The ever increasing prices of oil has strengthened the hold exercised by petro dollar holders on the world economy.High oil prices are a sort of tax on oil importing nations but they generate windfall revenues for the oil exporting countries specially in the gulf region. In 2006 petro dollars were the single largest source of net global capitalin flow. A major chunk of these revenues are recycled into the global market , making petro dollars a strong player in the market.
Where are these petroldollars used ??
Central Banks
Part of petrodollars end up in the cenral banks ,which invest in foreign assets to stablize foreign currencies against balance of payment fluctuations.
Sovereign Wealth Funds
These are state owned investment funds , used to invest oil surpulses into the global financial markets.
Goverment Investment Corporations
Increasingly, oil exporters channel some of their wealth into smaller, more targeted funds, such as Dubai International Capital (DIC) and Istithmar. These entities invest directly in domestic and foreign corporate assets, shunning the portfolio approach of the sovereign wealth funds.
Goverment Controlled Companies
Fueling Liquidity
In fixed income markets this increased liquidity has significantly lowered the interest rates.
Its estimated that total foreign net purchases of US bonds have brought down long-term rates by about 130 basis points.Taking into account the allocations of GCC investors,it is estimated that each year equity markets receive $200 billion in petrodollars, accounting for about $2 trillion—or 4 percent—of their capitalization
Some observers worry that this new liquidity is having an inflationary effect on asset prices, perhaps fueling bubbles.
Concern Is ....
Despite the many beneficial effects of petrodollars in increasing global liquidity and spurring the growth of various financial-asset classes throughout the world, the rise of investors in oil-exporting countries has created concerns.
One worry is that the huge size of petrodollar sovereign wealth funds, coupled with their relatively high appetite for risk, could make global capital markets more volatile. The limited transparency of these funds amplifies the anxiety.
A final concern: the long-term economic impact of higher oil prices. In the 1970s their rise sparked inflation in the major oil-consuming economies and sent global banks on a petrodollar-fueled lending spree in Latin America
Sunday, February 10, 2008
Saturday, February 9, 2008
SatyamWay
Found this interesting piece of info while reading an interview of Mr.Ramalinga Raju , founder and chairman of Satyam Computers.This is something which happened in 1991 ,when the west wasn't very sure of outsourcing work to India.And its then that Satyam got its first fortune 500 client in India.This happened in US Midwest where in Satyam took up a rented house , across its customer's software development centre .Ten satyam engineers field tested the benefits of Global IT offshoring by pretending they were in India.They worked nights to simulate the time difference and for 6 months never met their customers across the street in person , communicating only through a dedicated satellite link"In the end the team worked better from this place called Little India as compared to working onsite"....
That was a really different way of proving ones's credentials.
From then on Ramalinga Raju an commerce graduate & an MBA has been on the path of trying out new things .Currently they are working on a new business model which they call the "Satyam Way".
will write abt the satyam way in my next post .....
Ref : Mckinsey Quaterly
That was a really different way of proving ones's credentials.
From then on Ramalinga Raju an commerce graduate & an MBA has been on the path of trying out new things .Currently they are working on a new business model which they call the "Satyam Way".
will write abt the satyam way in my next post .....
Ref : Mckinsey Quaterly
Monday, February 4, 2008
MicroSoft Bids for Yahoo
Yahoo offlate has been in troubled waters where in there shares have lost 30% of their value over the last one year.They also decieded to lay off around 1000 employess.
Now they have found an interested partner in the form of Microsoft who beleive that MS & yahoo as such would be the right combination to deliver maximum value to the share holders.
Microsfot's $31 a share offers a 62 percent premium for shareholders.
This acquisition if successfull would create a ruckos in the field of online advertising, currently worth $40 billion and expected to grow to $80 billion in next three years .
Google was early to understand the power of Internet , MS though late on this , is trying to catch up pace with this acquisition..
Thursday, January 10, 2008
@Dubai
Finally I am in SPJCM dubai , its been an eventful journey all through .Never thought one day i would find myself in dubai ! But then things have been going greatand I ended up here
The flight journey was quite good , with lots of beverages and food been served.The only disappointment would have been the air-hostessess ;-)(I was in an Air India Flight).Thanks to couple of my other batchmates whom i met at the airport the journey was quite a fun.And as such i beleive in travelling light and so wasn't carrying many accoutrements.
Though the flight was good we had a tough time at the dubai airport , as there were quite a fewformalities to be completed , as in a retina test and all , of which we weren't aware of !But all's well tat end's well once we were done with all our formalities we met the spjcm person who had come down t recive us.I really hope this wasn't an harbinger of the tough times to come :-)But then once we came out of the airport we got imbibed in the dubai freeways and the profiligacyof the people which can be seen the cars they own.It was really a delirious feeling , which i shallremember for long time to come.That's it abt an landmark journey of life , which I am sure is going to have an great impact on my life ...Will continue my experiences in the next post as well..ciao !!
The flight journey was quite good , with lots of beverages and food been served.The only disappointment would have been the air-hostessess ;-)(I was in an Air India Flight).Thanks to couple of my other batchmates whom i met at the airport the journey was quite a fun.And as such i beleive in travelling light and so wasn't carrying many accoutrements.
Though the flight was good we had a tough time at the dubai airport , as there were quite a fewformalities to be completed , as in a retina test and all , of which we weren't aware of !But all's well tat end's well once we were done with all our formalities we met the spjcm person who had come down t recive us.I really hope this wasn't an harbinger of the tough times to come :-)But then once we came out of the airport we got imbibed in the dubai freeways and the profiligacyof the people which can be seen the cars they own.It was really a delirious feeling , which i shallremember for long time to come.That's it abt an landmark journey of life , which I am sure is going to have an great impact on my life ...Will continue my experiences in the next post as well..ciao !!
Thursday, November 29, 2007
Pepsi New Ad Theme - What a Contrast
Pepsi plans to rope in the childhood story of the worlds fifth most powerful women,Indra Nooyi, into its advertising campaign.I believe after all the pesticide issue this advertisement would be an attempt to get an sympathetic corner in the minds of the consumer via pepsi's Corporate Social Responsibility (CSR) ventures.
It shows how at the age of 5 the current CEO used to wake up at dawn to fill buckets of water.It links her vision of finding more ways to generate water and how PepsiCo is making a difference with its water harvesting activities in Indian villages.What sounded weird to em in this article was that it that water is an issue close to Ms Nooyi’s heart.She has been quoted as saying she still feels guilty filling a bathtub with water. She has stated publicly that she and her family used to wake up in the early hours to fill every bucket in the house, and they had to learn to live off two buckets of water.Now its well known that the manufacturing units setup by these cola companies are one of the major reasons of depleting water resources in their vicinity.
One of the best examples is the coke unit in village of Plachimada in the southern Indian state of Kerala. Plachimada is a farming village of about 800 families, many of them tribal.This unit alone for its massive operation requires a lot of water: around one and a half million litres of groundwater per day in fact. That’s five times the amount of water that ends up in the bottles.
Quote from the website ecologist "A year after Coca-Cola arrived, the water in the local wells turned a strange colour, and villagers began complaining of fever, stomach pains, headaches and diarrhoea. Child mortality rates also increased suddenly. It was as late as August last year that the district medical officer eventually told the people of Plachimada that their water was toxic and unsafe for drinking. Now all 800 families have no choice but to make a four-kilometre round trip on foot, twice daily, to collect water from outside the toxic zone."
This does give an idea as to why cola companies are looking for new ways to generate water that to under the umbrella of activities concerning social cause.This is the reason i find this ad so contrasting , since they are the very people who have contributed in a big way to this water crisis .But on a positive note its nice to see that the MNC companies are at least looking for options to compensate for the harm they have done to the society.
It shows how at the age of 5 the current CEO used to wake up at dawn to fill buckets of water.It links her vision of finding more ways to generate water and how PepsiCo is making a difference with its water harvesting activities in Indian villages.What sounded weird to em in this article was that it that water is an issue close to Ms Nooyi’s heart.She has been quoted as saying she still feels guilty filling a bathtub with water. She has stated publicly that she and her family used to wake up in the early hours to fill every bucket in the house, and they had to learn to live off two buckets of water.Now its well known that the manufacturing units setup by these cola companies are one of the major reasons of depleting water resources in their vicinity.
One of the best examples is the coke unit in village of Plachimada in the southern Indian state of Kerala. Plachimada is a farming village of about 800 families, many of them tribal.This unit alone for its massive operation requires a lot of water: around one and a half million litres of groundwater per day in fact. That’s five times the amount of water that ends up in the bottles.
Quote from the website ecologist "A year after Coca-Cola arrived, the water in the local wells turned a strange colour, and villagers began complaining of fever, stomach pains, headaches and diarrhoea. Child mortality rates also increased suddenly. It was as late as August last year that the district medical officer eventually told the people of Plachimada that their water was toxic and unsafe for drinking. Now all 800 families have no choice but to make a four-kilometre round trip on foot, twice daily, to collect water from outside the toxic zone."
This does give an idea as to why cola companies are looking for new ways to generate water that to under the umbrella of activities concerning social cause.This is the reason i find this ad so contrasting , since they are the very people who have contributed in a big way to this water crisis .But on a positive note its nice to see that the MNC companies are at least looking for options to compensate for the harm they have done to the society.
Tuesday, November 20, 2007
Amazon's Kindle
Technology At its Best
This one is for all the bibliophile's out there .It gives you a perception of the extent to which technology has intruded into our lives.
Amazon has come up with a new product of theirs called Kindle .Kindle is an wireless portable device with instant access to numerous books, magazines, blogs and newspapers.Kindle is wireless.No computer is needed and you do ur shopping directly from the device.It makes use of the same technology as used by the cell phones so ideally one doesn't need an Wi-Fi hot spot to use this device.No software to install and no monthly bills .Once u order ur book, within minutes it gets delivered to Kindle.Weighing just 10.3 ounces this device sounds revolutionary but then it needs to be seen as to how many of us would not mind carrying a gadget just to satisfy his/her reading instincts ..
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