Tuesday, September 30, 2008
Banking Impact on IT
A report published in the Hindu Businessline said vendors like Infosys, Genpact and Cognizant have had Wachovia on their client list since 2005 while they also have Citigroup on their rolls. How the latter views the outsourcing deals post buyout would be a matter of crucial concern.
The newspaper said that while Infosys and Cognizant refused comment, Genpact CEO Pramod Bhasin claimed that it was too early to analyse implications of the acquisition. "We will wait and watch and continue with our business normally," Bhasin was quoted as saying by Businessline.
The paper also quoted analysts as saying that there will be no major impact till the integration is done. “Unlike the direct impact of Lehman Brothers, the effect of this deal will be a couple of quarters away for the Indian vendors,” said Mr S. Sabyasachi, research director at neoIT.
Analysts believe that the future of Wachovia’s engagement with Indian vendors will be driven by Citi’s outsourcing strategy though at a general level they believe that the turmoil could see a 15-20 per cent reduction in IT budgets of all financial institutions over the next two to three years.
Source:
BPO Watch
Monday, September 29, 2008
IT firms fish for overseas acquisitions
For instance, more than half of the 11 IT companies that provide full-year revenue guidance run the risk of missing their numbers (in dollars) this year, according to Credit Suisse analysts. Their new estimates are now at the lower end of guidance for Infosys and Satyam and below guidance for MindTree. Among the large caps, they say that HCL Tech provides the highest downside, followed by Wipro and Satyam and TCS. Since economists believe the bottom is still a couple of quarters away, it could lead to an elongated period of slowdown for these firms.
Another significant trend is the move of Indian IT firms to rise up the value chain — to compete with the likes of IBM, Accenture and HP (EDS) — with these buyouts, which give them "complementary skills, added capability besides business transformation (when IT becomes a critical part of the business model) capabilities".
Source:
BPO Watch
Syntel Misses on Revenue and EPS; IT Headcount Falls
Its observed Syntel might miss its well publicized 2010 internal revenue goal of 1 billion by nearly $400 million.
2Q08 results fell short of revenue and EPS estimates; the BPO engine suffered a dramatic deceleration (6.2% QoQ vs. 17.2% LTM); IT headcount dropped for the second straight quarter; 2008 EPS guidance of $1.74-1.82 includes $0.12 of non-recurring gains; excluding well- penetrated clients American Express and State Street Bank (35% of revenue), Syntel posted only 11% compound growth in 2005-07
Source:
Seeking Alpha
After Washington Mutual - WaMu, its the turn of Wachovia
In the latest byproduct of the widening global financial crisis, Citigroup Inc. will acquire the banking operations of Wachovia Corp. in a deal facilitated by the Federal Deposit Insurance Corp.
Citigroup will absorb up to $42 billion of losses from Wachovia's $312 billion loan portfolio, with the FDIC covering any remaining losses, the government agency said Monday. Citigroup also will issue $12 billion in preferred stock and warrants to the FDIC.
The deal greatly expands Citigroup's retail outlets and secures its place among the U.S. banking industry's Big Three, along with Bank of America Corp. and J.P. Morgan Chase & Co. But it comes at a cost -- Citigroup said Monday it will seek to sell $10 billion in common stock and slashed its quarterly dividend in half to 16 cents to shore up its capital position.
The agreement comes after a fevered weekend courtship in which Citigroup and Wells Fargo & Co. both were reportedly studying the books of Wachovia, which suffers from mounting losses linked to its ill-timed 2006 acquisition of mortgage lender Golden West Financial Corp.
Source:Yahoo
Saturday, September 27, 2008
3.3 million US jobs would have moved offshore by 2015
India ranked first in the survey on where financial services companies' BPO providers are located with 21% . Russia is next with 10% followed by the Philippines (9%) and Eastern Europe (8%). The United States, Mexico, and Israel tied at 7%. (
For a comprehensive analysis refer the complete article.
Source:
MSN News
Satyam top brass go on stock-selling spree
About half a dozen top executives of the company have offloaded over 1.5 lakh shares in the last few days.
Interestingly, Satyam's Chief Financial Officer, Srinivas Vadlamani, too, is among those top executives who have bundled out their shares. Apart from Vadlamani, the sellers include T. Hari, the company's global head of marketing communications, K. Sriram (part of consulting team), Manish Mehta (head of SAP practice), Kiran Cavale (head of business intelligence and data warehousing, and Venkat Kumar Raju. The list of sellers also includes Vinod Dham, who is on the board of directors of the company.
Source:
Sify
Sify HCL Tech makes counter bid for Axon of UK
HCL Technologies on Friday made an offer of 650 pence per share compared to Infosys’ offer of 600 pence announced late last month. This values Axon at 441.1 million pound ($810.8 million). After HCL’s offer, now Infosys will get a second chance to scale up its bid.
In case Axon’s shareholders decide to go with the Shiv Nadar company’s offer, Infosys stands to be paid one per cent of the deal amount as inducement.