(Reuters) - Wealthy Indians living overseas were shocked by the latest attacks on the country's financial capital, but still see their home country as a good place to invest given its long-term growth potential, bankers said.
Joseph Poon, head of Macquarie Private Wealth Asia inSingapore, said both his Indian and non-Indian clients will likely take the latest militant attacks in their stride, noting that Mumbai had suffered from terror attacks in the past.
“There's more physical fear than investment fear. People are aware of the risks in India and do not think the investment climate is going to change,” said Poon, who deals with ultra-high net worth clients with investable assets of $30 million or more.
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| Hotel guests are evacuated from the besieged Trident-Oberoi Hotel in Mumbai. Guests trapped by Islamist militants in a luxury hotel were being evacuated room by room on Friday as the end of a siege appeared imminent, while commandos stormed a nearby Jewish centre where Israeli hostages were held. REUTERS. |
“In the short term, there may be a bit of shock but the market will quickly bounce back like in 2006,” he said, citing a train bombing that year that killed 180 people.
Hundreds of people, including foreigners, were trapped by Islamist gunmen in Mumbai on Thursday after attacks on luxury hotels, hospitals and a tourist cafe killed at least 101 people. A global Indian diaspora of 30 million is estimated to generate an annual income equivalent to 30 percent of India's GDP, India's minister for overseas Indian affairs Valayar Ravi said this month, according to the Economic Times newspaper.
Singapore, a tropical Southeast Asian city-state, has a multi-racial society that is 9 percent ethnically Indian, and is home to many Indian expats who value its safety, clean environment and proximity to their homeland.
Shobha Tsering Bhalla, editor of India Se, a lifestyle magazine catering to non-resident Indians in Asia, said she will proceed with plans to buy a property in the country and her husband will go ahead with a business trip to India next month.
“We are shocked but life goes on,” said Tsering Bhalla, 53, who was born in Sikkim and is now a naturalised Singaporean. “We have seen India go through all sorts of problems and seen India come out relatively unscathed,” she said, adding that the security situation in India will likely improve in coming months as the Congress government is forced to clamp down on radicals.
Singapore-based Balakrishnan Kunnambath, head of SG PrivateBanking's global India unit that oversees domestic and offshore clients, agreed there will be a lot of nervousness in the short-term but no huge flight of capital.
“Affinity and patriotism could play a role -- non-resident Indians could be a bit more attached than a foreign investor.” An Indian media executive in Dubai, who declined to be identified, told Reuters it could actually be time to put money into India because of its weakening currency. The rupee fell to a record low versus the U.S. dollar last week.
Silicon Valley starts to feel sting of layoffs
(Reuters) - The economic slowdown has finally begun to hit home in Silicon Valley, with tech companies large and small shedding jobs in advance of what is widely expected to be a difficult year.
The scene may remind some of 2001 and 2002, when the Internet bubble exploded and dumped hundreds of thousands of engineers in the area onto the unemployment rolls.
But the situation is far different this time, with the financial and housing sectors to blame, not tech. And few, at least at this point, see the layoffs having a long-term impact on the Valley's fabled reputation as a cradle of innovation and risk-taking.
“In 2001, we were the epicenter, we were the cause,” said Stephen Levy, director of the Center for Continuing Study of the California Economy. “Now it's a world-wide recession event.” Although layoffs have just begun in the Valley -- with more expected -- many say employment will hold up better than it did after the dot-com bust, even as the world suffers through the most paralyzing financial meltdown in a generation.
Even so, that provides little comfort for the growing ranks of unemployed IT professionals struggling to get by.
Citigroup to slash 52,000 jobs, sees hard 2009
NEW YORK (Reuters) - Citigroup Inc this week revealed plans to cut 52,000 jobs by early next year in a dramatic move to restore the No. 2 U.S. bank to health as it combats mounting debt losses and sagging economies worldwide.
The cuts announced by Chief Executive Vikram Pandit affect 15 percent of Citigroup's workforce, and are in addition to 23,000 jobs eliminated between January and September.
Citigroup plans to slash expenses by as much as 20 percent, and spend a total of $50 billion to $52 billion in 2009. That compares with $61.9 billion over the last four quarters.
The cuts will be global, affecting many regions and business lines, including the retail and investment banks, a person close to the matter said. About one-half will come from layoffs and attrition, and the rest from the sale of units, such as the German retail banking business.
Pandit became Citigroup's chief executive last December, and has faced much criticism from investors and others for failing to implement a workable turnaround plan.
The New York-based bank has lost $20.3 billion in the last year, and some analysts do not expect it to make money before 2010. "As the economy continues to weaken they will have greater credit losses," said Michael Holland, founder of money manager Holland & Co in New York. "Cuts will lessen the losses, but they in no way guarantee profitability."
Pandit told employees in a memo that Citigroup has spent the last year "getting fit," and projects a "difficult" 2009 for clients and customers. Citigroup's latest cuts are the most by any U.S. company since the global credit crisis began last year. They are also the second most ever, trailing the 60,000 that International Business Machines Corp IBM announced in 1993, according to outplacement firm Challenger, Gray & Christmas Inc.
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