Dow cracks below 11,000 on Wall Street slide
NEW YORK: US stocks slid further on Friday, sending indexes down about 2 percent or more and the Dow briefly below 11,000 for the first time since July 2006, as investors fretted about the stability of home financing providers Freddie Mac and Fannie Mae.
US stocks tumble on Fannie, Freddie, oil
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Oil prices jump above $147 over conflict in Middle East
Oil prices spiked to a new record above $147 a barrel on Friday, as rising hostilities between the West and Iran and the potential for attacks on Nigerian oil facilities gave investors reason to rush back into the energy markets. Light, sweet crude for August delivery jumped $4.69 to $146.34 a barrel in early trading on the Nymex, after reaching an all-time high of $147.27. August Brent crude rose to a new trading record of $147.50 before easing back to trade $4.82 higher at $146.85 a barrel on the ICE Futures exchange in London.
The resurgence in crude prices not only raises the concern that $4-a-gallon ($1.05 a liter) gasoline is here to stay for US drivers it also means that heating American homes could get significantly more expensive this winter. Heating oil futures surged on the New York Mercantile Exchange to a record of more than $4.15 a gallon ($1.09 a liter), and natural gas also rose sharply. Iran, which has long been under UN scrutiny for its uranium enrichment program, has been testing missiles this week, including a new missile capable of reaching Israel.
On Thursday, Secretary of State Condoleezza Rice warned the oil-producing nation that the United States will defend its allies, and Iran responded with another missile launch. Crude had fallen by nearly $10 a barrel over two days at the start of the week, but rebounded by more than $5 a barrel Thursday as anxiety heightened about Middle East and Nigerian supplies being disrupted. Neither the United States nor Israel has ruled out a military strike on Iran. Traders fear the oil producing nation could block the Strait of Hormuz, through which about 40 percent of the world's tanker traffic passes.
``There's always a fear premium in pricing. The tensions in Iran and the threat of supply disruption will help support oil prices,'' said Jeff Brown, managing director of FACTS Global Energy in Singapore. The Organization of Petroleum Exporting Countries warned Thursday that it cannot replace the shortfall if Iran is attacked and takes its crude supplies off the market. Also Thursday, Nigeria's main militant group said it would resume attacks in the oil-rich region because of Britain's recent vow to back the government in the conflict there. Unrest over the past two years have already lowered the nation's typical daily oil output by a quarter. Continued...Next >>
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Source: ET
11 July 2008
Infosys Q1 2009 Results and other stories
India's Infosys Q1 net rises 21 pct, beats f'cast
Infosys Technologies Ltd, India's No. 2 software services company, posted a 21 per cent rise in quarterly profit, beating forecasts, boosted by a weaker rupee.
Infosys, which develops applications, designs supply chains and offers back-office services, said on Friday net profit rose to 13.02 billion rupees ($303 million) in the fiscal first quarter ended June from 10.79 billion reported a year earlier.
A poll of 15 brokerages had estimated a net profit of 12.69 billion rupees for Infosys, which counts ABN AMRO, Goldman Sachs, Philips Electronics, and U.S. insurer Conseco among its 500 or so clients.
A large pool of English-speaking graduates and comparatively cheaper wages had helped Indian firms ride an outsourcing boom for years, but the growth slowed last year when Wall Street banks made huge write-downs related to the subprime crisis and as the U.S. economy lurched towards recession. Although Indian outsourcing firms are expanding to Europe, Asia and the Middle East to lower their dependence on the United States, the country still accounts for half of their sales.
Shares in Infosys, which the market values at $23 billion, had risen 21 per cent in the June quarter, outperforming a gain of 13 per cent in the sector index and a 14 per cent drop in the main Mumbai index..
Shares turn negative as Infosys comes off
Infosys sees 2008/09 rev up 27.5-29.5%
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May industrial output up 3.8 per cent y/y
Capital goods drag on weak IIP data; L&T down 3%
Stocks slide on weak IIP nos, soaring inflation
Weak IIP data, inflation concerns pull down equities
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Other Top Stories
HCL sees USD75 mn forex loss in June qtr due to dollar rise
Bharat Heavy gets $510 mn contract
Welspun gets orders worth Rs 30 bn
TRAI agrees to DoT proposal to raise base price for 3G auction
Source: ET
Infosys Technologies Ltd, India's No. 2 software services company, posted a 21 per cent rise in quarterly profit, beating forecasts, boosted by a weaker rupee.
Infosys, which develops applications, designs supply chains and offers back-office services, said on Friday net profit rose to 13.02 billion rupees ($303 million) in the fiscal first quarter ended June from 10.79 billion reported a year earlier.
A poll of 15 brokerages had estimated a net profit of 12.69 billion rupees for Infosys, which counts ABN AMRO, Goldman Sachs, Philips Electronics, and U.S. insurer Conseco among its 500 or so clients.
A large pool of English-speaking graduates and comparatively cheaper wages had helped Indian firms ride an outsourcing boom for years, but the growth slowed last year when Wall Street banks made huge write-downs related to the subprime crisis and as the U.S. economy lurched towards recession. Although Indian outsourcing firms are expanding to Europe, Asia and the Middle East to lower their dependence on the United States, the country still accounts for half of their sales.
Shares in Infosys, which the market values at $23 billion, had risen 21 per cent in the June quarter, outperforming a gain of 13 per cent in the sector index and a 14 per cent drop in the main Mumbai index..
Shares turn negative as Infosys comes off
Infosys sees 2008/09 rev up 27.5-29.5%
-----------------------------------------------
May industrial output up 3.8 per cent y/y
Capital goods drag on weak IIP data; L&T down 3%
Stocks slide on weak IIP nos, soaring inflation
Weak IIP data, inflation concerns pull down equities
-----------------------------------------------
Other Top Stories
HCL sees USD75 mn forex loss in June qtr due to dollar rise
Bharat Heavy gets $510 mn contract
Welspun gets orders worth Rs 30 bn
TRAI agrees to DoT proposal to raise base price for 3G auction
Source: ET
Inflation, IIP spook market; Sensex ends 456 points down
Stocks on Dalal Street were slaughtered Friday after a host of negative data on the macro-economic front spooked investors. Inflation raced ahead, industrial growth showed a slowdown and crude oil resumed its northward journey. The pessimism was so strong that the market even snubbed IT bellwether Infosys Technologies' better-than-expected Q1 results. The day began on a positive note in reaction to Infosys' 4.24 percent rise in quarterly profit. The IT major raised its full-year revenue forecast in local currency but kept it flat in dollar terms. This did not go too well with investors, thus taking a toll on its shares, and in turn, dragging the entire IT pack in the first few minutes of trade. According to analysts, the outlook disappointed and underscored the increasingly difficult business conditions, particularly in the United States, the main market for Infosys. Infosys reported for the quarter ended June 30, 2008, a net profit of Rs 1,302 crore, up 4.24 per cent from Rs 1,249 crore in the preceding quarter ended on March 31, 2008. The IT major has guided for consolidated revenues of $1,215 million to $1,225 million for the quarter ending on September 30; year on year growth of 18.9-19.9 per cent. Consolidated earnings per American depositary shares is expected to be in the range of $0.55 to $0.56; YoY growth of 14.6-16.7 per cent. Inflation data was the next dampener. Inflation rose 11.89 per cent for the week to June 28. It was forecast to have risen to 11.75 per cent from 11.63 per cent a week earlier. Even the government has hinted that inflation could hit 13 per cent in the coming weeks and that any ease off in prices cannot be expected before the end of the year. To add the woes, India's industrial output rose 3.8 percent in May from a year earlier, sharply below the previous month's downwardly revised 6.2 percent and well below a forecast for growth of 7.2 per cent. This worsened the already jittery sentiment and selling pressure intensified. Capital goods took the sharpest knock. Meanwhile, crude oil rallied to a record high of $145.98 a barrel on concerns that Israel may be preparing to attack Iran, while a strike in Brazil and renewed militant activity in Nigeria would threaten to cut supplies. Bombay Stock Exchange's Sensex settled at 13,469.85, down 3.28 per cent or 456 points after oscillating between a high of 14066.36 and low of 13351.34. National Stock Exchange's Nifty ended 103 points or 2.47 per cent down at 4059.35. The broader index moved between a high of 4215.50 and low of 4014.45. Midcaps and smallcaps were relatively less affected as compared to frontline stocks. BSE Midcap and Smallcap indices ended 2.01 per cent and 1.4 per cent lower respectively. Biggest Sensex losers comprised Jaiprakash Associates (-8.48%), Tata Consultancy Services (8.03%), Satyam Computer (-7.19%), Infosys Technologies (-7.18%), Larsen & Toubro (-6.89%) and Reliance Infrastructure (-6.28%). Ambuja Cements (1.9%), HDFC Bank (1.21%), Hindalco Industries (1.01%), Bharti Airtel (0.44%) were the only gainers. Market breadth remained weak through the day. On BSE, 1655 declines outnumbered 995 advances, while on NSE, there were 318 gainers and 921 losers.
Top 20 IT Software and Service Exporters, Top 15 BPO rankings
Tata Consultancy Services Limited (TCS) is an information technology consulting, services, and business process outsourcing organization that envisioned and pioneered the adoption of the flexible global business practices that today enable companies to operate more efficiently and produce more value.With over 28,000 of the world's best trained IT consultants located in 32 countries, they are uniquely positioned to deliver their flexible world class services seamlessly to any location.More than 75 per cent of their customers reward reliability, passion, creativity, and unique ability to handle the broadest range of their IT needs by continually extending and deepening their partnerships with them.They are part of one of Asia's largest conglomerates - the TATA Group - which, with its interests in Energy, Telecommunications, Financial Services, Chemicals, Engineering & Materials, provides us with a grounded understanding of specific business challenges facing global companies.
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Infosys Technologies Ltd. was started in 1981 by seven people with US$ 250. Today, they are a global leader in the "next generation" of IT and consulting with revenues of over US$ 4 billion.Infosys has a global footprint with over 40 offices and development centers in India, China, Australia, the Czech Republic, Poland, the UK, Canada and Japan. Infosys has over 91,000 employees.Infosys' service offerings span business and technology consulting, application services, systems integration, product engineering, custom software development, maintenance, re-engineering, independent testing and validation services, IT infrastructure services and business process outsourcing.Infosys pioneered the Global Delivery Model (GDM), which emerged as a disruptive force in the industry leading to the rise of offshore outsourcing. The GDM is based on the principle of taking work to the location where the best talent is available, where it makes the best economic sense, with the least amount of acceptable risk.
------------------------------------------------
Wipro Technologies is a global services provider delivering technology-driven business solutions that meets the strategic objectives of their clients. Wipro has 40+ ‘Centers of Excellence’ that create solutions around specific needs of industries.With over 50 industry facing ‘Centers of Excellence', it has 647 clients - 72000+ employees and 53 development centers across the globe, iIt also has 500+ technology consultants and 10,000+ itinerant employees.
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Satyam Computer Services Ltd. is a global IT consulting and services provider, offering a range of expertise aimed at helping customers re-engineer and re-invent their businesses to compete successfully in an ever-changing market.More than 51,000 highly-skilled professionals in Satyam work Onsite, Offsite, Offshore and Nearshore, to provide customized IT solutions for companies across several industries.Satyam’s ideas and products have resulted in technology-intensive transformations that have met the most stringent of international quality standards.Satyam Development Centers in India, the USA, the UK, the UAE, Canada, Hungary, Malaysia, Singapore, China, Japan and Australia serve 654 global companies, of which 185 are Fortune Global 500 and Fortune US 500 corporations.Satyam’s presence spans 63 countries, across six continents.
------------------------------------------------
HCL Technologies provides software-led IT solutions, remote infrastructure management services and BPO. Having made a foray into the global IT landscape in 1999 after its IPO, HCL Technologies focuses on Transformational Outsourcing, working with clients in areas that impact and re-define the core of their business.The company leverages an extensive global offshore infrastructure and its global network of offices in 18 countries to deliver solutions across select verticals including Financial Services, Retail & Consumer, Life Sciences & Healthcare, Hi-Tech & Manufacturing, Telecom and Media & Entertainment (M&E).For the quarter ended 31st March 2008, HCL Technologies, along with its subsidiaries had last twelve months (LTM) revenue of US $ 1.8 billion (Rs. 7083 crores) and employed 49,802 professionals.The HCL team comprises approximately 55,000 professionals of diverse nationalities, who operate from 18 countries including 360 points of presence in India.3087 software engineers were added last year which meant a growth of 51 per cent. They have offices in 15 countries worldwide. Their customers include NTT Data, VDO, Toshiba and Intelsat.
-------------------------------------------------
Tech Mahindra is a global systems integrator and business transformation consulting firm focused on the communications industry.With the convergence of media and telecom, the changing landscape of the telecom industry is becoming extremely competitive. As companies rapidly strive to gain a competitive advantage, Tech Mahindra helps companies innovate and transform by leveraging its unique insights, differentiated services and flexible partnering models.
------------------------------------------------
Patni Computer Systems Ltd. is one of the global providers of Information Technology services and business solutions.Over 15,000 professionals service clients across diverse industries, from 22 sales offices across the Americas, Europe and Asia-Pacific, and 20 Global Delivery Centers in strategic locations across the world.They have serviced more than 400 FORTUNE 1000 companies, for over two decades.
-------------------------------------------------
I-flex Solutions Ltd.
It provides comprehensive IT solutions exclusively to the financial services industry worldwide.I-flex's de-risked revenue model continues to deliver consistent results despite changing global economic conditions. The company is not overly dependent on any one country or geographical region and has a diversified revenue stream from a widespread customer base.
-------------------------------------------------
MphasiS consistently delivers global Infrastructure Technology Outsourcing, Applications Services Outsourcing and Business Process Outsourcing services through a combination of technology know-how, domain and process expertise.MphasiS Limited was formed in June 2000 after the merger of the US-based IT consulting company MphasiS Corporation (founded in 1998) and the Indian IT services company BFL Software Limited (founded in 1993).
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Larsen& Toubro Infotech is an offshoot of Larsen & Toubro Ltd. (L&T) - a technology, engineering, manufacturing and construction conglomerate, with global operations. It is has a 7 decade history in India as premier engineering company and major infrastructure builder.
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Infosys Technologies Ltd. was started in 1981 by seven people with US$ 250. Today, they are a global leader in the "next generation" of IT and consulting with revenues of over US$ 4 billion.Infosys has a global footprint with over 40 offices and development centers in India, China, Australia, the Czech Republic, Poland, the UK, Canada and Japan. Infosys has over 91,000 employees.Infosys' service offerings span business and technology consulting, application services, systems integration, product engineering, custom software development, maintenance, re-engineering, independent testing and validation services, IT infrastructure services and business process outsourcing.Infosys pioneered the Global Delivery Model (GDM), which emerged as a disruptive force in the industry leading to the rise of offshore outsourcing. The GDM is based on the principle of taking work to the location where the best talent is available, where it makes the best economic sense, with the least amount of acceptable risk.
------------------------------------------------
Wipro Technologies is a global services provider delivering technology-driven business solutions that meets the strategic objectives of their clients. Wipro has 40+ ‘Centers of Excellence’ that create solutions around specific needs of industries.With over 50 industry facing ‘Centers of Excellence', it has 647 clients - 72000+ employees and 53 development centers across the globe, iIt also has 500+ technology consultants and 10,000+ itinerant employees.
----------------------------------------------
Satyam Computer Services Ltd. is a global IT consulting and services provider, offering a range of expertise aimed at helping customers re-engineer and re-invent their businesses to compete successfully in an ever-changing market.More than 51,000 highly-skilled professionals in Satyam work Onsite, Offsite, Offshore and Nearshore, to provide customized IT solutions for companies across several industries.Satyam’s ideas and products have resulted in technology-intensive transformations that have met the most stringent of international quality standards.Satyam Development Centers in India, the USA, the UK, the UAE, Canada, Hungary, Malaysia, Singapore, China, Japan and Australia serve 654 global companies, of which 185 are Fortune Global 500 and Fortune US 500 corporations.Satyam’s presence spans 63 countries, across six continents.
------------------------------------------------
HCL Technologies provides software-led IT solutions, remote infrastructure management services and BPO. Having made a foray into the global IT landscape in 1999 after its IPO, HCL Technologies focuses on Transformational Outsourcing, working with clients in areas that impact and re-define the core of their business.The company leverages an extensive global offshore infrastructure and its global network of offices in 18 countries to deliver solutions across select verticals including Financial Services, Retail & Consumer, Life Sciences & Healthcare, Hi-Tech & Manufacturing, Telecom and Media & Entertainment (M&E).For the quarter ended 31st March 2008, HCL Technologies, along with its subsidiaries had last twelve months (LTM) revenue of US $ 1.8 billion (Rs. 7083 crores) and employed 49,802 professionals.The HCL team comprises approximately 55,000 professionals of diverse nationalities, who operate from 18 countries including 360 points of presence in India.3087 software engineers were added last year which meant a growth of 51 per cent. They have offices in 15 countries worldwide. Their customers include NTT Data, VDO, Toshiba and Intelsat.
-------------------------------------------------
Tech Mahindra is a global systems integrator and business transformation consulting firm focused on the communications industry.With the convergence of media and telecom, the changing landscape of the telecom industry is becoming extremely competitive. As companies rapidly strive to gain a competitive advantage, Tech Mahindra helps companies innovate and transform by leveraging its unique insights, differentiated services and flexible partnering models.
------------------------------------------------
Patni Computer Systems Ltd. is one of the global providers of Information Technology services and business solutions.Over 15,000 professionals service clients across diverse industries, from 22 sales offices across the Americas, Europe and Asia-Pacific, and 20 Global Delivery Centers in strategic locations across the world.They have serviced more than 400 FORTUNE 1000 companies, for over two decades.
-------------------------------------------------
I-flex Solutions Ltd.
It provides comprehensive IT solutions exclusively to the financial services industry worldwide.I-flex's de-risked revenue model continues to deliver consistent results despite changing global economic conditions. The company is not overly dependent on any one country or geographical region and has a diversified revenue stream from a widespread customer base.
-------------------------------------------------
MphasiS consistently delivers global Infrastructure Technology Outsourcing, Applications Services Outsourcing and Business Process Outsourcing services through a combination of technology know-how, domain and process expertise.MphasiS Limited was formed in June 2000 after the merger of the US-based IT consulting company MphasiS Corporation (founded in 1998) and the Indian IT services company BFL Software Limited (founded in 1993).
-----------------------------------------------
Larsen& Toubro Infotech is an offshoot of Larsen & Toubro Ltd. (L&T) - a technology, engineering, manufacturing and construction conglomerate, with global operations. It is has a 7 decade history in India as premier engineering company and major infrastructure builder.
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For more Ranking Details
Source: The Economic Times.
Oil surges past $141 (Nearly $6) on Iran tensions, Nigeria
Oil surges past $141 on Iran tensions, Nigeria
Oil prices jumped 4 percent to above $141 a barrel on Thursday amid threats to production in Nigeria and Brazil and an additional missile test by Iran that escalated tensions with the West.
Further support came from the weak dollar, which fell on renewed credit worries after capital concerns dragged down shares in major mortgage finance sources Fannie Mae and Freddie Mac.
U.S. crude settled up $5.60 at $141.65 a barrel, off a session high of $142.10 a barrel. London Brent crude settled $5.45 higher at $142.03 a barrel.
The Movement for the Emancipation of the Niger Delta, the main militant group in Nigeria's oil-producing Niger Delta, said it was abandoning a cease-fire to protest a British offer to help tackle lawlessness in the region, raising concern of further disruptions to the OPEC nation's exporters.
"The cease-fire in Nigeria is ending on the 12th, and that's creating some jitters as far as supply is concerned," said Rob Kurzatkowski, futures analyst with optionsXpress.
Rebel attacks on oil infrastructure in Nigeria, the world's No. 8 exporter, have helped push crude prices to record highs over $145 this month, adding to a nearly 50 percent rise in prices this year.
Concerns that tensions between Iran, another OPEC member, and the West over Tehran's nuclear program could lead to an oil supply disruption have added to bullish sentiment.
Iran tested more missiles in the Gulf on Thursday, state media said, and the United States reminded Tehran that it was ready to defend its allies.
But a U.S. official said there was no information to confirm rumors of a third Iran missile test late on Thursday as prices surged near the settlement. There was no mention of a third test on Iranian satellite channels Press TV or Al Alam on their broadcast on Thursday evening. Continued...
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U.S. STOCKS - Market rises on Dow Chemical deal, Bernanke
FACTBOX - India's draft nuclear inspections pact with IAEA
Prime Minister calls for vote of confidence
Source: Reuters India
Oil prices jumped 4 percent to above $141 a barrel on Thursday amid threats to production in Nigeria and Brazil and an additional missile test by Iran that escalated tensions with the West.
Further support came from the weak dollar, which fell on renewed credit worries after capital concerns dragged down shares in major mortgage finance sources Fannie Mae and Freddie Mac.
U.S. crude settled up $5.60 at $141.65 a barrel, off a session high of $142.10 a barrel. London Brent crude settled $5.45 higher at $142.03 a barrel.
The Movement for the Emancipation of the Niger Delta, the main militant group in Nigeria's oil-producing Niger Delta, said it was abandoning a cease-fire to protest a British offer to help tackle lawlessness in the region, raising concern of further disruptions to the OPEC nation's exporters.
"The cease-fire in Nigeria is ending on the 12th, and that's creating some jitters as far as supply is concerned," said Rob Kurzatkowski, futures analyst with optionsXpress.
Rebel attacks on oil infrastructure in Nigeria, the world's No. 8 exporter, have helped push crude prices to record highs over $145 this month, adding to a nearly 50 percent rise in prices this year.
Concerns that tensions between Iran, another OPEC member, and the West over Tehran's nuclear program could lead to an oil supply disruption have added to bullish sentiment.
Iran tested more missiles in the Gulf on Thursday, state media said, and the United States reminded Tehran that it was ready to defend its allies.
But a U.S. official said there was no information to confirm rumors of a third Iran missile test late on Thursday as prices surged near the settlement. There was no mention of a third test on Iranian satellite channels Press TV or Al Alam on their broadcast on Thursday evening. Continued...
-------------------------------------------
U.S. STOCKS - Market rises on Dow Chemical deal, Bernanke
FACTBOX - India's draft nuclear inspections pact with IAEA
Prime Minister calls for vote of confidence
Source: Reuters India
India's GDP to be close to global average: Sify Special
`India's GDP to be close to global average'
With a clear shift in economic patterns across the globe, India is fast approaching its goal to be one among the largest economies of the world in terms of GDP, reveals a report by Goldman Sachs on the Expanding Middle – the exploding world middle class and falling global inequality. By 2030, incomes in China and India are projected to be close to the global average.
A simple way to see this is to look at the list of the seven largest economies (the ‘true G7’) in 1960, 2007 and 2050. In 1960, the largest economies were all essentially ‘developed’ countries from the higher income groups. By 2007, that has already clearly begun to change, with China in the top seven and Brazil, India and Russia not far behind. But developed countries still dominate the rankings.
From here on, the shift is likely to accelerate. These shifts could be a significant influence on spending patterns, resource use, and environmental and political pressures. In 2050, India would have the 3rd rank on the top seven nations list with an income ranking of 61.
There are two ways to look at it:
The first is the shift in spending power towards middle-income economies (and away from the richest countries), to a point where they may dominate global spending for the first time in decades, as the largest population countries enter the middle-income group
The second is the shift in spending power towards middle-income people and the explosion of what we think of as a global ‘middle class’ on a scale never seen before. Over the last ten years, we have already seen unprecedented expansion in this group.
Here, Goldman Sachs refers to global middle class as those with incomes between $6,000 and $30,000 per annum. According to the report, shifts in China and India are clearly an important part of the story, though peak growth in China is likely to come much earlier than in India. What is striking, though, is that the Expanding Middle, the narrowing of the global income distribution and the expansion of the global middle class is clear whether or not either or both of these giants is included, at least in the recent past and projected future.
The global income distribution is getting narrower, not wider. So while there is a lot of focus on widening inequality and the embattled middle class in developed countries, globally the opposite is true, the report points out. By 2030, two billion new people may join the world middle class.
The distribution of global incomes could narrow significantly further, even if inequality within some countries remains high or rises further, as middle income countries continue to move through the pack. World could outstrip anything which exists globally for decades, and will peak (at around 20 million per year) around the same time as India. Already by 2020, one third of the new entrants to the world middle class will come from outside China and India. And this percentage could reach half by 2030.
A result of these shifts would be a world that could continue to be dominated by the rise of the BRICs, the N-11 (The Next Eleven - Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, South Korea, Turkey, and Vietnam - are identified by Goldman Sachs as having a high potential of becoming the world's largest economies) and a handful of other emerging countries.
The first dimension of the `Expanding Middle’ is already visible. Spending power has already been shifting away from the richest countries towards a growing middle-income group. As a result of these shifts, the purchasing power of middle-income countries is rising and set to rise much more.
This group, which will be dominated by a subset - China, India, Brazil, Egypt, Philippines, Indonesia, Iran, Mexico, and Vietnam- of the BRICs and N11 will matter more and more for global spending patterns. The second dimension is also visible in the distribution of income across people.
A welcome side effect is that if our growth projections are met, poverty rates should continue to decline sharply. The BRICs continue to emerge as dominant forces in the global economy going forward. The report reveals the BRICs as four of the five largest economies in 2050.
Source: Sify.com
With a clear shift in economic patterns across the globe, India is fast approaching its goal to be one among the largest economies of the world in terms of GDP, reveals a report by Goldman Sachs on the Expanding Middle – the exploding world middle class and falling global inequality. By 2030, incomes in China and India are projected to be close to the global average.
A simple way to see this is to look at the list of the seven largest economies (the ‘true G7’) in 1960, 2007 and 2050. In 1960, the largest economies were all essentially ‘developed’ countries from the higher income groups. By 2007, that has already clearly begun to change, with China in the top seven and Brazil, India and Russia not far behind. But developed countries still dominate the rankings.
From here on, the shift is likely to accelerate. These shifts could be a significant influence on spending patterns, resource use, and environmental and political pressures. In 2050, India would have the 3rd rank on the top seven nations list with an income ranking of 61.
For Graphics, Visit: http://sify.com/finance/fullstory.php?id=14712240
There are two ways to look at it:
The first is the shift in spending power towards middle-income economies (and away from the richest countries), to a point where they may dominate global spending for the first time in decades, as the largest population countries enter the middle-income group
The second is the shift in spending power towards middle-income people and the explosion of what we think of as a global ‘middle class’ on a scale never seen before. Over the last ten years, we have already seen unprecedented expansion in this group.
Here, Goldman Sachs refers to global middle class as those with incomes between $6,000 and $30,000 per annum. According to the report, shifts in China and India are clearly an important part of the story, though peak growth in China is likely to come much earlier than in India. What is striking, though, is that the Expanding Middle, the narrowing of the global income distribution and the expansion of the global middle class is clear whether or not either or both of these giants is included, at least in the recent past and projected future.
The global income distribution is getting narrower, not wider. So while there is a lot of focus on widening inequality and the embattled middle class in developed countries, globally the opposite is true, the report points out. By 2030, two billion new people may join the world middle class.
The distribution of global incomes could narrow significantly further, even if inequality within some countries remains high or rises further, as middle income countries continue to move through the pack. World could outstrip anything which exists globally for decades, and will peak (at around 20 million per year) around the same time as India. Already by 2020, one third of the new entrants to the world middle class will come from outside China and India. And this percentage could reach half by 2030.
A result of these shifts would be a world that could continue to be dominated by the rise of the BRICs, the N-11 (The Next Eleven - Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, South Korea, Turkey, and Vietnam - are identified by Goldman Sachs as having a high potential of becoming the world's largest economies) and a handful of other emerging countries.
The first dimension of the `Expanding Middle’ is already visible. Spending power has already been shifting away from the richest countries towards a growing middle-income group. As a result of these shifts, the purchasing power of middle-income countries is rising and set to rise much more.
This group, which will be dominated by a subset - China, India, Brazil, Egypt, Philippines, Indonesia, Iran, Mexico, and Vietnam- of the BRICs and N11 will matter more and more for global spending patterns. The second dimension is also visible in the distribution of income across people.
A welcome side effect is that if our growth projections are met, poverty rates should continue to decline sharply. The BRICs continue to emerge as dominant forces in the global economy going forward. The report reveals the BRICs as four of the five largest economies in 2050.
Source: Sify.com
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