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Third Party Logistics Market is valued at INR 78 bn in 2008; Estimated to reach INR 172 bn in 2012. The market comprises of two segments Asset-based 3PLs and Non-asset based 3PLs. The third party logistics industry is growing at 22% per annum. ( http://www.bharatbook.com/Market-Research-Reports/Third-Party-Logistics-India.html )

The report provides a snapshot of the market. An overview gives a quick picture of the market with estimated market size, growth rate and share of 3 PL firms in logistics industry. An analysis of drivers reveals that high cost of logistics in India, fragmented logistics sector, phased implementation of VAT, increasing geographical distribution of consumer markets, government infrastructure initiatives, growth in auto and retail sectors, and economic growth is driving growth in this sector. The key challenges identified include infrastructure congestion, lack of trust and awareness, and service tax.

The report begins with an introduction which explains the significance of third party logistics in the logistics industry. Market overview gives a quick picture of the market with estimated market size, growth rate and share of third party logistics in overall logistics sector. The drivers and challenges explain the factors influencing growth of the industry and a brief analysis of the major issues/challenges hindering growth. The competitive landscape profiles the major players in this sector in terms of their business description. The report also provides details of the private equity investments and key developments in this sector.

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Article Source:http://www.articlesbase.com/business-opportunities-articles/third-party-logistics-sector-on-a-steady-growth-path-in-indian-market-1463356.html

Packaging is an industry which, for the multiplicity of its functions, gives rise to unique product, a “design item that also responds to the needs of advertising and communication, with a strategic role for the product and the brand.”

One can not help but notice that the development of the packaging has shifted its field from bare functionality to active element of the marketing mix. Then wrapping the products is of strategic importance for the competitiveness of the company.

In these years almost all packaging machines, especially manual or semiautomatic that did not have a high- packaging speed, were pneumatic machines. The evolution of of electric motors with the spread of brushless motors that led to lower prices, has allowed greater development of electro-mechanical technology on small packaging machines. The advantages of automatic packaging machines are several: improved reliability of the movements as reflected in applications such as centered printing and the stamping of packages; lower noise of the packaging machine; higher manufacturing speed; the elimination of compressed air as its costs management.

With the great success of 2007, Cibus Tec is preparing to the 2009edition, from October 27 to 30 in a phase of strong competitiveness in the food packaging market. Every two years, from seventy years ago, in Parma the excellence in technology for the food industry meets here: the technical and marketing needs of over twenty thousand international food companies can find in the macro areas of Cibus Tec, TECNOCONSERVE, Milc Multitecno, the more appropriate and innovative answers.

On this basis, Cibus Tec will build its 2009 edition, which will take place in a year of fierce competition, from which the values of winning will clearly emerge; it will be a reinvigoration of the program dedicated to foreign delegations and international visitors in general, the definition of a focus country in the Mediterranean area, paying close attention to the packaging industry, fresh pasta industry, cold chain, logistics and equipment for laboratories, fruit juice will characterize this year edition, which will enjoy a new exhibition lay-out, aimed at shrinking the event but safeguarding the identity of the exhibition areas and a new scheduling, Tuesday to Friday.

The exhibition will be confirmed at Cibus Tec as an important step in the strategy and in the communication mix of companies operating in various fields of the food processing & packaging, able to guarantee returns in terms of business really commensurate with its capacity for innovation and flexibility; while visiting Cibus Tec will increasingly be a necessary step in planning the construction of a new production or renovation of existing ones, by virtue of the characteristic of the Fair, unique in the world in this sense, of representing the productive chain of vegetable products or dairy in its absolute totality.

Whatever the problem of a plant manager, at Cibus Tec there is the solution, because the future goes from here, ever!

By Martina Meneghetti with support from bag forming equipment for any information, please visit devices for vertical packaging machines or for more info visit food packaging equipment

Webwriter of Prima Posizione Srl.

Article Source:http://www.articlesbase.com/business-opportunities-articles/the-vitality-of-the-packaging-sector-1410552.html

There are many small businesses nationwide that have been severely damaged by the credit constraints after a year of economic woes. However, while many small businesses have had to close their doors, others have managed to survive using invoice survival tactics such as invoice factoring.

It is definitely too late for all of the United States businesses that have been forced to close their doors over the last year, even though the Obama administration is now planning to assist small businesses in applying for loans. What’s more, the U.S. House of Representatives is planning legislation toward increasing the ceiling on federal government loan programs. This commitment to small businesses includes additional loan increases outlined in the House bill; redirecting some of the unspent funds from the Treasury’s Troubled Asset Relief Program (TARP).It will also provide capital to regional banks and communities nationwide.

There are an estimated 29.6 million or more small businesses in the U.S: They employ more than half of the country’s private sector workforce; and hire 40 percent of high tech workers. This includes about 52 percent home-based businesses and apx. two percent franchises; represents 97.3 percent of exporters of goods and 99.7 percent of all employer firms. It is the small business sector generating a majority of innovation that comes from U.S. companies.

Over the last year, tight credit markets have continued, scores more businesses closed, and now even a fast track plan may be too late to save some small businesses that have been critically damaged by the economy.

In the year 2008, small business openings and closings included:
- 627,200 new businesses, and 595,600 business closures, with more than 43,546 bankruptcies.
- Seven out of 10 new employer firms survive at least two years, and about half survive five years.

These findings do not differ greatly across industry sectors.

There are many businesses that have managed to stay in business and benefit from the working capital garnered from invoice factoring for small business in the face of these credit constraints at mainstream banks.

Factoring is not a loan – it is the purchase of financial assets, or receivables, and it differs from traditional bank loans in that bank loans involve two parties, while factoring involves three parties. Most financial institutions base their decisions on a company’s credit worthiness, whereas factoring is based on the value of the receivables.

Accounts receivable factoring benefits businesses that do not get paid for 30 to 60 or 90 days by advancing up to 90 percent against invoices to be paid.

Factoring begins with due diligence that typically takes one to two business days, and after this has been completed the client is at liberty to offer invoices to IFG for purchase. Upon receipt of invoices, IFG checks the credit of the debtor named on the invoice and makes sure that the sale represented has been satisfactorily completed. Once this is done the debtor is advised of the purchase by IFG and the client receives their funding.

Sources: U.S. Small Business Administration Office of Advocacy, September 2009; Survival and Longevity in the Business Employment Dynamics Database, Monthly Labor Review, May 2005. Redefining Business Success: Distinguishing Between Closure and Failure, Small Business Economics, August 2003.

Kristin Gabriel is marketing professional who works with The Interface Financial Group (http://www.ifgnetwork.com), North America’s largest alternative funding and facrtoring source for small business. The company provides short-term financial resources including invoice factoring, serving clients in more than 30 industries in the United States, Canada, Australia and New Zealand. IFG offers invoice factoring, accounting, finance, law, marketing and banking.

Article Source:http://www.articlesbase.com/business-articles/as-economy-recovers-small-businesses-use-factoring-to-stay-afloat-1373648.html

Glass Gallery a Complete Interior Glass shops in Hukum Singh Market ( sector 27, Noida. Mr Kahlid / Mr Tarq one of best handy work in the field of Glass works.  We do any type of Designer Glass & Toughened glass Door.

We deals & Specialized  in Computer Printing Glass, Sound Proof Glass, Toughened Glass, Taxture Glass, Beveling, Air brushing, Strain Glass, V. Groving, Bend Glass, Grading of Glass.

Our service Work Field is very wide, We Provided the Services in Residential, Retail, factory, commercial and industrial aluminum and glass as your needs. Glass Gallery Provided the services over the years have been able to create a good Reputation for itself in the market by offering commercial services. We have providing a multiple choice of Glass to  our client  in Glass works, what he need, and what type Glass he want ( like if he want to interior our dressing so  we have preferred the Printing Glass or Beveling to Glass, that the Interior room have well finished. And also all types of superior quality Glass Works like Mirror Beveling, Etching grinding & Glass Fancy Works etc .We offer our clients with the Various  colors and sizes available of Glass We offer our customers with different types of Glass. 

Due to our never ending quest for providing quality services, from time to time we invest in latest Pattern and Modernized of works that helps us in delivering good quality of Services at competitive pricing. Our exemplary Works and consistently in delivering quality Work services have enabled us to build a large clientele across in Noida, Delhi & Ncr. The quality Works offered by us help in meeting the expectations of the clients and rendering them with complete customer satisfaction.

Please give us a call or visit one of our Shops.

Article Source:http://www.articlesbase.com/business-articles/glass-gallery-weclome-to-glass-shops-in-sector-27-noida-1367674.html

Business intelligence and performance management focuses on providing the tools and processes to help you make better business decisions. In order to make better business decisions you first need to understand how your business is currently performing, you then need to understand why it’s working the way it is and this should lead you to be able to see where you need to take your business next. Business intelligence and performance management is all about making sure you’ve got the right tools and solutions to make these analyses accurately enough to derive better business decisions.

Performance management is the encompassing term that looks at both understanding the process of being able to pull in all the data within your business, then turning that data into useful information that can then be used with processes like budgeting and forecasting. Business intelligence is the specific process of taking that data and turning it into useful information that the people within your business can then use.

Performance management is particularly important if your business is growing because of the amount of data you have is always going to be growing and changing as the business grows, this means that the complexity of your processes, planning, budgeting and forecasting is also going to be increasing too. The tools you may be using already such as spreadsheets are going to quickly become overwhelmed and not suitable for the data they need to manage. A fully comprehensive performance management system will enable you to have greater control and add more cohesion to gathering and analyzing the data you need to ensure you are able to push your business forwards.

It’s not just growing businesses that could benefit from performance management systems, any organization from commercial to not for profit to public sector of any size can benefit from performance management because it’s about the data coming in and using it to power the business. It’s not just internal information and data that needs to be analyzed and assessed, no business can afford to be slack when it comes to keeping up with their industry and what their competitors are doing, by analyzing this information you are able to decide which direction you want to focus your business on. When it comes to critical business applications, like the general ledger, it’s often the finance department that’s in charge and responsible for running processes like the annual planning exercise, the budgeting or forecasting exercises. However, in order to gain real value from performance management you need to ensure it encompasses all departments within your organization like sales, HR, marketing etc. For example, by understanding the data from the sales department, the marketing department will be able to ensure campaigns are targeted in the areas that have proven to be successful. This means the finance department then acts like a central hub and gathers all the information from the different departments and can use it to the generate projections and outcomes for the overall business.

Once you’ve implemented an effective performance management system, you should start to see improved business performance which will give you the ability to make better business decisions faster. You’ll be able to identify any risks facing your business at a glance and mitigate them before they become a real threat as well as being able to identify opportunities and action plans to act on them. Performance management also means you’ll be able to have confidence that the data you’re working from is accurate and up to date which means time management should also improve too as no one is going to be arguing over whose numbers are correct.

IT Performs are business intelligence specialists, their primary objective is to help organizations get the most value from their data in the most effective way possible. IT Performs not only offer a full range of software solutions, but also consultative advice and business intelligence training too.

Article Source:http://www.articlesbase.com/business-articles/a-guide-to-performance-management-1352131.html

Introduction

In the United Kingdom, public health services are managed by the National Health Service (NHS). Unlike other countries like the United States, health in the UK is provided under a national health care system. This scheme is funded by the government through taxes and is also operated by the government. This kind of system is founded on the belief that all citizens in the United Kingdom are entitled to medical services. This goes a long way in ensuring that all the necessary medical services are available to consumers at their point of need. The National health care system is also advantageous in that it can provide long term services to those in need of them. The NHS was established with the intention of providing health care for all who needed it at the point of delivery because in the past, health care was not available to all who needed it. Consequently, there was a need to make sure that health care services were more coordinated in the region. There are numerous organisational changes that the NHS has undergone. First of all, it created an internal markets idea where health authorities and doctors were given funding from the government and they could use this to purchase health care from different groups like acute hospitals. However, with time, this scheme was not very effective as there was too much bureaucracy. Consequently, there was a need to bring in reforms in order to reduce inefficiencies and the current system was born; the use of primary care trusts. (Department of Health, 2006)

The Health care system in the United Kingdom is operated by a national budget made by the government. This budget normally includes all the issues that will affect the effectiveness of service provision such as; capital outlays, operating expenses and medical training. Specific health care providers normally operate on set budgets made on a yearly basis.

Despite all these benefits, one must not underestimate all the disadvantages that come with provision of health services under such a scheme. First of all, the total available resources will always and have always been less than the demand for health care. Consequently, there is a need to prioritise issues and allocate finances for the neediest groups. Groups such as the elderly are maintained at a pre-set fee and must therefore be denied certain medical procedures such as kidney dialysis; this procedure is only allowed for those who are fifty five years and below. There are many patients in the UK who have still not reaped the full benefits of a national health care system. Another challenge facing the health care system in the UK is the fact that there is little room for technology within service provision. All these challenges will be examined in detail in the subsequent portions of the essay.

Overview of the health care system in the UK

There are a number of stakeholders that are involved in provision of health services within the United Kingdom. The first being the Department of Health; their main objective is to ensure the well being and health of its citizens. Additionally, there is the National Health Service whose objectives are not clearly laid out. There are also Primary Care Trusts (PCTs) that have been commissioned with the process of selecting a number of health services for their local population in order to ensure the well being and health of the population. PCTs have the option of choosing health care services from any of the following groups (Department of Health, 2005)

social services
voluntary services
private clinics
private hospitals
NHS

In light of these alternatives, there is a variety of health care providers to choose from and these health care service providers need to market themselves in order to ensure that they get commissioned by the NHS trust care. Some of the issues that need to be given top priority during marketing include availability of suitable equipment and employment of new technologies in provision, Possession of well trained staff among other issues. Because of all these differences in priority issues, there is competition among health care service providers.

It should be noted that the government currently has moved towards incorporation of marketing strategies in the process of health care provision. The government has indicated their commitment towards marketing strategies because it uses private providers in the process of reducing the amount of time people spend waiting for services provided by the NHS. The government has also included independent centres in the process of treatment and diagnosis. Additionally, patients have been given choices between the NHS and private care providers with regard to elective services. The Department if Health (2006) asserts that whenever commissioning if health services is done, there should be utmost consideration of contestability. The latter trait is also applicable to medical services provided outside the hospital scenario such as carer services.

The relationship between the National Health Service and its suppliers is not clearly defined. This is because the NHS has some inherent community values between the organisation and its partners, however, it also has to consider the fact that it has to be contestable and market driven. This presents some complexities in the supplier-organisation relationship. There is a need to make sure that both aspects are adhered to. Health care trusts; who serve as health care commissioners, usually establish a criterion that facilitates the structuring of the local market. They are also charged with the responsibility of choosing service providers that will deliver health services that fall within their strategic direction and those ones that will also demonstrate that the organisation have obtained a return on their investment. (Coast, 1996)

What people think about the service

It should be noted that not many patients/clients are satisfied with the level of service provision by the NHS and even other service providers. The organisation subjects most of its patients to long waiting periods. Besides that, there are limited resources hence the NHS has to prioritise which services are more vital. The overall effect of this is that some patients may miss out on vital health services. Other people think that the NHS has not given them adequate opportunities to choose different health car options. Consequently, most of them seem to lack the ability to get better health care even when they can afford to.

Problems and issues of the service

Market research is a vital part of any organisation that wishes to stay ahead of its competitors. There is a need to include the needs of the patient when trying to decide on which health service providers will be chosen for certain medical services. Private health care providers should be acceptable to patients. If the NHS simply chooses its own bidders without consulting the population, then there may be customer dissatisfaction.

Another major marketing issue affecting the health service system, in the UK is the issue of technology and innovation within service delivery; this falls under the ‘product’ portfolio of the 4 principles of marketing. Service innovation is one of the key marketing techniques that any organisation worth its salt needs to take advantage. Principles of marketing are founded on the belief that a product with more value will fetch greater demand from the market. Service providers who continuously embrace innovation will provide consumers with greater value for their investments and this will give them an edge over their competitors. The NHS has not fully embraced those options in its marketing strategy. Consequently, patients are not getting the best quality service from the organisation. Innovation could have been seen through provision of health care for patients in the privacy of their homes. The organisation also has the option of introducing outpatient follow ups. This will ensure that health care consumers receive ‘after sales service’. This could go a long way in reducing the long patient lists since potential health problems could be detected early enough and dealt with. The overall health of the population may improve and this will enhance consumer satisfaction. The organisation needs to embrace the fact that most of its consumers re not satisfied with their level of service provision because they have not been innovative. (Maynard, 1991)

In line with innovation, the NHS has not introduced numerous choices for the consumer. There is a lack of innovation during the process of designing product packages. Issues such as community service are not included in mainstream services offered by the NHS. The result of such an approach is that there is a sort of monopoly by the NHS trusts and general practitioners. The health organisation has not realised that consumers need to determine for themselves which services are more appropriate for them. By increasing choice for patients, there will be more responsiveness among health care providers and the NHS. This is an aspect that is lacking and needs to be embraced.

Innovation is not only applicable to the NHS; private health care providers need to embrace this too. In the past, they have not demonstrated their ability to incorporate new and creative ideas in health care provision. There is also a need to adopt technology in various aspects of their operations. Currently, most practitioners may be seen trying to outsource IT experts when dealing with medical records. This causes serious impediments to the delivery of services a it is too bureaucratic. Patients have complained about how most doctors they approach spend most of their time on the computer rather than on patients themselves.  This means that there is a need to train medical professionals on how to deal with new technologies. In line with this, there is also a problem with the coordination of Information Technology systems. Complaints have brought forward by patients about how different health providers affiliated to the NHS have no coordinated health care records. Therefore, a patient who had done an x-ray in one health clinic and seeks treatment from another health clinic will be asked to carry his or her results manually to the second clinic. This need not be the case; all private health care providers affiliated to the NHS should coordinate their information systems to maximise efficiency and also to prevent undue waiting periods for their consumers. (Dopson, 2003)

The third marketing problem that the NHS has is the issue of consumer education. Most consumers who may opt to go for elective services do not have the knowledge of where they can find these practitioners. The main marketing issue here is promotion. Compared to other public health services like education, there are minimal cases of promotion in the health services sector. Consumers need to know the various health options available to in order to make use of them. The main promotional tactic that has been utilised by the NHS is public relations. Many NHS trusts usually establish community services with their local populations and this is the major route that they have concentrated on. However, there is very little implementation of advertising campaigns by the NHS and other private health care providers. Additionally, there is the use of sales personnel to market health products. The latter strategy could be adopted by private health care providers who offer elective services. They have not promoted their services to various individual in order to let them know what they can offer. (Hyde, 2004)

External forces affecting the problems

Political

The NHS and private service providers are faced with certain political issues. They need to make sure that decisions made are in line with current legislations. If this does not occur, then there may be challenges from the public.  For example, an NHS trust in Derbyshire was faced with court battles from a patient after the primary trust made the decision to procure United Health Europe Limited as their private service provider. The case started in the High Court and eventually reached the court of Appeal which ruled that the NHS should start another process of procurement as they had made the wrong choice when selecting the private care provider because they had not engaged in adequate consultation with the public. This indicates that the NHS was lacking in the area of market research.

The Health Care and Social Care Act of 2001 requires that NHS primary care providers need to engage in adequate consultations with the public whenever there is a need to introduce new services to the market or before market testing. The issue of market research was also highlighted in the case of Morris v Trafford NHS trust. The NHS needs tp make sure that there is full involvement of the local community in any of its decisions.

Another political issue that affects the above marketing issues is conflict of interest. There are instances when commissioners of health services happen to be health providers themselves. This could undermine efforts to choose the most appropriate health clinician or service provider if the person doing the choosing can be chosen too. (Chappel et al, 2001)

Economic factors

The major factor that the NHS has to consider when offering services to the public is its budgetary constraints. The NHS is run by the government and mainly depends on budgetary allocations granted by the government. Consequently, there is a need to make sure that all the marketing services will be conducted within the given budget. This is a major constraint during the process of decision making; most services, equipments, recruitments have to be laid aside just because there is alack of adequate funding. Subsequently, the best decisions need to be made in order to maximise the limited resources available for use by the National Health Service.

In addition to this, there is also the issue of competition among private health care service providers. The government gave private health service providers the mandate to offer treatment and diagnosis to patients. This means that they need to make use of various marketing tools in order to stay ahead of their competitors. Most of them still lack the ability to develop adequate marketing strategies to deal with this new development. There are various options that marketers can use to deal with competition.

Another economic factor that affects the NHS is the fact that they have so many factors that they need to include in the decision making process. NHS trusts have numerous partners and stakeholders that they deal with on a day to day basis. As a result, they cannot make marketing decisions to suite themselves alone and then leave out their partners’ view points. They have to adopt consultative approaches within their marketing processes. (Mullen, 2004)

Social factors

It is quite necessary for the NHS to tackle some of the needs that their local communities have. This means that there should be identify some of the needs that their clientele have before they can adopt models for the company. It should therefore be noted that the number of patients is increasing by the day and the NHS needs to find out some of the causative factors from the community itself and then come up with strategies to deal with it. The issue of community involvement has led to one of the major marketing problems facing the NHS; market research. They seem to lack the ability to involve the public in this crucial awareness strategy and have therefore been lagging behind.

Private service-providers need to come up with innovative packages for their clientele. However, this can only be achieved through staff training and development. They also need to ascertain that their staff members have the best possible working conditions and also that they are given good salary packages. This will reduce confrontations within private clinics or hospitals and will also enhance cohesion.

Cultural factors

The people in the United Kingdom have taken up unhealthy lifestyles that are incompatible with healthy populations. Most people are fond of eating junk foods or foods rich in cholesterol. This means that the UK population is particularly vulnerable to heart related complications. Additionally, a large majority of the population engage in smoking hence increasing the cases of respiratory illnesses. Therefore, the NHS needs to prioritise some of these issues. They need to asses the level of prevalence of the above mentioned diseases through market research and then they need to come up with special product packages to combat them. (Chappel et al, 2001)

Technological factors

There is a need for the NHS to embrace more technology in the area of service provision. The field of medicine has numerous applications that can utilise technology. This can be in record keeping, coordination of services by other NHS providers, use of up to date equipments in the treatment and diagnosis phase and also in the administrative process. Countries such a the US do not have a national health care system and they boast of having one of the most technologically advanced medical systems in the world. This brings to light the fact that a national health care system can slow down technological adaptations.  However, with consistent efforts by the various stakeholders in the NHS, then there will be continuous improvement in this area.

Private health providers also need to embrace technology through use of advanced equipments and training techniques for their staff members.

Environmental factors

The major environmental aspect affecting health care providers is in relation to the community. The organisation is expected to participate in community cleaning services in order to serve as an example to the locals. This will boost their public relations and will go along way in promoting their services. Additionally, health care providers need to make sure that they use biodegradable disposing bags for their health related wastes.

Marketing strategies that can solve the problems

The first thing that the NHS needs to do is to adopt a market research strategy. Market research is the process of;

collecting
recording
analysing data that exists in the market (Kress, 1988)

This data will normally involve both consumers and competitors. Most of the time, market research is done in order to find out information before introduction of certain products or in order to come with forecasts. Normally, organisations will need to come up with demographic factors about their clients. Market research should be mainly be adopted by private health care providers. Since the government has given private service providers the mandate to offer health services to consumers directly, there will be a need to come up with the most attractive package since the sector is no vulnerable to market forces.

Some of the tools that the private service providers or the NHS can use to conduct their market research can include the use of questionnaires. They could find out what patients normally look for in a good health care system. In order to reduce ambiguity or diverse answers, there could be a list of these items to choose from. Additionally, the questionnaires could also include information about where consumers mostly go to purchase their health care and what prices are charged. This will give private service providers information about their competitors and will help them to come up with better prices for their services. This will help them in the process of achieving competitive edge. The main advantage of using questionnaires is that they take up relatively minimal time compared to other sources. Secondly, questions are straight forward and uniform. This will help the service providers come up with solutions as fast as they possibly can.

Market research can also be conducted through secondary sources. Here, private service providers can use the internet or company websites in order to compile information about some of their competitors. By conducting marketing research, private service providers will ensure that their prices, products and location strategies suite their clients. The internet is quite a valuable source on some of the strengths and weaknesses of health service providers. In case company websites are not available, then private health care providers can make use of journal article or newspapers containing information about their field of interest. There are also other countries in Europe that have adopted similar health care system to the UK’s. As result it possible for the NHS to emulate some of their marketing strategies in order to improve the public’s health. (Rossi, 1983)

Market research will go a long way in ensuring that two of the marketing problems mentioned above have been solved. The first was the issue of patient involvement in decision making processes. Issues found from the research should act as a basis for some of the changes to be incorporated into the NHS and also among private care providers. The second issue that will be solved is the issue of innovation. Consumers can give their take on some of the services that they would like to see in the NHS or among private service providers. This will ensure that most of these issues highlighted could be lumped up into anew product package. Consumers have numerous and creative ideas that could boost the public health care system in the United Kingdom.

The second marketing strategy that private service providers could adopt is through brand positioning. There are two main avenues available;

intangible brand strategy
tangible brand strategy

Intangible strategies are those brands that are not linked to any particular product. Such brands are usually designed to capture audiences through their names rather than the rationale behind them. The second type of strategy is the tangible brand strategy. These are brands that are linked to specific functions. The most appropriate strategy for private health care providers is the latter. This is because some of the most powerful organisations in the world have adopted this strategy. For example, FedEx has established a tangible strategy that links its name to guaranteed delivery. Citizen Bank has established brand that is responsive and rapid. (Bohmer et al, 2001)

The first step is the process of creating a strong brand image is through a compilation of items that may be most attractive to customers these could include

-properly trained nurses

-convenient locations

-best trained doctors

-has treated people for 50 years

These and many more could act as a platform. The market research strategy mentioned above could also act as a guide and will need more editing and analysis in order to come up with the most popular attributes. Thereafter, the health care providers could compare their attributes with those ones offered by the competitors and deduce which ones will fetch the highest market power. The health care providers then need to come up with feasibility options for different brand options. For example, is they choose the issue of having well trained nurses as their brand strategy, then they must asses what it will entail financially to adopt that trait. This is because possessing well trained nurses is a good motivating factor for patients but may not be very affordable for a particular service provider. (Mitton & Donaldson, 2004)

The issue of brand strategy is quite useful to private service providers because they have now been given the mandate to provide elective services. If clinics, hospitals, etc do not adopt a brand strategy, then they take the risk of disappearing among the other health care providers. Brand strategies will solve the problem of consumer education because they will act as platform for promoting the respective health service provider.

Conclusion

The National Health Service and private health providers have not involved the public in their decision making processes, they have also been slow in promotional efforts. Lastly, the two groups have also done very little innovation in their service delivery. These three marketing challenges can be solved through adoption of brand strategies and through market research. (Fowler, 1993) In the current market place, organisations are becoming highly competitive; using these marketing strategies could put an end to patient dissatisfaction.

Reference:

Department of Health (2006): About us: The Department of Health, retrieved from http://www.dh.gov.uk/AboutUs/fs/en accessed on 30 April 2008

Mitton, C. & Donaldson, C. (2004): Priority Setting Toolkit: A guide to the use of economics in healthcare decision making; London, UK: BMJ Publishing, pp. 35–45

Bohmer, P. et al (2001): Maximising health gain within available resources in the New Zealand public health system; journal of Health Policy, 55:37–50

Chappel, D. et al (2001):  Implementation and evaluation of local-level priority setting for stroke; Public Health. 2001, 115: 21–9

Maynard, A. (1991): Developing the Health Care Market; The Economic Journal, 101:1277–86.

Mullen, P. (2004): Quantifying priorities in healthcare: transparency or illusion? Health Service Management Resource; 17:47–58

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INTRODUCTION

One of the outstanding features of globalization in the financial services industry is the increased access provided to non-local investors in several major stock markets of the world. Increasingly, stock markets from emerging markets permit institutional investors to trade in their domestic markets. Indian stock market opened to Foreign Institutional Investors in 14th September 1992, initially with lot of restrictions. The regulation on them are liberalized and minimized now, since 1993 has received a considerable amount of portfolio investment from foreigners in the form if FIIs investment in equities. This has become a turning point of India stock market. The government of India announced the policy of the government to permit the FII investment in India capital market. According to the SEBI modified the regulation on 14-11-1995. In order to make investment in India equity market they wanted to register with Security Exchange Board of India as foreign institutional investors. It is possible for foreigners to trade in India securities without registering as Foreign Institutional investors, but such cases require approval from Reserve Bank of India or the Foreign Institutional Promotion Board. They are generally concentrated in secondary market.

Domestic market alone not able to meet the growing capital requirement of the country and financing from mutilated institution has lost primary in the emerging in the global order .Besides aimed primarily at ensuring non-debt creating capital inflows at a time of extreme balance of payment crisis. It was to tie over the balance of payment crisis in the early 1990s

Portfolio flows often referred to as ‘hot- money’ are notoriously volatile capital flows. They have also responsible for spreading financial crisis causing contagion in international market. Evan though, the FIIs have been plying a key role in the financial markets since their entry into this country. The explosive portfolio flow by FII brings with them great advantages as they are engine of growth, lowering cost of capital in many emerging market. This opening up of capital markets in emerging market countries has been perceived as beneficial by some researchers while others are concerned about possible adverse consequences.

Clark and Berko (1997) emphasize the beneficial effects of allowing foreigners to trade in stock markets and outline the “base-broadening” hypothesis. The perceived advantages of base-broadening arise from an increase in the investor base and the consequent reduction in risk premium due to risk sharing. Other researchers and policy makers are more concerned about the attendant risks associated with the trading activities of foreign investors. They are particularly concerned about the herding behavior of foreign institutions and the potential destabilization of emerging stock markets.

This study addresses these issues in the context of foreign institutional investors’ (FII) trading activities in a big emerging market – India. India liberalized its financial markets and allowed FIIs to participate in their domestic markets in 1992. Ostensibly, this opening up resulted in a number of positive effects. First, the stock exchanges were forced to improve the quality of their trading and settlement procedures in accordance with the best practices of the world. Second, the information environment in India improved with the advent of major international financial institutional investors in India. On the negative side we need to consider potential destabilization as a result of the trading activity of foreign institutional investors. This is especially important in an emerging country that has embarked upon reforms to open up its market.

OBJECTIVES The objectives of this study were as follows;

(1) To study the role of FII investment in the Indian stock market, ( 2 ) To examine the causal relationship between net FII investment and BSE sensex using granger causality test (3) To examine the causal relationship between net FII investment and NSE sensex using granger causality test (4 )To examine whether FIIs were a channel of global disturbance into the Indian stock market.

TOOLS: Study was carried out with the help of unit root test, co integration test, causal regression and F statistics for FII investment and index from BSE and NSE

LETERATURE REVIEWS

Gayathri Devi .R in 2003, she conducted study on “Causal Relationship between FIIs and Stock Market: A critical study”. It revealed that there was long run relationship between net FII investment and sensex, FII investment did not respond the short-run changes or technical-position of the market and they were more driven by fundamentals, and FII investments did granger cause India stock market. “Selen Serisoy Guerin” in 2006, conducted study on “The Role of Geography in Financial and Economic Integration: A comparative Analysis of foreign direct investment, Trade and Portfolio Investment Flows”.. It found support for the argument that most FDI among Industrial countries were horizontal, whereas most FDI investment in developing countries was vertical and our results indicated that portfolio investment flows compared to FDI, were highly sensitive to change in GDP per capita, this implied that if there was a negative output stock, portfolio investment flows would be more volatile than FDI. A.Julia Priya, D. Lazar and Joseph Jeyapual in 2005, they conducted study on “Role of Foreign Institutional Investors on stock market development in India”, Results revealed that sensex, market capitalization of NSE, Turnover of BSE and NIFTY without market capitalizations were influenced by Foreign Institutional Investors“Suchismita Bose and Dipankor coondoo” in 2004, they conducted study on “The Impact of FII Regulation in India”,. These results strongly suggested The liberalization policies had the desired expansionary effect and had either increased the mean level of FII inflows and/or the sensitivity of these flows to a change in BSE returns and /or the Parthapratim pal in 2004 conducted study entitled as “Recent volatility in stock markets in India and foreign institutional investors. Findings of this study indicated that Foreign institutional investors had emerged as the most dominant investor group in the domestic stock market in India. Particularly, in the companies that constitute the Bombay stock market sensitivity index, their level of control was very highinertia of these flows.

“sandhya Ananthanaryanan, Chandrasekhar krishnamurthi and Nilajan Sen in 2003 conducted study as “Foreign institutional Investors and Security Returns: Evidence from Indian Stock Exchanges”, It found strong evidence consistent with the base-broadening hypothesis.It did not find compelling confirmation regarding momentum or contrarian strategies being employed by FIIs.It supported price pressure hypothesis.

It did not find any substantiation to the claim that foreigner’ destabilize the market. J.S. Pasricha and Umesh.C.Singh in 2001, tried to analyze the impact of FIIs investment on Indian capital market. Their study revealed that FII are here to stay and have become the integral part of Indian capital market. Their entry has led to greater institutionalization of the market. They have brought transparency in the market operations.S.S.S. Kumar in 2001, attempted in his study to find the effect of FIIs on the Indian stock market. The inference analysis of the paper suggests that FII investments are more driven by market fundamentals rather than by short term changers or technical position of the market. As per K. Seethapathi and V. Subbulakshmi study entitled “Foreign investment: Need for focus”, They concluded that, the flows have to pick up. The political will is to be demonstrated by the government. In addition, the regulators have to identify the reasons for failure in converting approvals into actual investments and those issues are to be addressed immediately. E. Han Kim and Vijay Singal in 1997, they conducted study entitled “Are open market Good for Foreign Investors and Emerging Nations?”, Conclusion revealed as. Integrating the emerging stock markets into world markets has had benefits, and will continue to have benefits for both global investor and host countries. The end result of integrated markets a better allocation of resources, improved productivity of capital, and a higher standard of living.

THEORETICAL REVIEW

Between late 1990 and the middle of 1991, the economy faced severe balance of payment difficulties, coming close to defaulting on its external payment obligations in January and June of 1991. In January 1991, the Government negotiated with the International Monetary Fund (IMF) for loans. What followed was the implementation of the conventional IMF-World Bank prescription of short-term ‘stabilization’, consisting of devaluation, temporary import compression, fiscal and monetary compression with a rise in interest rates, followed by more long-term ‘structural adjustment’ measures, seeking to restructure the domestic economy.

The New Economic Policy was an outcome of implementation of the ‘structural adjustment’ program. The ‘economic reforms’ or ‘economic liberalization’ program, which began to be implemented with the announcement of the New Economic Policy (NEP), included wide-ranging changes in industrial policy, trade policy and foreign investment policy, a redefinition of the role of the public sector in the economy and redesigning the architecture of the domestic financial system. By narrowing down the topic, first it concentrates on capital account liberalization.

CAPITAL ACCOUNT LIBERALIZATION

The process of capital account liberalization in India needs to be situated in its wider context, for it was shaped by the reality in the national context and the conjuncture in the international context. In response to the external debt crisis, which surfaced in 1991, the government set in motion a process of stabilization, adjustment and reform. Economic liberalization and structural reforms sought to increase the degree of openness of the economy through trade flows, investment flows, technology flows and capital flows. The process began the introduction of convertibility on trade as quantitative restrictions on imports, except for with consumer goods were dismantled and tariff levels were reduced. It was combined with a liberalization of the regimes for foreign investment and foreign technology. And restrictions on international economic transactions, including capital movements, were progressively reduced. This process was also influenced by the gathering momentum of globalization which was associated with increasing economic openness in trade flows, investment flows and financial flows.

The approach to capital account liberalization in India was much more cautious. What was liberalized was specified. Everything else remained restricted or prohibited. The contours of liberalization of the capital account were, in large part, shaped by the salutary lessons of the external debt crisis which surfaced in early 1991 and brought India close to default in meetings its international obligations. The balance of payments situation, then, was almost unmanageable.

The vulnerability was accentuated by two factors: it became exceedingly difficult to roll-over short-term debt in international capital markets and there was capital flight in the form of withdrawals from deposits held by non-resident Indians. This experience dictated the parameters of capital account liberalization8. It prompted strict regulation of external commercial borrowing especially short-term debt. It led to a systematic effort to discourage volatile capital flows associated with repatriable non-resident deposits. Most important, perhaps, it was responsible for the change in emphasis and the shift in preference from debt creating capital flows to non-debt creating capital flows. To some extent, the liberalization that was introduced was also influenced by the perceived needs of the economy: financing the current account deficit, mobilizing resources for investment and attracting international firms. But capital account convertibility remained, fortunately, in the realm of rhetoric. The Mexican crisis in late 1994 was, ironically enough, a blessing in disguise for India. It was not just an early warning signal. It dampened the enthusiasm of those who advocated capital account liberalization with a big bang. It lent support to those who questioned the wisdom of capital account convertibility that would have been premature in every sense. The contours of capital account liberalization in India were determined by these factors.

In sketching these contours, it is necessary to distinguish between different forms of private capital inflows and outflows, as there are important differences between these categories in the nature and the degree of liberalization. A complete description would mean too much of a digression. For our purpose, it would suffice to consider the contours of liberalization in the following categories of capital account transactions:

• Direct investment,

• Portfolio investment, and

• Non-resident deposits.

Foreign Direct Investment

It is defined as a long-term investment by a foreign direct investor in an enterprise resident in an economy other than that in which the foreign direct investor is based. The FDI relationship consists of a parent enterprise and a foreign affiliate which together form a transnational corporation (TNC). In order to qualify as FDI the investment must afford the parent enterprise control over its foreign affiliate.

The liberalization of the policy regime for direct foreign investment began in July 1991 with two major decisions. First, direct foreign investment with up to 51 per cent equity was to receive automatic approval in selected high priority industries subject only to a registration procedure with the Reserve Bank of India. Second, a Foreign Investment Promotion Board was constituted to consider all other proposals for direct foreign investment where approval was not constrained by pre-determined parameters and procedures. In effect, this created a dual route for inflows of direct foreign investment. The approval was automatic, within the specific parameters, from the Reserve Bank of India, while all other inflows were subject to approval through the Foreign Investment Promotion Board. The access through the automatic route has been progressively enlarged over time. Needless to add, outflows associated with direct foreign investment are not subject to any restrictions, but this was so even in the era of capital controls.

Foreign Portfolio Investment (FPI)

Portfolio investment represents passive holdings of securities such as foreign stocks, bonds, or other financial assets, none of which entails active management or control of the securities’ issuer by the investor; where such control exists, it is known as foreign direct investment.

The liberalization of the policy regime was extended to portfolio investment in September1992. To begin with, foreign institutional investors such as pension funds or mutual funds were allowed to invest in the domestic capital market subject simply to registration with the Securities and Exchange Board of India. Guidelines issued by the Reserve Bank of India permitted such foreign institutional investors to invest in the secondary market for equity subject to a ceiling of 5per cent (subsequently raised to 10 per cent) for individual foreign institutional investors in a single Indian firm with an overall limit at 24 per cent of equity (later relaxed to 30 per cent of equity at the option of the firm) for total foreign institutional investment in a single Indian firm. Foreign portfolio investment further classified into

1. FIIs

2. ADR/GDR, and

3. Offshore funds.

Foreign institutional investors (FIIs)

One who propose to invest their proprietary funds or on behalf of “broad based” funds or of foreign corporates and individuals and belong to any of the under given categories can be registered for FII.

• Pension Funds

• Mutual Funds

• Investment Trust

• Insurance or reinsurance companies

• Endowment Funds

• University Funds

• Foundations or Charitable Trusts or Charitable Societies who propose to invest on their own behalf, and

• Asset Management Companies

• Nominee Companies

• Institutional Portfolio Managers

• Trustees

• Power of Attorney Holders

• Bank

Access was provided to foreign institutional investors in the secondary market for debt. Soon thereafter, foreign institutional investors were also allowed investment or placement in the primary market, subject to approval from the Reserve Bank of India, with a maximum limit of 15per cent of the new issue. It was some time before foreign institutional investors were permitted investment in government securities in the primary and secondary markets. This came in 1996-97 and was subject to the ceiling for external commercial borrowing. Subsequently, in 1998-99, foreign institutional investors were also permitted to invest in treasury-bills. There is no reserve requirements stipulated for, or taxes imposed on, these capital inflows. It also needs to be said that foreign institutional investors are allowed to repatriate the principal, the capital gains, the dividends, the interest and any other receipt from the sale of such financial assets, without any restriction, at the market exchange rate. The income tax rate for dividends on such portfolio investment for foreign institutional investors is 20 per cent, which is much lower than the corporate income tax rate for domestic or foreign firms. But foreign institutional investors are subject to a higher short-term capital gains tax at 30 per cent compared with 20 per cent for domestic investors, while the long-term capital gains tax is the same at 10 per cent. Sales of such financial assets for the purpose of repatriation are absolutely unrestricted, provided the sales are through stock exchanges. However, disinvestment through any other route, or in any other form, requires approval from the Reserve Bank of India.

Global Depositary Receipt:

Global Depositary Receipt A negotiable certificate held in the bank of one country representing a specific number of shares of a stock traded on an exchange of another country. American Depositary Receipts make it easier for individuals to invest in foreign companies, due to the widespread availability of price information, lower transaction costs, and timely dividend distributions. Also called European Depositary Receipt.

The option of portfolio investment was also made available to domestic corporate entities from September 1992. Indian firms were allowed access to international capital markets through global depository receipts or Euro convertible bonds which converted debt into equity after stipulated period. This access, however, was not automatic. Individual applications, drawn up inconformity with the general guidelines of the government, were subject to approval. This process remains unchanged.

Offshore Funds:

An offshore fund is a collective investment scheme domiciled in an Offshore Financial Centre, for example British Virgin Islands, Luxembourg, Cayman Islands or Dublin.

Similar facilities for portfolio investment were subsequently extended to Offshore funds, non-resident Indians (as individuals) and overseas corporate bodies, only for investment in shares or debentures through stock exchanges, on the same terms as foreign institutional investors, but subject to a ceiling of 5 per cent for individual non-resident Indians or overseas corporate bodies in a single Indian firm.

Among the various components of portfolio investment, FII comprises the bulk of portfolio inflows. The main objective of foreign institutional investors is to minimize risk and maximize returns by diversifying their portfolios internationally. Major determinants of investment decisions of FII are country and region specific.

Portfolio flows often referred to as ‘hot- money’ are notoriously volatile capital flows. They have also responsible for spreading financial crisis causing contagion in international market. Evan though, the FIIs have been plying a key role in the financial markets since their entry into this country. The explosive portfolio flow by FII brings with them great advantages as they are engine of growth, lowering cost of capital in many emerging market. This opening up of capital markets in emerging market countries has been perceived as beneficial by some while others are concerned about possible adverse consequences.

Among the most active FIIs are Morgan Stanely Asset Management, jardine Fleming, Capital International, J. Henery schorder, templeton, Warburg Pinkers, Internatioanl Alliance and Quantum fund.

Foreign Institutional Investors in India

India opened her doors to foreign institutional investors in September, 1992. This event represents a landmark event since it resulted in effectively globalizing its financial services industry. Initially, pension funds, mutual finds, investment trusts, Asset Management Companies, nominee companies and incorporated/institutional portfolio managers were permitted to invest directly in the Indian stock markets. Beginning 1996-97, the group was expanded to include registered university funds, endowment, foundations, charitable trusts and charitable. Since then, FII flows which form a part of foreign portfolio investments have been steadily growing in importance in India. Other than in the year 1998, the net flows have been positive. The nuclear tests and East Asian crisis did slow down the flows but as stated by Gordan and Gupta (2003), their effects were short lived. That the percentage of total net turnover of BSE, the share of average of FII sales and purchases increased from 2.6 percent in 1998 to 5.5 percent in 2002. The cumulative net FII investment in India as on August 2003 is approximately $17400 million. As of August 2003 net FII investment was 9 percent of the BSE market capitalization which is small compared to the size of the market. However, in the words of Banaji (2002), it is not the market capitalization that matters but what is important is the level of the free float, that is, the shares that are actually publicly available for trading. With floating stock in the Indian market being less than 25 percent, about 35 percent of the free float available has been bagged by FIIs – despite the fact that they invest in just a few highly liquid stocks.

Though India receives hardly 1 percent of the FII investments in emerging markets, the portfolio flows to India have been less volatile when compared with that of many other emerging markets (Gordan and Gupta, 2003). FIIs by adopting a bottom-up approach seem to invest in top-quality, high growth, large cap stocks (Gordan and Gupta, 2003). Sytse et al. (2003) provide empirical evidence that foreign institutional investors in India, invest in large, liquid companies which enable them to exit their positions quickly at relatively lower cost and also that the foreign institutional owners have a larger impact than foreign corporate owners when performance is measured using stock market valuation criterion.

India is one of the fastest growing economies in South Asia, promising a growth of over 9 percent, second only to China, it would not be a surprise to see increased FII flows to India in the future. FIIs are now looking at the economy as a whole, with the macro-economic factors also playing their role in attracting foreign investors. Factors like a strong currency, key reforms in the banking, power and telecommunications sector, increased consumer spending and stable policies are expected to play a major role in attracting FIIs to India. The Securities Exchange Board of India (SEBI) along with the Institute of Chartered Accountants of India (ICAI) jointly monitor the markets and announces the regulatory measures thus making the Indian companies more transparent and more disciplined.

According to the April 2005 report on corporate governance by CLSA Emerging Markets, India ranks fourth with a score of 55.6 percent. Banaji (2000) emphasizes that the capital market reforms like improved market transparency, automation, dematerialization and regulations on reporting and disclosure standards were initiated because of the presence of the FIIs. But FII flows can be considered both as the cause and the effect of capital market reforms. The market reforms were initiated because of the presence of FIIs and this in turn has lead to increased flows.

The Government of India gave preferential treatment to FIIs till 1999-2000 by subjecting their long term capital gains to lower tax rate of 10 percent while the domestic investors had to pay higher long-term capital gains tax. The Indo-Mauritius Double Taxation Avoidance Convention 2000 (DTAC), exempts Mauritius-based entities from paying capital gains tax in India – including tax on income arising from the sale of shares. This gives an incentive for foreign investors to invest in Indian markets taking the Mauritius route. Consequently, we now see investments coming from Mauritius while there were none before 2000.

The country wise distribution of the FIIs registered in India, with majority of them coming from USA and UK. Chakrabarti (2002) and Rao et al. (1999) point out the fact that due to existing inter-linkages, the source of the FII investment might not be the country from where the institution operates. Nevertheless, the figure gives us an idea of the country wise distribution of the FIIs in India. So as to encourage long term investments in the Indian market, Budget 2003 proposed that investors who buy stocks of listed companies from March 1, 2003 be exempt from paying tax on the gains they make on their investments, provided they hold them for more than one year. With so much to benefit from, the FII investment in India is likely to increase in the future.

Regulation on FII

Investment by FII was jointly regulated by Securities and Exchange Board of India (SEBI) through the SEBI (Foreign Institutional Investors) Regulations, 1995 and by the Reserve Bank of India through Regulation 5(2) of the Foreign Exchange Management Act (FEMA), 1999. The promulgation of legislation pertaining to foreign investment by SEBI in 1995 market a watershed for FII flows to India; this led to a significant increase in the level of FII equity inflows in the pre-Asian crisis period. The SEBI FII Regulations and RBI policies are amended and modified from time to time in response to the gradual maturing of the Indian financial market and changes taking place in the global economic scenario.

In order to trade in India equity market, foreign corporation need to register with SEBI as Foreign Institutional Investors. Without registration they can invest, but cases require the approval from RBI. They are generally concentrated in secondary market. FII are allowed to invest in

a) Securities in primary and secondary market including shares, debentures and warrant of companies, unlisted, listed or to be the listed in India.

b) Units of mutual funds

c) Dated government securities

d) Derivative traded in a recognized stock market and

e) Commercial papers

FII can invest their own funds as well as invest on behalf of their over seas clients registered as such with SEBI. These client accounts that the FII manages are known as ‘sub accounts’. FII sub accounts include those foreign corporate, foreign individual, institution funds or portfolio established or incorporated out side India.

FII may issue deal in or hold off share derivative instrument such as participatory notes (PN). The entities that can subscribe to the PN are : a) Any entity incorporated in a jurisdiction that requires filing of constitutional or other documents with a registrar of companies or comparable regulatory agency or body under the applicable companies legislation in that jurisdiction; b) Any entity that is regulated, authorized or supervised by a central bank, such as the Bank of England, or any other similar body provided that the entity must not only be authorized but also be regulated by the aforesaid regulatory bodies; c) Any entity that is regulated, authorized or supervised by a securities or futures commission, such as the Financial Services Authority or other securities or futures authority or commission in any country , state or territory ; d) Any entity that is a member of securities or futures exchanges such as the New York Stock Exchange or other self-regulatory securities or futures authority or commission within any country, state or territory provided that the aforesaid mentioned organizations which are in the nature of self- regulatory organizations are ultimately accountable to the respective securities financial market regulators.

Investment limit

As per the September 1992 policy permitted foreign institutional investment registered FII could individually invest in a maximum of 5% of a company’s issued capital and all FIIs together up to a maximum of 24%. From November 1996 are allowed to make 10 percentage investment in debt securities subject to the specific approval from SEBI as a separate category of FIIs or sub accounts as 100% debt fund investment such investment were of occurs subjected to the fund specific ceiling prescribed by SEBI and had to be within overall ceiling US 1.5 $. The investment was however, restricted to the debt instrument of companies listed or to be listed on the stock exchanges. In 1997, the aggregate limit on investment by FIIs was allowed to be raised from 24% to 30% by then board of directors of individual companies by passing a resolution in their meeting and by special resolution to that effect in the company’s Board meeting. In June 1998 the 5% individual limit was raised to 10%.In March 2000, the ceiling on aggregate FII portfolio investment increased to 49%.This was subsequently raised to 49%, on March 8 2001, Finance minister announced February 28 2002 that foreign institutional investors can invest in accompany under the portfolio investment rout beyond 24% of the paid up capital of the company with the approval of the general body of the share holders by a special resolution.

Benefits and costs of FII investments

The terms of reference asking the Expert Group to consider how FII inflows can be

encouraged and examine the adequacy of the existing regulatory framework to adequately address the concern for reducing vulnerability to the flow of speculative capital do not include an examination of the desirability of encouraging FII inflows. Yet, for motivating the consideration of the policy options, it is useful to briefly summarize the benefits and costs for India of having FII investment. Given the Group’s mandate of encouraging FII flows, the available arguments that mitigate the costs have also been included under the relevant points.

Benefits

Reduced cost of equity capital

FII inflows augment the sources of funds in the Indian capital markets. In a commonsense way, the impact of FIIs upon the cost of equity capital may be visualized by asking what stock prices would be if there were no FIIs operating in India. FII investment reduces the required rate of return for equity, enhances stock prices, and fosters investment by Indian firms in the country.

Imparting stability to India’s Balance of Payments

For promoting growth in a developing country such as India, there is need to augment domestic investment, over and beyond domestic saving, through capital flows. The excess of domestic investment over domestic savings result in a current account deficit and this deficit is financed by capital flows in the balance of payments. Prior to 1991, debt flows and official development assistance dominated these capital flows. This mechanism of funding the current account deficit is widely believed to have played a role in the emergence of balance of payments difficulties in 1981 and 1991. Portfolio flows in the equity markets, and FDI, as opposed to debt-creating flows, are important as safer and more sustainable mechanisms for funding the current account deficit.

Knowledge flows

The activities of international institutional investors help strengthen Indian finance. FIIs advocate modern ideas in market design, promote innovation, development of sophisticated products such as financial derivatives, enhance competition in financial intermediation, and lead to spillovers of human capital by exposing Indian participants to modern financial techniques, and international best practices and systems.

Strengthening corporate governance

Domestic institutional and individual investors, used as they are to the ongoing practices of Indian corporates, often accept such practices, even when these do not measure up to the international benchmarks of best practices. FIIs, with their vast experience with modern corporate governance practices, are less tolerant of malpractice by corporate managers and owners (dominant shareholder). FII participation in domestic capital markets often lead to vigorous advocacy of sound corporate governance practices, improved efficiency and better shareholder value.

Improvements to market efficiency

A significant presence of FIIs in India can improve market efficiency through two channels. First, when adverse macroeconomic news, such as a bad monsoon, unsettles many domestic investors, it may be easier for a globally diversified portfolio manager to be more dispassionate about India’s prospects, and engage in stabilsing trades. Second, at the level of individual stocks and industries, FIIs may act as a channel through which knowledge and ideas about valuation of a firm or an industry can more rapidly propagate into India. For example, foreign investors were rapidly able to assess the potential of firms like Infosys, which are primarily export-oriented, applying valuation principles that prevailed outside India for software services companies.

Costs

Herding and positive feedback trading

There are concerns that foreign investors are chronically ill-informed about India, and this lack of sound information may generate herding (a large number of FIIs buying or selling together) and positive feedback trading (buying after positive returns, selling after negative returns). These kinds of behavior can exacerbate volatility, and push prices away from fair values. FIIs’ behavior in India, however, so far does not exhibit these patterns. Generally, contrary to ‘herding’, FIIs are seen to be involved in very large buying and selling at the same time. Gordon and Gupta (2003) find evidence against positive-feedback trading with FIIs buying after negative returns and vice versa.

BoP vulnerability

There are concerns that in an extreme event, there can be a massive flight of foreign capital out of India, triggering difficulties in the balance of payments front. India’s experience with FIIs so far, however, suggests that across episodes like the Pokhran blasts, or the 2001stock market scandal, no capital flight has taken place. A billion or more of US dollars of portfolio capital has never left India within the period of one month. When juxtaposed with India’s enormous current account and capital account flows, this suggests that there is little evidence of vulnerability so far.

Possibility of taking over companies

While FIIs are normally seen as pure portfolio investors, without interest in control, portfolio investors can occasionally behave like FDI investors, and seek control of companies that they have a substantial shareholding in. Such outcomes, however, may not be inconsistent with India’s quest for greater FDI. Furthermore, SEBI’s takeover code is in place, and has functioned fairly well, ensuring that all investors benefit equally in the event of a takeover.

Complexities of monetary management

A policymaker trying to design the ideal financial system has three objectives. The policy maker wants continuing national sovereignty in the pursuit of interest rate, inflation and exchange rate objectives; financial markets that are regulated, supervised and cushioned; and the benefits of global capital markets. Unfortunately, these three goals are incompatible. They form the “impossible trinity.” India’s openness to portfolio flows and FDI has effectively made the country’s capital account convertible for foreign institutions and investors. The problems of monetary management in general, and maintaining a tight exchange rate regime, reasonable interest rates and moderate inflation at the same time in particular, have come to the fore in recent times. The problem showed up in terms of very large foreign exchange reserve inflows requiring considerable sterilization operations by the RBI to maintain stable macroeconomic conditions. The Government had to introduce a Market Stabilization Scheme (MSS) from April1, 2004.

With the foreign exchange invested in highly liquid and safe foreign assets with low rates of return, and payment of a higher rate of interest on the treasury bills issued under MSS,

sterilization involves a cost. With a rapid rise in foreign exchange reserves and the need for having an MSS-based sterilization involving costs, questions have been raised about the desirability of encouraging more foreign exchange inflows in general and FII inflows in particular. While there is indeed the issue of timing the policy of encouragement appropriately to avoid the pitfalls of throwing the baby with the bath water, there can not be a turnaround from the avowed policy of gradual liberalization, including the cap ital account. All modern market economies have evolved policies to reconcile prudent monetary management with the benefits of a liberal capital account. There is no scope for any diffidence in India also moving in the same direction.

CONCLUSION

The liberalization policies had the desired expansionary effect and had either increased the mean level of FII inflows and/or the sensitivity of these flows to a change in BSE returns and /or the inertia of these flows. On the other hand, the restrictive measures aimed at achieving greater control over FII flows also did not show any significant negative impact on the net inflows, it had found that these policies mostly render FII investment sensitive to the domestic market returns and raise the inertia of the FII flows.

Foreign institutional investors had emerged as the most dominant investor group in the domestic stock market in India. Particularly, in the companies that constitute the Bombay stock market sensitivity index, their level of control was very high. Data on shareholding pattern showed that the FIIs were currently the most dominant non-promoter shareholder in most of the sensex companies and they also controlled more tradable shares of sensex companies than any other investor groups .The sensex, market capitalization of NSE, Turnover of BSE and NIFTY without market capitalizations were influenced by Foreign Institutional Investors. FIIs investment was not across the shares listed in the stock exchange but instead it was very concentrated on the top few company’s shares. Though there was a role by FII on Indian stock market. It was to be taken very cautiously because their influences were on the very few shares in the stock market, which influenced the indicator included in the study but which might not help the Indian economy to grow

The influence of FIIs on the movement of sensex became apparent after general election in India, during this period sensex experienced its worst single-day decline in its history and in the three month period between April to June 2004, it declined by about 17 percent. Moreover, this study also showed that even sharp changes in sensex did not necessarily indicted a significant alteration of actual shareholding pattern of different investor groups even in sensex companies. The activities of foreign institutional investors in emerging economies following the opening-up of the capital account were not simply positive for these countries but could also exert adverse effects. The reasons were derived from asymmetric distributions of information between local and foreign investors and between fund holders and mangers. Foreign institutional investors could be assumed to have relatively little information on specific developments in emerging markets so that ‘diluted information’ and ‘illusive competition’ could result. Their influence on these markets was likely to worsen the relative position of local investors which leads to ‘unbalanced diversification’. Moreover, due to their incentives they were likely to amplify occurring imbalances or even trigger financial shocks leading to what they call ‘obscure risks’ and ‘booming contagion’. The was long run relationship between net FII investment and sensex, FII investment did not respond the short-run changes or technical-position of the market and they were more driven by fundamentals, and FII investments did granger cause India stock market. The FIIs investments are highly concentrate in terms of their market value in very small number of companies. There seemed to be a clear distinction in the FIIs shareholding in nifty and non-nifty companies. There was a wide gap between the actual investments by FIIs and the investments allowed as per the cap.The gap in their investments existed both in nifty and non-nifty companies

REFERENCES

1 “Parthapratim pal” in 2006, he conducted study on “Foreign Portfolio Investment, Stock market and Economic Development: A case study of India”,

2 “Selen Serisoy Guerin” in 2006, conducted study on “The Role of Geography in Financial and Economic Integration: A comparative Analysis of foreign direct investment, Trade and Portfolio Investment Flows”

3 Keneeth A. Froot and Tarun Ramadorai in 2005, they conducted study on “The information content of international portfolio flows”,

4 A.Julia Priya, D. Lazar and Joseph Jeyapual in 2005, they conducted study on “Role of Foreign Institutional Investors on stock market development in India”,

5 Keneeth A. Froot and Tarun Ramadorai in 2005, they conducted study on “Currency Returns, Intrinsic value, and Institutional-Investor flows”,

6 Megumi Suto and Masashi Toshino in 2005, they conducted a study entitled as “Behavioral Biases of Japanese Institutional Investors: fund management and corporate governance”

7 “Suchismita Bose and Dipankor coondoo” in 2004, they conducted study on “The Impact of FII Regulation in India”,

8 Lakshmi sharma in 2004, he studied, “A Gap Analysis of FIIs Investment-An estimation of FIIs investment Avenues in Indian Equity Market.

9 Parthapratim pal in 2004 conducted study entitled as “Recent volatility in stock markets in India and foreign institutional investors.

10 “Michael Frenkel and Lukas Menkhoff” in 2004, they conducted study on “Are Foreign Institutional Investor Good for Emerging Markets?”,

11 “Brian Bushee” in 2004, he conducted study on “Identifying and attracting the “right” investors: evidence on the behavior of Institutional investors”,

12 “Christophe faugere and Hany A. Shaby in 2003, they analyzed study on “Volatility and Institutional Investor holdings in a declining market: A study of NASDAQ during the year 2000”.

13 Gayathri Devi .R in 2003, she conducted study on “Causal Relationship between FIIs and Stock Market: A critical study”

14 “sandhya Ananthanaryanan, Chandrasekhar krishnamurthi and Nilajan Sen in 2003 conducted study as “Foreign institutional Investors and Security Returns: Evidence from Indian Stock Exchanges”,

15 Stuart L. Gillan and Laura T. Starks in 2003, they conducted study as “corporate Governance, corporate ownership, and the Role of Institutional Investors: A Global perspective”,

16 “Vihang Errunza” in 2001, he conducted study entitled as “foreign portfolio equity investments, financial liberalization and economic development

17 J.S. Pasricha and Umesh.C.Singh in 2001, tried to analyze the impact of FIIs investment on Indian capital market.

18 S.S.S. Kumar in 2001, attempted in his study to find the effect of FIIs on the Indian stock market.

19 “Rajesh chakrabarti” in 2000 conducted study on “FII Flows to India: Nature and Causes”

20 C.H. Rajeswar in 2000, he conducted study entitled “Foreign Institutional Investors – A new force of support and discipline”

21 As per K. Seethapathi and V. Subbulakshmi study entitled “Foreign investment: Need for focus”,

22 Ila Patnik and Deepa Vasudevan in 1998, their study entitled “foreign portfolio investment to India

23 “Rene M. Stulz” in 1999, he analyzed study on “international portfolio flows and security markets”.

24 Yung Chul Park and Chi-Young Song, they conducted study on “Institutional Investors, Trade linkage, Macroeconomic similarities and contagious Thai crisis

The public sector is supposed to witness a considerable surge in business process outsourcing in the coming years. The usual features of the public sector like budget cuts and spending deficits have put immense pressure on the government’s banking policies. This pressure in turn is diverted towards the public sector resulting it to resort to business process outsourcing of certain tasks.

There have been previous attempts by numerous public sector organizations to outsource in the past. These attempts tasted limited success. However, the move in 2010 is likely to be on a much broader scale. The procurement process of the public sector is estimated to be the one with the most need as it looks to outsource to serve the major purposes of cost-cutting while maintaining or improving the delivery levels of services.

According to the experts, the sector needs to find some more areas to include into shared services so that a BPO can be employed. The requirement for the sector to introduce extensive changes and fresher operating models, instead of mere efforts to enforce efficiency is looming large. The imminent possibility of the crisis makes it necessary to implement these changes which can be facilitated by hiring s BPO. A BPO has achieved considerable success in helping corporate giants to turn around amidst this economic slowdown; hence, the expectation in case of the public sector is completely justified. The main obstacle for this outsourcing is the bureaucracy involved in case of the public sector. Having said this, the urgency of a turn around will provide enough impetus to use business process outsourcing, even if it means massive reorganization of the entire sector.

In general, 2010 will see a resurgent BPO industry following the recession. The outsourcing vendors are looking forward to a boost in their confidence. The year would also popularize the concept of mini-multi-sourcing as end-users opt for a better BPO experience. In this case, the end-user can focus on smaller tasks assigned to a number of vendors. Another key aspect being introduced in 2010 is environmental concerns for the call center industry. The boom in the business process outsourcing industry will sustain as the need to rebuild companies resurface following the retrenchment. The introduction of new destinations is also a possible option. Countries like China, Brazil and Philippines will look to get on the BPO bus.

To know more about BPO services and call center services you can log on to our website where you will get a wide array of necessary information on business process outsourcing and call centre services.

Article Source:http://www.articlesbase.com/business-opportunities-articles/business-process-outsourcing-charge-of-the-public-sector-1740984.html

Indian Natural Gas Sector Analysis

Natural gas is fast gaining its appropriate place in India’s huge energy basket that incorporates both renewable and non-renewable energy sources to meet soaring domestic energy demand. Thanks to inherent environment friendly nature, cost effectiveness and greater efficiency, natural gas is proving its utility in energy as well as non-energy sectors. ( http://www.bharatbook.com/detail.asp?id=128444&rt=Indian-Natural-Gas-Sector-Analysis.html )

According to research report “Indian Natural Gas Sector Analysis”, India has set a target of producing 42.28 Billion Cubic Meter natural gas for FY 2009 of which only 32.8 Billion Cubic Meter have been produced. This huge shortfall is transformed in around 8 Million Metric Tons of LNG imports at comparatively higher international prices. The Indian government has further widened demand-supply gap by setting low prices which put immense subsidy pressure on domestic oil and marketing companies.

Despite intense pressure on oil and marketing companies, we have found that Liquefied Petroleum Gas (LPG), Compressed Natural Gas (CNG) are positioning themselves as a future fuel option both for industrial and non-industrial sectors in the domestic market. The number of LPG customers is expected to grow at a CAGR of around 9% to touch 150 Million mark by FY 2013. This will result in a sharp growth of LPG demand, exerting more pressure on its domestic production and imports. CNG is also rapidly gaining recognition as cost effective and pollution free green fuel vehicle. In fact, with close to 0.6 Million vehicles, India stood second in terms of number of CNG vehicles in the Asia Pacific region behind only Pakistan. The number of CNG vehicles is expected to grow at a CAGR of 16% during FY 2010–FY 2013 on account of favorable government policies.

Our report “Indian Natural Gas Sector Analysis” contains extensive information, rational analysis, quantitative data, comparable figures and well-structured tables on the natural gas market in India. The report gives a deep insight into different segments of natural gas such as LNG, LPG, and CNG, with focus on their performance. It also facilitates deep understanding on fast emerging segments, such as Gas Hydrates, Coal Bed Methane, Underground Coal Gasification, to update clients about new developments taking place in the field of natural gas exploration. Analysis and statistics regarding market size, growth, segmentation and trends in technology developments have been comprehensively covered in the report to provide cutting edge market intelligence on the market considering the impact of global economic crisis on the industry.
 

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Russia Banking Sector Forecast to 2012

The banking sector in Russia has witnessed appreciable growth in past few years and has continued the trend despite crisis. Showing resistance to the global economic meltdown, the sector continued to record double digit growth in 2008 and 2009. This uniqueness of the Russian banking sector reflects huge potential for growth and investment in the country. The banking assets are forecast to grow at a CAGR of nearly 22% during 2008-2013. The federal government and Central Bank of Russia are taking all the necessary measures to support the banking sector and maintain liquidity in the domestic economy. ( http://www.bharatbook.com/detail.asp?id=129775&rt=Russia-Banking-Sector-Forecast-to-2012.html )

Our findings, which have been amassed in our new research report titled “Russia Banking Sector Forecast to 2012”, reveal that despite adverse economic conditions, banks continued to lend to the enterprises as well as households. Total credit extended (to households and non-financial organizations) by Russian banks increased 34.5% in 2008. We also noted that state and foreign controlled banks have increased their market share to the total credit volume extended by banks in Russia. It indicates that banks are still actively lending, and are optimistic about economic conditions in Russia. Bank loans are projected to grow at a CAGR of around 23% during 2008-2013.

Moreover, deposits with Russian banks are expected to grow at a CAGR of 20-25% during 2008-2013. With the support of regulatory bodies and federal government, banks have been able to sustain the consumer confidence on the domestic banking system. Individual or household deposits, which account for over one-third of total deposits with Russian banks, grew at CAGR of about 31% during 2004-2008, while corporate deposits grew at even higher rate.

The report “Russia Banking Sector Forecast to 2012” is the outcome of extensive research and detailed study of the Russian banking sector carried out by our team of experts. In this report, all the important performance indicators of the Russian banking sector have been discussed in detail. Most importantly, it also features forecast on each of the key banking segments to provide better understanding of the banking sector in the country. Moreover, the report analyzes the trend of macroeconomic factors critical to the banking sector and their impact on the sector. Additionally, the report sheds light on the emerging industry trends which are expected to decide the future of the Russian banking sector.
 

To know more and to buy a copy of your report feel free to visit : http://www.bharatbook.com/detail.asp?id=129775&rt=Russia-Banking-Sector-Forecast-to-2012.html 

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Contact us at :

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Tel: +91 22 27578668
Fax: +91 22 27579131
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We are the leading information aggregator, facilitates and supports the business information needs. With over 115,000 reports, you can get instant access and insights on the studies in yo for market research , corporate / strategic planning by providing the latest information in the form of reports, journals, magazines and databases on varied industries like automotive, oil and gas, shipping, textiles, pharmaceuticals, energy, banking, finance, insurance, risk management, country intelligence, consumer & durable goods, chemical and more ur areas of interest. Contact us at +91 22 27578668 / 27579438 or email info@bharatbook.com or our website www.bharatbook.com

Article Source:http://www.articlesbase.com/business-opportunities-articles/russia-banking-sector-forecast-to-2012-1728107.html