Indian investors' perception about mutual funds

Beyond Returns

Over the years, Indian investors' perception about mutual funds has evolved. Unfortunately, investors are unable to assess mutual funds holistically, writes ICICI Prudential AMC MD and CEO Nimesh Shah.

 

ICICI Prudential AMC MD and CEO Nimesh Shah

Over the years, Indian investors' perception about mutual fundshas evolved from suspicion to acceptance and eventually to respect, which has helped the industry gain a rightful place next to traditional products such as bank deposits. Unfortunately, investors are unable to assess mutual funds holistically; what is viewed is merely assessment of the recent performance.

While it is true that what matters to investors is returns, to comprehend the robustness of the potential for returns on a consistent basis, investors also need to understand 'how' these returns are achieved. The 'how' encompasses a fund house's philosophy, its organisation structure, quality of people, processes, governance standards, investment style, strategy and client servicing, among others.

While it is true that these qualitative factors do not guarantee sustainability of returns, they nonetheless provide the basis for a higher potential for continued good performance. Let's understand these factors-

ORGANISATION STRUCTURE
The efficient functioning of any business is based upon the foundation of a robust organisation structure that operates smoothly and with the necessary controls over activities. These include the quality and commitment of the owner/sponsor, quality of the executive management, and the role and effectiveness of the board of trustees. An asset management company, or AMC, should also be assessed on its ability to adopt and absorb technology advantageously, expand its distribution network, mitigate losses and retain talent. While the financial strength of the mutual fund house can be gauged from its annual reports, an investor can assess the strength of the organisation by looking at its reach and processes adopted to benefit the endcustomer.

INVESTMENT DECISION-MAKINGInvestment styles, processes, philosophy and strategies differ among AMCs and there is no one 'best' practice. However, the key is to adopt comprehensive processes and adhere to them in a disciplined manner. This provides assurance to investors and other stakeholders. In addition to processes, the quality of the investment team, the experience of the team members in terms of managing different investment styles, the team's commitment to the fund house's investment strategies and policies, the quality and independence of in-house research and the quality of dealing operations are critical factors. Information about these aspects can be garnered from the AMC's website, scheme documents and financial advisors associated with the fund house.

RISK MANAGEMENT

Will you
send your children to a school where teachers don't admit their own kin? Then how can you invest in a fund whose managers don't put their money alongside yours?

Indian markets have become globally integrated and, therefore, are vulnerable to external developments, resulting in volatility and increasing complexity. As a result, risk management has become critical. Investors should assess the attitude and approach of the management and the experience of the fund house's investment team in implementing sound risk management practices. They should assess riskmitigation measures adopted by the fund house at the macro and portfolio levels.

TRUE TO LABEL PRODUCTSEach scheme has an objective. The fund manager needs to strictly adhere to the objective. This ensures clear positioning of the scheme. More important, this assures investors that the fund manager is abiding by the mandate.

TRANSPARENCYClear disclosure about functioning, policies and practices makes a fund house stand for integrity and reliability within the investor and financial advisor community. In addition, investor education initiatives are clear differentiators. The fund house's website should offer investors comprehensive information to ensure transparency and build investor knowledge.

AMC EMPLOYEES INVESTING IN ITS SCHEMESWill you eat at a restaurant where chefs don't eat food cooked by themselves? Will you send your children to a school where teachers don't admit their own kin? Then how can you invest in a fund whose managers don't put their money alongside yours? It's comforting to know that fund managers believe enough in the fund to invest own money in it.

COMPARING PERFORMANCE WITH THE BENCHMARKComparing a scheme's performance with its benchmark is an objective method of assessing its performance. However, investors should compare performance across time periods to make a fair judgment.

In conclusion, investors need to form their view about a fund house on the basis of multiple parameters and not just returns. Only the fund house's pedigree, philosophy, mission, vision, quality of processes, distribution reach, customer service and performance compared to benchmarks can give the investor a true picture of its robustness.

NIMESH SHAH
Managing Director & CEO ICICI Prudential AMC

Narendra Modi important for the stock market

Why has Narendra Modi become important for the stock market?

Narendra Modi

Last week when I met with the head of equities at one of India's largest private insurance companies, he said that in his 16-year career the last three years were the worst for the country. "And my worry is if [Bharatiya Janata Party's Narendra] Modi doesn't come to power than another three will continue to be bad for India."

His major fear was if Modi doesn't come to power the stock market will see a free fall. Most importantly, the rupee will fall close to 70 per dollar following an outflow from foreign institutional investors. If that happens, it will have a contagion effect with the greatest fears for India being a downgrade by rating agencies. India is just one notch above the junk status. A downgrade would mean losing its investment-grade rating and no money coming into the liquidity driven equity market. FII flows remain key to India and its capital markets. Rating agency Moody's has clearly indicated it would downgrade India if it doesn't see a stable government at the centre. A fragmented government without either a clear mandate or policy platform would heighten the downside credit risk.

In the current scenario, however, the fear seems to be unwarranted and a downgrade doesn't look likely. Looking at the economic numbers one would feel the fear of a downgrade has receded with the current account deficit and fiscal deficit under control and the rupee stable. This along with export income improving, import declining as well as inflation falling to an eight-month low augurs well for India. On the currency front, the Reserve Bank of India (RBI) has done a remarkable job with strong foreign exchange reserves ($292 billion) as well as allowing domestic banks to raise foreign currency non-resident deposits up to $30 billion. The RBI is also keeping a close watch on the US by keeping favourable interest rate differential among both nations such that flows into India remain intact. The new Fed chief's statement that interest rates will not be raised in the medium term has brought comfort to the market.

Today, barring a stable government at the centre all factors that could pull down the market - increase in US interest rates, uncontrolled deficit and drop in FII inflows -- have taken a back seat.

So, why is Modi important for the market? There is a feeling that the National Democratic Alliance (NDA) is pro-business, and therefore everyone wants Modi to come to power as they think he will replicate the Gujarat growth model in the country. This is the reason why most companies have stalled their investment spends as they don't have the confidence in the current system.

One wonders why it took 10 years for businessmen to realise that the NDA is pro-business. You can call it luck that played a huge role in the United Progressive Alliance (UPA) governing India for the past 10 years. After the UPA came to power in 2004, India saw its biggest ever bull-run for the next five years and it also enjoyed the multiplier effect of work that the previous government had done in terms of infrastructure and growth. In fact, in May 2009 after the UPA emerged victorious, the Sensex rose 20 per cent in a single day on the hope that reforms will take forefront, but the UPA's second stint was marred by corruption and scams, and reforms and growth took a back seat.

Today, the government machinery is in a deadlock. The market wants a government that is pro-reforms. It is not that Modi has a magic wand that can bring growth from day one. It will take at least 12 to 18 months for the economy to come back on track, but hopes are if Modi comes to power he will start on a clean slate and will have no baggage like the UPA, which will help him to drive economic reform and growth. Though the market is hoping for Modi to come into power, Modi or not, a stable government at the centre will emerge as a key catalyst for the market.

Meanwhile, with the December quarterly results coming to an end, the focus will shift to global markets and FII flows. On Monday, the government will also unveil its interim budget for 2014/15. In less than 100 days India will see a new government coming into power. Until then, the Indian market may remain rangebound as well as volatile, and react to global events.

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SMART PHONE BATTLE

The Flagship Battle

Barely three months into the new year, we already have the wraps off some of the new flagships phones.

Gone are the days when tech giants would launch just one flagship smartphone a year and that too at a specific time. With new and big devices coming much more frequently, the latest instance being Samsung Galaxy S5, Sony Xperia X2 and LG G Pro 2 phones at the Mobile World Congress, Gadgets and Gizmos takes a look at what's on offer.

The last year saw the launch of a number of flagship smartphones that were capable of giving the iPhone 5 and the Samsung Galaxy S4, a run for their money. The HTC One, Sony Xperia Z1 and even the LG G Pro - each one of them had something special. Barely three months into the new year, we already have the wraps off some of the new flagships phones.

Samsung Galaxy S5

The fastest growing Android smartphone maker in the world has stepped into the fifth stage of the Galaxy series. Samsung has unveiled the Galaxy S5, which features several improvements over the S4. The smartphone has a 5.1 inch Full HD display and a a 16MP camera which can capture ultra-HD videos at 30 frames per second. It operates on Android KitKat and runs on 2.5GHz quad core application processor, paired with 2GB of RAM. A fingerprint scanner has been integrated into its home button, much like that of the iPhone 5s. Samsung has followed Sony's footsteps as well and waterproofed this phone. It is water and dust resistant and certified as such. It can withstand water up to a depth of one meter for a maximum of 30 minutes. Connectivity options onboard include USB 3.0, Bluetooth 4.0, NFC, Wi-Fi, and LTE support.

Sony Xperia Z2

The successor to the Xperia Z1 has also arrived. The phone has a slightly bigger display than most, measuring 5.2 inch. It has a 20.7MP camera - an Exmor RS for mobile image sensor, featuring the award-winning G Lens. The phone can also capture 4k videos. It will run on Android KitKat, a Qualcomm Snapdragon 801 processor - a 2.3GHz quad-core Krait CPU and 3GB RAM. It can support LTE and NFC connectivity, and has a 3200mAh battery. Sony is calling it "the world's best camera and camcorder in a waterproof smartphone"

LG G Pro 2

Successor to the LG G Pro, the Pro 2 has picked up the industrial design and material feel of the recently launched LG G2, which includes back mounted buttons for volume and power, as well as the curved back cover and the 13MP camera module. But there are a few changes. The phone comes with the 5.9 inch display with 1080p resolution, which makes it a phablet. It runs on Qualcomm Snapdragon quad core processor clocked at 2.26 Ghz and paired with 3GB RAM. It also has Dolby mobile sound enhancement and LG Optimus UI onboard

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union-bank-of-india-crisis-rising-npas

Gathering Storm

The upheaval at United Bank of India once again highlights the disproportionately high non-performing assets of state-run banks. The situation is rapidly going out of control.

ON SHAKY GROUND: United Bank of India's headquarters in Kolkata. The lender posted a massive loss for the quarter and nine months ended December 2013 due to rising bad loans. (PHOTO: Subir Halder, IMAGING: Ravi Reddy)

In October last year, Kolkata-based UCO Bank highlighted its "turnaround story" in an investor presentation. The state-run bank told investors that it had managed to overcome the challenges it faced three years earlier of worsening asset quality. The bank had strengthened its risk management practices and improved its credit monitoring systems, it said. What it didn't say was that its gross non-performing assets (NPAs) at more than five per cent of advances were among the highest in the Indian banking industry.

A few kilometers away from UCO Bank's headquarters is the main office of United Bank of India(UBI), another state-run lender that is now at the centre of a storm triggered by a surge in bad loans. On February 7, UBI reported a net loss of Rs 1,683 crore for the nine months ended December 31, 2013, compared with a net profit of Rs 361 crore a year earlier. Barely a fortnight later, the bank's chairperson and managing director Archana Bhargava resigned after only 10 months into the job. Bhargava had been trying to sort out the mess of bad loans and had stopped the practice of restructuring doubtful debts, but eventually quit as the problem spiralled out of control.

The story of these two lenders highlights the deep NPA mess in the banking sector. The two banks, like many others, rapidly expanded their loan books on the back of high economic growth in the initial years of the last decade until the 2008 global financial meltdown reversed the trend. The situation has turned worse in the past two years as a sharp economic slowdown and high interest rates led to defaults by companies that had borrowed heavily to expand their businesses during the boom years.

Gross NPAs of domestic banks jumped to 4.2 per cent of total lending by the end of September 2013 from 3.6 per cent six months before, according to the Reserve Bank of India (RBI). Bad loans could climb to seven per cent of total advances by March 2015, the RBI warned in a report in December. In absolute terms, gross NPAs are estimated to touch Rs 2.50 lakh crore by the end of March this year. This is equal to the size of the budget of Uttar Pradesh. The biggest chunk of the soured debts is with staterun banks, which account for two-thirds of loans but 80 per cent of the bad assets. The government is keeping a tab on the matter. On March 5, Finance Minister Palaniappan Chidambaram reviewed the performance of state-run banks and said that controlling bad loans was their biggest challenge.

Besides UBI and UCO Bank, many other state-run lenders are struggling with bad loans. A case in point is Mumbai-based Central Bank of India. The bank's former chairman, M.V. Tanksale, had targeted to control gross NPAs below four per cent in 2013/14 but that looks highly unlikely considering bad loans touched 6.48 per cent of total lending for the nine months through December. Allahabad Bank is also facing the heat as the RBI has ordered a special audit of the Kolkata-based lender. Canara Bank and Oriental Bank of Commerce have the highest portfolios of restructured corporate loans. Private-sector and foreign lenders are better placed. Gross NPAs at HDFC Bank, for instance, are less than one per cent of total advances. The NPA coverage ratio - a measure of a bank's ability to withstand losses from bad assets - is at 80 per cent compared with about 50 per cent for UCO Bank.

Shinjini Kumar, Leader of banking and capital markets practice at PricewaterhouseCoopers, says there are concerns regarding governance, decision making, credit appraisal and human resources at state-run banks. "We have to start asking why some banks are performing worse than others," she says.

Bankers say there is a lack of rigour in loan appraisal systems and monitoring of warning signals at state-run banks. This is particularly true in case of infrastructure projects, many of which are struggling to repay loans. RBI Deputy Governor K.C. Chakrabarty said recently state-run banks lacked expertise in evaluating such projects. There are also instances of asset-liability mismatches as banks mostly attract short-terms deposits while lending to infrastructure is typically for 20 to 30 years.

The NPA mess is not entirely because of the reversal of economic cycles. Indiscriminate lending by some state-owned banks during the high growth period between 2003/04 and 2007/08 is one of the main reasons for the deterioration in asset quality. "The increase in stressed assets could be attributed in part to the macroeconomic slowdown as well as to the excesses of the boom period manifested in terms of excessive leverage," says Abizer Diwanji, National Leader for financial services at consulting firm E&Y India. UBI, for instance, was growing at over 30 per cent. But nobody raised concerns over the rapid growth at a bank which was classified as "weak" by the RBI in 1999 because it was surviving mainly on capital infusions by the government.

While the slowdown that began in 2008 impacted most banks, private-sector and foreign lenders learnt their lessons quickly. But many staterun banks failed to assess the impact of the slowdown on their corporate borrowers. "They failed to notice the debt overhang in some large corporate houses," says a private-sector banker. One such corporate house is Lanco Group. The infrastructure company had a debt of Rs 39,034 crore with a debt-to-equity ratio of 9.4 in March 2013, shows a study by investment bank Credit Suisse. UBI is one of the lenders to Lanco.

RBI Governor Raghuram Rajan is pushing banks hard to control bad loans. Rajan has announced measures for early detection of stressed assets, greater discipline and monitoring by lenders either through coordination with others or through internal processes. Cyril Shroff, Managing Partner at legal firm Amarchand & Mangaldas & Suresh A. Shroff & Co., says the RBI framework is "a definite positive step" as it emphasises not only the need for greater coordination among lenders but also asks them to work jointly rather than individually.

Many say one of the key reasons for the worsening situation at staterun banks is the absence of effective leadership. "The practice of air dropping chairmen from other banks with short tenures is the main culprit," says a banker, who does not want to be named. This banker cites the example of ICICI Bank's K.V. Kamath and HDFC Bank's Aditya Puri, who have led the two relatively healthy lenders for many years. The story is quite different in state-run banks. Consider the case of UBI. In November 2008, S.C. Gupta joined UBI as chairman and managing director. Gupta came to UBI from Bank of Baroda, where he had most of his career. When his tenure ended in April 2010 the government could have named his deputy, T.M. Bhasin, as his replacement. Instead, Bhasin was made chairman of Indian Bank and Bhaskar Sen was roped in from Union Bank of India to take Gupta's place at UBI. Sen was then replaced by Bhargava, who was earlier with Canara Bank.

Many suggest the government should consider promoting executive directors as chairmen of the same banks rather than transfering them to other banks. Leadership at the middle level is also lacking. "The quality of people, clearly, is an issue at stateowned banks. Their pay is also not commensurate with private and foreign bankers," says Nikhil Shah, Senior Director at Alvarez & Marsal India, a firm that helps banks turn around stressed corporate loans.

Rising NPAs are not just hurting banks' profitability but are also reducing the amount of funds available for fresh lending as banks need to make higher provisioning for bad debts. "The older the NPAs get, the more sticky they become and worse they are for the balance sheet in terms of capital cost," says Kumar of PwC. Arun Tiwari, Chairman and Managing Director of Union Bank of India, says banks have to salvage the blocked revenue stream from existing borrowers and also use the available funds to get new customers to make up for the shrinking income.

Banks must also accelerate efforts to recover bad loans. After 2008, fresh NPAs every year have been more than the amount recovered from bad assets. "Banks are not well equipped to manage recoveries. We need to promote distressed funds and asset reconstruction companies, and introduce bankruptcy laws," suggests Diwanji of E&Y.

A new threat is emerging from restructured loans, as economic growth continues to be weak and interest rates remain high. Restructured assets in the banking system have crossed 10 per cent of total advances. Uday Kotak, Vice Chairman and Managing Director, Kotak Mahindra Bank, said on a TV channel recently he estimated stressed assets - gross NPAs plus restructured debts - at Rs 10 lakh crore, amounting to a quarter of all deposits. This would pose fresh problems for the government, which is deliberating on a bailout package for UBI that includes capital infusion. There was also talk that UBI could be merged with Union Bank of India, which has a stronger balance sheet.

However, the government can't rescue weak state-run banks every time they fall into a crisis. "The government is contributing to banks' capital but it is ultimately taxpayers' money," says Shah of Alvarez & Marsal. So, what should be done to control NPAs? Banks should focus on greater monitoring of stressed loans and early detection of deterioration in asset quality. "Existing methods would seem to be more in the nature of actions which deal with the situation where the horses have bolted the stables, rather than effectively preventing it from happening," says Shroff. "The issue of NPAs needs to be tackled at the level of prevention rather than cure."

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US says ready to do business with Narendra Modi

The United States would welcome Bharatiya Janata Party's (BJP) prime ministerial candidate Narendra Modi if he wins the upcoming election, a US official has said, in the clearest sign Washington will drop a travel ban on Modi imposed after anti-Muslim riots in 2002.

US Assistant Secretary of State Nisha Biswal told a television interviewer that Washington was ready to do business with Modi, the front runner ahead of the April-May general election who is best placed to form a coalition government.

"I would just say that the United States has welcomed every leader of this vibrant democracy, and that a democratically elected leader of India will be a welcome partner," Biswal told Headlines Today when asked if Modi, as prime minister, would be granted a US visa.

Biswal made her comments in New Delhi on a visit to rebuild trade and political ties shaken by a row over the arrest in New York last December of an Indian diplomat suspected of visa fraud.

US Ambassador to India Nancy Powell visited Modi at his home in Gandhinagar in Gujarat last month, ending a long estrangement over riots that erupted in the state governed by the Hindu nationalist leader.

At least 1,000 people, most of them Muslims, were killed in 2002 when mobs went on a rampage across Gujarat after a train carrying Hindu pilgrims was torched, killing 59 people.

Powell's visit was the highest-profile encounter between US officials and Modi since the State Department revoked his visa in 2005 over the bloodshed to which rights activists say he turned a blind eye. He denies the allegation.

Biswal said the United States hoped India would continue to build a tolerant, moderate and secular society when asked if Washington had put its human rights concerns on the back burner because of Modi's political rise.

"Visa issues are handled on a case by case basis. And determinations are made based on the facts of the day and are reviewed at the time that a request is made," she said according to a transcript released by the US embassy.

The US administration, which does not want to be seen as taking sides in the Indian election campaign, has stopped short of stating publicly that Modi would be able to travel to the United States should he win the lower house election, leading to speculation that he would not be welcome in Washington.

But diplomats say the until the election results are known, the question of whether Modi would be given a visa is hypothetical. Should he become the country's next leader, he would automatically receive a US visa, they say.

Modi himself has not commented on the travel ban, but for his supporters in the Bharatiya Janata Party and outside the US decision has been a sore point. Senior party leader Arun Jaitley said last month that the US boycott had not been based on any evidence or court verdict but on "excessive propaganda".

Britain was the first European country to end its boycott on meeting Modi followed by other European countries last year.

soutce: Reuters ( photo)

powerful-business women

MOST POWERFUL BUSINESS WOMEN

VINITA BALI

MD, Britannia Industries
Britannia's managing director this year has been moved to 'Hall of Fame'(Reserved for those who have made it to the list at least seven times). She says her travels overseas helped her understand diversity and adapt to different environments and people.

PHOTO: Nilotpal Baruah/www.indiatodayimages.com

RENUKA RAMNATH

Multiples Alternate Asset Management
Renuka Ramnath has also been moved to the 'Hall of Fame' this year. She says: "The choice of investors and team members are the cornerstones of private equity. Those decisions were extremely deliberate."

PHOTO: Nishikant Gamre/www.indiatodayimages.com

RENU SUD KARNAD
Housing Development Finance Corporation
HDFC's managing director this year moves to 'Hall of Fame'. She says being part of two decisions that changed the way the lender does business are her most memorable moments.

PHOTO: Mandar Deodhar

VANITHA NARAYANAN
Managing Director, IBM India
The IBM India chief began as a trainee in the company and is one of a handful of women heading a technolgy company in India.
ON THE GLASS CEILING
I have certainly not felt it. But we cannot declare victory and women should continue to remain focused

PHOTO: Nilotpal Baruah/www.indiatodayimages.com

PALLAVI SHROFFSenior Partner, Amarchand & Mangaldas & Suresh A. Shroff & Co
She has represented a roster of corporate giants, and actively backs other women in her profession.
ON THE GLASS CEILING
I have probably been lucky. But not everyone supports a woman who is going up the ladder. A number of organisations do not support females. It is a reality, though it is sad.
PHOTO: Shekhar Ghosh/www.indiatodayimages.com

SHUBHALAKSHMI PANSE
Managing Director, Allahabad Bank 
Raised to be independent, Allahabad Bank's chairman says her parents' message to her was 'You can do it'.
ON THE GLASS CEILING
Being a woman was not an issue - until I became general manager. Women are then looked down upon. Not much is expected of them.

PHOTO: Photo: Shekhar Ghosh

VINITA SINGHANIA
Managing Director, Jk Lakshmi Cement
Singhania found her experience as a housewife helped her when she began to run a cement business.
ON THE GLASS CEILING
Women are moving shoulder to shoulder with men. women sarpanches are making themselves heard even with ghoonghats on 

PHOTO: Shekhar Ghosh/www.indiatodayimages.com
PRIYA NAIR
Vice President, Detergents, HUL
She has made her mark with out-of-the-box business solutions.
I, ME, MYSELF
Energetic, focused, passionate, risk taker with unwavering resolve

PHOTO: Rachit Goswami/www.indiatodayimages.com

\ANJALI BANSAL
Managing Director, Spencerstuart India
She also mentors proficient women executives for board roles.
ON THE GLASS CEILING
It does exist but we cannot talk about a gender-related glass ceiling alone. It is also relevant to nationality and ethnicity.

PHOTO: Nishikant Gamre/www.indiatodayimages.com

SWARUPA SANYAL
Head Of Strategy And Corporate Initiatives, Genpact
Swarupa Sanyal is implementing a blueprint that seeks to transform India's largest BPO firm into a leaner, bigger and more profitable company.
I, ME, MYSELF
To me it's normal to be a part of the family where a woman is working, so I suspect that is my biggest advantage.

PHOTO: Photo: Vivan Mehra/www.indiatodayimages.com

SOURCE:businesstoday

Finance Minister P. Chidambaram

Incurable Optimist

Was Finance Minister P. Chidambaram's growth projection in his latest Budget too rosy? The evidence of the last two years seems to suggest so.

By any measure, Finance Minister P. Chidambaram can be called an optimist. Last month when he presented the interim Budget of the United Progressive Alliance (UPA) government, he not only praised his government for its past performance, but also painted a rosy picture for the future. However, the estimates he has given on several fronts - gross domestic product (GDP) growth, tax revenues and more - key components of the rosy picture he painted, are now being increasingly regarded with suspicion. For a start, doubts about Chidambaram's projections come from the downward revision of growth estimates in recent years.

The advance GDP growth estimate for 2012/13, for instance, was five per cent, but the first revised estimate brought the figure down by 50 basis points to 4.5 per cent. The year before that, 2011/12, saw the GDP estimate being revised twice both times lower than the advance estimate. "The downward revision of GDP estimates is a reason to worry. It seems the speed of (economic) recovery was overstated," says D.K. Joshi, Chief Economist at ratings agency Crisil.

Other economists are equally sceptical about the finance minister's advance estimate of GDP which, for 2013/14, has been pegged at 4.9 per cent. Discussing the future, Shubhada Rao, Chief Economist at YES Bank, adds: "Assumptions on growth in tax collections and GDP are optimistic and may not eventually pan out. We expect GDP growth in 2014/15 to remain in the range of 5.2 to 5.6 per cent as recovery in real growth is very likely to be moderate."

Indian business graduates get jobs in US

A fourth of Indian business graduates get jobs in US

About one in four business school graduates in India find jobs in America, second only to China, which sends 38 per cent of its alumni to the US, according to a new survey.

While 64 per cent of Indian business graduates stay in their home country, 23 per cent go the US and two per cent to Canada.

In the case of China, 48 per cent stay home, while eight per cent prefer Hong Kong as their second job destination after the US.

The Alumni Perspectives Survey by the Graduate Management Admission Council (GMAC), which administers the worldwide Graduate Management Admissions Test (GMAT), is based on a poll of 20,704 alumni from 129 nations, including 984 from India.

After India, Mexico (18 per cent) sent the most business graduates to the US followed by Japan (16 per cent), Germany (15 per cent), Canada (15 per cent), and Australia (4 per cent).

As for the US, 97 per cent of its business school graduates find jobs at home with only 3 per cent going abroad.

In terms of salary, business school graduates in India get the lowest starting annual salary of $11,223 while those in Canada get the highest at $75,000.

US comes next with $57,000 followed by France at $52,991, Spain at $29,553 and China with $16,413.

Other Key Findings:

1. Globally, 13 percent of alumni work outside their country of citizenship, a figure that varies widely by world region, from just three percent of US citizens to 37 per cent of Central Asian and Middle East/African citizens.

2. As a group, graduate business school alumni most attribute their career success to their personal effort (95 percent), followed by their graduate management degree (80 per cent), and years of work experience (74 per cent).

3. Graduate business school alumni work in all kinds of industries, although 2 in 5 alumni work in finance and accounting (20 per cent) or in the products and services sectors (20 per cent).

4. Among self-employed alumni, more than 3 in 10 work in both products and services and consulting.

5. Across all class years surveyed, 11 percent of business school alumni are self-employed, ranging from five percent from the most recent classes of 2010-2013 to 23 per cent of those who graduated before 1990.

6. Fourteen percent of recent alumni entrepreneurs (from the classes of 2010-2013) work in the technology sector, compared with just 2 per cent of those who graduated before 1990.

7. Soft skills account for 3 of the top 5 skills that business school alumni use every day on the job.

8. More than three-quarters (77 per cent) of business school alumni give financially to their alma mater, influenced by their belief that their institution provided them with a valuable education.

(IANS) 

Bill Gates news

Bill Gates: 'Robot Apocalypse' on the Way! Is Software Automation Stealing the Pie from Humans?

• Article

              Bill Gates, Microsoft co-founder and one of the richest men in the world, spoke at the American Enterprise Institute at Washington DC.

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Reuters
Co-founder and chairman of Microsoft

According to Business Insider, Gates said within 20 years from now, quite a lot of jobs will be replaced by "Software Automation."

"Software substitution, whether it's for drivers or waiters or nurses, it's progressing," the former Microsoft CEO said.

"Technology over time will reduce demand for jobs, particularly at the lower end of skill set. 20 years from now, labor demand for lots of skill sets will be substantially lower." "I don't think people have that in their mental model," he added.

According to The Economist, Gates is not the only one signaling this worrisome scenario. The report said at least a dozen job types will be taken over by robots in the next two decades, which cover both high-paying and low-skilled works. These include commercial pilots, legal work, technical writing, telemarketers, accountants, retail workers and real estate sales agents.

How to Control This Societal Onslaught?

When asked about what the governments across the world should do to prevent such societal adversity, Gates said they should get control of the situation by asking businesses (enterprises) to keep employing "humans" over "bots."

This translates to eliminating payroll and corporate income taxes, at the same time, not increasing the minimum wage so that the businesses will feel comfortable employing people instead of getting their jobs done with the help of robots, BGR reported.

Gates added, "When people say we should raise the minimum wage. I worry about what that does to job creation, potentially damping demand in the part of the labor spectrum that I'm most worried about."

Can we Relate This to the Current 'Job Outsourcing Trend' to the Developing Countries?

Gates' idea of providing "incentives" to businesses (enterprises) to keep humans in job instead of bots sounded similar to the outsourcing of jobs from "developed nations" to the "developing countries" for cheap labor.  

Somehow the developed nations are able to live through this scenario even with many of their jobs outsourced. On that note, will we be able to survive this software automation trend as well?

source:http://au.ibtimes.com/articles/543806/20140318/bill-gates-microsoft-robot-apocalypse-jobs-automation.htm#.Uyp8UKiSxOI

iPhone 6 Release Date

iPhone 6 Release Date Nears as Apple to Further Bring Down iPhone 5C Price

iPhone 6 release date may happen soon as rumors claimed Apple will reduce the iPhone 5C's price.

Rumors claimed Apple will release an 8 GB iPhone 5C soon. Engadget got hold of a photo of the alleged 8 GB 5C's packaging. Also, German carrier O2 leaked a document of a memo sent to employees informing the staff of an iPhone's launch tomorrow. The 8 GB variant will cost around $85.

The reason behind this was because iPhone 5C was a bit of a flop when it was released late last year. It ended up being a cheaper model of iPhone but still expensive compared to other smartphones in the market. According to Digitimes, more than 3 million iPhone 5C units are waiting for buyers, of which 2 million are stored in Pegatron's warehouses, while 1 million units are collecting dust in carriers' and retailers' shelves.

Previous reports revealed iPhone 5S was the real winner among the 2013 iPhone models that Apple came up with. The low cost iPhone 5C failed to attract iPhone consumers yielding to poor sales and profits. But making an iPhone 5C with a different storage variant is not too difficult for Apple. The company saw the potential of selling more units.

iPhone 6 release date was set to arrive as soon as September this year. The report said iPhone 6 release date will follow the previous year's launch of iPhone 5S and iPhone 5C. Consumers can expect iPhone 6 around September or October, according to iDigitalTimes.

It was previously reported iPhone 6 will be released in June at Apple's annual Worldwide Developers' Conference alongside the upcoming iOS 8.

Rumors claimed two iPhone 6 will be coming this year and both versions will come with a bigger screen display. One of the new iPhone variants was speculated to enter the phablet category as one of the variants with 5.6-inch screen panel.

Also, rumors claimed iPhone 6 will pack faster and better A8 processor, and the upcoming iOS 8. The iPhone 5S' touchID fingerprint sensor will surely receive new features and improvements.