Markets and Industry Roundup - week ending May 8, 2009

Markets Roundup:

• 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