Indians need to "straddle the pyramid" to make the India@75 vision happen, says management guru.
Coimbatore Krishnarao Prahalad, the guru of post-modern management, today threw the dream of leadership in the new world order by 2022 at a large and influential section of India Inc.
India, Prahalad said, can have by 2022 the world's largest pool of trained manpower (500 million skilled workers), 30 companies in the Fortune 100 list, 10 per cent of world trade and 10 Nobel Prize winners. On the softer side, it can become the source for global innovation and a new moral voice for people around the world.
He spelt out his vision for India@75 at a five-star hotel in capital city, where over 700 members of the Confederation of Indian Industry (CII), a third of them on video link, listened to him in rapt attention. Several bureaucrats too were seen in the audience.
Briefing a select group of journalists earlier in the morning, Prahalad said he had deliberately kept the means of getting there out so that the focus could be kept on the goals. But he said that even in the current circumstances the probability of meeting the targets was high.
The vision has been adopted by CII, which will now look at how to make it happen. Sources at the industry association said the need for such a target was felt after Prime Minister Manmohan Singh told the new leadership under ICICI Bank Managing Director & CEO KV Kamath a few days ago to work out a long-term vision.
CII did not have to go far in search of such a piece of work. Prahalad, who is a professor at the University of Michigan, had actually spelt out the details of his vision, India@75, at the India@60 celebrations of CII at New York in September 2007. He touched down in New Delhi late last night.
Prahalad said his earlier targets for India were no less audacious but were still met. "I had talked of Indian multinationals in the mid-1990s. Who would have believed it," he said, adding: "Seven years ago, I had suggested a target of 10 per cent growth (in gross domestic product). Many in India had said we don't have resources for 10 per cent growth."
Still, it would be tough to achieve the targets of India@75. To begin with, India faces an acute shortage of workforce across sectors. Several businessmen now identify it as the biggest impediment to their growth. The target of trained 500 million workers, experts said, is a far cry.
The country's share in world trade is 1.5 per cent - way below his target of 10 per cent. And not a single Indian company finds a slot in the list of top 100 companies, though India has turned into a nursery for billionaire businessmen.
Having exhorted companies the world over to seek their fortune at the bottom of the value pyramid, Prahalad today said that Indians need to "straddle the pyramid" to make the India@75 vision happen.
On the civic side, he said the prerequisites for growth were an emphasis on individual rights as against group rights and the urgent need to treat corruption as treason. "A nation becomes less corrupt before it gets rich," he had said at the India@60 event.
Friday, May 09, 2008
U.S. Stocks Decline on AIG's Loss; Delta Retreats on Record Oil
U.S. stocks fell, sending the market to its first weekly drop in a month, as American International Group Inc.'s plan to raise $12.5 billion to cover writedowns renewed concern more losses are coming in the financial industry.
AIG, the world's biggest insurer, tumbled to a two-month low and posted the steepest decline in the Dow Jones Industrial Average Delta Air Lines Inc. and Carnival Corp. led declines among companies hurt by higher fuel costs as oil climbed to a record for a fifth day. Mylan Inc., the largest U.S. maker of generic medicines, retreated the most since February after posting a wider first-quarter loss and sales that trailed analysts' estimates. Stocks slumped in Europe and Asia.
The Standard & Poor's 500 Index sank 10.3, or 0.7 percent, to 1,387.38 at 10:15 a.m. in New York, giving it a 1.9 percent decline this week. The Dow slid 104.86, or 0.8 percent, to 12,761.92. The Nasdaq Composite Index lost 11.37, or 0.5 percent, to 2,439.87. More than two stocks fell for each that rose on the New York Stock Exchange.
``We're still cautious on the financials,'' said Julie Van Cleave, who oversees $4.5 billion as head of large U.S. growth stocks at Deutsche Asset Management in Milwaukee. ``People have been looking for the easy turn. It will take another couple of quarters before we're at a point where we feel more comfortable making a bigger allocation.''
The S&P 500 is down 5.7 percent this year as losses at the world's largest financial firms have climbed to more than $321 billion following the collapse of the subprime mortgage market. Profits have slumped 18 percent on average for the 420 companies in the index that have reported first-quarter results so far, led by an 86 percent decline at financial companies, data compiled by Bloomberg show.
AIG Tumbles
AIG tumbled $2.67, or 6.1 percent, to $41.48. The insurer reported a first-quarter net loss of $7.81 billion, compared with earnings of $4.13 billion a year earlier. AIG wrote down contracts it had sold to protect investors by $9.11 billion in the quarter to comply with rules that require the company to estimate their present market value. Standard & Poor's and Fitch Ratings cut the company's credit grades after the announcement.
Citigroup Inc. the biggest U.S. bank by assets, slipped 7 cents to $24.23 on plans to ``wind down'' about $400 billion of assets as part of a program to return to profitability. The bank announced the wind-down today in a presentation posted on the company's Web site. The New York-based company, which lost $5.1 billion in the first quarter, has recorded more than $40 billion of credit losses and writedowns since the subprime mortgage market collapsed last year.
Delta, Mylan
Delta Air Lines dropped 2.6 percent to $7.37. Crude oil rose to a record above $126 a barrel, set for the biggest weekly gain in more than a year, on speculation Nigerian export cuts may curb U.S. supplies during the peak summer driving season.
Carnival, the largest cruise-line company, slumped 1.6 percent to $39.81.
Fuel expenses for the U.S. major airlines now represent about 40 percent of total costs for the industry, according to a research report by Merrill Lynch & Co. distributed yesterday.
Mylan fell 8.3 percent to $11.43, the second-biggest drop in the S&P 500. The largest U.S. maker of generic medicines reported a wider first-quarter loss on costs tied to the $6.9 billion purchase of Merck KGaA's generics division in October.
McDonald's Corp. fell 45 cents to $59.32. Goldman Sachs Group Inc. removed the world's largest restaurant company from its ``conviction buy list'' and added Burger King Holdings Inc. McDonald's had risen 16 percent since being added to the list June 12, and additional gains may be ``muted'' in the coming months, Goldman analysts led by Steven T. Kron wrote in a report. Burger King may benefit from price increases and extended summer hours, Goldman said.
Burger King fell 37 cents to $27.80.
Priceline.com
Priceline.com Inc. surged $15.63, or 13 percent, to $139.41. The Internet travel agency featuring William Shatner as its spokesman said annual profit, excluding some items, may be as much as $5.65 a share. That topped the average analyst estimate of $5.09 a share. First-quarter revenue gained 34 percent as international sales more than doubled, the company said.
Stocks failed to pare losses after the government said the U.S. trade deficit narrowed more than forecast in March as imports dropped by the most in more than six years, reflecting the economic slowdown. The gap shrank to $58.2 billion, the lowest this year, from a revised $61.7 billion in February, the Commerce Department said.
AIG, the world's biggest insurer, tumbled to a two-month low and posted the steepest decline in the Dow Jones Industrial Average Delta Air Lines Inc. and Carnival Corp. led declines among companies hurt by higher fuel costs as oil climbed to a record for a fifth day. Mylan Inc., the largest U.S. maker of generic medicines, retreated the most since February after posting a wider first-quarter loss and sales that trailed analysts' estimates. Stocks slumped in Europe and Asia.
The Standard & Poor's 500 Index sank 10.3, or 0.7 percent, to 1,387.38 at 10:15 a.m. in New York, giving it a 1.9 percent decline this week. The Dow slid 104.86, or 0.8 percent, to 12,761.92. The Nasdaq Composite Index lost 11.37, or 0.5 percent, to 2,439.87. More than two stocks fell for each that rose on the New York Stock Exchange.
``We're still cautious on the financials,'' said Julie Van Cleave, who oversees $4.5 billion as head of large U.S. growth stocks at Deutsche Asset Management in Milwaukee. ``People have been looking for the easy turn. It will take another couple of quarters before we're at a point where we feel more comfortable making a bigger allocation.''
The S&P 500 is down 5.7 percent this year as losses at the world's largest financial firms have climbed to more than $321 billion following the collapse of the subprime mortgage market. Profits have slumped 18 percent on average for the 420 companies in the index that have reported first-quarter results so far, led by an 86 percent decline at financial companies, data compiled by Bloomberg show.
AIG Tumbles
AIG tumbled $2.67, or 6.1 percent, to $41.48. The insurer reported a first-quarter net loss of $7.81 billion, compared with earnings of $4.13 billion a year earlier. AIG wrote down contracts it had sold to protect investors by $9.11 billion in the quarter to comply with rules that require the company to estimate their present market value. Standard & Poor's and Fitch Ratings cut the company's credit grades after the announcement.
Citigroup Inc. the biggest U.S. bank by assets, slipped 7 cents to $24.23 on plans to ``wind down'' about $400 billion of assets as part of a program to return to profitability. The bank announced the wind-down today in a presentation posted on the company's Web site. The New York-based company, which lost $5.1 billion in the first quarter, has recorded more than $40 billion of credit losses and writedowns since the subprime mortgage market collapsed last year.
Delta, Mylan
Delta Air Lines dropped 2.6 percent to $7.37. Crude oil rose to a record above $126 a barrel, set for the biggest weekly gain in more than a year, on speculation Nigerian export cuts may curb U.S. supplies during the peak summer driving season.
Carnival, the largest cruise-line company, slumped 1.6 percent to $39.81.
Fuel expenses for the U.S. major airlines now represent about 40 percent of total costs for the industry, according to a research report by Merrill Lynch & Co. distributed yesterday.
Mylan fell 8.3 percent to $11.43, the second-biggest drop in the S&P 500. The largest U.S. maker of generic medicines reported a wider first-quarter loss on costs tied to the $6.9 billion purchase of Merck KGaA's generics division in October.
McDonald's Corp. fell 45 cents to $59.32. Goldman Sachs Group Inc. removed the world's largest restaurant company from its ``conviction buy list'' and added Burger King Holdings Inc. McDonald's had risen 16 percent since being added to the list June 12, and additional gains may be ``muted'' in the coming months, Goldman analysts led by Steven T. Kron wrote in a report. Burger King may benefit from price increases and extended summer hours, Goldman said.
Burger King fell 37 cents to $27.80.
Priceline.com
Priceline.com Inc. surged $15.63, or 13 percent, to $139.41. The Internet travel agency featuring William Shatner as its spokesman said annual profit, excluding some items, may be as much as $5.65 a share. That topped the average analyst estimate of $5.09 a share. First-quarter revenue gained 34 percent as international sales more than doubled, the company said.
Stocks failed to pare losses after the government said the U.S. trade deficit narrowed more than forecast in March as imports dropped by the most in more than six years, reflecting the economic slowdown. The gap shrank to $58.2 billion, the lowest this year, from a revised $61.7 billion in February, the Commerce Department said.
Oil Climbs Above $126 to Record as Euro Advances Against Dollar
Crude oil rose above $126 a barrel in New York to a record as the euro and yen advanced against the dollar, prompting investors to buy commodities.
The euro strengthened on signs the European Central Bank will keep rates at a six-year high to cut inflation. Dollar-based commodities like oil are often bought to counter the currency's weakness. Nigerian output fell to the lowest this decade in April because of a strike and attacks on oil installations.
``Oil is a safe haven because of the weak dollar and how badly the financial sector has been doing,'' said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. ``There are also geopolitical concerns about places like Nigeria and Venezuela that are propping prices up.''
Crude oil for June delivery rose $2.09, or 1.7 percent, to $125.78 a barrel at 9:28 a.m. on the New York Mercantile Exchange. The contract surged to a record $126.20 today. Prices are up 8.4 percent this week, the biggest weekly gain in more than a year. Futures are more than double from a year ago.
Brent crude oil for June settlement climbed $2.86, or 2.3 percent, to $125.70 a barrel on London's ICE Futures Europe exchange. The contract touched a record $125.90 today.
Goldman Sachs analyst Arjun N. Murti wrote in a report on May 6 that ``the possibility of $150-$200 per barrel seems increasingly likely over the next six-24 months.'' Murti first wrote of a ``super spike'' in March 2005, predicting crude may trade between $50 and $105 a barrel through 2009.
Fund Buying
``There's been a paradox, prices have surged over the last week while we've had bearish headlines,'' said Nauman Barakat, senior vice president of global energy futures at Macquarie Futures USA Inc. in New York. ``Clearly there's been a lot of fund buying on the back of Goldman's super-spike repot. They were right on the nose last time.''
The Organization of Petroleum Exporting Countries, the producer of more than 40 percent of the world's oil, may meet before September to consider increasing output in an attempt to rein in record crude-oil prices, Libya's Shokri Ghanem said.
``We would consider among other options the possibility of increasing output as a way to ensure market stability,'' Ghanem, who is the chairman of Libya's National Oil Corp., said in a telephone interview today from Tripoli.
The euro strengthened on signs the European Central Bank will keep rates at a six-year high to cut inflation. Dollar-based commodities like oil are often bought to counter the currency's weakness. Nigerian output fell to the lowest this decade in April because of a strike and attacks on oil installations.
``Oil is a safe haven because of the weak dollar and how badly the financial sector has been doing,'' said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. ``There are also geopolitical concerns about places like Nigeria and Venezuela that are propping prices up.''
Crude oil for June delivery rose $2.09, or 1.7 percent, to $125.78 a barrel at 9:28 a.m. on the New York Mercantile Exchange. The contract surged to a record $126.20 today. Prices are up 8.4 percent this week, the biggest weekly gain in more than a year. Futures are more than double from a year ago.
Brent crude oil for June settlement climbed $2.86, or 2.3 percent, to $125.70 a barrel on London's ICE Futures Europe exchange. The contract touched a record $125.90 today.
Goldman Sachs analyst Arjun N. Murti wrote in a report on May 6 that ``the possibility of $150-$200 per barrel seems increasingly likely over the next six-24 months.'' Murti first wrote of a ``super spike'' in March 2005, predicting crude may trade between $50 and $105 a barrel through 2009.
Fund Buying
``There's been a paradox, prices have surged over the last week while we've had bearish headlines,'' said Nauman Barakat, senior vice president of global energy futures at Macquarie Futures USA Inc. in New York. ``Clearly there's been a lot of fund buying on the back of Goldman's super-spike repot. They were right on the nose last time.''
The Organization of Petroleum Exporting Countries, the producer of more than 40 percent of the world's oil, may meet before September to consider increasing output in an attempt to rein in record crude-oil prices, Libya's Shokri Ghanem said.
``We would consider among other options the possibility of increasing output as a way to ensure market stability,'' Ghanem, who is the chairman of Libya's National Oil Corp., said in a telephone interview today from Tripoli.
MARKET PREDICTION
OIL IS MOVING TOWARDS NEW HIGH AND SOME OF OUR ANALYST MR VISHNU ESTIMATING IT TO TOUCH $130 LEVEL WITHIN A MONTH...WHICH COULD TURNS THE THINGS IN WORST.
OVER THE LAST FEW DAYS WE HAVE SEEN DRASTIC DECREASE IN VOLUME, WHICH CLEARLY SHOWS THAT INVESTORS ARE WAITING FOR RIGHT TIME.
BUT BESIDE ALL THESE THINGS WE HAVE SEEN SOME ADDITION IN OI WHICH CLEARLY SPECIFY THAT INVESTORS BECOME CHOOSY.
MARKET VIEW
SUPPORT: 5000
SL : 4970 FOR ALL INTRADAY LONG POSITION
WEEKLY TRGT: 5200/5210.
STOCKS
OVER THE LAST FEW DAYS WE HAVE SEEN DRASTIC DECREASE IN VOLUME, WHICH CLEARLY SHOWS THAT INVESTORS ARE WAITING FOR RIGHT TIME.
BUT BESIDE ALL THESE THINGS WE HAVE SEEN SOME ADDITION IN OI WHICH CLEARLY SPECIFY THAT INVESTORS BECOME CHOOSY.
MARKET VIEW
SUPPORT: 5000
SL : 4970 FOR ALL INTRADAY LONG POSITION
WEEKLY TRGT: 5200/5210.
STOCKS
- TATA STEEL, GTOFFSHORE, ARVINDMILL.
- APIL(WITHSL 590)
HAVE A NICE TRADING DAY...
-MR SAM
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