Summary: Heard on the Street

Wednesday, 01 August 2007

Mumbai is evolving into a hot yacht market! Second annual International Boat Show is scheduled next March. There about 7 million households in India earning between $10,000 and $100,000 a year. India's outbound investment through M & A activity is likely to exceed the inbound investment by $30 billion this year. There are 10,000 Indian-owned business in London alone employing about 49,000 employees. TCS employs 4000 employees in the U.K. and generates $800 million in revenue. Per capita income of Indians is expected to increase during the current fiscal year by 26% to $1021. About 5% of London's GDP is generated by Indian multinational companies and Indian-owned businesses. This amounts to $14.4 billion. After the U.S., India is the second largest creator of jobs in the U.K. Special Economic Zones (SEZ) are likely to generate directly and indirectly about 3 to 5 million jobs by 2009 according to the Secretary of the Commerce Ministry, Government of India. Robyn Meredith has just published a new book titled - "The Elephant and the Dragon". Check it out. Nokia has two thirds of the market share of cell phones in India! Motorola has about six percent. How come Nokia has been able to capture so much market share when Motorola is struggling to establish itself? The reason may be hidden in Motorola's poor quality handsets and lousy software interface. Not to mention that the cell phone battery in Motorola handsets die in less than two years! Indian and Chinese consumers are known to be extremely value conscious. Try selling poor quality inexpensive handsets to Indians and Chinese and they are going to run away faster than you could imagine. New automotive hub, India? Yes, that is what is in the plans. Hyundai has already announced its intentions to make India the automotive export hub. Renault teaming up with Bajaj to fullfill its dream small car. China has added $266 billion to its foreign exchange reserves in first half of 2007. This is more than what they added in entire 2006! China also has accumulated total of $1.33 trillion in its foreign exchange reserves kitty. Asian countries have accumulated $3.52 trillion in foreign exchange cash reserves. India approves 26 new Special Economic Zones including one proposed by Reliance. Reliance plans to introduce 2500 western style supermarkets over next three years. It already has a head start in the city of Hyderabad. Wipro is buying firms with expertise in computer aided design and engineering services. Knowledge Process Outsourcing is expected to be $18 billion industry by 2010. 350 Japanese companies are active in India compared to 30,000 in China. Japan & India are embarking on the development of corridor between India's political capital, New Delhi and its commercial capital, Mumbai by laiunching a $90 billion initiative. Per capita water storage in India is alarmingly low and may impact its GDP growth. Jet Airways to introduce "flying suites" on its 777 airplanes flying from New York to Brussels and onto Mumbai reports New York Times. The new luxury service will start on August 5th and will include eight suites in first class. Reliance supermarkets have opened in 20 Indian cities. There are 220 stores today with plans call for 2,500 outlets in the next four years, including 500 hypermarkets. India's foreign exchange reserves now stand at $212.549 billion as of June 22, 2007 adding $35 billion over last six months. India started the year at $177.251 billion. Year to date increase in the reserves stands at healthy 20%. TCS employs 800 engineers in China. Huawei employs 1500 engineers in its R&D center in Bangalore. Indian cotton is being sold in big quantities to China. China, in turn, converts the imported cotton into garments which are sold the world over. India exported $905 million worth cotton to China in 2006. Bilateral trade between India and China has reached new heights. In 2006 it hit $25 billion. It is expected to cross $40 billion by 2010. India's trade with the U.S. stands at $32 billion. China on the other hand exported $287 billion. Washington Post reports that Marriott Hotels will triples it portfolio of hotels in India by 2010. Hotels rooms in India are slated to double in next five years. There are about 100,000 hotel rooms in India today. According to Goldman Sachs, BRIC (Brazil, Russia, India and China) collectively house 35% of the top twenty energy companies overtaking the U.S. for the first time. Europe has 35% and the U.S. has 30% of the top twenty companies. India's trade deficit was reported to be $6.2 billion in May. May number is little lower than the trade deficit in the month of April. India's commerce & industry minister, Kamal Nath, expects foreign investments to hit $30 billion in the current fiscal year. Mahindra & Mahindra's vehicle output has increased by 52% over last year. India auto industry is registering high growth numbers starting from relatively low base. Honda owns 5.5% market share in India's automotive sector. It is spending $491 million in building a new plant with an annual capacity of 200,000 cars. Currently in India, eight people out of 1000 own a car. This number is expected to double by 2010. India is expected to receive $15 billion in foreign investment in Indian equities in 2007. $4 billion have been received to-date. Knowledge Process Outsourcing (KPO) market is heating up. Of the estimated $54 billion market, India expects to capture 15% by 2010. Indian Railways is embarking of electrification of 500 Km of rail routes. India continues to increase spending on infrastructure projects. The government has earmarket about $350 billion on infrastructure projects over next several years. Combined GDP of BRIC (Brazil, Russia, India and China) on absolute dollar basis (not PPP) stands today at $5 trillion. US GDP is at $13 trillion out the world GDP of $43 trillion. Over next eight years, total GDP of BRIC countries is to rise substantially. Get used to another acronym - GRDI. It stands for Global Retail Development Index. For the GRDI is 100. Russia and China are at 80. BRIC countries are likely to see one of the biggest growth in retail sector over next several years. IBEF has published some interesting data. Household income has been further segmented. According to the report, the rich in India command household income above $115,000 (USD)! High Income have household income in the range of $57K and $115K. The consuming class have in the range of $23K and $57K. And finally the working class range between $10.2K and $23K. The average per capita income for India is currently at $638. The following investment goals have been defined by the Indian government by 2010. Power: $140 b Roads: $25 to 30 b Ports: $8 to 10 b Civil Aviation: $15 to 17 b Telecom: $22 b India produced 1.3 million cars last year. The automobile market is growing at 10% a year. Sensex is again on the roll! GDP growth rate has hit 9.4%. GE expects $3.0 billion revenue in India in 2007 Nashik, Maharashtra is attracting BPO companies More than half of GE's $1.6 billion revenue in India in 2006 came from infrastructure related projects.. Infrastructure would limit India's GDP growth rate according leading economist in India. Gujarat is creating a gas grid across the state. Best Western hotels to develop 100 properties over next eight years in India. 50% of acreage under cotton cultivation will be bt cotton next year. Wine industry is growing a whopping 40% growth in Maharashtra. Personal Outsourcing gaining ground according to Wall Street Journal Bharti Airtel subscriber base crosses 40 million India's share of world trade is at 1.5% equating to $294 billion. China's share of world trade is 6%. Telecom subscriber base has reached 212.02 million. Teledensity number has inched up to 18.74% IT spend in India to increase by 26% in 2007-08. McKinsey predicts sustained economic growth rate of 7.3% over next two decades. Rupee may further strengthen against US dollar. Some are predicting INR 38-39 to a USD. Retail sector is showing tremendous strength. Indians spent $300 billion in 2006. Reliance plans to spend $5.5 billion to open convenience stores. Retailer Pantaloon plans to open 4000 stores by 2010 spending $1 billion. India's economy is slated to grow at 9.2% annual rate for the fiscal year ending March, 2008. Wockhardt to open 30 hospitals by 2012.

 

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