The economic slowdown in North America and Europe has made 40 per cent of the large businesses cut their overall IT budgets, but companies were expanding their services spending by taking more activist sourcing approach to governance, according to survey by technology research firm Forrester.
Forrester surveyed nearly 950 senior managers across North America and Europe on their IT services spending and overall services strategies and priorities. While 43 per cent have already cut their overall IT budgets in 2008 in reaction to a slowing global economy, 24 per cent have put their discretionary spending on hold. About 28 per cent said the economy has had no impact on their IT budgets.
The Indian IT vendors, who earn over 60 per cent of their revenues from the US, have been facing challenging times as a result of uncertainty in the largest IT services market. The National Association of Software and Services Companies (Nasscom) has forecast that the country’s IT and BPO exports would grow at a slower pace at 25 per cent in the current fiscal, as compared to 29per cent growth witnessed last year.
“This is not an across-the-board spending slowdown. The impact of the economy on IT budgets varies widely by industry and geography,” said Mr John McCarthy, Vice-President and principal analyst with Forrester Research. The survey showed that IT departments in financial services were hit hardest with 49 per cent respondents in the sector having cut their budgets.
Further, IT departments of North American firms have been affected more by the economy than their European counterparts. About 49 per cent of the North American firms have cut their IT budgets compared to 31 per cent in Europe.
“The slowdown has firms renegotiating rates, being more selective in choosing vendors, and examining spending plans more thoroughly, but they are still expecting to pay more for services. The demand for enterprise IT services has not dropped significantly,” McCarthy said.
Forrester said the demand for services hold steady with 45 per cent of those surveyed planning to increase their use of applications outsourcing and 43 per cent of them moving work offshore. The survey showed that only 9 per cent of respondents used offshore resources, while 14 per cent planned to ramp-up use, 19 per cent piloting and 22 per cent not using but actively tracking developments. While those not sending work overseas, a majority cited the questionable quality of the work done offshore.
Tuesday, September 9, 2008
Monday, September 8, 2008
The Importance of a Trading Plan
Why do you need a Trading Plan?
1 - During trading hours, emotions will turn smart people into idiots. Therefore, you have to avoid having to make decisions during those hours. For every action you take during trading hours, the reason should not be greed or fear. The reason should be because it is in the plan. With a good plan, your task becomes one of patience and discipline.
2 - Consistent results require consistent actions - consistent actions can only be achieved through a detailed plan.
What should be in your trading plan?
1 - Your strategy to enter and exit trades
You have to describe the conditions that have to be met before you enter a trade. You also have to describe the conditions under which you will close a position. These conditions may include technical analysis, fundamental analysis, or a combination of both. They may also include market conditions, public sentiment, etc...
2 - Your Money management rules to keep losses small - the goal of money management is to ensure your survival by avoiding risks that could take you out of business. Your money management rules should include the following:
- Maximum amount at risk for each trade.- Maximum amount at risk for all your opened positions.- Maximum daily and weekly amount lost before you stop trading
3 - Your daily routine - after the market closes, before it opens, etc...
4 - Activities you carry out during the weekend.
5 - I also like to include reminders that I read every day
I will follow a trading plan to guide my trading - therefore my job will be one of patience and discipline.
- I will always keep my trading plan simple.- I will take actions according to my trading plan, not because of greed, fear, or hope.- I will not deceive myself when I deviate from my trading plan. Instead I will admit the error and correct it.
I will have a winning attitude.
- Take responsibility for all your actions – don’t blame the market or world events.- Trade to trade well and for the love of trading, not to trade often and not for the money.- Don’t be influenced by the opinions of others.- Never think that taking money from the market is easy.- Don’t try to guess the future – trading is a game of probabilities.- Use your head and stay calm – don’t get excited or depressed.- Handle trading as a serious intellectual pursuit.- Don’t count how much money you have made or lost while you are in a trade - focus on trading well.
A trading plan will not guarantee you success in the stock market but not having one will pretty much guarantee failure.
1 - During trading hours, emotions will turn smart people into idiots. Therefore, you have to avoid having to make decisions during those hours. For every action you take during trading hours, the reason should not be greed or fear. The reason should be because it is in the plan. With a good plan, your task becomes one of patience and discipline.
2 - Consistent results require consistent actions - consistent actions can only be achieved through a detailed plan.
What should be in your trading plan?
1 - Your strategy to enter and exit trades
You have to describe the conditions that have to be met before you enter a trade. You also have to describe the conditions under which you will close a position. These conditions may include technical analysis, fundamental analysis, or a combination of both. They may also include market conditions, public sentiment, etc...
2 - Your Money management rules to keep losses small - the goal of money management is to ensure your survival by avoiding risks that could take you out of business. Your money management rules should include the following:
- Maximum amount at risk for each trade.- Maximum amount at risk for all your opened positions.- Maximum daily and weekly amount lost before you stop trading
3 - Your daily routine - after the market closes, before it opens, etc...
4 - Activities you carry out during the weekend.
5 - I also like to include reminders that I read every day
I will follow a trading plan to guide my trading - therefore my job will be one of patience and discipline.
- I will always keep my trading plan simple.- I will take actions according to my trading plan, not because of greed, fear, or hope.- I will not deceive myself when I deviate from my trading plan. Instead I will admit the error and correct it.
I will have a winning attitude.
- Take responsibility for all your actions – don’t blame the market or world events.- Trade to trade well and for the love of trading, not to trade often and not for the money.- Don’t be influenced by the opinions of others.- Never think that taking money from the market is easy.- Don’t try to guess the future – trading is a game of probabilities.- Use your head and stay calm – don’t get excited or depressed.- Handle trading as a serious intellectual pursuit.- Don’t count how much money you have made or lost while you are in a trade - focus on trading well.
A trading plan will not guarantee you success in the stock market but not having one will pretty much guarantee failure.
Thursday, September 4, 2008
Better times ahead?
Better times ahead?
Ram Prasad Sahu & Jitendra Kumar Gupta / Mumbai September 1, 2008, 20:40 IST
Weakening of freight rates is a short-term phenomenon that will impact the shipping sector. But, healthy demand and supply bottlenecks will ensure stable growth for companies in this sector.
A slowdown in consumption due to a weakening global economy has resulted in a drop in demand for shipping services. This, coupled with fears of a supply overhang, has led to a steep decline in freight rates for tankers which transport crude and oil products as well as cargo carriers that deliver iron ore and coal.
The Baltic Dry Index and Baltic Dirty Tanker Index which measure cost of shipping dry commodities and crude have dipped 40 per cent apiece over their respective highs in May and July this year.
The impact of this is visible on the stock prices of shipping companies which have tanked between 19-42 per cent since May versus a 15 per cent decline in the Sensex.
Though things have looked better since July except for Bharati Shipyard and Shipping Corporation which have given negative returns, most companies have however returned far less than Sensex’s 12.5 per cent.
While the drop in American consumption of petroleum products has caused a blip in the demand for oil and thus hiring rates for tankers, the slowdown in construction activity in China and factory closures before the start of Olympics reduced the demand for commodities and bulk vessels.
Though the situation does not look too appetising, what are the implications of the current trends on the fortunes of shipping companies and ship builders?
We look at the various segments including tankers, dry bulk, containers and specialised ships to ascertain the short- to -medium term movement of freight rates, supply of ships and growth prospects for Indian shipping companies and ship builders
Ram Prasad Sahu & Jitendra Kumar Gupta / Mumbai September 1, 2008, 20:40 IST
Weakening of freight rates is a short-term phenomenon that will impact the shipping sector. But, healthy demand and supply bottlenecks will ensure stable growth for companies in this sector.
A slowdown in consumption due to a weakening global economy has resulted in a drop in demand for shipping services. This, coupled with fears of a supply overhang, has led to a steep decline in freight rates for tankers which transport crude and oil products as well as cargo carriers that deliver iron ore and coal.
The Baltic Dry Index and Baltic Dirty Tanker Index which measure cost of shipping dry commodities and crude have dipped 40 per cent apiece over their respective highs in May and July this year.
The impact of this is visible on the stock prices of shipping companies which have tanked between 19-42 per cent since May versus a 15 per cent decline in the Sensex.
Though things have looked better since July except for Bharati Shipyard and Shipping Corporation which have given negative returns, most companies have however returned far less than Sensex’s 12.5 per cent.
While the drop in American consumption of petroleum products has caused a blip in the demand for oil and thus hiring rates for tankers, the slowdown in construction activity in China and factory closures before the start of Olympics reduced the demand for commodities and bulk vessels.
Though the situation does not look too appetising, what are the implications of the current trends on the fortunes of shipping companies and ship builders?
We look at the various segments including tankers, dry bulk, containers and specialised ships to ascertain the short- to -medium term movement of freight rates, supply of ships and growth prospects for Indian shipping companies and ship builders
Wednesday, September 3, 2008
A cheque that can't be dishonoured
UCO Bank launched its new product 'Pre-Funded Cheque' a facility which would be backed-up by pre-arranged funds kept in a separate savings or current account of the customer without having any scope of dishonour of cheques."The pre-funded cheque is a blend of qualities of our various products. This will cater to diversified requirements of our customers," Uco Bank's General Manager, K V Kulkarni, told reporters here today.The new product would help the bank mobilise CASA deposits, he said.With the cheque backed up by pre-arranged funds kept separately in savings or current account of the customer, it would prevent any chance of dishonour of the cheques on account of insufficiency of funds.The customer can earn interest on funds kept in his savings bank account and also save commission normally incurred on issuance of demand draft, traveller's cheque, manager's cheque or gift cheque.The facility at present would be available at selected 261 CBS branches of the bank.The cheques are payable at par at all CBS branches of the bank.The cheques are issued in three pre-determined denominations, upto Rs 1,000, Rs 5,000 and Rs 10,000.The service charges shall be levied upfront at Rs 100 per cheque book of 10 leaves of Rs 10,000 denomination and Rs 50 per cheque book of 10 leaves for denominations of Rs 5,000 and 1,000.The customers can also opt for stop payment of such cheques.
More pain for realty sector: Enam
Enam Securities said that there is more pain in store for the country's real estate sector in the next 6-12 months, but the long-term outlook is still positive."Short-term conditions are unfavourable because of dampened affordability, high interest rates and oversupply. These are likely to play spoilsport in the near term," Enam Securities' Senior vice-president (Real Estate) Pankaj Jaju said here.This kind of situation is likely to continue in the near term before looking up after 6-12 months, he said.Subdued demand and the resultant price correction in the short-term would affect project Internal Rate of Returns and as a result, the focus of the builders would shift from owning land to execution.In addition to that, inability of companies to access funds may result in liquidation of assets at lower prices, impacting their profitability considerably, he said."So far, belief in strong end-user demand and high investor appetite for under construction properties fuelled liquidity. This is now disappearing on account of inability to churn capital, possible oversupply situation and waning demand," he said.Jaju said that when all signs pointing to a correction in real estate prices, builders are holding on the inventories to rack rates.The long-term outlook is still positive because of favourable demographics, increased urbanisation and higher disposable incomes. However, reduction in mortgage rates and higher loan to value (LTV) ratio are critical to improve affordability and re-instate sentiment, he said.
Monday, September 1, 2008
'It's Better To Pay A Higher EMI And Buy A House'
Interview: Pranav Ansal Vice-Chairman & MD, Ansal API
Even if loans are expensive, Pranav Ansal, vice-chairman and managing director, Ansal API, says people would be better off paying higher EMIs than continuing to stay on rent. At the same time, he feels that competition will make developers offer something extra to homebuyers and that mid-income housing is where the real market is as most buyers are looking for homes in this space. Excerpts from an interview with Urmila RaoHow would you term the current real estate market scenario? Is it price correction or a crash?It is not a crash. There has been no dip in the sales of projects by major developers. The products of reputed builders are selling and their volumes are still the same. However, a lot of new builders with credibility issues are not able to sell because customers are skeptical about putting in money fearing failure in delivery. The slowdown has happened only to this extent.Industry body Assocham’s report says that the banks’ home loan disbursal rates have declined. Rating agency Fitch recently talked about a 16 per cent drop in home registrations in Mumbai.There have been no dips at all in some markets. We operate in 16 cities in northern India and I have not seen a decline in any of these cities. I also don’t see any decrease in sales in Mumbai. HDFC has seen 60 per cent growth in home loans. Well, they were expecting 100 per cent growth, and it is just 60 per cent. But still, there is growth.How do you justify the discount offers, freebies and schemes that even reputed developers are offering? Are these not a strategy to boost falling sales?If the market is very competitive, then people have to give various sops. It’s a part of marketing in areas where there is oversupply. We did that in some of our projects. But in projects where there isn’t too much competition, we don’t offer anything. Sops are purely a result of the demand and supply equation. In cities like Lucknow and Jaipur, where we are the largest developer by far, we don’t give any sops. Our scheme of EMI holiday (paying EMIs after the possession) is the future for all property transactions. Ten years down the road, 90 per cent of the homebuyers will be on EMI holiday schemes. Why didn’t the EMI waiver scheme start earlier when the residential market was on an upswing?Yes, the scheme started just one-and-a-half to two years back. The builders went to the bankers and it took time for the banks to understand and get involved in this scheme, do the paperwork and get clearances. Now, the EMI waiver scheme has started even for commercial projects. Freebies are a function of competition but the EMI holiday scheme is what the market is going to be in the future.Will we see an end of the schemes when the market firms up again?The EMI waiver scheme will stay. The sops will stop.What is your advice to the end-user buyer at a time when home loan interest rates, inflation and premium housing costs are up?People buying homes fall in two categories—those who want to move out of joint families and those who are living on rent. Rentals are increasing at a pace much higher than inflation. So, it still makes sense for a customer to pay a higher EMI and buy a home. This move has two advantages. First, from the point of view of income tax benefit and second, ownership of property. Unlike rentals, payment of EMI for 15-20 years gives a person ownership of the property, creating an asset for him.Of course, price increase is a concern because earnings have not risen that much. But, more than earnings, this is linked with the rental outgo. A person could get to own a property after 15-20 years if takes a call and pays the higher home loan interest rates now. But, if he doesn’t, then he will have to pay a much higher price after 15 years. That is why property transactions happen despite higher inflation.So, a person staying on rent should consider buying a home?Paying rentals does not end up in ownership even after 10 years. Also, you will maintain a rented house only up to a certain standard. You don’t want to invest a lot in maintaining a house that you don’t own.Many developers are getting into mid-income housing. Is this a new trend?Mid-income housing is where the market is. Almost 90-95 per cent of the country is mid-segment buyers. Premium housing accounts for only 1-2 per cent of the market in India. Many developers are building premium housing simply because it adds to their profile. Developers who realise the demand for mid-income housing and cater to it will always be there. Niche market is very exciting and tempting, but is a very small market compared to the mid-segment market. This segment is here to stay. How do you define mid-income housing?Every city has its own definition depending on its income brackets. So, for Delhi NCR, mid-segment is Rs 50-75 lakh. Most of our projects in Gurgaon, Noida, Greater Noida and Ghaziabad are in this range. In Kundli, it’s about Rs 40 lakh.What can we expect in the coming year?Major developers will not have delivery issues, but a lot of new developers will not be able to cope up and some of the projects will never see the light of the day. So, automatically, supply will come down and the value of deliverable properties will go up further. This is the fourth slowdown that we are seeing in 40 years of our operation. This time it is even greater because there are more people in the business and a lot of them will have serious issues. In one to one-and-a-half years, we are likely to charge another 5-10 per cent premium on our products owing to our credibility
Even if loans are expensive, Pranav Ansal, vice-chairman and managing director, Ansal API, says people would be better off paying higher EMIs than continuing to stay on rent. At the same time, he feels that competition will make developers offer something extra to homebuyers and that mid-income housing is where the real market is as most buyers are looking for homes in this space. Excerpts from an interview with Urmila RaoHow would you term the current real estate market scenario? Is it price correction or a crash?It is not a crash. There has been no dip in the sales of projects by major developers. The products of reputed builders are selling and their volumes are still the same. However, a lot of new builders with credibility issues are not able to sell because customers are skeptical about putting in money fearing failure in delivery. The slowdown has happened only to this extent.Industry body Assocham’s report says that the banks’ home loan disbursal rates have declined. Rating agency Fitch recently talked about a 16 per cent drop in home registrations in Mumbai.There have been no dips at all in some markets. We operate in 16 cities in northern India and I have not seen a decline in any of these cities. I also don’t see any decrease in sales in Mumbai. HDFC has seen 60 per cent growth in home loans. Well, they were expecting 100 per cent growth, and it is just 60 per cent. But still, there is growth.How do you justify the discount offers, freebies and schemes that even reputed developers are offering? Are these not a strategy to boost falling sales?If the market is very competitive, then people have to give various sops. It’s a part of marketing in areas where there is oversupply. We did that in some of our projects. But in projects where there isn’t too much competition, we don’t offer anything. Sops are purely a result of the demand and supply equation. In cities like Lucknow and Jaipur, where we are the largest developer by far, we don’t give any sops. Our scheme of EMI holiday (paying EMIs after the possession) is the future for all property transactions. Ten years down the road, 90 per cent of the homebuyers will be on EMI holiday schemes. Why didn’t the EMI waiver scheme start earlier when the residential market was on an upswing?Yes, the scheme started just one-and-a-half to two years back. The builders went to the bankers and it took time for the banks to understand and get involved in this scheme, do the paperwork and get clearances. Now, the EMI waiver scheme has started even for commercial projects. Freebies are a function of competition but the EMI holiday scheme is what the market is going to be in the future.Will we see an end of the schemes when the market firms up again?The EMI waiver scheme will stay. The sops will stop.What is your advice to the end-user buyer at a time when home loan interest rates, inflation and premium housing costs are up?People buying homes fall in two categories—those who want to move out of joint families and those who are living on rent. Rentals are increasing at a pace much higher than inflation. So, it still makes sense for a customer to pay a higher EMI and buy a home. This move has two advantages. First, from the point of view of income tax benefit and second, ownership of property. Unlike rentals, payment of EMI for 15-20 years gives a person ownership of the property, creating an asset for him.Of course, price increase is a concern because earnings have not risen that much. But, more than earnings, this is linked with the rental outgo. A person could get to own a property after 15-20 years if takes a call and pays the higher home loan interest rates now. But, if he doesn’t, then he will have to pay a much higher price after 15 years. That is why property transactions happen despite higher inflation.So, a person staying on rent should consider buying a home?Paying rentals does not end up in ownership even after 10 years. Also, you will maintain a rented house only up to a certain standard. You don’t want to invest a lot in maintaining a house that you don’t own.Many developers are getting into mid-income housing. Is this a new trend?Mid-income housing is where the market is. Almost 90-95 per cent of the country is mid-segment buyers. Premium housing accounts for only 1-2 per cent of the market in India. Many developers are building premium housing simply because it adds to their profile. Developers who realise the demand for mid-income housing and cater to it will always be there. Niche market is very exciting and tempting, but is a very small market compared to the mid-segment market. This segment is here to stay. How do you define mid-income housing?Every city has its own definition depending on its income brackets. So, for Delhi NCR, mid-segment is Rs 50-75 lakh. Most of our projects in Gurgaon, Noida, Greater Noida and Ghaziabad are in this range. In Kundli, it’s about Rs 40 lakh.What can we expect in the coming year?Major developers will not have delivery issues, but a lot of new developers will not be able to cope up and some of the projects will never see the light of the day. So, automatically, supply will come down and the value of deliverable properties will go up further. This is the fourth slowdown that we are seeing in 40 years of our operation. This time it is even greater because there are more people in the business and a lot of them will have serious issues. In one to one-and-a-half years, we are likely to charge another 5-10 per cent premium on our products owing to our credibility
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