Was Cyrus Mistry removed from the post of Tata group chairman because of his inability to display the leadership expected of him? If a report on ET Now is to be believed, then Cyrus Mistry was not “cut out for the job”. Sources in Tata Group have told the channel that Cyrus Mistry was sacked because he was unable to make the cut as a leader. “Mistry did not display the leadership expected from the Chairman of Tata Sons. He was decent and hardworking, but was not cut out for the job,” sources have told the channel.
It appears that Mistry was given the ‘opportunity’ to resign, but he chose not to. “There is no particular reason for the decision to remove Mistry, the accretion of things led to it. There is no gentle way of removing a Chairman, it had to be done,” sources said, adding that the Tata Sons Board felt that Mistry was not what the group needs as a leader. Now, Mistry is expected to resign from the post of Chairman of several group companies as well.
Late President A P J Abdul Kalam was a tad cautious about ‘Make in India’ campaign saying though it’s “quite ambitious”, it has to be ensured that India does not become the low-cost, low-value assembly line of the world. On Digital India, he felt it has the potential to activate the knowledge connectivity needed in villages and remote areas and “we need to bridge the gaps of lower level of literacy, language and customised content, though”. These views are expressed in the soon-to-be published “Advantage India: From Challenge to Opportunity”, one of the last books written by Kalam along with his aide Srijan Pal Singh.
The book, published by HarperCollins India, also has his unfinished speech of July 27 at IIM-Shillong where he collapsed only to breathe his last hours later. The NDA government launched ‘Make in India’ in September last year. The programme aims at promoting India as an important investment destination and a global hub for manufacturing, design and innovation. “Well, let us be clear on this. ‘Make in India’ is quite ambitious. But we need such high aspirations… I agree with the infrastructure concern. “India has seen an unbalanced infra growth -variations are rampant across states and sectors. For instance, while the telecom and Internet sectors have made remarkable progress, many villages still are not connected with roads and power. Physical infrastructure cannot be ignored for manufacturing growth,” he wrote.
It’s no secret that Citi’s top chartist Tom Fitzpatrick is bullish on Gold. Earlier this week he reiterated his call that the yellow metal would head to $3,500 in a few years.
Fitzpatrick offered more color in some follow-up commentary published in King World News.
He employs his analogy of the “stairway to hell” which tracks the debt ceiling.
The recent “squeeze in Gold” has sent it significantly below this “stairway to hell” chart (Debt limit) which has continued higher. As we said earlier, we do not believe that this fall in Gold will be sustainable and expect new highs in the trend eventually. As we also said, we have retained a long-term target of about $3,500 for some time on this Gold price based on a comparison of this period and that seen in the 1970’s….
“As we headed towards the last Presidential election there was a considered view in the markets that by the end of President Obama’s 2nd term the debt limit could be as high as $22 trillion. Then we got the sequester, a more rosy economic outlook, tapering talk and all this has been forgotten. For how long?
The market dynamics above combined with the change of leadership at the Fed may well be “resurrecting that thought.” If so, our 2nd favorite Gold chart comes into play.
Fitzpatrick thinks that $22 trillion debt limit will come within three years, which is when we could see $3,500 gold.
Who has been running for the exits in the recent rout in Asian equities?
HSBC parses the data and finds something surprising: Mutual fund outflows from India have been relatively moderate and investors are still heavily overweight the market.
Mutual fund positions in the Philippines have also stayed high, as investors hope that the market will recover. It had been doing well earlier this year on the back of optimism in the current leadership’s plans for reform but has been falling since May.
On India, HSBC’s strategist Herald van der Linde writes:
Despite the uncertainty of growth in India, equity positions have remained sticky, possibly a reflection of investors’ comfort with some of the larger, defensive, high ROE companies in that market.
“Defensive” is a key word. Overall, funds have favoured defensive markets, building up their overweight positions in Asia’s relatively developed markets such as Malaysia, Singapore and Hong Kong. Funds also have overweight positioning in defensive sectors, including healthcare and utilities.
The average household in Japan hasn’t felt optimistic about the economy since early 2006, and in July the pessimism got a bit deeper.
The Cabinet’s monthly consumer confidence survey in Japan unexpectedly dropped to its lowest since January last month. The index fell to 43.6 from 44.3, versus expectations that it would climb to 45. (A score below 50 suggests pessimism).
Of the four components, only employment inched forward from June. But respondents were more pessimistic when asked about their overall livelihood, income growth and willingness to buy durable goods.
The results underscore the difficulty Japan’s leadership has in wanting to raise a national sales tax. The move is supposed to be a financially responsible bid to raise tax revenue, but critics point out that consumer confidence is too fragile and the tax could hurt the nascent recovery.
I am proud of my nation, says Amartya Sen at this Idea Exchange. I want a country in which a large portion of the population cannot be scared, rightly or wrongly, about the nature of the leadership.I don’t understand the why the hype about Gujarat’s growth model.
So much for the view that foreign appetite in China is waning.
Foreign direct investment in the world’s second largest economy rose 20.1 per cent in June from the prior year, against forecasts of a mild 0.7 per cent gain, according to data from the Ministry of Commerce.
FDI in the month was $14.39bn, versus $9.26bn in May. The higher-than-anticipated investment figures place the year-to-date gain 4.9 per cent ahead of last year, at $61.98bn.
When year-to-year FDI figures in May were up just 1 per cent, investors were concerned that weak demand for exports was hurting investor appetites.
Now it appears multinationals still believe in the long-term trend as China’s new leadership shifts its emphasis towards qualitative growth.
If C Northcote Parkinson had formulated a law of obsolescence, it would probably read like this: “The greater the efficiency achieved by an organisation in performing its core tasks, the more rapid will be its descent into obsolescence.” But since neither he nor anyone else I know of did, I will stake my claim on it.
The conceptual foundations of this proposition are quite simple. Organisations succeed and grow because they figure out how to do a few things very well. These things – products or services, with all the attendant processes – then expectedly tend to crowd out everything else they do. People move up the ladder because they have been associated with successful activities. Over a period of time, the top leadership comprises exclusively people who have all come up in exactly this fashion. The focus of the organisation on these activities and the reward and recognition systems tied to them gradually leads to the disappearance of everybody who has other interests or perspectives, particularly from the top leadership.
Every product and service has a natural life cycle and, consequently, so do business models and strategies. This is what drives obsolescence. Organisations of the kind described above lose the ability to anticipate and respond to the end of the life cycle, because they are full of people with huge vested interests in the current model. As a result, when the life cycle ends, their knowledge and skills developed while perfecting the process stop being competitive advantages and, very often, can become a liability because they are not easily transferred to the beginning of a new product life cycle. Obsolescence is the outcome.
“Years ago, Mrs Thatcher recognized the truth behind the European Project,” UKIP’s Nigel Farage reminds his European Parliament ‘colleagues’, “she saw that it was about taking away democracy from nation states and handing that power to largely unaccountable people.” In one of his most wonderfully vitriolic remonstrations, the fiery Farage blasts Europe’s leadership, “this European Union is the new communism.” Slamming Olli Rehn and his Troika cohorts for “resorting to the level of common criminals and stealing people’s money”, Farage warns, rather chillingly, that, “it is power without limits. It is creating a tide of human misery and the sooner it is swept away the better.” Simply put, he concludes, the European Parliament is living out a federal fantasy which is no longer sustainable.
China Retail Sales For March +12.4% Y/Y (Vs. +12.6% Expected)
China March Industrial Production +8.9% (Vs. +10.1% Expected)
Prior was +9.9% y/y
China March Fixed Asset Investment Excluding Rural 20.9% (Vs. 21.3% Expected)
Prior was 21.2%
On a separate note:
The Chinese statistics office have said the Q1 miss is due to slower global growth and also domestic policy adjustment. There is some speculation doing the rounds that the figures may be slightlyunderstated (!) so as to give the new leadership a lower base to work from going forward.
Also, note that its only a matter of time before these weak numbers park talk of PBOC easing.