“Correlation of gold is very low with equity markets; a gold ETF actually provides stability to the portfolio.”

The factual answer is, as Kotak would vindicate, an obvious no! It’s quite clear that customers are not investing that avidly in gold ETFs. Is a fear of volatility, or the rising Sensex the reason? Benchmark’s Mehta disagreed, saying, “Correlation of gold is very low with equity markets; a gold ETF actually provides stability to the portfolio.” Jain of Kotak gave a supporting perspective, “Since the time we have launched our product, gold has reached $666 levels from $640 levels (upside of 3.5%) & correspondingly, Sensex has moved from 14,500 to 15,500 level (upside of 7%).” Considering the amazingly low risk attached with investing in gold, even a return that is half of that in equity markets is quite respectable.

Th e truth is, investors are simply not aware of gold ETF schemes. “The awareness of this type of investment vehicle is still low. Also, if the exchange traded funds have to reach the rural public & masses, things like, account opening procedures & documents should be kept simple,” says S.I. Kannan, analyst with Kotak Commodities.

Unless SEBI, AMFI & our Finance Ministry take proactive steps in educating investors about such a terrific investment vehicle, gold ETFs would remain dismally unknown.

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Source: IIPM Editorial, 2008

An IIPM and Management Guru Prof. Arindam Chaudhuri's Initiative

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Despite roadblocks, the much-debated subject of HR outsourcing is seeing heated action in india

The cornerstone of success of RPO sector in India is its firm stronghold on permanent staffing arena. However, breaking this tradition, Ma Foi has attained clear leadership in temporary staffing area, with currently about 140,000 temporary staff on their payrolls and the company is pretty confident that, by 2007-end, this number would rise to about a million. Temporary staffing is a solution that companies are looking at to solve their short-term staffing problems. More retail & financial services sector companies are opting for temporary staffing, especially during festive seasons when business increases 10-15 folds & warehousing, shop floor et al needs call for more hands.

With 40 overseas clients & a host of domestic clients, Ma Foi recorded revenues of Rs.3.3 billion for FY06 – a growth of 74%. Adds Hastha, “In mature economies like the US & the UK, we have companies that have outsourced their entire HR function. India too is waking to this wave of outsourcing & we are hoping that in the coming three to four years, even India would be at par with other mature economies. Also, the Indian companies have now started realizing that by outsourcing they can have access to the quality people who can support them.”

The sad twist to this tale, however, is that HR outsourcing is limited to a trickle effect as, even today, Indian companies are more comfortable outsourcing only non-value added services like the payroll processing or recruiting. Other major HR functions are still done in-house. However, things are fast changing on the Indian turf too. Hastha further points out, “Organisations such as ours are now being started to be seen as partners rather than vendors & I take it as a very positive development that is happening now in India.” Ma Foi functions as an extended arm to various organizations & also helps in building the brand while undertaking large-scale recruiting for some of their clients. Opines Hastha, “For instance, when we were doing recruiting for the BPO arm of HSBC, we were very aware of what HSBC as a brand means & what is important to them as an organisation, what are the hygiene factors & we educate all the people that get hired by the organisation. So when they enter into the organisation, they are full aware of what their responsibilities are and what is expected out of them.” An innovative initiative is the setting up of retail job shops, called Ma Foi Job Centre in Mumbai. States Hastha, “In a city like Mumbai, it was important for us to go to the customer rather than always have the customer come to us.”

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Source: IIPM Editorial, 2008

An IIPM and Management Guru Prof. Arindam Chaudhuri's Initiative

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The rice MSP saga is no different from the story of wheat procurement

According to the United Nations Food & Agriculture Organisation’s (FAO) report titled Food Outlook, in the past two years, the global production of wheat has declined from 630 million tonnes to 600 million tonnes. If we look at India, in the past three years, on an average, the wheat production has remained static at 71 million tonnes, while the need is to produce 75 million tonnes for the 1.2 billion strong population in the country. Although low productivity is one of the major causes of farmers’ woes, the government’s apathy towards the farmer’s needs to meet the ever increasing productivity costs, is the biggest culprit. Consider this: In the last five years, the cost of fertilizers, seeds and electricity has gone up by 15%. For the last five years in a row, the minimum support price (MSP) for wheat has remained almost stagnant. Despite the prevailing drought, the MSP for wheat for the year 2005-06 had been fixed at Rs.650 per quintal as against the 2001- MSP of Rs.610 (an annualised increase of just around 1%, not even enough to cover inflation).

The rice MSP saga is no different from the story of wheat procurement. Despite all odds, farmers in the country did manage to produce 73 million tonnes of wheat. And what did our rather visionary government do – they picked up only 7.1 million tonnes of the produce, claiming farmers were demanding more than required. Good for farmers, as private firms are offering them money in the range of Rs.900-1,400 per quintal of wheat, whereas the governmentis adamantly holding on to Rs.850 per quintal.


For Complete IIPM Article, Click here

Source: IIPM Editorial, 2008

An IIPM and Management Guru Prof. Arindam Chaudhuri's Initiative

IIPM Arindam Chaudhuri 4Ps Business & Marketing Business & Economy Kkoooljobs Planman Media Planman Consulting Planman Marcom Planman Technologies Planman Financial Planman Motion Pictures GIDF The Daily Indian IIPM Think Tank The Sunday Indian