Markets and Industry Roundup - week ending April 17, 2009

Markets Roundup:

• Markets closed marginally higher after seesawing earlier in the week, allowing the market to score a sixth straight week of gains
• Weak March retail sales data fueled profit taking in the market at the beginning of the week
• Goldman Sachs announced a $5 billion common equity offering that will prove dilutive to existing shareholders, but is intended to help repay TARP funds. However, it was offset by a better-than-expected earnings announcement and a reaffirmed outlook.
• March industrial production fell a more-than-expected 1.5%, while capacity utilization came in at 69.3%.
• Consumer prices for March slipped 0.1%, but core prices increased 0.2%. Economists expected a respective increase of 0.1% and an increase of 0.1%.

Industry Roundup:

• Tech services sector stocks were down 1% during the week
• The biggest news in the technology services industry last week was Tech Mahindra emerging as the highest bidder for Satyam @ Rs 58 per share for the 31% stake. Along with the 20% open offer Tech Mahindra will make at the same price, the 51% Satyam stake could cost Tech Mahindra at least $580 million
• The Hokkoku Bank Japan has extended its strategic outsourcing contract with IBM for an additional 6 years and 8 months. As part of the agreement, IBM Japan will manage the operation and maintenance of the company's information technology systems.
• IBM announced that Daishi Bank, Japan has extended its outsourcing contract for an additional 6 years. IBM will manage the operation and maintenance of the company's information system and the development and maintenance of its applications.
• IBM announced an agreement with STAR India, a leading media & entertainment company in Asia, to implement SAP ECC 6.0 application for all major business processes
• Jet Plastica, a leading manufacturer of foodservice disposables, has selected IBM to implement the Infor ERPLN Fast Start program and the Cognos Enterprise Reporting tool
• IBM created a new consulting organization, IBM Business Analytics & Optimization Services, dedicated to the market for advanced business analytics & business optimization
• IBM announced that it is establishing the first IBM cloud computing laboratory in Hong Kong. The new facility will provide a global hub for Web-based messaging services to support IBM's emerging LotusLive cloud service portfolio, which offers affordable, company-to-company social networking and online collaboration tools.
• HP announced that it has signed a seven-year infrastructure services contract to reduce operating costs, improve flexibility and accelerate business growth for Celesio AG, one of Europe’s leading pharmaceuticals services providers
• Accenture won a five-year IT outsourcing agreement from Scripps Networks Interactive, a developer of lifestyle-oriented content for television & internet, to provide application development & maintenance as well as infrastructure-management services such as data center, security, and network services.
• Accenture won a five-year application outsourcing contract from BMW to consolidate its information technology processes. As part of the agreement, Accenture will help BMW consolidate a vendor network of its application operations service providers & to make overall IT processes more reliable, predictable and efficient.
• CSC announced that the NASA Shared Services Center, a public-private partnership between NASA, CSC & the state governments of Mississippi & Louisiana, won the Best New Captive Services Delivery award from the Shared Services Outsourcing Network
• CSC, established in 1959, is celebrating its 50th anniversary, marking five decades of delivering technology services across the globe.
• ACS announced that it will be hiring 215 new employees – 180 in Lexington and an additional 35 in London – to positions for customer care agents, data entry, clerical and managers who are needed to respond to increased business.
• Tata Consultancy Services (TCS) has brought about 500 employees accounting for 10% of its UK workforce back to India, as a part of its cost-cutting drive.
• Infosys announced its Q4FY09 and full year FY09 results - Revenue for Q4 of $1,121m, a decline of 4.3%QQ/1.8%YY and earnings for Q4 of $0.56, a growth of 1.8%YY; Revenue for FY09 of $4,663 million, a growth of 11.7%YY, and earnings for FY09 of $2.25, a growth of 10.3%YY. Infosys has guided Q1FY10 revenue of US$1,060-1,080m, down 3.6-5.4%QQ and 6.5-8.2%YY and fiscal 2010 revenues to be down 3.1-6.7%YY and fiscal 2010 margin to be down 300 basis points
• A survey by Infosys of 139 of the its clients, representing 83% of its revenue revealed that IT budgets are being slashed this year, some by up to 10%.
• Infosys sees over $1 billion worth of outsourcing contracts coming from the Indian market over next few years, as country’s government and state-owned organisations seek to become more efficient by outsourcing their IT needs
• During the week, both Cognizant & Wipro announced being named ‘Leader’ in ‘The Forrester Wave(TM): Global IT Infrastructure Outsourcing, Q1 2009’ by Paul Roehrig, PhD
• Perot Systems has signed an agreement with The Christ Hospital to provide revenue cycle services including billing, follow-up and certain customer service functions
• Wipro Technologies CTO Vijaya Kumar laid out its strategy to enter the cloud computing market over the next three to six months
• Wipro BPO has received the 'highest average rating' among Indian service providers from IDC for providing value-added business process redesign and management
• Delta Air Lines, the world's largest commercial carrier after its merger with Northwest Airlines in 2008, said that it is pulling back 2,000 jobs from Wipro claiming customer dissatisfaction, after six years of having outsourced the call services