mercedes-Benz India. “With the sixth model now added to our local production portfolio, we are even better positioned than before to cater to the increasing demand,” adds Arora.The capacity addition in the new Mercedes plant will be carried out in phases. “Last year, we sold 10,200 units and it grew 40 per cent this year so far,” says Kern. “We will not be able to achieve total capacity of 20,000 unit sales this year, but hopefully, if we manage to run at the same pace, it won’t take much time,” he boasts.Kern obviously needs to pump up his confidence. He is aware that competitors Audi and BMW are not exactly sitting idle, and the demand in the luxury car market is not galloping. But if the numbers show up, the new Mercedes plant and its products are ready. unni@businessworld.in, @unni_ch(This story was published in BW | Businessworld Issue Dated 27-07-2015)
Read More
Chinese stocks opened down on Tuesday, taking no comfort from a slew of support measures unleashed by Beijing in recent days, and unnerved by Chinese Premier Li Keqiang's failure to mention the market chaos in a statement on the economy. Before the market opened, Li said in comments on a government website that China had the confidence and ability to deal with challenges faced by its economy, but had nothing to say on the three-week plunge that has knocked around 30 percent off Chinese shares since mid-June. After a brief pause to the slide on Monday, the CSI300 index of the largest listed companies in Shanghai and Shenzhen fell 4.8 percent in early trading on Tuesday, while the Shanghai Composite Index shed 3.4 percent. The ChiNext growth board, home to some of China's giddiest small-cap valuations, fell 5.1 percent. In an attempt to halt the slide, China has arranged a curb on new share issues and orchestrated brokerages and fund managers to buy massive amounts of stocks, helped by China's state-backed margin finance company, which in turn has a direct line of liquidity from the central bank. The official Shanghai Securities News reported on Tuesday that China's major insurance firms ploughed tens of billions of yuan into blue-chip exchange-traded funds (ETF) and large caps on Monday. China Life Insurance Co Ltd bought a net 10 billion yuan ($1.6 billion) in index funds, while China Pacific Insurance Group and other insurers each invested more than 1 billion yuan, the newspaper said. That helped the indexes rise just over 2 percent on Monday, but the relief was shortlived. Lei Mao, assistant professor of finance at Warwick Business School, said government measures to support the market distorted the allocation of funds and trading behaviour and could create the conditions for further sharp falls. "Even an optimistic investor should not participate in the market for now," he said. Traders are increasingly unnerved by the unusually large number of Chinese companies asking for their shares to be suspended from trading, fearing that many of them are looking for excuses to sit out the market turmoil. About a quarter of the roughly 2,800 companies listed in Shanghai and Shenzhen had filed for a trading halt by the close on Monday, and on Tuesday the Securities Times said another 200 had announced a suspension. Investors were also reacting to news of tightened restrictions on futures trading on a major small-cap index. Out Of HandThe rapid decline of China's previously booming stock market, which had more than doubled in the year to mid-June, had become a major headache for President Xi Jinping and China's top leaders, who are already struggling to avert a sharper economic slowdown. Even China's bullish securities regulators admitted that markets had become too frothy before they turned down, but the slide quickly showed signs of getting out of hand. A surprise interest-rate cut by the central bank at the end of June, relaxations in margin trading and other "stability measures" did little to calm investors, many of whom have borrowed heavily to play the stock market. In a series of announcements on Saturday, China's top brokerages pledged to collectively buy at least 120 billion yuan of shares to help steady the market, and said they would not sell while the Shanghai Composite Index remained below 4,500, a level last seen on June 25. Underlining scepticism beyond mainland China about the sustainability of the measures, Hong Kong listed shares of Chinese brokerages took a beating on Monday. In addition, 28 companies that had been approved to launch IPOs announced they had suspended their plans. (Reuters)
Read More
New airlines Vistara, Air Asia keeps adding new routes, while established players Jet, SpiceJet offer price cuts, services, writes C H UnnikrishnanPassengers are the winners now in the Indian aviation market with offers raining from airlines. Low fare carrier SpiceJet has joined the bandwagon after Jet Airways and Indigo to offer promotional rates and heavy discounts. While, newly started airlines Vistara and Air Asia continued expanding their domestic routes connecting premium destinations providing the passenger more flying options. SpiceJet,has on Monday (6 July) announced the launch of a ‘Red Hot Fares’ sale focused exclusively on its western and southern domestic network. These fares start from Rs 1,899 all-in for routes including Mumbai-Goa, Ahmedabad-Mumbai, Bangalore-Hyderabad, Chennai-Bangalore, Pune-Bangalore. The three day sale will remain open till July 08 and the travel period covered in this sale is 15th July to 30th September 2015, said a SpiceJet release on Monday. The offer is valid for direct as well as connecting flights on the selected routes, it added.India's aviation sector, which has been under financial stress and regulatory glitches, has of late shown improvement in financial performance and the market has also seen a lot of traction. With new players expanding their routes, passengers are getting lot more options on pricing as well as better connectivity. While, established airlines including Indigo, Jet and GoAir offering a bouquet of enhanced services and price discounts.The new full service carrier Vistara, promoted by Tata group and Singapore Airlines, had last month added two daily flights connecting Bengaluru to New Delhi and Mumbai. As India’s most popular business destination, Bengaluru is a natural extension to Vistara’s growing network and it is the second destination for the new airline in South India after Hyderabad, and the tenth destination overall since it commenced operations in January this year. Vistara's network currently offers 237 weekly frequencies connecting Delhi, Ahmedabad, Bengaluru, Bagdogra, Guwahati, Goa, Hyderabad, Lucknow, Mumbai and Pune.While, the country's oldest private airline and second largest full service carrier Jet Airways had a couple of weeks ago tied up with Vietnam Airlines to extend its frequent flyer programme --JetPrevilige. The airline's chief executive officer Cramer Ball had said in a last week interview that it will have many more such partnership with international players for JetPrevilige programme as well as code sharing. Jet already have multiple partnerships with international airlines, including the ones with its equity partner Etihad Airways, in these fronts.India's new low fare airline, AirAsia-- a joint venture between Tata Sons and Malaysia's Air Asia Berhad, had also in June announced a big sale offer throughout the airline’s extensive route network.With this, AirAsia India offered all-inclusive one way fare from as low as Rs 799 for flights from Bengaluru to Kochi, Rs 999 from Bengaluru to Goa, Pune and ishakapatnam, Rs 1599 from Bengaluru to Jaipur, Rs 1799 from Bengaluru to Chandigarh, Rs 1999 from New Delhi to Bengaluru and Goa, Rs 1799 from New Delhi to Guwahati and vice versa. “We are absolutely delighted to announce Big Sale which will allow guests to plan their travel well ahead of time. Big Sale is available across our network and with this promotional offer we hope to see more people planning their holidays for next year," said Air Asia India's chief executive Mittu Chandilya.AirAsia had also added a new flight from Imphal to its network of destinations in June, making its total route network in India to 11. Air Asia, a joint venture with Air Asia Berhad with 49 per cent stake and Tata Sons and Telestra Tradeplace and holding 30 per cent and 21 per cent respectively.SpiceJet, which has got a fresh lease of life after original promoter Ajay Singh back to the board, had also made a similar offer in June for international routes. With this, the airline had Following close on heels with its new brand image SpiceJet is turning really hot this monsoon announcing its international travel sale. The airline is had offered some 50000 seats at red hot fares for select international sectors under which the all inclusive one-way fares ranged from a minimum of Rs. 3099 to Rs. 5599 for some very popular destinations as Colombo, Bangkok, Dubai, Male, Muscat etc. The sale schedule was also strategically sketched to the advantage of its frequent flyers. The four day sale was launched on 16th June to June 20 and the travel period covered in this sale is 1st July to 31st October. “We are getting Red, Hot and Spicy and as we get there we want our customers to really connect with the brand values that SpiceJet stands for. We expect the brand’s sheer vibrancy and energy to be transmitted effectively to the very heart of our customers thereby strengthening our customer bonding further. We are extremely bullish for this sale gesture to be admired by our guests given its unmatched value and benefits.” said Sanjiv Kapoor, chief operating officer, SpiceJet.Vistara, which is keen to scale up in the domestic market, may be in the international routes too at the earliest, is now connecting all the premium destinations in India. “Bengaluru, as the third most populous city in India and the top destination for IT (information technology) exports from the country, is naturally the most visited city in India for business travel and offers ample potential for Vistara." said Vistara chief executive officer Phee Teik Yeoh. "We are very pleased to connect India’s IT capital to its national capital New Delhi and commercial capital Mumbai. We look forward to serving a wider customer base on these routes and offering them a chance to experience Vistara’s seamless, thoughtful and personalised service," he said on the new route expansion. In the first five months of commercial operations, Vistara has already flown more than 300,000 customers and has delivered one of the highest on-time performance - in excess of 96 per cent month on month since February, claimed a recently statement from Vistara. Its offerings including premium economy class, the frequent flyer program --Club Vistara, the in-flight menu and in-flight entertainment system with wireless streaming also adds value to the passenger's experience, it added. "In the coming months, customers can expect a wider choice of destinations, more frequencies and new offerings added to Vistara’s product and services portfolio such as more strategic partnerships and a signature lounge at the New Delhi airport," the airline said .Vistara, owned by TATA SIA Airlines Ltd, a 51:49 joint venture between Tata Sons Ltd and Singapore Airlines Ltd, commenced its commercial operations on January 9 this year.While, India's largest full service airline Jet Airways' frequent flyer programme --JetPrivilege signed a reciprocal frequent flyer partnership with Vietnam Airlines in June to provide enhanced connectivity for JetPrivilege members with the opportunity to earn and redeem JPMiles across Vietnam Airlines' network on destinations like Ho Chi Minh City, Nha Trang, Phnom Penh, Hanoi via Bangkok and Singapore. Similarly members of Vietnam Airlines' Golden Lotus Plus programme can also earn and redeem their miles across Jet Airways’ network. “We are delighted to partner with Vietnam Airlines. We have constantly endeavoured to offer our JetPrivilege members a wholesome flying experience across the globe," said Manish Dureja, managing director, JetPrivilege in a recent statement.
Read More
