Adidas investor says loses confidence in management: report

 

Frankfurt: Adidas AG’s failure to narrow the market share gap with rival sportswear maker Nike Inc. means shareholders should refuse to back the German company’s management, a top investor was quoted as saying.

 

Ingo Speich, a fund manager with Union Investment, told German weekly Frankfurter Allgemeine Sonntagszeitung the company had failed to narrow the gap with Nike and he had lost confidence in management as a result.

 

“Even at home, in Germany as well as in Europe, Nike is gaining market share from Adidas,” Speich is reported to have told the paper, according to an advance copy of an article set to be published on Sunday.

As a result, investors gathering for the company’s annual shareholder’s meeting on 8 May should refuse to grant the customary endorsement of management’s actions, said the investor whose fund is Adidas’s tenth-largest shareholder with a 0.89% stake.

 

“Nike is pulling ahead of Adidas, against this background it is incomprehensible why the supervisory board extended Herbert Hainer’s contract by two years,” Speich told the paper, referring to the company’s chief executive.

 

Adidas said in March Hainer would remain CEO until March 2017.

Speich said Adidas’s targets for 2015 are unrealistic under the current management. “We no longer have confidence,” Speich is said to have told the paper. 

 

A spokesman for Adidas said Speich’s views were “one sided” and said the company had delivered record profits in 2013. No-one at Union Investment could be reached for comment.

 

Adidas, whose shares dropped last month to their lowest in a year, had set targets for 2015 sales of €17 billion ($23.4 billion) and an operating margin of 11%—both ambitious given a target of between 8.5% and 9% for 2014 and 2013 sales falling 3% to €14.5 billion.

 

The company warned in March that weakening emerging market currencies, notably the Russian rouble, would hurt 2014 results and posed a risk to its 2015 targets, even as sales are helped by the soccer World Cup.

 

Nike, which has been encroaching on Adidas’ home territory in western Europe and challenging its dominance in the soccer market, has said it hopes to reach sales of $36 billion by 2017, up from $25.3 billion in fiscal 2013. Reuters.

 

RANJAY KUMAR,

PGDM 2nd SEM,

SOURCE-: MINT 

 

FIIs continue to be bullish on IT services companies

Foreign institutional investors (FIIs), the lifeline of the Indian equity market continue to show confidence in India. Since September 2013 FIIs have invested $12 billion in Indian equities.

A recent study by Axis Capital revealed that the ownership of FIIs in Nifty 50 companies at the end of March 2014 quarter has hit an all-time high of 22.8 per cent. This is 40 basis points (bps) higher than in the December 2013 quarter.  The change in FII holding has come after Narendra Modi's name was announced as the BJP's prime ministerial candidate.

FII continue to show confidence in IT services companies in particular. For three consecutive quarters FIIs have increased their holding in IT services companies. For the March 2014 quarter, FII holding in IT services was up at 22.1 per cent, as against 20.6 per cent in December 2013 quarter. Since June 2013, FII holding in IT services has increased 7.6 per cent from 14.5 per cent. FIIs are overweight in Infosys, TCS, HCL Technology and Tech Mahindra.

Apart from IT services, BFSI (Banking Financial Services and Insurance) and Engineering were the only other two sectors that saw FIIs buying in the March 2014 ended quarter. FII holding in the BFSI sector rose to 29.2 per cent and in engineering sector to 2.6 per cent.

Meanwhile FIIs continue to pare position in FMCG. The FII holding in FMCG sector was at 9.3 per cent in March 2014, down from 11.4 per cent in June 2013. This is due to the reduction in FII position in Hindustan Unilever. On the other hand, domestic institutional investors (DII) increased its position in FMCG in March 2014 to 15.1 per cent from 14.8 per cent in December 2013. DII increased its stakes in ITC.

HDFC Bank, Infosys, TCS, HDFC Bank and Reliance Industries were the top 5 portfolio stocks for FII in the Nifty. These five stocks accounted for 37 per cent of the overall weightage of the FII holding in Nifty 50 stocks.

Meanwhile FIIs continue to pour money into India. In fact it's not just India, but FIIs have remained positive across emerging market in April. With the tapering in the US already been discounted by the market and interest hike in US not expected in the next 12 months the foreign flows is expected to remain positive. In fact expectation of another QE in Euro-Zone and in Japan will further increase liquidity in the world that augurs well for emerging markets like India. However for strong money flows to continue structural reforms and policy changes to attract investment will be key job for the new government that will come into power by the end of this month. So far the expectation in the market is BJP-led National Democratic Alliance (NDA) government will come into power this May.

Until the outcome of the general election, the Indian market will react mainly on global cues, currency and FII flows. On Thursday, May 8, 2014, both European Central Bank and Bank of England will hold its monetary policy meeting. Some key results from domestic companies like HDFC, Lupin, Ranbaxy Laboratories, Glaxosmithkline Consumer Healthcare, Titan, Canara Bank and Union Bank will remain in focus. At the current market levels there is no room for error and investors should stay guarded on their optimism and keep sufficient room for safety. In fact investors until May 16, 2014 will be better-off waiting on sidelines at this juncture.

vimal singh

pgdm 1st yr

Sony warns of deeper loss as it exits PC business

Sony on Thursday warned it would report a bigger-than-expected annual loss, blaming costs tied to its exit from the personal computer business, as the once-mighty firm undergoes a painful restructuring.

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The Japanese electronics giant said it would book a 130 billion yen net loss ($1.27 billion) in the latest fiscal year to March, while it slashed its operating earnings outlook.
The figure is worse than a 110 billion yen net loss forecast just three months ago, when Sony also announced it would cut 5,000 jobs in its struggling computer and television units.

The move came after Moody downgraded its credit rating on Sony to junk, saying the maker of Bravia televisions and PlayStation game consoles had more work to do in repairing its battered balance sheet.
On Thursday, Sony said it now expected to record 30 billion yen in additional expenses owing to its move out of personal computers, and 25 billion yen in impairment charges tied to its overseas production of Blu-ray discs, DVDs and CDs. Sony reports its financial results later this month.
"Primarily due to demand for physical media contracting faster than anticipated, mainly in the European region, the future profitability of the disc manufacturing business has been revised," it said.
Operating profit in the latest fiscal year would be down 89 percent from the previous year, although sales were expected to jump about 14 percent to 7.77 trillion yen, it said.
PC sales got worse after its February profit warning and "consequently, (the firm) expects to record write-downs for excess components in inventory and accrual of expenses to compensate suppliers for unused components ordered for Sony's spring PC lineup", the company said.
"In addition, certain restructuring charges are expected to be recorded ahead of schedule," it added.
Sony, which is a small player in the global personal computer market, is selling its Vaio-brand PC division to a Japanese investment fund as it looks to concentrate on its lineup of smartphones and tablets.
After suffering four years of losses, Sony crept back into the black in the previous fiscal year -- although that was mostly due to a  weak yen and asset sales, including the firm's US headquarters in Manhattan.
Despite its high-profile struggles, Sony has seen buoyant sales of its Xperia smartphone offering and record demand for its new PlayStation 4 console. An entertainment arm, which includes a Hollywood studio, and little-known insurance business also make money.
But the firm's chief executive Kazuo Hirai, who has been leading a sweeping overhaul of Sony's business, has rejected calls to exit the money-losing television unit.
Japanese manufacturers have suffered badly in their TV divisions as razor-thin margins and fierce overseas competition weigh on results.   
                                         
                          Mithilesh chaubey
                           PGDM 2 SEM

India consumer confidence highest in 18 months 

NEW DELHI: Consumer confidence level in India has improved since the fourth quarter (October-December) of 2012 according to a survey conducted by market research firm Nielsen, which found that a majority of respondents feel the country will wriggle out of slowdown over the next twelve months.
India retained its position as the second-most optimistic country among a total of 60 nations where the “Global Survey of Consumer Confidence and Spending Intentions”, was conducted, according to Nielsen.
Consumer confidence in India during the first quarter of current fiscal (January-March) was at 121 India has retained its position as the second-most optimistic country among 60 nations Consumer confidence in India stood at 121 during the JanMarch quarter of 2014 against 121 in Oct-Dec 2012 Indonesia leads the global index with 124 points against 115 in the previous quarter. Indonesia leads the global index with 124 points and Philippines stands at the third place with 116 points.
The consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism.

Around 74% of respondents in India are optimistic about job prospects over the next 12 months and the sentiment is up by 4 percentage points from the last quarter.
The survey also pointed out that 68% of urban respondents in India feel that the country is going through a phase of economic recession, and, of these respondents, about 54% said t

 country will be out of recession phase over the next one year.

“Consumers are reconciled to the negative economic conditions and despite the challenge of inflation are hoping for a better fiscal year. They are optimistic that overall sentiment and investment will pick-up gradually,” said Piyush Mathur president, Nielsen India.
Nielsen’s survey, established in 2005, measures consumer confidence, major concerns and spending intentions among over 30,000 respondents with Internet access across 60 countries.
“Overall discretionary spending is higher than the last four quarters and there is a renewed focus on savings for the long-term. Consumers are also anticipating the outcome of the elections and the impact will reflect in subsequent months,” added Mathur.
NAME- RAJ GAURAV
               PGDM 2 SEM

Jaguar starts track testing upcoming SUV

Jaguar starts track testing upcoming SUV

2May2014

  According to reports, Jaguar’s upcoming SUV has started track testing at the Nürburgring. The SUV is based on a slightly smaller version of the aluminium monocoque used for the Range Rover and Range Rover Sport. Around 4.6m long, it’s expected that this architecture will also be used for the new mid-range Discovery family model and for a future Range Rover variant that will slot in between the Evoque and the Range Rover Sport. 

 

Jaguar is understood to be placing a performance emphasis on its SUV, exploiting its natively rear-drive layout. It is likely to be benchmarked against the Porsche Macan, which is currently regarded as the best-handling SUV. 

 

The Jaguar will have a number of advantages over the Porsche, not least that it has the engine mounted well back in the engine bay, so a 50/50 weight distribution is likely.

 

Dubbed internally as a ‘sports crossover’, the SUV will be the second model in the biggest new-model offensive in Jaguar’s history. It’s a product programme that has to boost Jaguar’s annual sales well into six figures and – in the medium term – well beyond 2,00,000 units annually. 

 

The production car is powered by Jaguar Land Rover’s range of home-grown Ingenium four-cylinder petrol and diesel engines, a range that promises to be flexible enough to offer low CO2 emissions in the firm's upcoming XE and a top speed as high as 186mph in petrol form when hooked up to twin turbochargers. 

 

It’s not yet known whether the SUV will be offered in pure rear-wheel drive form, but that’s a distinct possibility for the lower-powered models, not least because it would benefit fuel economy. 

 

 AJAY SINGH THAKUR

PGDM 2nd sem

Congress would back tax reform if in Opposition: Jairam

Jairam Ramesh, a union minister and senior Congress leader, criticised opposition leader Narendra Modi for blocking the general services tax (GST), which is aimed at easing doing business, raising revenues and boosting growth.

 If India's ruling Congress party is pushed into opposition after a general election, it would give its backing to a major tax reform it tried to bring in during 10 years in office, a government minister and party strategist said on Thursday.

Jairam Ramesh, a union minister and senior Congress leader, criticised opposition leader Narendra Modi for blocking the general services tax (GST), which is aimed at easing doing business, raising revenues and boosting growth.

"If the people of India want us to be in the opposition, we will not do what Mr Modi did to us on GST, he single-handedly derailed the most important economic initiative of (our government)," Ramesh said in an interview as the world's biggest election reaches the final stage.

Results are due on May 16.

BJP-ruled states, including Gujarat, which Modi governs, stymied efforts by two successive finance ministers to bring in the new indirect tax regime, which would replace some state taxes.

Modi, who opinion polls favour to form the next government with his Bharatiya Janata Party and allies, now says he will bring in GST if he wins office, blaming the delay on the government's poor coordination with states, whose support is needed to implement the reform.

 

The measure, stuck for years, would convert the country into a single fiscal union and add 2 percentage points to overall economic growth, economists estimate.

The BJP had become the party to beat in this election but claims of victory were premature, Ramesh said. He said the mammoth election - with 815 million eligible voters - remained a close fight between the Congress-led coalition and the Hindu nationalist opposition. It was far from certain that Modi will become prime minister, he said.

Most opinion polls have forecast the BJP to emerge as the single largest group in the election and best-placed to form a coalition government, riding a wave of anger and discontent over graft scandals and a slowing economy.

But Ramesh's remarks suggested that the Congress was not about to give up the fight and that it would try and stop Modi - whom it deeply reviles - from cobbling together a simple majority in Parliament required to rule.

"With almost 75 to 80 per cent of the (election) over, I am reasonably certain it will be a very, very close contest," said Ramesh, who heads the rural development ministry.

"It is becoming increasingly apparent that the so-called sweep for the BJP is not going to happen. The polls have vastly overestimated the BJP's performance while downplaying the Congress performance."

Opinion polls have a mixed record in India which has an electorate bigger than the United States and Europe put together.

Ramesh said the party's own assessment was that it had picked up support in states such as Punjab in the north, Jharkand and Chhattisgarh in the east and Karnataka in the south that went to the polls in the second half of the campaign.

The BJP's power base is in the Hindi heartland in the north and the west of the country and it needs to lure in regional players in the south and east to build a stable coalition.

Failure to win big could be a problem for the Hindu nationalist Modi, seen as a polarising figure mistrusted by the country's sizeable Muslim minorities.

He has been unable to shake off criticism that he failed to protect Muslims in a spasm of bloodshed in the western Gujarat state that he governs, even though a Supreme Court ordered inquiry absolved him of any responsibility.

VIMAL SINGH

PGDM 1st yr

Congress would back tax reform if in Opposition: Jairam