Markets closed the week in line with previous week’s close despite sell-off before the long Memorial Day holiday weekend
Housing starts during April came in at an annualized rate of 458,000, while building permits for April hit a rate of 494,000. Both marked record lows
Worse-than-expected jobless claims supported the premise that economic conditions remain tenuous. Initial claims for the week ending May 16 totaled 631,000, while continuing claims climbed to a new record of 6.66 million.
S&P Ratings revised its outlook on the U.K. to negative from stable
Debate around whether market's rounding action of past 2 weeks will turn into a correction or just a modest consolidation
Industry Roundup:
Tech services sector stocks were down 1% during the week
IBM won a seven-year strategic agreement from Ferrosan, an international consumer & healthcare company in Denmark, to manage Ferrosan's IT infrastructure
Russian Railways, one of the largest railway operators in the world, announced that it is working with IBM to help optimize its IT infrastructure and is using new technologies to improve its freight and passenger management systems
IBM has been selected by Ling Tung University to build a smarter healthcare system to monitor the health of senior citizens in Taiwan anywhere, at anytime
IBM announced that Gartner has ranked IBM as the worldwide market share leader in the Portal Products and User Interaction Tools enterprise software segment
IBM & Bulgarian government announced their cooperation in nano-science & a deal for IBM to support the creation of what will be the first Bulgarian nano-technology center
Accenture has signed a three-year deal to provide Carlsberg IT with management consulting, systems integration, application development and maintenance, and programme management services in Europe
CSC announced that it is joining the Mission Support Alliance LLC team as a subcontractor on the Department of Energy’s recently announced award of a Mission Support Contract, which will provide site-wide services to support clean-up work at its Hanford site in southeastern Washington state
Infosys, TCS and Wipro have featured in the list of 100 best performing technology companies in the world, 'Infotech 100' list for 2009, compiled by BusinessWeek
HCL Technologies has entered into an outsourcing services engagement with MTV Networks (MTVN) to help MTVN brands in managing technology-led solutions in digital content creation, media asset management, community networking and cross-brand programming. The key benefits to MTVN from this engagement include platform standardization, reliability and business continuity during transition.
HCL Technologies has announced that ICRA has assigned an A+ rating to the Rs 5 billion Commercial Paper Programme of HCL Technologies. The rating indicates highest credit quality rating assigned by ICRA to short term debt instruments.
Atheeb Telecom, Saudi Arabia’s latest telecom service provider, announced its new five-year contract with Wipro to deploy an end-to-end IT solution covering operations support systems/ business support systems (OSS/BSS) and underlying infrastructure components.
EXL Services marked its 10th anniversary by formally unveiling a new branding and visual identity with the new tagline "Go Next. Now" encapsulating its DNA of ‘the Relentless Pursuit of Excellence’. It underscores EXL's commitment to consistently raise the bar through differentiated Transformational Outsourcing services that deliver a unique value proposition to clients.
Markets logged a weekly loss of 5.0%, its worst in two months, on profit taking following the market's record April rally
US trade deficit widened to $27.6 billion in March, which is the first time in eight months that the deficit widened
April total retail sales decreased 0.4%, and sales less autos decreased 0.5% as compared with consensus forecast for total sales to be flat and sales excluding autos to increase 0.2%. However, the decline wasn't as sharp as what was seen in March, when total sales slid 1.3%, and sales less autos declined 1.2%.
March business inventory data showed a 1.0% decrease in inventories, which was largely in-line with expectations
Continuing jobless claims climbed more than expected to a record high of 6.56 million. With jobless claims mounting, many expect consumer spending to remain challenged
April CPI met expectations by coming in flat, while Core CPI saw a stronger increase than had been expected by coming in with a 0.3% monthly increase
Industrial production for April fell 0.5%, which wasn't as bad as what had been expected, and capacity utilization came in at 69.1%, moderately better than what was expected
Media reports said the cost of borrowing between banks had fallen, offering a refreshing sign that credit conditions were loosening
Industry Roundup:
Tech services sector was down 1% during the week
IBM has helped the Health Insurance Institute of Slovenia to roll out a new electronic health insurance card system across the country that enables healthcare providers to instantly and accurately check a patient's health insurance status and allows for health claims to be processed online.
HP Middle East introduced its latest Document Management technology, with the launch of products aimed at increasing efficiency and security of business-critical document workflow for companies in the Middle East
Accenture is reportedly about to open a subsidiary in India under a separate name with rates well below the premium-level pricing Accenture has traditionally charged, according to the Economic Times of India. As per the report, the new unit will bill at rates about 10% below the $27 or $28 hourly rate Accenture charges its clients.
CSC announced today that the US Army has awarded the company a task order to provide systems engineering, technical and program support for the Project Manager, Defense Communications and Army Transmission Systems. The task order has a one-year base period and two one-year options, bringing the estimated total three-year task order value to $226 million
CSC was awarded SAP Global Pinnacle Award for its achievements in global information technology outsourcing on the eve of SAPPHIRE, SAP’s annual customer conference. The company also was recognized as a finalist in the customer satisfaction category.
ACS has been awarded a $37.5 million contract to assist the state of Louisiana to oversee construction and handle claims of eligibility for the Small Rental Property Program, an initiative to rebuild rental property damaged by hurricanes Katrina and Rita.
ACS will provide Medicaid fiscal agent services to the State of Virginia under a five-year, $84 million contract. Under the contract, ACS will assume operations of the state's existing Medicaid management information system and enhance the system with 24-hour access for transactions processing and improved online provider enrollment.
TCS obtained a five-year contract to provide information-technology support to Volkswagen Group UK Ltd.
TCS and Infosys announced separately that Forrester cited them as Leader in its April 2009 report "The Forrester Wave(TM): Global IT Infrastructure Outsourcing, Q1 2009”
Infosys Australia’s recently formed strategic consulting group bagged its first big-bank client, one of the big four in Australia, this month for a range of IT consulting services.
Infosys and Oracle today announced the completion of the implementation of a global Human Capital Management (HCM) system, based on Oracles PeopleSoft Enterprise, at Weatherford International Limited.
Equitorial Trust Bank, one of the leading indigenous banks in Nigeria, has signed Infosys’ universal banking application, Finacle, to replace their current legacy Globus banking application. ETB joins other banks such as Hatton National Bank in Sri Lanka in moving away from the Globus to Temenos upgrade track and pitching tent with Finacle.
HCL AXON, integrated SAP services division of HCL Technologies, announced that Jet Aviation has selected HCL AXON`s proprietary maintenance, repair and overhaul (MRO) solution, iMRO, to optimize the management of MRO operations within their existing installations of SAP solutions
HCL Technologies announced that it has built a hosted SAP infrastructure for MIsys, a provider of integrated solutions for banking, treasury and capital markets, which will deliver predictable and standardized SAP performance for Misys’ end-to-end users across America, Europe and Asia. The benefits of the solution to its users include scalability, flexibility and ease of deployment for SAP applications.
HCL Technologies announced that it has engaged with Rockwell Automation to achieve referenced status as part of the Rockwell Software Enterprise Solution Partner Program. During the initial membership phase, the companies will collaborate on the delivery and integration of Rockwell Automation software and solutions by HCL's Manufacturing Solution Experts.
Cognizant and SAP AG today announced a global services partnership in an effort to deliver increased business value by streamlining their engagement and enabling both companies to respond quickly to the ever-changing needs of their customers
Wipro and SmartOps Corporation, the leading provider of enterprise-class supply chain optimization solutions, announced the launch of their holistic Multi-echelon Inventory Planning & Optimization offering
Wipro announced that it has signed a $34 million information technology services deal with U.S.-based refiner Sunoco Inc
Wipro Infotech becomes the first 'Platinum Partner' from India for Hitachi Data Systems. This alliance will help enterprise customers across verticals avail of the wide range of services, consultation and storage solutions
Patni announced that it was named the 2009 ‘IT Supplier of the Year’ by Weyerhaeuser, a leading provider of integrated forest products
Markets recorded another week of gains on more signs of economic stabilization
Investors who were waiting on sidelines have started to invest, as March saw the biggest sequential inflow of funds into mutual fund assets since April 2003
Government announced findings of its much awaited stress test on 19 major financial institutions and has instructed 10 institutions (Bank of America, Wells Fargo, GMAC, Citigroup, Morgan Stanley, Regions Financial, SunTrust Banks, KeyCorp, Fifth Third Bancorp, PNC Financial Services) to raise more capital
The latest ADP Employment Report estimated that 491,000 jobs were cut from private payrolls in April, which isn't nearly as bad as the 645,000 job cuts that were expected. It is also down substantially from the 742,000 job losses recorded for the prior month.
Government said non-farm payrolls shed 539,000 jobs in April, the fewest in six months and better than the expected decline of 600,000.
Pending home sales for March advanced by a better-than-expected 3.2% month-over-month
Construction spending in March increased 0.3% month-over-month, exceeding the 1.6% decrease that was expected
ISM non-manufacturing index rose to 43.7 in April from 40.8 in March
$14B auction of 30-year Treasury bonds was poorly received sending interest rates higher
On the negative side however, several prior months were revised lower, and the unemployment rate jumped to 8.9% from 8.5%, as expected
Oil prices continued to jump on the improving economic outlook
Markets also took cue from the news that Asian stocks marched higher following word that several Asian finance ministers ordered an emergency liquidity fund of $120 billion to be pooled and that China's second quarter GDP is expected to outpace that of the first quarter
Industry Roundup:
Tech services sector shares was up 1% during the week
IBM announced the signing of a services agreement with Germany's Federal Employment Agency, Bundesagentur fur Arbeit (BA) to help the agency file, distribute, process and manage documents electronically
IBM has been selected by Taiwan government to help build a Smart Taxation Service System. The project, is expected to deliver significant cost savings through improvements in taxation processes, service delivery and by building a more cost- and power-efficient data center
IBM has been declared the leader for building innovation into large-scale outsourcing contracts as part of the Bathwick Services Index research, conducted by The Bathwick Group on prominent outsourcing vendors in Europe
HP and Research In Motion have entered into a strategic alliance to deliver a portfolio of solutions for business mobility on the BlackBerry platform. The solutions, which include support for BlackBerry Enterprise Server 5.0, are focused on increasing service levels, reducing operations costs and improving productivity.
EDS, a HP company, is reported to be close to buying Fidelity's India-based IT operations for $150 million plus a long-term outsourcing deal from Fidelity, the world's biggest mutual-fund company. IBM had the inside track earlier this year, and Infosys, which has 3,000 people on the Fidelity account, could lose one of its largest clients.
Accenture received Global ISO 14001 Environment Management System certification from BSI for all its 53 locations around the world
Accenture Insurance Claim Components Solution has received the top score for ‘overall customer satisfaction’ in the Average Customer Experience Rankings report, published by Novarica, an independent research & advisory company focused on technology strategy for financial services & insurance executives
The U.S. Air Force has awarded CSC eight task orders to provide logistics and maintenance support to the U.S. Army Regional Aviation Sustainment Management. The task orders each have a one-year base period and a one-year option, and are collectively valued at $347 million.
CSC announced that it has signed a new 10-year $90-million contract with Wilton Re, a provider of life insurance and re-insurance, to provide a full range of business process outsourcing services.
ACS signed a 5-year, $84 million contract with Virginia Department of Medical Assistance to manage its Medicaid program
ACS has been named Employer of the Year by Horizon Goodwill for working with Goodwill to recruit, hire and train people with disabilities and other employment barriers
ACS said that BPO represented 95% of new deals; ACS, who currently maintains about 5,000 workers in India out of its total workforce of 74,000, also said that it aims to have 50% of employees in India (did not mention the time frame)
Infosys was among the 17 Indian firms that figure among the top 50 in the 2009 Reputation Institute Global 200 list of the world's 200 most reputable companies published by Forbes. Italy-based chocolate producer Ferrero was ranked as the most reputable company and IKEA was the second.
Cognizant reported first quarter 2009 results - Revenue of $746 million (+16% y/y; -1% q/q) as compared to $643 million in first quarter 2008; Net income and diluted EPS of $113 million and $0.38 in the quarter up from $102 million and $0.34 made in the same period last year; guides Q2 revenue of $760 million (+2% q/q) and full year revenue of $3.1 billion (+10% y/y)
Cognizant has signed a global strategic partnership with Temenos, a global provider of integrated core banking systems, to significantly enhance its service and delivery capabilities for Temenos’ T24 Model Bank
Perot reported first quarter 2009 results - Revenue of $621 million, a decrease of 9% year-to-year, over first quarter 2008 revenue of $680 million; Diluted EPS was $.24, an increase of 4% over first quarter 2008 diluted EPS of $.23; guides Q2 revenue of $620-635 million (+0-2% q/q) and diluted EPS of $0.23-0.25
Swan Telecom, majorly owned by UAE-based Etisalat, has shortlisted Wipro, IBM and Tech Mahindra, for an outsourcing contract estimated at $505 million
Genpact reported first quarter 2009 results – Revenue of $266 million, an increase of 13% from $235 million in the year-ago period (83% revenue from BPO and 17% from IT; GE contribution of 42% of revenue); net income rose to $30 million or $0.14 per share from $20 million or $0.09 per share in the previous year; guides 10-15% increase in revenue for full year compared to $1.05 billion of 2008
WNS reported fourth quarter 2009 results – Revenue less repairs of $96 million, an increase of 27% from corresponding quarter last year; net income of $2.4 million compared to $6.1 million from the corresponding quarter last year
Patni announced an Operational Fund Accounting Service designed to manage back-office functions for buy-side firms that ensure data consistency, accurate financial reporting, customer data security & privacy and freeing customers to build their businesses. Patni is currently managing back office accounting for 450 portfolio funds on behalf of customers within the hedge fund & mutual fund industries with more than $325 billion of assets under management.
EXLS reported first quarter 2009 results – Revenue of $41 million, a decrease of 8% y/y and 6% q/q; net income of $3 million compared with $7 million made in first quarter of 2008; diluted EPS down to $0.10 per share from $0.12 in the previous quarter and $0.16 in the corresponding quarter previous year
Markets closed higher during the week despite profit taking and end-of-the-month squaring of positions
Week began with the news of an outbreak of swine flu which gave investors an excuse to turn cautious
Factory orders for March declined 0.9%, worse than the 0.6% decline that was widely expected
ISM Manufacturing Index for April showed continued contraction at 40.1, though better than 38.4 that was expected, and was also up from 36.3 in March
Personal consumption climbed 2.2% after dropping 4.3% in the fourth quarter
GDP report indicated that U.S. economy fell 6.1% in the first quarter as against an expected fall of 4.7%. The economy contracted at a 6.3% in the fourth quarter. GDP has now fallen in three consecutive quarters. That hasn't happened in 34 years, since the third quarter of 1974 through the first quarter of 1975.
Hope for an economic recovery in the second half of this year helped prop up oil prices
Banks came under pressure as investors became a bit skittish after hearing that results from the government's bank stress tests won't be released until May 7, which is later than the May 4 release that was originally planned. Rumours suggest that the government's findings are not entirely positive
Federal Reserve left short-term interest rates at a record low and said the pace of economic contraction appears to be somewhat slower
Some of the selling in the week was tied to Chrysler's bankruptcy filing, which was no surprise but served as a reminder that many companies remain in trouble
Industry Roundup:
Tech services sector stocks were up 6% during the week
IBM declared quarterly dividend of $0.55 per common share, an increase of 10% from last quarter. IBM has increased its quarterly dividend by 175 % since 2006. This is the 14th year in a row that IBM has increased its quarterly cash dividend. With this payment, IBM will have paid consecutive quarterly dividends every year since 1916.
IBM authorized $3 billion in additional funds for use in the company’s stock repurchase program. IBM said it will repurchase shares on the open market or in private transactions from time to time, depending on market conditions. This is in addition to approximately $3.7 billion remaining at the end of March from a prior authorization.
ABC Brazil Bank has signed an agreement with IBM in Brazil to implement a scalable modular datacenter, following Information Infrastructure best practices.
Amway GmbH and IBM announced they have renewed and expanded a €3.2 million outsourcing contract for three additional years. The expanded agreement provides an on demand model that enables Amway to flexibly adjust its use of IT resources to meet its business requirements
IBM and Atkins, a design and engineering consultancy group in the UK, announced a £14.4 million five-year managed data storage transformation agreement. The IBM solution will put in place the infrastructure and tools needed to manage the storage environment across the business.
IBM announced the opening of a Healthcare Industry Solution Lab in Beijing, where IBM will work with hospitals and rural medical cooperatives to make healthcare "smarter" as the Chinese government enacts widespread healthcare reform.
HP announced that Woolworths, Australia’s largest retailer and second-largest private employer, has chosen the HP Neoview enterprise data warehousing platform, along with HP consulting services, to increase operational efficiencies and improve insight into store operations.
EDS, an HP company, signed an agreement with Continental Airlines to enhance its EDS Flight Planning Services in order to reduce flight operating expenses and create efficiencies for Continental by automating some aspects of flight planning.
Accenture has been awarded a three-year consulting and IT services contract by Carlsberg, Copenhagen. Under the contract, Accenture will provide Carlsberg with management consulting, systems integration, application development, application maintenance and program management services in Europe.
ACS announced a 10-year extension to its exclusive agreement with TravelCenters of America LLC for truck stop scanning and document delivery services
ACS reported its fiscal third-quarter results - Revenues of $1.6 billion, up by 5% as compared with $1.5 billion in the third quarter of the previous year; Net income was $93.2 million or $0.95 per diluted share, up 13% as compared with $82.6 million or $0.85 per diluted share in the third quarter of last year
Infosys and The Co-operative Financial Services (CFS), part of The Co-operative Group, the UK's largest consumer co-operative, announced that CFS has chosen Finacle to power its business transformation initiative
Infosys BPO ranked 4th in the annual survey 'FAO Enterprise Provider Bakers Dozen' undertaken by FAO Today for 2008. The survey ranks top companies in the domain of Enterprise Finance & Accounting outsourcing, on parameters of breadth of service, quality of service and deal size based on customer rating.
Infosys has appointed KV Kamath, non-executive Chairman of ICICI Bank, India's second largest bank, as an additional director to the Infosys Board
Wipro won a $50 million IT services contract from Unitech Wireless, pipping rivals including IBM, Tech Mahindra and TCS. Unitech Wireless, controlled by Norway’s biggest telecom company Telenor, has licences to provide telecom services in all of India’s 22 telecom circles, but is yet to start operations.
Wipro decided to do away with the bonds, through which freshers paid a security deposit of Rs75,000 & agreed to work for a minimum of 15 months
HCL Technologies Ltd has been named as one of Britain's Top Employers 2009 by CRF International along with IBM, McDonalds & The Co-Operative Group
HCL Technologies announced that it has won a five-year contract from UTi Worldwide Inc, an international, non-asset-based supply chain services and solutions company. UTi has selected HCL as a strategic global partner for IT application & infrastructure operations, and management
HCL BPO, a division of HCL Technologies, announced the signing of a five-year deal with a Britain-based water utilities client
Syntel reported its Q1FY2009 results - Revenue for the quarter at $96.4 million, y/y decline of 7.9% and q/q decline of 2.1%; Net income was $27.3 million or $0.66 per diluted share, compared to $20.4 million or $0.49 per diluted share in the prior-year period.
Patni reported its Q1FY2009 results - Revenue for the quarter was $156.4 million as against $176.4 million in the same period last year, down 11 per cent; net income of $18.1 million in the quarter, a decline over 17% over corresponding quarter last year
Patni unveiled ‘Midflight Optimization’ offering for telcos, 70% of whom are having time & cost overruns in their ongoing BSS transformation programs & need mid-course correction. The solution will deliver mid-project correction savings of 30% of the entire transformation cost & expedite time to market by 25%
Patni has been ranked as No. 1 ‘Green Innovative Information Technology Vendor’ by 2009 Black Book Top Green Outsourcing Vendors Survey
Hexaware reported its Q1FY2009 results – Revenue for the quarter at $ 52.6 million, y/y decline of 21.5% q/q decline of 15%; Net income at $3.4 million, decline from $4.0 million made in same quarter last year
Tech Mahindra announced its fourth quarter results - Revenues of Rs10.5bn (-7%qoq, +3%yoy); Net profit of Rs2.3bn (3.5%qoq, 5.3%yoy)
The International Association of Outsourcing Professionals (IAOP) released the rankings for the fifth annual list of the world's leading service providers. Accenture and IBM were named to the top two positions for the second consecutive year in the Global Outsourcing 100. iGATE is 59 on the list.
Industry Roundup:
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