Newsweek’s new owners think they can succeed at something its previous owners failed at: printing a weekly magazine in the US. IBT Media, the obscure media firm that bought Newsweek in August, said it intends to revive the magazine’s print edition early next year, possibly as soon as January. The announcement is a remarkable twist in Newsweek’s evolution, coming less than a year after its previous owner, IAC, stopped printing the magazine. The brand was basically left for dead — but now the cover of IAC’s final edition, with the phrase ‘#LastPrintIssue’, rendered as a Twitter hashtag, seems decidedly premature. IBT’s decision is at odds with a general industry move away from print and towards the Web.A MeltdownArcelorMittal’s acquisition of a US plant jointly with Nippon Steel and Sumitomo Metal Corp will not affect the world’s No. 1 steelmaker’s debt targets, ArcelorMittal’s CEO Lakshmi Mittal said. ArcelorMittal unveiled the $1.55 billion takeover of ThyssenKrupp’s US steel finishing plant earlier in December, saying it would finance the deal via equity and debt at the joint venture level. Mittal said the deal would have a minimal impact on this year’s debt and no effect on medium-term debt target. The company estimates net debt of $17 billion by the end of 2013, falling to $15 billion in the medium term. Meanwhile, ThyssenKrupp announced plans to sell 51.5 million new shares as it seeks to shore up funds depleted by a downturn in the global steel market and an ill-advised foray into the Americas. The firm’s ventures comprised a steel slab mill in Brazil and a US finishing plant, but the plan fell apart when Brazil’s currency rose, hiking labour and production costs, and demand for cars slowed.Motown BluesIn a landmark ruling, Detroit was officially declared bankrupt, clearing the way for potentially sweeping cuts to city worker pensions and retirement benefits and for steep and possibly precedent-setting losses to the cash-strapped city’s bond holders. The federal judge based his decision on the city’s dismal finances and the $18 billion owed to a multitude of creditors. Detroit’s emergency manager Kevyn Orr said the city will seek to file a plan of readjustment — the city’s roadmap to financial solvency — by January. From being the cradle of US’s auto industry, Detroit is now known as the largest bankrupt city in US’s history.Sticking To His GunsUS President Barack Obama’s health initiative seems fraught with problems, but he’s not giving up. He urged Americans not to be discouraged by the rocky rollout of healthcare.gov and vowed to fix whatever glitches remained as he sought to restore confidence in his leadership. Obama, who has been struggling to contain the political damage from the troubled rollout of the new health law, said repairs to the website have now made it work well for the vast majority of users and that “we’re are going to keep on working to fix whatever problems come up”. He said Republican lawmakers were “rooting for this law to fail” and had offered no alternative to the law other than its repeal, which he rejected as a possibility.Looking UpA pick-up in inflation in November eases pressure on the European Central Bank (ECB), and the first fall in unemployment in almost three years shows that a tentative euro zone recovery is gaining traction. This data lent credence to the ECB view that the 17-country bloc is undergoing a gradual economic recovery more than five years after a financial crisis erupted. Consumer price inflation — the rate of increase in the cost of shopping and paying household bills — rose in the euro zone by 0.9 per cent in November, slightly more than economists had predicted. This, as unemployment fell in October to 12.1 per cent from September’s 12.2 per cent, the first fall since February 2011.Worst Over? Spain says it has technically escaped a two-year recession by posting feeble growth in the third quarter. But its unemployment rate still hovers at 26 per cent. The gross domestic product edged up by 0.1 per cent in the third quarter of 2013, the National Statistics Institute said. The upward tick snapped an unbroken two-year downturn in activity in Spain, the euro zone’s fourth largest economy. The government is forecasting a 1.3 per cent economic contraction in 2013 and 0.7 per cent growth in 2014.Running AheadGerman sporting goods maker Adidas is counting on soccer and running gear, among others, to help it achieve profit and sales growth in 2014 and achieve its 2015 goals, the company said. Adidas, the world’s second largest sportswear brand behind Nike, is aiming to increase sales to €17 billion in 2015 and raise its operating profit margin to 11 per cent by then, compared with €11 billion and 7.5 per cent in 2010.Pumping In MoneyJapanese Prime Minister Shinzo Abe’s cabinet approved a $182 billion (18.6 trillion yen) economic package to pull the economy out of deflation, but doubts remain about the economic impact. The core of the package is the 5.5 trillion yen in spending measures Abe ordered in October to bolster the economy. This package has raised concerns that Japan’s government hasn’t broken away from the stop-gap measures and piecemeal policymaking that some say has hampered long-term growth.Hair SmartSony is taking wearable technology to a whole new level. The electronics company has filed a US patent for a ‘SmartWig’, which will use sensors to detect everything from blood pressure to brain waves. The wearable wig could also be used in a number of practical ways, such as helping blind people navigate without any extra assistance, said Sony.Gaining FavourThe Chinese yuan overtook the euro in October, becoming the second-most used currency in trade finance after the US dollar, according to global transaction services organisation SWIFT. The market share of yuan usage in trade finance grew to 8.66 per cent in October from 1.89 per cent in January 2012. The US dollar has a share of 81.08 per cent. The top five countries using the yuan for trade finance were China, Hong Kong, Singapore, Germany and Australia.(This story was published in BW | Businessworld Issue Dated 30-12-2013)
Read More
It (Nano) came to be termed the cheapest car by the public and, I am sorry to say, by ourselves. I think that is unfortunate”— Ratan Tata, former chairman, Tata Sons“Unfortunately, there are a number of cases where investigating agencies and other authorities like Comptroller and Auditor General have overstepped their limits”— P. Chidambaram, finance minister, at a CBI conference“Whatever the finance minister says should be considered as gospel (truth)”— Vinod Rai, former CAG, responding to the finance minister’s charge“Reports of our death are greatly exaggerated”— John Chen, interim chief executive, BlackBerry, in an open letterRatan Tata, former chairman, Tata Sons (Pic by Tribhuwan Sharma)“India is not a country for the weak-hearted”— Ramesh Tainwala, executive director & president, Asia-Pacific, Samsonite International , on doing business in India“I’m too grown up to be nervous about an election”— Sheila Dikshit, chief minister of Delhi, on the Delhi assembly elections“He had no long-term good intentions for the company or its shareholders or people inside the company”— Michael Dell, chairman and CEO, Dell, on billionaire investor Carl Icahn who had opposed the $24.9-billion deal to take Dell private(This story was published in BW | Businessworld Issue Dated 30-12-2013)
Read More
Indian companies that built most of the parts for the country's recently launched Mars mission are using their low-cost, high-tech expertise in frugal space engineering to compete for global aerospace, defence and nuclear contracts worth billions.Mangalyaan spacecraft was launched last month and then catapulted from Earth orbit on 1 December, clearing an important hurdle on its 420 million mile journey to Mars and putting it on course to be the first Asian mission to reach the red planet.The venture has a price tag of just Rs 4.5 billion, roughly one-tenth the cost of Maven, NASA's latest Mars mission. Two-thirds of the parts for the Indian probe and rocket were made by domestic firms like Larsen & Toubro, the country's largest engineering firm, Godrej & Boyce, and state plane-maker Hindustan Aeronautics.While such companies have a long way to go before they can attract big business in the commercial space sector, years of work on home-grown space projects are helping them carve out a niche as suppliers of precision parts for related sectors like defence, aeronautics and nuclear energy.Those firms with proven space know-how will find themselves with the advantage as India, the world's biggest arms importer, shells out $100 billion over a decade to modernise its military with the country favouring local sources.India in June strengthened a defence policy stipulating that local firms must be considered first for contracts and foreign companies winning contracts worth more than Rs 3 billion must "offset" at least 30 per cent of the deal's value in India."We think over the next two to three years we will be able to convert this into a profit centre," said S. M. Vaidya, the business head of Godrej's aerospace division, which made the rocket's engine and fuel-powered thrusters for the Indian Mars probe.Thanks to the space work, the company's engineers now know how to handle the specific metal alloys and the high-precision welding needed for aircraft and missiles as well as rockets, Vaidya added.Godrej has worked with India's space agency for almost three decades and in recent years started making engine parts for aircraft makers Boeing Co, the Airbus unit of EADS and Israel's state-owned Rafael Advanced Defence Systems Ltd. It is in talks with Boeing to make parts for aircraft frames.Home-Grown, Go It AloneIndia launched its domestic space program 50 years ago and had to develop its own rocket technology after Western powers levied sanctions in response to a 1974 nuclear weapons test, resulting in a "go it alone" development mentality.The Indian Space Research Organisation, or ISRO, has worked to keep import costs low by designing most of the parts for its programme that are then outsourced to the domestic private sector.ISRO must still import some metal alloys used in the space programme that it then gives to its contractors and Indian companies also must buy some of the machinery needed to make the parts from Europe and Japan.India's heavy reliance on domestic companies for its space programme allows it to tap homegrown technicians and engineers who earn half as much as those in the West. Starting salaries for aerospace engineers in India are at most $2,000 per month, according to Indian recruitment consultancy TeamLease. The same role in the United States brings in about $5,300 on average, according to the National Association of Colleges and Employers."The commercial value of the business with ISRO is not high, it is the spin-offs that are valuable," said M. V. Kotwal, president of the heavy engineering division at Larsen & Toubro, which has made $5.7 million in parts for ISRO in recent years.L&T has also supplied $240 million worth of parts so far to ITER, an inter-governmental science experiment that is building a thermonuclear reactor in southern France.Godrej earlier this year won a deal to build a frame for the world's largest optical telescope in collaboration with University of California, the California Institute of Technology, and the Association of Canadian Universities for Research in Astronomy.Walchand Nagar Industries, a Pune-headquartered company that made Rs 100 million worth of parts for India's Mars rocket, said the project helped it win contracts worth double that amount for a state-run nuclear plant in Gujarat. (Reuters)
Read More
The rupee and bonds rallied on 9 December after the country's main opposition party, BJP, which is widely seen by investors as being more business friendly, performed well in state elections.The centre-left party's main opponent, the Hindu nationalist Bharatiya Janata Party (BJP), was the clear winner in three big states that went to the polls according to results on 8 December, with the count close in a fourth.The partially convertible rupee was trading at 61.04/05 per dollar at 0913 IST (0343 GMT), after hitting as high as 60.84 to the dollar at the open, its strongest level since 12 August. It had closed 6 December at 61.41/42.The benchmark 10-year bond yields fell 4 basis points to 8.81 per cent. (Reuters)
Read More
Vasundhara Raje, who failed five years ago on account of infighting in BJP, reinvented herself and galvanised the cadre to spearhead her party's spectacular comeback to power in Rajasthan. 60-year-old Raje, who belongs to the royal Scindia family of Gwalior and married in Rajasthan, had even once threatened to quit the party. But then she managed to get the BJP high command fully behind her in her bid to oust the Congress government headed by Ashok Gehlot. The icing on the cake for her was the full-throated backing from Narendra Modi who extensively toured Rajasthan during the election campaign. Her rise from a National Executive member of BJP to one of its most powerful leaders in Rajasthan can be attributed to her charismatic personality and strong will, which have helped her tide over political crises from within and outside in her 30-year-long political career. While she is adored by her supporters for her plainspoken and outgoing manners, her detractors believe her inaccessibility and like-it-or-lump-it attitude was the reason behind BJP's debacle in 2008 assembly polls and the subsequent Lok Sabha elections. Member of a Maratha royal family who married into a Jat family, she enjoys a connect with masses cutting across castes and communities that lends her the X-factor in a heterogeneous state like Rajasthan where acceptability of most politicians wilts outside a particular region or group. Daughter of founding BJP leader Vijayraje Scindia and sister of deceased Congress leader Madhavrao Scindia, she has been elected to the state assembly thrice and five times to Lok Sabha. After being appointed as BJP's National Executive member in 1984, she became vice-president of Yuva Morcha in Rajasthan a year later and was elected to state assembly the same year. Since then Raje's rise has been steady which culminated in her becoming the state's first woman chief minister in 2003 when the "angrezi-speaking maharani", a phrase used by her critics to refer to her elitist and royal background, led BJP to its most famous victory in the predominantly rural state. The saffron party had bagged a majority for the first time -- it won in 120 out of 200 seats -- a feat which had eluded even its stalwart and former CM Bhairon Singh Sekhawat. If she was seen as an efficient administrator with a grip on bureaucracy, she was also accused of having authoritarian tendencies which antagonised powerful satraps and numerically significant groups like Gujjars and Meenas, resulting in BJP losing a tight electoral race in 2008 to Congress. Raje became the leader of Opposition but had to quit in February, 2010, on the party's directions after BJP suffered a drubbing in Lok Sabha polls, winning only four of 25 seats. It was the time when RSS was asserting itself in the party's affairs and Raje was never a favourite of the Hindutva organisation. Unlike her mother, who passionately advocated political Hinduism, Raje kept RSS and its affiliates at an arm's length from government's affairs. Marginalised by her party, she kept a low profile for some time before she rallied her supporters to bounce back last year. First, she cut RSS-favourite Gulab Chand Kataria, a seasoned party leader and chief ministerial aspirant, to size by forcing the party to cancel his planed 28-day yatra across the state last year. The yatra, he believed, would have propelled him as the BJP's face in the state at a time the Ashok Gehlot government was seemingly in a drift. A majority of party's MLAs sided with her, knowing well that she and not Kataria had the charisma of bringing the party back to power. A reluctant BJP national leadership had little choice but to bow to her wishes and let her helm the party's affairs. Raje was appointed state party president and launched Suraj Sankalp Yatra in April, which drew a good response from people, lifting the morale of party workers. She was later named party's chief ministerial candidate. She also vociferously supported Narendra Modi's prime ministerial candidature within the party and as the Gujarat Chief Minister's graph rose so did hers, neutralising any potential obstacle she might have had to face. A graduate with economics and political science degrees from Mumbai University, Raje'e energetic campaign has been one of the hallmarks of the electioneering. At a personal level, she is more of the quintessential modern woman leader who is as much at ease in the traditional tribal dress hearing out the concerns of village population as she enjoyed walking the ramp or interacting with celebrities in royal parties. And her supporters love their 'maharani' for this.(PTI) =======
Read More
Congress accepted defeat in Delhi, Madhya Pradesh and Rajasthan, saying it was disappointed with the poll outcome. "The results in Delhi, Madhya Pradesh and Rajasthan are disappointing.... Congress accepts its defeat with great humility.... We concede that we have lost there," party spokesman Randeep Singh Surjewala said when asked about the trends. He, however, dismissed suggestions that the performance of BJP in the Assembly polls was an indication that the party could sweep the Lok Sabha election next year. He recalled that BJP had won 2003 Assembly polls but lost badly in the Lok Sabha elections. "Any celebration ahead of the 2014 Lok Sabha polls will be premature. BJP refuses to learn from history.... There was similar sort of upbeat mood in the BJP in 2004, when the NDA had lost," he said. Surjewala also said that Chhattisgarh "is a ray of hope" and Mizoram "will also bring some cheer". Expressing suprise over the results in Delhi, where the debutant Aam Aadmi Party is competing with BJP for the first place, AICC general secretary in-charge for the state Shakeel Ahmed said, "We were not expecting these results. The reasons for this will be analysed". Congress has been in power in Delhi for 15 years with Shiela Dikshit having the distinction of the longest-serving woman Chief Minister in independent India. In the last Assembly polls, the Congress had won as many as 43 seats in the 70-member legislative Assembly and its fortunes have dwindled sharply this time with the party likely to get less than 10 seats. Congress leader Abhishek Singhvi dismissed suggestions that the trends showed that there was a wave in favour of BJP Prime Ministerial candidate Narendra Modi in the country. Congress leader and Union Minister Shashi Tharoor said his party has very capable and experienced political leaders who are surely going to analyse in detail and find what corrective measures are needed. He said across the the country there were regional parties and areas where the BJP has no presence. "So we should not be too hasty in suddenly seeing a sort of tsunami in favour of party that has done well today," Tharoor said. (PTI)
Read More
Indian gold imports may fall 70 per cent in the final quarter of 2013 from 255 tonnes in the year-ago period and are expected to be half usual levels at 500-550 tonnes next year if new import rules are maintained, a top trade body official said on 6 December.To curb a record trade deficit, India imposed an import duty of 10 per cent on gold, and tied imports for domestic consumption to exports, creating scarce supply of the yellow metal and boosting premiums to a record.As a result, Indians have depended heavily on old heirlooms and smuggled yellow metal to meet wedding demand."Year 2014 seems to be a difficult one for the Indian gem and jewellery industry so far as gold imports are concerned," Bachhraj Bamalwa, director at the All India Gems and Jewellery Trade Federation (GJF), said in an interview at the Reuters Global Gold Forum.India, which may import a lower-than-usual 700-750 tonnes in 2013, is unlikely to ease its import policy or the customs duty until the trade deficit is under control, Bamalwa added."Demand (for) jewellery has not yet picked up, so the industry is not yet in panic, but I am not (very) sure about the future - say, after 30 days," said Bamalwa.The World Gold Council (WGC) cut its forecast for Indian gold demand earlier this month, predicting the country could also lose its crown as the world's biggest consumer of bullion to China.The WGC said Indian demand could be 900 tonnes in 2013, from its previous forecast of 1,000 tonnes.Fourth-quarter demand is expected to be low because consumers brought forward wedding purchases to April and May, when gold prices fell drastically, Bamalwa said.Premiums for gold in India climbed to a record $160 an ounce above spot prices this week. By the end of the quarter, they may have risen as high as $200 an ounce, Bamalwa said.Spotlight On ExportsUnder the government's new rules, gold importers must export 20 per cent of their total imports. Importing agencies such as banks and state-run companies can bring in a maximum of two consignments of metal before having to furnish proof of exports, he said.Jewellers are trying to increase exports but the global economic situation is "not very encouraging", Bamalwa said.Jewellery exports, on which domestic imports are dependent under the new rule, have slid nearly 55 per cent to $3.95 billion so far this fiscal year, from April to October.Falling exports will have a knock-on effect on future imports because of the ties between the two, which in turn will hurt domestic jewellers who should be seeing surging demand as the wedding season gets into full swing.The trade body plans to approach the government to provide low-cost finance to jewellery exporters, against a 12-13 per cent funding cost now. Its global competitors get financing at 2-3 per cent."We will be approaching the government for some incentives, but since the country is going for general elections next year, the incentives may not come before the next government comes to power," Bamalwa said. Elections are due in May in India, the world's second-most populous country.Bamalwa said the government was "in no mood" to relax its new import duty rules, or its gold export requirements, until the current account deficit had been reined in.(Reuters)
Read More
The World Trade Organization reached its first ever trade reform deal on Saturday, 7 December, to the roar of approval from nearly 160 ministers who had gathered on the Indonesian island of Bali to decide on the make-or-break agreement that could add $1 trillion to the global economy The approval came after Cuba dropped a last-gasp threat to veto the package of measures. "For the first time in our history, the WTO has truly delivered," a tearful WTO chief Roberto Azevedo said. "This time the entire membership came together. We have put the 'world' back in World Trade Organization," he said. The talks had dragged into an extra day after Cuba at the last minute refused to accept a deal that would not help pry open the US embargo of the Caribbean island. It later agreed on compromise language with the United States. The agreement marks WTO's first global trade agreement since it was created in 1995 and rescues the WTO from the brink of failure and will rekindle confidence in its ability to lower barriers to trade worldwide, after 12 years of fruitless negotiations. Read: Draft WTO Deal Approved (Reuters)
Read More
Gold prices fell by Rs 465 to Rs 30,785 per ten gram in the national capital Friday on reduced offtake by stockists at existing higher levels amid a weak global trend.Silver remained under selling pressure for the fourth straight day and lost Rs 200 to Rs 43,600 per kg, after losing Rs 1,275 in the previous three sessions.Traders said reduced offtake by stockists and retailers at existing higher levels amid a weak global trend as US economic data reinforced concern that the Fed will begin trimming stimulus measures, curbing demand for precious metals as a haven, mainly pulled down the bullion prices.Gold in New York, which normally sets price trend on the domestic front, fell by 1.46 per cent to USD 1,225.10 an ounce and silver by 1.42 per cent to USD 19.44 an ounce last night.On the domestic front, gold of 99.9 and 99.5 per cent purity tumbled by Rs 465 each to Rs 30,785 and Rs 30,585 per ten gram, respectively. It had shot up by Rs 450 Thursday. Sovereign held steady at Rs 25,200 per piece of eight gram in scattered deals.Similarly, silver ready fell by Rs 200 to Rs 43,600 per kg and weekly-based delivery by Rs 120 to Rs 44,180 per kg, while silver coins remained unchanged at Rs 82,000 for buying and Rs 83,000 for selling of 100 pieces.(PTI)
Read More
A recovery in the rupee is giving Finance Minister P. Chidambaram rare relief in his battle against a threatened credit rating downgrade to junk status by reducing pressure on the government's subsidy bill.Still, the minister can only meet his fiscal deficit target of 4.8 per cent of GDP by rolling over a substantial amount of subsidy spending into next year's budget and by finding big savings elsewhere, two senior finance ministry officials said.But a 10 per cent rise in the rupee - which slumped to a record low late in August - means Chidambaram can at least reduce the amount of subsidy spending that gets pushed into next year's budget to $12 billion from a previous estimate of $15 billion, these officials said.Other budget headaches mean he will have to find about $8 billion in savings from budgeted spending plans to meet the deficit target, they said.The sources, who have direct knowledge of the budget issues or have been briefed on them, declined to be identified because the revised budget numbers are not yet public."Chidambaram wants to put the house in order before the 2014 election campaign kicks off and the US Federal Reserve begins cutting its monetary stimulus," said one of the officials.National elections have to be called by May 2014 and emerging markets are on edge as investors speculate on when the US central bank might reduce its economic stimulus, which could prompt capital to shift into U.S. assets.A finance ministry spokesman declined to comment on the budget estimates other than saying revised figures are still being worked out.Missing TargetsChidambaram has said the fiscal deficit target is a line that will not be crossed as he seeks to fend off the threat from Standard & Poor's to downgrade India's sovereign credit rating, currently clinging to the bottom rung of investment grade.The budget is under pressure on a number of fronts; subsidy spending on fuel, food and fertiliser has blown out, economic growth has slumped to its weakest level in a decade and a programme to sell state assets is in tatters.The government had initially budgeted spending of about $36 billion for subsidies, but that swelled to $52 billion when the rupee hit its record low.Reflecting the economy's weakness, net tax receipts in the first seven months of the fiscal year are about 7 per cent higher than the year-earlier period, the slowest pace in four years and well below the full-year budget target of 19 per cent. This could create a budget hole of some $2.4 billion, said the second official."We will need savings of up to 50,000 crore if the shortfall in tax receipts is between 10-15,000 crore," this official said.Expected income of $8.8 billion from the sale of government stakes in state-run companies looks increasingly out of reach.The government could announce later the results of a sale of a 4 per cent stake in power transmission company Power Grid. Based on the sales price and oversubscription, the sale will raise around $270 million, which would take the total amount raised so far from state asset sales this fiscal year to about $500 million.The government still hopes to bring in nearly $3.5 billion more by selling its remaining stake in Hindustan Zinc and Bharat Aluminium before the end of the fiscal year."The disinvestment numbers are there in the budget. But it appears that we are going to miss them by a wide margin, like every year," said the second senior official.Any Means NeededIn the absence of the share sales, Chidambaram told his cabinet colleagues earlier in the week that money would have to be raised by pressing state firms to buy back government shares or to issue a special dividend, said the first senior official citing a description of the meeting by Chidambaram.Prime Minister Manmohan Singh had called the meeting to discuss the sale of the government's share in state-run coal producer Coal India and power equipment manufacturer BHEL.Chidambaram also hopes to make savings by strictly implementing rules on allocating funds to other ministries, which will slow down how quickly they receive the money, the first official said."We are expecting savings of about 40-50,000 crore, though the numbers still have to be finalised," this official said.Non-spending of allocated funds could help in achieving the budget deficit target, the finance ministry's spokesman said.The revenue position will be clearer by the end of December, by which time Indian companies will have deposited their advance tax payments for the third quarter.The government expects major savings from ministries like drinking water and sanitation, rural development, defence, trade, communications, power and planning. In April to October, the deficit reached about 84 per cent of the full-year target.(Reuters)
Read More
