Yvo de Boer, Executive Secretary, UNFCC, at an OPEC seminar, says "OPEC part of the solution to climate change, not part of the problem" (source: UNFCC website). He might have actually committed a faux pas by making a statement like this. The world's largest cartel's greed sees no end and oil at $100 per barrel is just a matter of time. Higher the price of oil, higher will be the investment in "Green Technologies". Did Yvo de Boer mean OPEC's greed helps the cause of reversing climate change ?
What about a new slogan for green initiatives - "Opec's Envy, IPCC's Pride", on the lines of Onida's tagline ('Neighbor's Envy, Owner's Pride').
The IPCC report released yesterday points to some ominous signs. Not only does the report suggest that humankind is the cause of global warming, but also states that the results of inaction could be devastating.
United Nations Climate Change conference will be held in Indonesia during the first two weeks of December. Policymakers will begin to discuss a global climate change treaty that will replace the Kyoto protocol, expiring in 2012. Can they persuade the US and Australia to finally commit to reducing emissions ? And what about India and China ? Though the per capita emissions of these countries is far lower than the developed nations, there will be increasing pressure on them to commit to capping the overall emissions.
Meanwhile, climate change has become a big business and this lobby could induce a change in the stance of of politicians who believe that climate change action could hurt the economy. Policymakers are looking at near-term concerns, but one cannot miss the point that only those nations that are endowed with fossil fuels have to worry in the long run, unless they act decisively to invest their spoils (accrued through the high price of oil) in taking stakes in companies that own 'green technologies'.
Sunday, November 18, 2007
Monday, April 9, 2007
Bangalore - the new home to IBM's Chief HR Officer ??
The Economist carries an interesting article:
Hungry Tiger, Dancing Elephant - How India is changing IBM's world
The article analyzes how IBM is changing its business strategy to take advantage of the talent-pool available in India. India is fast becoming the country that houses the maximum number of IBM employees. IBM's business in India is growing @ 40% to 50%. IBM has realized that to compete with top-tier Indian companies it needs to leverage the global service delivery model (pioneered by Tata Consultancy Services - India's largest IT services company) - the model comprising of onsite, offshore and nearshore business development centres.
People who have worked at some point in time in the Indian software industry would know that TCS has a much better and robust business model when compared to the other top-tier companies. Its clientile, focus on innovation and creation of knowledge assets, best-in-class processes, and a deep talent pool have placed it in a strong position to leverage the opportunites that globalization creates, without eroding its short-term competitiveness.
IBM's chief procurement officer John Paterson moved office to China. (Read http://av.blogspot.com/2007/04/offshoring-corner-office.html)
I would not be surprised if within the next couple of years, IBM's Chief HR Officer moves office to Bangalore...
Hungry Tiger, Dancing Elephant - How India is changing IBM's world
The article analyzes how IBM is changing its business strategy to take advantage of the talent-pool available in India. India is fast becoming the country that houses the maximum number of IBM employees. IBM's business in India is growing @ 40% to 50%. IBM has realized that to compete with top-tier Indian companies it needs to leverage the global service delivery model (pioneered by Tata Consultancy Services - India's largest IT services company) - the model comprising of onsite, offshore and nearshore business development centres.
People who have worked at some point in time in the Indian software industry would know that TCS has a much better and robust business model when compared to the other top-tier companies. Its clientile, focus on innovation and creation of knowledge assets, best-in-class processes, and a deep talent pool have placed it in a strong position to leverage the opportunites that globalization creates, without eroding its short-term competitiveness.
IBM's chief procurement officer John Paterson moved office to China. (Read http://av.blogspot.com/2007/04/offshoring-corner-office.html)
I would not be surprised if within the next couple of years, IBM's Chief HR Officer moves office to Bangalore...
Sunday, April 8, 2007
Private Equity Boom - How long will it last ??
MUST READ
An amazing article (in the CFO magazine dated 1st Apr, 2007) on the private equity (PE) boom
http://www.cfo.com/article.cfm/8909971/1/c_8910395?f=home_magazine
Refer to my comments posted on this blog on March 30th
http://av.blogspot.com/2007/03/fallout-of-ballooning-asset-bubble.html
An amazing article (in the CFO magazine dated 1st Apr, 2007) on the private equity (PE) boom
http://www.cfo.com/article.cfm/8909971/1/c_8910395?f=home_magazine
Refer to my comments posted on this blog on March 30th
http://av.blogspot.com/2007/03/fallout-of-ballooning-asset-bubble.html
Making Mumbai an International Financial Centre
A high-powered expert committee has come out with a report on how Mumbai can join the league of New York and London in the export of International Financial Services.
A summary of the report:
http://finmin.nic.in/press_room/2007/gist_of_report.pdf
It is a well-known fact that India has the basic ingredients for Mumbai to emerge as a world-class IFC. Technologically advanced stock exchanges, intellectual capital, a growing domestic economy, and its strong and independent institutions (market regulation, democracy, judiciary, and the press).
However, the report cites inadequate liquidity in the debt, currency, and related derivatives markets as a major hindrance. The debt for the recent large M&A deals announced by Indian companies were raised abroad. Apart from foreign debt being cheaper, the Indian market does not have the liquidity to manage such deal sizes.
The Reserve Bank of India is uncomfortable with speculative positions on currency. It allows taking positions only for hedging balance sheet exposure. The committee has recommended full capital convertibility (removal of all restrictions on currency transactions).
The report also urges the government to act to bring Mumbai upto world standards in urban infrastructure and governance, so that it attracts immigrants from all over the world.
In a lighter vein, if Mumbai does indeed become an IFC, inbound immigration service could become a great money spinner sooner than later.
A summary of the report:
http://finmin.nic.in/press_room/2007/gist_of_report.pdf
It is a well-known fact that India has the basic ingredients for Mumbai to emerge as a world-class IFC. Technologically advanced stock exchanges, intellectual capital, a growing domestic economy, and its strong and independent institutions (market regulation, democracy, judiciary, and the press).
However, the report cites inadequate liquidity in the debt, currency, and related derivatives markets as a major hindrance. The debt for the recent large M&A deals announced by Indian companies were raised abroad. Apart from foreign debt being cheaper, the Indian market does not have the liquidity to manage such deal sizes.
The Reserve Bank of India is uncomfortable with speculative positions on currency. It allows taking positions only for hedging balance sheet exposure. The committee has recommended full capital convertibility (removal of all restrictions on currency transactions).
The report also urges the government to act to bring Mumbai upto world standards in urban infrastructure and governance, so that it attracts immigrants from all over the world.
In a lighter vein, if Mumbai does indeed become an IFC, inbound immigration service could become a great money spinner sooner than later.
Saturday, April 7, 2007
Buffett's Annual Letter to Shareholders
Every year Warren Buffett, the world’s most legendary (and richest) investor, makes his annual letter to shareholders public. As always, the 2007 letter is a good read (its labeled “2006″ because its a report about last year).
As always, this year, his thoughts range quite widely. A few parts caught my attention:
His company increased in value by $ 16.9 billion in 2006 - the biggest single year value gain in corporate history (or so they think). Berkshire-Hathaway owns more than 60 companies, including insurance, clothing, furniture, jewelry and candy companies, restaurants, natural gas and corporate jet firms .
He has announced his retirement, but still don’t have a successor for him. But he is not handing over to children, nor ducking the decision. That would be to risk, in his own words, “decay… accompanied by my delusional thinking that I am reaching new heights of managerial brilliance”.
“Our most important business, insurance, benefited from a large dose of luck: Mother Nature, bless her heart, went on vacation. After hammering us with hurricanes in 2004 and 2005 — storms that caused us to lose a bundle on super-cat insurance — she just vanished. Last year, the red ink from this activity turned black, very black.”
Buffett expresses regret at the passing of traditional climate patterns, and had similar sentiments for the glory days of the newspaper industry (another big industry for Berkshire-Hathaway), where he thinks that “eroding fundamentals will overwhelm managerial brilliance”. Even if “non-economic buyers” emerge for newspapers “the ‘psychic’ value of possessing one will wane”.
Buffett does not expect that upcoming disclosure rules will put a stop to “astronomical” executive compensation, often unrelated to performance. That will “only occur if the largest institutional shareholders - it would only take a few - demand a fresh look at the whole system”.
As always, this year, his thoughts range quite widely. A few parts caught my attention:
His company increased in value by $ 16.9 billion in 2006 - the biggest single year value gain in corporate history (or so they think). Berkshire-Hathaway owns more than 60 companies, including insurance, clothing, furniture, jewelry and candy companies, restaurants, natural gas and corporate jet firms .
He has announced his retirement, but still don’t have a successor for him. But he is not handing over to children, nor ducking the decision. That would be to risk, in his own words, “decay… accompanied by my delusional thinking that I am reaching new heights of managerial brilliance”.
“Our most important business, insurance, benefited from a large dose of luck: Mother Nature, bless her heart, went on vacation. After hammering us with hurricanes in 2004 and 2005 — storms that caused us to lose a bundle on super-cat insurance — she just vanished. Last year, the red ink from this activity turned black, very black.”
Buffett expresses regret at the passing of traditional climate patterns, and had similar sentiments for the glory days of the newspaper industry (another big industry for Berkshire-Hathaway), where he thinks that “eroding fundamentals will overwhelm managerial brilliance”. Even if “non-economic buyers” emerge for newspapers “the ‘psychic’ value of possessing one will wane”.
Buffett does not expect that upcoming disclosure rules will put a stop to “astronomical” executive compensation, often unrelated to performance. That will “only occur if the largest institutional shareholders - it would only take a few - demand a fresh look at the whole system”.
Friday, April 6, 2007
Offshoring the Corner Office ???
The link below leads you to an excellent article. It explains how Globalization is creating a shift in the country from which senior management operates
http://www.cfo.com/article.cfm/8834573?f=related
Though the article discusses the phenomenon of senior management team operating in different locations to capitalize on business opportunites, the idea of moving decision making jobs to low-cost locations is increasingly debated in mainstream media.
George David, Chairman of United Technologies, a Fortune 50 company, had earned $88 million in compensation in 2005. He had jokingly suggested outsourcing his own job to India.
The advent of KPO as a business model has increasingly made analytics based decision making "outsourceable". Technology has reduced distance. Travel has become faster and easier.
In such a scenario, it may not be long before boards demand outsourcing management jobs to the country with a vast pool of high quality managers - India.
http://www.cfo.com/article.cfm/8834573?f=related
Though the article discusses the phenomenon of senior management team operating in different locations to capitalize on business opportunites, the idea of moving decision making jobs to low-cost locations is increasingly debated in mainstream media.
George David, Chairman of United Technologies, a Fortune 50 company, had earned $88 million in compensation in 2005. He had jokingly suggested outsourcing his own job to India.
The advent of KPO as a business model has increasingly made analytics based decision making "outsourceable". Technology has reduced distance. Travel has become faster and easier.
In such a scenario, it may not be long before boards demand outsourcing management jobs to the country with a vast pool of high quality managers - India.
Friday, March 30, 2007
Fallout of the ballooning asset bubble....
Global M&A topped 1 trillion USD in the first three months of this year (Jan '07 to Mar '07) reports Financial Times.
This is 15% higher than same period last year. What is causing such a frentic activity ? The surge of liquidity in the last two years, has been blamed for most of the excesses.
Is this a bubble that is likely to burst and have far reaching consequences on the economy ???
How do bubbles get created in the first place ? Bubbles are created when the fundamentals of an underlying asset are ignored and purchasing decisions are based on just one factor - "is someone likely to buy from me at higher price later?"
The newspaper DNA reported about Mumbai's first real estate bubble
http://www.dnaindia.com/report.asp?NewsID=1082931
The $1000 billion worth of deals would have been financed primarily through LBO funds and a sizeable portion of it would have involved private equity players. The modus operandi - borrow money cheap, buy out, show short term improvement in operations, sell out. But what is strange is that players like Blackstone are raising money by taking their company public rather than selling their investments - "same phenomenon of expecting to sell assets at a higher price eventually?"
Let us hope that there is no sudden panic which would cause manic deleveraging. Otherwise it would lead to severe pain in the world's financial system.
How do you protect yourself ? If you are holding on to a risky asset, it is time you diversified or managed the risk by buying some form of insurance.
This is 15% higher than same period last year. What is causing such a frentic activity ? The surge of liquidity in the last two years, has been blamed for most of the excesses.
Is this a bubble that is likely to burst and have far reaching consequences on the economy ???
How do bubbles get created in the first place ? Bubbles are created when the fundamentals of an underlying asset are ignored and purchasing decisions are based on just one factor - "is someone likely to buy from me at higher price later?"
The newspaper DNA reported about Mumbai's first real estate bubble
http://www.dnaindia.com/report.asp?NewsID=1082931
The $1000 billion worth of deals would have been financed primarily through LBO funds and a sizeable portion of it would have involved private equity players. The modus operandi - borrow money cheap, buy out, show short term improvement in operations, sell out. But what is strange is that players like Blackstone are raising money by taking their company public rather than selling their investments - "same phenomenon of expecting to sell assets at a higher price eventually?"
Let us hope that there is no sudden panic which would cause manic deleveraging. Otherwise it would lead to severe pain in the world's financial system.
How do you protect yourself ? If you are holding on to a risky asset, it is time you diversified or managed the risk by buying some form of insurance.
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