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Sunday, March 1, 2020

economic news of india - world economic news - economics news for students - indian economy news

economic news of india - world economic news - economics news for students - indian economy news


Dalal Street prepares for Manic Monday as pandemic fears surge

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The panic that gripped the stock market last week, as Covid-19 spreads across the world, is expected to spill over to Monday. With the US Federal Reserve's efforts to pacify investors on Friday failing to stop the Dow Jones from plunging 1.4 per cent, analysts expect the market to slide further. The Nifty could drop by as much as 5 per cent from current levels if the index falls below the psychologically crucial 11,000-point level, they said.The Nifty tumbled 3.7 per cent to 11,202 on Friday, posting the biggest single-day fall in four and a half years on Friday.Last week, the benchmark indices — the Sensex and the Nifty — declined about 7 per cent, their biggest weekly drop since August 2009. Investor wealth was slashed by Rs 11.03 lakh crore.India's monitoring and quarantine system has kept the disease at bay so far but it may not be able to withstand the effects of a global downturn if Covid-19 continues to spread."I don't think there is a large economic impact as such in India but the impact is more on the market, which essentially reflects the market taking a riskoff approach, given the heightened uncertainties," said Sanjeev Prasad, cohead, Kotak Institutional Equities. 74432726 While US indices pared losses after Federal Reserve chair Jerome Powell's assurances that the central bank would take action if the US economy takes a hit from the coronavirus, they still ended weak, suggesting the market is expects aggressive rate cuts in 2020."The fundamentals of the US economy remain strong," Powel said. "However, the coronavirus poses evolving risks to economic activity. The Federal Reserve is closely monitoring developments and their implications for the economic outlook. We will use our tools and act as appropriate to support the economy."Wall Street has interpreted the statement as signalling a rate cut in the March 17-18 meeting but it's not anticipating one before that. The extent of the rate cut at the meeting and the accompanying commentary will be crucial for the market.Mohamed El Erian, chief economic adviser at Allianz, said in a tweet, "Many will be relieved to finally hear from him (Powell), especially given threats to the wellfunctioning of markets. What they won't get is a Fed solution to the economic sudden stops."Worries about a weakening global economy caused oil to post one of its worst weekly losses since 2008. Equity markets across the Middle East slumped in response to the drop in oil prices with Brent Crude falling below $50 a barrel last week. Saudi Arabia's main index fell 3.7 per cent. Saudi Aramco fell to its lowest level since an initial public offering in December.Chinas' official manufacturing PMI (purchasing managers' index) in February was 35.7, worse than the lowest reached previously during the global financial crisis during 2008-9 when the PMI was at 38.8 - 45.3. ING said China's weak manufacturing PMI will shock the market on Monday.At home, about 60 per cent of BSE 500 stocks are trading below their longterm average of the 200-day moving average — a key sentiment indicator — amid the rout in global markets as investors fret that the spreading global pandemic could lead to a recession worldwide. When the majority of the top stocks are below the 200 DMA, it suggests sentiment is bearish. Technical analysts said it will be critical for the Nifty to stay above 11,000, failing which the index could fall to 10,700.The torrent of foreign institutional selling seen last week is making investors skittish about the market's near-term prospects. Foreign investors have sold Indian equities to the tune of Rs11,200 crore in the past five days amid growing aversion to riskier emerging market equities. Analysts said stocks with higher foreign investor holdings will be most vulnerable to further declines if their sell-off continues.There have been more than 83,000 coronavirus cases across the globe, according to news reports, resulting in factory closures and profit warnings by companies such as Disney, Apple, British Airways, Microsoft and Qualcomm.

A Rs 2.5 lakh cr bomb is about to blow up

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KOLKATA: An additional 4% of outstanding corporate borrowings from banks, translating roughly into Rs 2.54 lakh crore could tip into default over the next three years if the pace of economic expansion doesn't pick up sufficiently.A study of top 500 private sector companies by India Ratings & Research showed that about Rs 10.5 lakh crore of their debt could turn vulnerable, which means borrowers could face difficulty in servicing these loans.These 500 debt-heavy borrowers have an outstanding loan book of Rs 39.28 lakh crore. Out of this, the existing default amounts to Rs 7.35 lakh crore loans.The size of system level corporate loan book stands at around Rs 64 lakh crore.The rating firm has done the study for its clients."The problem emanates from the inability of corporates to deploy their funds productively. The share of productive assets in the system has gone down sharply as incremental debt continues to be used to fund losses and even large sums of related-party transactions. This makes it imperative to strengthen corporate governance standards," said Arindam Som, an analyst at India Rating & Research.The predictions are based on the assumptions of 6% average real GDP growth in FY21 and FY22, with input cost not rising more than 4% and rupee not depreciating by more than 5%. Even if the average GDP growth rises to 7% over the same period, the incremental slippages could still be around Rs 1.98 lakh crore over the next three years, the analyst said.The Indian economy grew at 4.7% during the third quarter of FY20. India Ratings has predicted 5.5% GDP growth for FY21.In case the average real GDP growth slows to 4.5% over FY21-FY22, incremental delinquencies could be higher by an additional 159 basis points to 5.59% of the system debt, the study said.Som said the sectors that are most vulnerable now are iron & steel, residential real estate, engineering, procurement & construction (EPC), conventional power generation and telecom.The fresh default of Rs 2.54 lakh crore is likely to result in around Rs 1.37 lakh crore in credit costs, putting banks' profitability under more pressure. According to Reserve Bank of India's new rule, companies that delay in loan repayment by a single day are considered defaulters. A default does not necessarily mean that it would translate into non-performing assets. An account is classified as NPA if it is not serviced for 90 days.The report identified the quantum of vulnerable debt by analysing the refinancing risk and asset quality for 11 sectors and places each sector in its vulnerability matrix. The report further discussed the components of refinancing risk – business risk, liquidity and financial flexibility of the players in each sector.The firm had conducted a similar analysis in 2016 & said that the predictive ability of the analysis was very high, with around 67% of the extremely vulnerable issuers actually defaulting since then.

China-made phone, TV stocks start vanishing

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Kolkata: Supplies of iPhones and other handset brands are running low at shops in India as disruptions stemming from the Covid-19 outbreak in China start to bite. Also hit are Xiaomi, TCL and Realme phones, said multiple cellphone and electronic retailers. In the past week to 10 days, only 10-20% of the usual number have been sent to stores, they said.Apple is the worst hit with many stores saying the iPhone 11series has almost dried up as have some models of the Apple Watch, according to three senior industry executives.Supplies of the locally manufactured iPhone XR and 7 are not impacted, they said TCL and Xiaomi televisions too are in short supply and Xiaomi is postponing its entry into air-conditioners by a few weeks. The fourth-largest smartphone brand Realme is facing a squeeze on the supply of new smartphone models like the C3 and 5i, the executives said. 74432366 Retailers said discounts on products have come down and some products such as iPhones, MacBook computers and Apple Watches are now sold at the sticker price in offline stores. While plants have resumed operations in China, they are functioning at about 35-50% of capacity. As a result, the prices of some components have already risen, forcing manufacturers to increase the prices of TVs, some smartphones and ACs by 5-10% from this month."There are supply issues for several brands. There is no clarity when the situation will normalise," said Nilesh Gupta, director at Vijay Sales, a leading electronics retailer in Mumbai and New Delhi. "If it doesn't get corrected fast, we may move into a stock-out situation from next month."Retailers Start Stocking upVishal Mewani, director of Mumbai's leading chain Kohinoor Electronics, said the impact is more for brands like Realme, TCL and Xiaomi. "We are getting 10-20% of the required quantity," he said.A Xiaomi India spokesperson said the extended shutdown in China has led to a small impact on the supply chain for televisions for early March. "We are working towards balancing the demand in India which should be met soon," the person said. The foray into ACs is speculative and Xiaomi won't comment on that, the person said.Realme India said there was a shortage of a few imported components due to factories of several vendors having postponed resumption after recent closures. But almost all major suppliers are back at work and the situation will improve soon, the spokesperson said. Realme said workers at the factories are working multiple shifts and it is confident of launching new products as planned.Apple did not respond to queries. TCL India declined to comment.Fearing disruption, retailers have started stocking up on some products such as air conditioners, imported TVs, washing machines and refrigerators. Retailers are building up inventory anticipating short-term supply constraints, said Pulkit Baid, director at Great Eastern Retail, a leading chain in the east and the north.Most consumer electronics and smartphone makers are heavily dependent on China for the manufacture of finished products and components. The virus has also spread to South Korea, which is home to Samsung and LG. South Korea is a base for imported products sold in India and high-end components.Apple was the first to say last month that supplies from China had been badly hit as manufacturing partners are ramping up production slower than expected.The senior executive of an Apple exclusive store chain said distributors have indicated supplies will normalise only by April since most production is being routed to the US and Europe. "Business is down by 50% last week and March is looking bleak," he said.

PMT Fields Case: UK court denies Indian govt's appeal

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New Delhi: A UK court has denied the Indian government permission to appeal a recent order that potentially reduced the liability of Reliance, Shell and ONGC in the ongoing arbitration over the finances of the Panna, Mukta and Tapti (PMT) oil and gas fields, sources familiar with the matter said.The court on Friday denied government the leave to appeal in the so-called 'agreement case' in the decade-old PMT dispute over sharing of profit between the government and three companies that operated the fields. This apparently means the arbitration panel would have to reconsider the issue in view of the court's latest order, sources said.The British court had earlier rejected most issues raised by the companies against the arbitration panel's earlier order, which largely upheld the government's contention in the dispute.74432384 No Hints on Govt's Legal OptionsThe government has estimated that the partners need to pay $4.5 billion including interest, while the companies say the amount would depend on the final arbitration award.The government has not given any indication of whether it can or would explore more legal options before taking the matter back to the tribunal, while Shell said it was premature to comment."We cannot comment as the court processes in various jurisdictions are still ongoing. The eventual impact of these processes will only be clear upon conclusion of the arbitration process. We are not in a position to state anything further at this stage," a spokesperson for Shell said. Queries emailed to Reliance Industries and the oil ministry elicited no response till the time of going to press on Sunday.The dispute between the government and erstwhile stakeholders in PMT fields — Reliance Industries and Shell (formerly BG Exploration) — has been over the state's share of income from these fields. RIL and Shell owned 30% participating interest each in the PMT fields while ONGC owned the balance 40% until last year when the production contract expired. ONGC, which now fully controls the field, is not part of the arbitration but will have to share any liability that may arise after the final award is announced.The arbitration has stretched for a decade and the matter has oscillated between court and arbitration tribunal for three years and is still at least several months away from any resolution, as per people with knowledge of the matter.In October 2016, the arbitration tribunal pronounced a Final Partial Award that went largely in favour of the government, following which the oil ministry computed the three oil companies' liability and directed them in May 2017 to pay up the differential share of profit and royalty of $3.9 billion. The companies refused to pay, saying the award had been challenged in an English Court and the liability not yet quantified by the tribunal.The government, in turn, went to the Delhi High Court to enforce the award, and last year also urged the court to restrain sale of assets by Reliance until the money needed to pay up its liability in the PMT case is secured. The Centre's estimate of liability has now jumped to $4.5 billion after including interest that must be jointly paid by Reliance, Shell and ONGC in proportion to their stakes in the PMT fields.The dispute is over issues such as the income tax rate considered to calculate profit from fields and the inclusion of marketing margin in sales price for computing the profit share and royalty, and cost recovery limit. The tribunal is slated to hear a key issue of cost recovery limit this month in London.

Niti Aayog, health ministry reach consensus on Medical Devices Bill

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NEW DELHI: Government think tank Niti Aayog and the health ministry have arrived at a consensus on the Medical Devices Bill, according to sources, ending months of wrangling over several issues, including what will encourage domestic manufacturing.Sources told ET that the final draft of the Medical Devices (Safety, Effectiveness and Innovation) Bill, 2019, proposes that medical devices should be regulated by a separate division under the Central Drugs Standard Control Organisation (CDSCO)."All stakeholders have arrived at a consensus over the bill and we will soon make a presentation before the PMO (Prime Minister's Office) for their approval," one of the people cited earlier told ET, requesting not to be named.The division that will monitor medical devices will be headed by a technical expert, and there will be no separate regulator, as conceptualised by the Aayog earlier.Besides, the regulation of the devices will be under a separate Act and not under the Drugs and Cosmetics Act, 1940, as was being pushed by the health ministry.This follows several rounds of discussions over the last few months to resolve the impasse created by the Aayog and the ministry pushing their own prescriptions.A consensus was arrived at after the PMO intervened, given the urgency to push domestic manufacturing of medical devices in a big way to bring down costs as well as reduce imports.However, the decision to use IIT labs for certification of these devices, as well as ensuring that certification is of global standards and there is no need for dual certification, would be taken up at a later stage once the Bill is passed by Parliament, the person cited earlier told ET.The ministry will soon move a cabinet note on this. After approval, the Bill will be tabled in Parliament.The CDSCO, under the health ministry, regulates the safety, efficacy and quality of notified medical devices under the provisions of the Drugs and Cosmetics Act, 1940, and Rules made there under.74432492 However, this has been a bone of contention between the ministry and the Aayog, with the latter being of the view that drugs and devices are two different things and cannot be regulated by a drug expert.Currently, only 23 categories of medical devices are regulated in India under the Drugs and Cosmetics Act.74432495 The health ministry had recently notified that all medical devices will be brought under regulation in a phased manner. It has proposed seven categories of devices intended for use in human beings or animals, categorising them as drugs with effect from December 1, 2019.Ultrasound equipment would be under the category of drugs from November 1, 2020.74432502 At over $15 billion, India's medical devices market is the fourth largest in Asia after Japan, China and South Korea, and is projected to grow to $50 billion by 2025. India imports 80% of its medical devices.

M&M in talks with Ashok Leyland, Renault & Hyundai to supply electric powertrains

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MUMBAI:Mahindra and Mahindra has initiated talks with Ashok Leyland, Renault and Hyundai to supply its electric powertrain to its peers, seeking to establish its credentials in a mobility segment that many believe would soon alter the dynamics of the hitherto fuelfired automotive industry. Executives said that while discussions with Renault and Hyundai are at a preliminary stage, talks with Ashok Leyland have advanced, with the two companies examining possible synergies. For electric vehicles to be commercially viable, the EV industry needs to have scale and localise."If every OEM starts buying from different sources, costs will be high. (If you) supply to multiple sources, there will be economies of scale," said Pawan Goenka, MD of Mahindra & Mahindra and chairman of Mahindra Electric, which is free to sell electric powertrains to its direct rivals. Justifying asset-specific investments in electric powertrains will be difficult for every manufacturer. For instance, an OEM cannot set up a lithium ion plant only for its own use. Such a plant will need to cater to 1 lakh vehicles and volumes might not justify investments by any one manufacturer. "There is enough for everyone in the EV game as it's a game that's just starting and it would only improve the overall EV ecosystem," said Goenka. Hyundai has been looking at multiple partnerships to localise, seeking to ensure that EVs become mainstream and affordable. Ashok Leyland is also is quite open to the idea of working with partners on electric vehicle technology, an idea which has been resonated by its management. The truck major has partnered with Chetan Maini-promoted Sun Mobility to launch the Circuit S, an electric bus powered by the latter's swappable battery technology. 74431156 "OEMs need to come together to pool resources and create a much better ecosystem for EVs in India. It makes sense to collaborate and co-create solutions to realise the 'electric dream. Automakers have been doing this for decades. Fiat's engine business is a very good recent example," said Avik Chattopadhyay, founder at Expereal, a consultancy firm. "What Mahindra provides has to be better than a Panasonic or CATL or LG Chem as they are the domain experts." Mails sent to Ashok Leyland and Renault remained unanswered. Mahindra is bullish on the technology parameter and is keen on providing electric powertrains for third-party usage which signals a shift from its earlier EV strategy of bringing in electric vehicles. The company has announced an investment exceeding Rs 1,250 crore in the next three years on EVs. "I believe OEMs will work closely with specialised technology companies and powertrain technologies need to come from technology providers," said BVR Subbu, former president, Hyundai India and currently on the board of companies involved in e-mobility.Experts believe 'specialist groupings' would develop and point to possibilities like Comstar-Sona, Mahle-Graziano, etc. developing e-driveline capabilities in India.

Tweet Buster: St in ‘panicdemic’ & why RBI can’t soften virus hit

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NEW DELHI: The week gone by freshened up memories of 2008 financial crisis as global stock markets plummeted following the spread of coronavirus to more than 50 countries. As the world grappled with the economic implications of the crisis, investors were busy fleeing towards safe haven assets such as bonds and gold. BSE benchmark Sensex nosedived 1,448 points alone on Friday to log its second-worst pointwise decline in history. No sector was left unscathed.ETMarkets.com did a roundup of what the top market minds made of this move and what they predict going ahead. On a lighter note, chairman of Mahindra Group Anand Mahindra proposed a new term for the coronavirus panic-induced market crash: 'Panicdemic'.Time to coin a new phrase. When markets panic over a pandemic is it a 'panicdemic?'— anand mahindra (@anandmahindra) 1582869920000 Independent market expert Sandip Sabharwal seems to find opportunity amid this crisis. The expert would like to buy this market fall, yet he is unsure it has reached the bottom yet.As a BULL I have a strong urge to Buy now after such a severe sell off Controlling those urges as the worst might… https://t.co/hxDGVnXyBk— sandip sabharwal (@sandipsabharwal) 1582861969000 Sabharwal in another tweet said India unlike other times is better placed to face the crash and is no longer part of the "fragile" club. He finds India's forex reserve, strong FDI inflows and low inflationary pressures as a cushion against market selloff.The good part for #India this time Vs previous market selloffs is that - Our external position is strong with reco… https://t.co/pikfe8Alzz— sandip sabharwal (@sandipsabharwal) 1582620620000 In another tweet, he said the fall could play out over the next 2-3 weeks, but could be well over before the summer comes and the possibility of coronavirus spreading recedes. People try to find a bottom after just ONE day of a Nasty #StockMarket selloff Not so fast The time will come soon… https://t.co/g9p6w42ayY— sandip sabharwal (@sandipsabharwal) 1582549364000 #Coronavirus outbreak is a Non Linear event. As such predicting its effect in terms of duration and extent on the… https://t.co/Tms38dZdEt— sandip sabharwal (@sandipsabharwal) 1582809518000 Value investor Jiten Parmar advised investors to not invest in companies that are likely to benefit from the spread of coronavirus in the short term, instead he advised them to focus on sectors with long term tailwinds.Do not make investment decisions based on short term benefits to certain companies/sectors due to CoVid 19. That ma… https://t.co/I5toyUOZus— Jiten Parmar (@jitenkparmar) 1582885481000 Safir Anand, who like Parmar is a value investor, made a case for India trying to capitalise on this opportunity to lure global giants to set up shop here. India should be using this opportunity to reach out to global giants to derisk from over dependence on china for ma… https://t.co/XxYk4yWocP— Safir (@safiranand) 1582831559000 Market veteran Shankar Sharma compared Dow and Nifty's movement correlation and wondered why don't Indian markets go equally higher as the US', but come down with the same momentum.I am very upset with the behavior of the Indian stock market. Jab saare Global markets chaley in last 1-2 years, to… https://t.co/WasMQH3OlF— Shankar Sharma (@1shankarsharma) 1582869431000 Chief Economic Adviser at Allianz, Mohamed A El-Erian pointed out that contracting China PMI due to the spreading coronavirus is further adding on to the pain points caused by the trade war. Shock number out of #China. The February #PMI for manufacturing came in at just 35.7(the consensus estimate was 45.… https://t.co/WHXS0YP139— Mohamed A. El-Erian (@elerianm) 1582938596000 El-Erian doesn't see the central bankers' action as a possible respite for tackling the issue. Here's why.In FINANCIAL sudden stops, #CentralBanks can resolve market failures and help restore economic activity #ECONOMIC s… https://t.co/GEb8nb8gqj— Mohamed A. El-Erian (@elerianm) 1582897846000 Back home, Sabharwal echoed the same view. Unfortunately #coronavirus led slowdown is not an event that Monetary Policy can address. It's both a Supply and De… https://t.co/mzWGaYjEvV— sandip sabharwal (@sandipsabharwal) 1582637565000 Investment tipsDespite all the gloom that engulfed markets here are some investment tips that experts have for Dalal Street investors. Sandip Sabharwal says pharma stocks could soon make a bottom and China supply disruption-led selloff could be the final nail in the coffin. After a long time we could actually be in a phase where many large Pharma Stocks could make a bottom. China Supply… https://t.co/kUL4FI4dnj— sandip sabharwal (@sandipsabharwal) 1582618023000 iThought co-founder Shyam Sekhar advises not tying money with sentiment but with goals."If you want a happy #investing life, tie your #Money decisions to goals. Not to sentiment and volatility. Returns… https://t.co/NXXen5uYGk— Shyam Sekhar (@shyamsek) 1582944379000 Sekhar also finds value in microcap stocks and says that during an economic rebound, it makes sense to have those in your portfolio.My sense is that #microcaps are definitely looking interesting. When the economy regains growth, it makes sense to… https://t.co/baveHjzZpm— Shyam Sekhar (@shyamsek) 1582892715000

View: Global markets are pricing in a coronavirus recession

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By Marcus AshworthGlobal markets have entered the meltdown stage, accelerating in the past few days beyond a relatively orderly stock-market correction. With coronavirus cases now on all continents this is no longer a domestic China problem; that suddenly dawned on complacent investors after last weekend's big outbreak in Italy.Hence the stampede to get into cash as lockdowns and states of emergency have multiplied, from Lombardy to Japan's northern island of Hokkaido. Any attempt by the stock markets to bounce is just being seen as an opportunity to offload more shares. This is a catch-up effect and is starting to look overdone.Yes, investors hate uncertainty and the deluge of virus warnings from businesses is alarming, but the markets are starting to price in a global recession and that doesn't seem a true reflection — at least, not yet — of the virus's impact. Largely, this is down to portfolio protection. It's also a symptom of the longest-ever bull market for equities; a catalyst for a long overdue correction that has been delivered all at once. As my colleague Chris Hughes has noted, many of the biggest European companies have problems that predate the virus scares. With an increasing amount of investments in passive index funds there's a shoal effect. Re-weighting out of equities into the perceived safety of bonds is the knee-jerk reaction, even if yields are non-existent. It becomes a return of capital game (that is, putting it back somewhere safe) rather than return on capital. Poor corporate results are going to be punished more heavily in a febrile market environment. 74426165 The U.S. economy in particular is still in decent shape. The U.K. is readying for its biggest fiscal boost in history and there are even signs Germany has got the message. Noises out of the European Commission are that budgetary limits can be eased. China has managed the crisis steadily and Japan cannot be far away from pulling the stimulus lever again. Are you listening G20? That is where the concerted political and economic response needs to come from.This is not a deadly killer like Ebola. Markets will eventually rationalize what's going on, and accept that the world can get back to business — with sensible precautions. There will be a first-quarter hit to global growth, but it will hopefully be contained — so long as the virus is contained. Countries heavily dependent on tourism will suffer longer. Fixed-income markets in particular have got ahead of themselves in driving toward all-time lows. This effectively signals recession, with a further three U.S. Federal Reserve interest rate cuts now being priced in for this year. So far the reaction from the Fed, the European Central Bank and the Bank of Japan is that none will be forthcoming.This might change, of course, given the deep selloffs on Friday. But it's right for central bankers to keep a calmer head than market traders. A token Fed cut — or at least a promise of ongoing liquidity provision — wouldn't hurt in the short term. Christine Lagarde has said the ECB doesn't need to take action yet, but again some restricted measure might help confidence. This is both a demand and supply shock, given the strain it puts on global supply chains and on consumers and travelers. The reality is that there's very little central banks can do to arrest it — bar some symbolic nod to improve sentiment. The Hong Kong government even tried helicopter money this week, without any discernible effect. Monetary policy is practically useless in this context. It's down to governments to fire up the fiscal engines.(This column does not necessarily reflect the opinion of economictimes.com, Bloomberg LP and its owners)

Infosys sees a spot as insurance companies look to vet cyber infra of clients

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MUMBAI: Software services exporter Infosys is looking to win deals from insurance companies to assess the cyber infrastructure of potential clients before they firm up contracts.While insurance companies are creating their own cyber security services arms, IT services providers are looking at winning deals that involve usage of technology to carry out due diligence and underwriting work. Vishal Salvi, chief information security officer and head of cybersecurity practice at Infosys, said: "There are opportunities where we are at the early stages of exploration about looking at how we can collaborate with global insurance companies where they, for example, may call us to do due diligence on a particular client before they certify them for some cyber insurance."He said: "For organisations which want cyber security insurance, before they approach any insurance company, they may want to first upgrade their cyber security posture so that they get better terms with the insurance company. So that can generate a lot of work for us." Infosys' cyber security segment has been expanding in the last few quarters with new centres across the world providing managed services to clients.Revenue of the cyber security vertical is not reported separately, it is classified under the 'digital' business, which constituted 40.6% of total revenue at $1.31 billion at the end of the third quarter. Technology companies have been signing large contracts with insurance provides. Accenture and AXA XL recently signed a deal to collaborate on cybersecurity services to AXA's underwriters, brokers and clients.While analysts say the market for cyber security services in insurance is growing, Indian service providers are facing competition from global players in this space. "It is unclear that there is a large cyber security TAM (total addressable market) for Indian service providers. It does, however, provide them with a nose under the tent if they can utilise it to engage clients and their cyber security organisations as aresult of the need for this insurance. But I feel this is a clever trick shot, not a fundamental component of a successful cyber security channel to market," said Peter Bendor-Samuel, CEO of research and consulting firm Everest Group.

Capgemini to hire up to 30,000 employees in India this year

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Mumbai: French tech major Capgemini, which employs close to 1.15 lakh people in India, is looking to hire up to 30,000 employees in the country this year, as it seeks to derive more value from its presence here. The hiring will be evenly split between freshers and experienced professionals, or laterals, its country chief executive Ashwin Yardi told. The Indian workforce constitutes for over half of its global employees base. "India forms a very important part of our business and we will hire 25,000-30,000 people here this year on a gross basis," Yardi said. At present, it is focusing efforts on re-skilling employees for the technologies of the future, he said, adding that this has now become a continuous process. It has been found that youngsters under 30, who make up for over 65 per cent of its workforce, show a keenness to learn, he said, adding that it is conducting special programmes for the mid-level managers having 10-15 years of experience who would be placed as project managers or architects. Yardi said there has not been any "restructuring or involuntary attrition" beyond the normal course of exits due to performance-related issues. Clients have become more demanding, wherein employees have to be moved into a project on an immediate basis, Yardi said, adding that the utilisation levels have not been because the training and skilling activities take place along side project work for an employee. He said there is sufficient space at Airoli (near Mumbai), its biggest development centre, and also added that it has created capacity at other centres over the last two years which can accommodate the new joinees. At a time when some of its peers are laying a lot of stress on research and development activities and are filing for patents, the company has taken a call not to do 'blue sky thinking' and adopt the "applied innovation" concept to come up with client specific improvements, he said. The company is also not keen to play on the products front and is happy being a services company, he said. It can be noted that many IT companies are focusing on products, and claim that it helps them maintain or widen profit margins. The French company is also not investing in startups unlike some peers, but working jointly with over 150 of them on critical technologies, Yardi said. He said the company believes in offering an entire bouquet of services to a client to meet the entire spectrum of needs, and discloses the work done by a startup to the client. It has also hired a chief innovation officer from a startup recently, he said.

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