Will super typhoon derail Philippines’ economy?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

As the Philippines continues to suffer the devastating impact of the worst storm to have ever hit land, analysts have started to weigh up how damaging this tragic event could be on the country`s burgeoning economy.

The storm is estimated to have killed up to 10,000 people and destroyed towns and villages across on the island of Leyte and neighboring island Samar, after storm surges as high as trees and wind gust reaching 175 miles per hour ravaged the region.

Since the typhoon made landfall on Friday, the Philippines` domestic currency – the peso – has weakened by 0.3 percent against the dollar to trade at around 43.405. Meanwhile, the Philippine stock market fell 2.2 percent in the first half an hour of trading Monday.

According to PJ Garcia, head of institutional business at BPI Asset Management, the economic impact of the typhoon should be contained to the area of the Philippines most heavily hit and the effect on the rest of the economy should be minimal.

“This is a very unfortunate event. It`s unprecedented in terms of the damage done [to the region]…The market will likely, of course, see some correction from here in the short term, [but] in terms of the impacts on earnings for listed companies, I think the impact is not as adverse as the devastation on the ground,” he said.

Garcia added that the damage to the economy was unlikely to show up in the Philippines` final quarter economic data, but would come through in the first quarter of next year, with the agricultural sector taking the heaviest hit.

The hardest-hit province of Leyte produces a high level of rice and sugar.

“Remember before the super typhoon hit the region, a lot of the farmers were under harvesting period. Unfortunately they got hit before they could harvest their produce and that will affect agricultural output… We expect a one-off spike in inflation at least for November and December as a result of the agricultural losses,” he added.

However, Garcia added that a silver lining would be the massive infrastructure re-building effort the region would require, and would help offset the damage to growth.

The Philippine economy has bolted ahead in recent years, clocking a 6.6 percent growth last year, with the government targeting a similar level in 2013.

In terms of currency, Ray Attrill, co-head of FX strategy at the National Australian bank, said the Philippines peso was set to suffer a similar plight as the Indonesian rupiah in the aftermath of the 2004 tsunami.

“In that case [the 2004 tsunami] the rupiah did fall about 10 percent in the immediate aftermath… my guess is we are closer to the 2004 tsunami [in terms of similar reaction]… which probably means downward pressure on the peso,” he said.

However, Attrill added that he expected the selloff to be short-term, as large-scale foreign aid flowing into the region combined with a likely increase in foreign workers sending extra money back home, which makes up a large part of the Philippines` economy, would likely provide longer term support.

Philippine Finance Minister Cesar Purisma told CNBC on Monday that the typhoon would shave between 8 to 10 percent off the region`s gross domestic product next year, and roughly 1 percent of the Philippines`s overall growth.

-By CNBC`s Katie Holliday: Follow her on Twitter @hollidaykatie

Copyright 2011 cnbc.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Shareholder activism puts big business at risk

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Activist shareholders have ramped up the pressure on companies over the last three years, according to a new report, leaving few big companies immune to their advances.

There were over 320 activist interventions – when a shareholder uses their stake in a company to put pressure on management – across the world in the first nine months of 2013, research by law firm Linklaters found. This marked an 88 percent rise on the same period in 2010.

Larger businesses – with market capitalisations of more than USD 2 billion – were now a serious target, the report said, following a 129 percent rise in activist investments at these mid- and large-cap companies.

The research, published Monday, comes amid what some have dubbed the “golden era of activist investors.”

High profile activist investors include Carl Icahn ( pushing for an Apple share buyback ), Dan Loeb (who has put pressure on Sotheby`s CEO to leave ) and Bill Ackman (who called Herbalife`s business model a “pyramid scheme.” )

Given the prominence of Icahn and Loeb`s tech investments, it may come as no surprise that the type of companies targeted by activist investors has also changed significantly over the past three years, according to Linklaters` research.

In 2010, the majority of activist activity was in the financial sector – the focus of 36 percent of interventions – with only 16 percent of activism taking place at technology firms.

By contrast, in 2013 some 22 percent of activity was focused in the tech sector, with just 15 percent of actions occurring at financial companies.

Charles Jacobs, a London partner at Linklaters, said that the rise in shareholder activism was impacting boardrooms – especially in larger companies.

“Across all industries, few large companies are now immune to the advances of activist shareholders,” he said in a statement.

“Big companies are typically well equipped to deal with takeover approaches, but many need to be better prepared than ever to respond when activist shareholders appear on their share register.”

The US still accounts for the vast majority of activist activity, Linklaters found, but activism is growing in Europe, with investors increasing their activity in the region by 62 percent since 2010.

The vast majority of activists sought changes to board composition, according to the research. This outnumbered those investors pushing for share buybacks by more than three-to-one in the first nine months of 2013.

“With the activists` focus on using boardroom change to further their agenda, no management team can afford to mishandle an approach,” Jacobs added.

Copyright 2011 cnbc.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Is the euro zone at risk of Japan style deflation?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

As inflation in the euro zone languishes at its lowest level in four years, some analysts argue that the region is at risk of a Japan-style deflationary rut.

In October, the euro zone’s inflation reading came in at 0.7 percent on year, down from September’s 1.1 percent and a four-year low. Core consumer prices in Japan, which include oil but strip out volatile food prices, rose 0.7 percent in year to September with a broader measure rising 1.1 percent.

(Read More: Is Japan finally defeating its deflation demons?)

Japan, the world’s third biggest economy, has been plagued by deflation for almost two decades and inflation has only recently started to edge higher following aggressive monetary stimulus from the Bank of Japan.

Worries over low inflation levels prompted the European Central Bank to cut its benchmark interest rate by 25 basis points on Thursday.

“Policymakers in Europe are pressured to act because they do not want Europe to become the next Japan,” said Kathy Lien, managing director of foreign exchange strategy for BK Asset Management.

(Read More: Japan tax break aims to lure Mrs. Watanabe from deflationary bunker)

“With consumer price growth slowing and producer prices in negative territory, deflation is becoming a growing risk for the euro zone,” she added.

The euro zone economy has showed signs of picking up this year after it posted 0.3 percent growth in the second quarter, emerging from its longest recession in 40 years.

But according to Lien, ongoing sluggish growth, particularly in peripheral economies, has made deflation a serious risk. The euro zone’s peripheral economies include Spain, Italy, Greece and Portugal, for example.

(Read More: Euro zone unemployment stuck at record high)

Martin Schulz, a senior economist at the Fujitsu Research Institute, added: “After the financial crisis [in Japan], banks had to restructure and cut assets, reducing credit to corporations, which affected their balance sheets negatively. Corporations had to cut costs and restructure.”

“When corporations have to cut costs simultaneously they create deflation from the real side of the economy. This is what is happening in Europe’s South, and it’s what the ECB has to fight,” he said.

Other analysts drew parallels between the demographics of the euro zone and Japan at the start of its deflationary period.

“There are certainly parallels between Japan and Europe in terms of demographics,” said Frederic Neumann, co-head of Asia economics and managing director at HSBC.

Neumann said the trigger for Japan’s deflationary phase was when its working-age population began to shrink in 1997. He said that some countries in Europe are now in the same position.

But Neumann added that there were clear differences between Europe and Japan’s inflationary outlooks, arguing that Japan’s demographic and indebtedness issues were far more entrenched than the euro zone’s.

“Europe doesn’t face as big a problem with its private debt as Japan … Comparisons can be drawn between Japan and some of the more peripheral euro zone countries but not all of them,” he said.

“Germany, for example, does not suffer from excessive levels of private debt along with some of the other northern countries. This is a key difference from Japan, which, in addition to its demographic headwinds also faced severe pressures for private sector deleveraging in the 1990s,” he added.

Neumann said deflationary pressures were not a problem exclusive to Europe or Japan, but to the world over, pointing to the US, where inflation was an annualized 1.2 percent in September, down from 1.5 percent in August, and 2 percent in July.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Oil prices may plunge if Iran gets a nuclear deal

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Oil futures bounced off an earlier four-month low on Friday, but analysts told CNBC that prices could plunge if an agreement on Iran’s nuclear program is made this weekend.

Secretary of State John Kerry unexpectedly joined the ongoing negotiations in Geneva, sparking speculation that a preliminary deal could be reached soon. Iranian oil exports have been decimated by sanctions placed against the country’s energy sector by the United States and Europe in response to its nuclear ambitions.

“I want to emphasize there is not an agreement at this point in time,” Kerry told reporters in Geneva. “There are still some very important issues on the table that are unresolved. It is important for those to be properly, thoroughly addressed.”

(Read more: Kerry: Iran nuclear talks face ‘important gaps’)

However, energy analysts said that Kerry’s participation—along with British Foreign Secretary William Hague, French Foreign Minister Laurent Fabius and German Foreign Minister Guido Westerwelle—is a positive sign. The dignitaries are all expected to meet with Iran Foreign Minister Javad Zarif on Friday.

“This news reinforces our existing expectation for an ‘agreement in principle’ or ‘preliminary deal’ or ‘first step,'” analyst Kevin Book of ClearView Energy Partners said in a note to clients. “We reiterate our bearish bias for Brent crude.”

Book predicted that Brent crude oil futures could fall as much as $12 if a deal is reached to remove sanctions on Iran. Those measures have kept about 1 million barrels a day of Iranian crude out of the world market.

While Brent—the international benchmark for crude oil—has topped $100 a barrel for the better part of three years, prices have slid more than 10 percent since the end of August, due in part to an easing of tensions between Iran and the West. December Brent crude futures rose slightly Friday morning after falling to a session low of $102.98 a barrel, the lowest price since July.

NBC News reported from Geneva that Kerry’s involvement in the talks is “the strongest sign yet that the first phase of a nuclear deal with Iran may be near.”

(Read more: Gas and heat are cheap, but consumers may not care)

Even though such a deal would be preliminary, it’s still significant. NBC News cited an unnamed senior US official as saying that any agreement would reign in advances by Iran’s nuclear program in return for a “limited” and “reversible” easing of economic sanctions.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Current situation worse than that in 2008: Marc Faber

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

A credit boom in countries such as China means that the world is in a worse position than it was in 2008 when a global financial crisis tipped the world into recession, Marc Faber, editor and publisher of The Gloom, Boom & Doom Report, told CNBC.

“If I am telling you that we had a credit crisis in 2008 because we had too much credit in the economy, then there is that much more credit as a percent of the economy now,” Faber said.

He referred to a recent report by former Bank for International Settlements chief economist William White which said that total credit in advanced economies is now 30 percent higher as a share of gross domestic product (GDP) than it was in 2007.

“So we are in a worse position than we were back then,” Faber told CNBC Asia’s “Squawk Box.”

“Look at China, its credit as a percent of the economy has increased by 50 percent in the last 4-1/2 years. This is the fastest credit growth you can imagine in the whole of Asia,” he added.

(Read more: China showing symptoms of financial crisis: Report)

Economists have voiced concerns that China’s rapid credit growth in recent years poses one of the biggest financial risks to the world’s second biggest economy.

In recent months, there have been some signs that Chinese authorities have taken steps to contain that credit growth, tightening credit available to banks in the money markets.

(Read more: China money market rates soar to 4-month high)

Faber, well-known for his bearish views, also voiced concern about rising household debt in Asia.

“Government debt has not gone up that much but household debt has,” said Faber. “In Thailand, where I spend a lot of time, we have had no recession, but we have had no growth either. It’s the same in Singapore and Hong Kong.”

According to Barclays, Singapore has one of the highest levels of household borrowing relative to GDP in Asia at 75 percent, up from around 63 percent in 2010 as low interest rates encouraged borrowing.

(Read more: Household debt: Singapore’s Achilles heel?)

“It will end badly and the question is whether we will have a minor economic crisis and then huge money printing or get into an inflationary spiral first,” Faber added.

“Why are so many product prices in Singapore and Hong Kong more expensive than in the U.S.? It’s because when you have asset inflation and high property prices, shops have to pay higher rents, so they charge more for their products. So asset inflation can flow into consumer inflation,” he said.

Both Singapore and Hong Kong have seen real estate prices soar in the past few years, triggering a wave of measures in both Asian financial centers to contain prices.

— By CNBC.com’s Dhara Ranasinghe; Follow her on Twitter
@DharaCNBC

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Nissan’s Ghosn: Auto industry not in crisis

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Carlos Ghosn, the CEO of Japan’s Nissan Motor, has dismissed worries that the auto industry is in crisis after the world’s sixth largest automaker slashed its profit outlook last week.

Nissan cut its annual net profit outlook for the year ending March 2014 by nearly 20 percent to 355 billion yen (USD 3.62 billion) amid an expected slowdown in its emerging market sales and quality issues involving multiple vehicle recalls.

“Frankly I don’t think the industry is in a crisis because the industry will see another record year in 2013 and 2014. [The] prospect is also good,” Ghosn told CNBC Thursday.

(Read More: Nissan announces management makeover)

According to Ghosn, the downgrade to Nissan’s profit forecasts was a result of the company being cautious about potential headwinds it could face as it ramps up aggressive expansion plans.

“When car manufacturers are engaged in a very strong growth – particularly in the case of Nissan – they are a little bit vulnerable to head winds… a lot of your resources are dedicated to growing. If you have too many headwinds at the same time that you are investing a lot of money, you are more in a certain way vulnerable to readjusting your profit forecast,” he said.

Nissan is aiming to raise its global market share to 8 percent by the end of March 2017 from last year’s 6.2 percent and has been boosting efforts to build capacity worldwide. It is constructing eight new plants and expanding a factory in Russia.

(Watch This: Nissan shares hit by gloomy guidance)

The automaker’s relentless push into emerging markets has led to some concerns over its over-exposure to what most view as a risky asset class.
But Ghosn has defended the growth story of emerging markets: “We know very well…growth in emerging markets will never be linear. You’re going to have great years, some correction, [and] from time to time, stabilisation. We’re ready for that.”

(Read More: Nissan to buildself-driven cars)

The CEO also weighed in on the surprise rate cut by the European Central Bank cut on Thursday, saying he thought the cut would help improve the environment for companies and entrepreneurs in Europe on a broader scale, but added that he had doubts it would help automakers directly.

“No I don’t it’s going to be boosting [autos]. I think it’s going to be one of the elements helping create a new environment for European [companies],” he said.

(Read More: Weak yen won’t sway Nissan: Ghosn)

“For the last five years, Europe was about deficit, crisis of the euro and big doubts about the future and uncertainty. We’re starting to see a shift where people are starting to look at the future with a little bit more assurance. The fact [is] that the ECB is supporting that,” he added.

Ghosn is also CEO of Paris-based auto maker Renault. The two companies have been strategic partners since a cross-shareholding agreement in 1999. The two manufacturers maintain their independent brand identities but each acts in the financial interest of the other.

CNBC spoke to Ghosn on the day of the launch of the Nissan Qashqai.

— By CNBC’s Katie Holliday: Follow her on Twitter
@hollidaykatie

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Twitter to debut amid signs of wear in market

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Social media icon Twitter will debut on Thursday in a stock market that`s been showing clear signs of wear and has some investors burrowing further into defensive names.

But before the Wall Street open, the European Central Bank (ECB) will hold its policy meeting, which could be an important tone setter for the day. There is some speculation that the ECB will cut rates, a move that would weigh on the euro and send European stocks higher.

(Read more: Cashin: Why I`m `frustrated` with stock market)

“There`s some suspicion they`ll cut the benchmark rate by another quarter point,” said Boris Schlossberg, foreign exchange strategist at BK Asset Management. However, Schlossberg expects the ECB will just signal that it could move, and then wait until its next meeting to take action. “I think they have to be more dovish in their outlook because the euro zone economy is coming to a halt. If [ECB President Mario Draghi] doesn`t do anything, you have probably a small pop in the euro to [1.36] and then we stop and wait for the nonfarm payrolls.”

Investors have been anticipating Friday`s U.S. October employment report; even though it will be skewed by the partial U.S. government shutdown in October, it could signal how close the Federal Reserve is to tapering its quantitative easing program.

Many Fed watchers don`t expect the Fed to start paring back its $85 billion in monthly bond purchases until early next year. “If [the ECB`s Draghi] does cut, I think the euro drops to 1.34 and then if you get the compounding effect of good U.S. data on Friday, it`s realistic to think of 1.33 euro, which would be beneficial to the euro zone.”

The Dow Wednesday rose 128 points to a new closing high of 15,746, and the SandP 500 was up 7 points at 1770, but the Dow Transports, the Nasdaq and Russell 2000, which had been leading the market, all traded lower. Momentum names sold off, led by car maker Tesla, which lost 14.5 percent after disappointing sales Tuesday. Priceline and Netflix were both lower on the day.

(Watch this: Impact of yield spreads on forex markets)

“A lot of those names that are under pressure are the big winners of the year,” said David Lutz, head of ETF trading strategy at Stifel Nicolaus. Lutz said some investors were clearing the deck, selling stocks to invest in the gusher of IPO s this week, including the big one – Twitter.

“If this was a pure rush for the exits, I would have anticipated value to be really outperforming growth,” he said, noting that value stocks were only slightly ahead. Investors did put funds into the defensive telecom and utilities sectors, both of which have lagged the SandP`s 24 percent year-to-date gain. The consumer staples sector was also a leader Wednesday, though it is up 22 percent for the year.

Art Cashin, director of floor operations at UBS, said there have been odd divergences in the market, but he does not see it caused by selling by IPO buyers. “The Russell and Nasdaq were coming under pressure for the last two weeks. People may be moving into safety,” he said, adding fewer stocks are leading the market higher.

Twitter`s opening trade is much anticipated; some traders expect it to just trade a few dollars higher, but there was talk that heavy demand for the stock could cause it to soar. The offering of 70 million shares was priced at $26, just above the $23 to $25 range but below the $27, $28 talk earlier in the day.

(Read more: Stay away from Twitter, advisors say in survey)

“I think it will open up $4, or $5 or $6 dollars, something like that,” said Steve Massocca of Wedbush Securities, adding he doesn`t expect the stock to see a huge burst higher when it opens. “I think it`s too big and there`s too much stock.”

According to Renaissance Capital, the average first day pop in initial public offerings is 17 percent this year.

Birinyi Associates examined post-IPO trading in internet companies` stocks. For the investors that bought when the stock first opened for trading, the performance has been disappointing. Birinyi analysts note that since 2011, internet IPOs have traded lower 62 percent of the time and in their first six months, they have lost an average 8.6 percent from the opening trade. Only 41 percent of these issues are currently outperforming the SandP 500.

According to Birinyi, LinkedIn is one of the few that moved higher in the first week, gaining 13.7 percent. Facebook was down 21.5 percent in its first week, and Zynga fell 13.9 percent in the first week.

Massocca disagrees with those who say Twitter may represent a market top though he does expect the market to pullback by as much as 7 percent. “It`s a highway marker on the way to the top,” he said. The market hasn`t made much progress moving higher since summer, even though it has seen new records, he added.

“I just think the market is expensive. Stocks are expensive. They`re expensive as a multiple of earnings. Earnings season was okay, not great. Odds are we have some kind of correction here in my opinion,” he said.

Besides the excitement around Twitter, traders will be watching a bunch of earnings reports before the bell. Companies due to report include Siemens , AMC Networks, Wendy`s, Apache, Arcelor Mittal, International Game Technology, Scripps National Interactive, Tim Hortons, Calpine, Scotts Miracle-Gro, Gartner, Foster Wheeler, and Beazer Homes. Companies due to report after the close include Disney, Priceline.com, Groupon and Great Plains Energy.

Among economic reports expected on Thursday are jobless claims and third quarter Gross Domestic Product (GDP), both at 8:30 a.m. GDP is expected to show just 1.6 percent growth, and 335,000 claims are expected.

Cashin said the claims could be trouble if they don`t show the expected decline. “They may not drop as low as some people think they will,” he said. Claims have been distorted by computer troubles in California.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

‘Coffices’ take off as the work place goes mobile

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

What do you get when you cross a café and an office? The answer is a Coffice and it`s a trend that`s gathering pace in Australia and other parts of the world.

Easy access to the internet and the widespread use of smartphones means that working habits have changed and it`s no longer unusual to see coffee shops used for both social and business purposes.

Eagle Waves Radio, a radio station based in a café in Sydney`s Central Business District, says that 15 percent of small business owners in Australia prefer to work in a cafe, or even a hotel foyer, for the ambiance and convenience.

Angela Vithoulkas, who launched the radio station inside her café earlier this year, estimated that about 85 percent of her customers use the space for work.

“I`ve been a café owner for 27 years and what I`ve seen is that with the onset of the internet and increased technology, people are no longer tied to their office,” she said.

“That said, the GFC [global financial crisis] in Sydney really changed the way everybody worked, simply because many people lost permanent jobs and had to adapt,” Vithoulkas said.

(Read more: Australia keeps rates unchanged at record low)

She added: “So a lot of people started up small businesses or became independently employed. They don`t want to go to the expense of hiring an office, why should they? They meet clients at the closet café and that is often a casual but creative way to conduct a meeting.”

Australia`s unemployment rate was 4.2 percent in 2008 just before the collapse of US investment bank Lehman Brothers sparked a global crisis, hitting a peak of 5.9 percent in July 2009. Data on Thursday showed the unemployment rate at 5.7 percent last month.

Vithoulkas pointed to surveys from US universities showing that working in a café could enhance workers` creativity.

A study by the University of Illinois published in The Journal of Consumer Research last year found that a moderate level of ambient noise often associated with coffee shops enhances “performance on creative tasks.”

(Read more: Asia tablet makers take a bite out of Apple)

“For my business I just need to be online with a laptop to use email or make a call, so working from a coffee shop gives me the flexibility,” said the owner of a recruitment firm, who declined to be named, saying he spends a lot of time in Japan, Singapore and Hong Kong.

“Working culture has changed because people use email so much more, are online more and use instant messaging. So a lot of business now is about responding quickly and keeping the momentum going. You can do that from a smartphone but typing from a laptop in a coffee shop is better,” he added.

The term Coffice meanwhile has become part of modern vocabulary partly generated by the growth in new technology.

(Read more: `Selfie` and `phablet` added to the English dictionary`)

According to the website www.urbandictionary.com, a Coffice is a combination of a coffee shop and an office or a “coffee shop one makes into an office where non-coffee shop work is performed.”

“I would say a lot more wheeling and dealing takes place over a coffee now than a beer or golf as used to be the case,” said Vithoulkas at Eagle Waves Radio.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Will the ECB cut rates on Thursday?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

The European Central Bank (ECB) will announce its monthly decision on interest rates on Thursday, with opinion divided over whether it will cut rates in response to a sharp fall in inflation.

Last week’s surprisingly low inflation data sparked concerns that the 17-country euro zone is heading for a period of deflation and boosted expectations of a near-team rate cut by the central bank when its governing council meets. Inflation fell to a near-four-year low of 0.7 percent in October.

(Read more: Pressure on ECB to cut rates)

Not everyone is expecting a dramatic move this month, although a number of banks – including Societe Generale and BNP Paribas – said the inflation data boost the chances of a rate cut in December.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Visa abuse: What price for skilled labor?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

For over a decade, there’s been an ongoing argument about the job market. On one side, various companies are saying they can’t find enough skilled workers in the US and therefore have to import workers from overseas. On the other side, labor organizations are saying greedy Corporate America wants cheap foreign labor rather than higher-priced American workers.

Now, smack in the middle of this ongoing debate, throw a news event from last week: One of the largest suppliers of overseas workers to American companies, Infosys, agreed to pay USD 35 million to settle a federal probe.

Investigators alleged that the company used fraudulent tactics to get cheap visitor visas for its personnel, rather than more expensive worker visas. The company denied guilt, but paid the largest settlement ever in an immigration case.

So, it makes you wonder about the larger debate: If Infosys had to pay higher visa costs, would its workers really be that cheap? If American companies really don’t have enough qualified workers, would they still import them despite the higher cost?

Also read: Cognizant’s stellar Q3 shores up sectoral revival hopes

“The case should highlight this widespread and corrosive business practice of using guest-worker visas to replace American workers and to facilitate the offshoring of high-wage American jobs,” said Ron Hira, a public policy professor at the Rochester Institute of Technology and author of “Outsourcing America,” in an email response to questions.

“It is an extraordinarily profitable business model (more than 25 percent net margins) that is bad for American workers as well as the American economy … Everyone who has objectively looked at the ‘skills gap’ comes to the conclusion that one simply doesn’t exist — particularly in these ordinary IT jobs.”

Not everyone agrees, however.

“This Infosys squabble has nothing at all to do with the systemic skills gap/open jobs situation in America,” said Gary Beach, author of “The US Technology Skills Gap.” “It is much ado about nothing.”

Beach argues that the Infosys investigation concerned only 15 percent of the company’s workforce in the United States. Even if, for argument’s sake, other Indian labor suppliers were misusing guest-visa programs in a similar fashion, which hasn’t been suggested, it would only amount to 7,000 jobs, according to Beach’s calculations.

“It is still a drop in the bucket of the 12 million unemployed Americans and 4 million open jobs,” Beach said in an email exchange.

Still, others argue the Infosys settlement misses the point.

“I have long criticized the hoopla given to such cases as scapegoating, attempts to distract attention from the fact that abuse of immigration policy (H-1B, employer-sponsored green cards, etc.) pervades the ENTIRE tech industry, NOT just the Indian body shops such as Infosys,” Norm Matloff, a professor of computer science at the University of California, Davis, said in a commentary.

“The Indian firms hire at a less-skilled level of worker and yes, sometimes do violate the rules, but why is that any different from mainstream US firms using industry-installed loopholes to hire foreign students from US universities instead of equally-qualified US citizens and permanent residents? Abuse is abuse.”

Apparently the job-skills debate will go on.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow