After a 15 year stint, Heinz Krogner , chairman of Esprit handed over the running of the $5 billion company to Ronald Van der Vis, CEO of Esprit, last November. The task on hand for Ron as the 69-year-old Heinz calls him, was not an easy one: “Though Esprit is young (founded in 1968), a brand gets tired over a period of time. Esprit is like a pearl, but does not shine anymore. It needs to be made more exciting which is a tough job and Ron has a lot of work ahead.” Along with young Ron, Heinz has laid out a roadmap with six identified focus areas.

A self-confessed Indophile, Heinz is in India along with Van Der, to launch the first SOS village, an organisation which works with orphans and which is supported globally by Esprit. Heinz is pragmatic about his expectations from India. And candid about the effects of the global economic crises and the fact that Europe’s consumption is shrinking at an alarming rate.

As he lays out the roadmap, it is clear that he has handed over the reins at a very critical juncture in Esprit’s history. “Take the case of Ford . What a ride they enjoyed back in the 1930s and 1940s! But as soon as companies like Porsche came in, things changed. Along with being successful, well-loved, well-perceived by your customers, comes the danger of becoming more common than normal. So, it’s critical to brush up again,” says Heinz.

Where Heinz is candid, Van der Vis is cautious. While he agrees its time to “re-polish” the pearl, he argues that Esprit was just “going back to the roots” to the DNA of the brand. Speaking about Esprit’s social conscience, he says it is hardly a recent development.

The founders, Susie and Doug Tompkins and their employees voluntarily did community work like planting trees among other things. Both founders are still hugely into ecological land preservation. “We do not have to fake it, nor is it just fashionable CSR,” says Van der Vis about supporting SOS.

Being conscious about the environment, is inculcated into every Esprit employee who, Heinz adds, is very young. The average age is 30. “Young people are very open to social responsibility. Of course we also have to be responsible to our shareholders but equally so to society. And in this, what Ron says is true, we have been doing this since 1968,” says Heinz.

When Van der Vis took over, there was the economic crisis, profits had been affected after a decade and though Esprit was still a very successful company it was time for some change. “We were going to strengthen the brand, because we are a branded company, selling branded apparel. We needed to enhance the brand globally,” begins an extremely focused Van der Vis.

Brand leads to product. Esprit operates 12 divisions but over time some of these had begun to get too similar and in fact, even started to overlap. The differentiation is being spearheaded by Heinz. He delineates the lines that cater to different customers, for different occasions and ensures that the products are fashioned accordingly. Thirdly, a tough but essential decision was to close down some of the loss making stores, (an announcement Esprit made at their full year results) to improve the profitability of their store network.

The fourth part of Van der Vis’s strategy was to focus on bundling the group’s sourcing efforts. Each of the 12 divisions previously had their own sourcing teams and the effort was to try to get them to work together: to centralise suppliers and yet ensure that a division use them individually. Logistics and IT followed with an aim to be efficient and more effective. “We are building a new distribution warehouse in Europe to improve our logistical efficiency as well,” adds Van der Vis.

What however brings in the big change for Esprit is the sixth focus area, of a new organisation structure for their sales. From a structure where they had continental presidents, responsible for retail and wholesale, they have turned back the clock. Heads now focus purely on either wholesale or retail and not on geographies. “We are going back to a proven system,” says Van der Vis, smiling at his ‘back to the roots’ line.

A big impetus to the brand will come from the fact that in February this year Esprit was able to buy back the 51% of their joint venture in China, strategically giving them a chance to build a second leg for the company next to their European business.

“We can focus on emerging markets like China where currently we operate more than 1,000 points of sale. We are the number three women’s brand in China. Thanks to Heinz’s involvement we were able to buy this back and this gives us a new growth engine for the future,” says Van der Vis.

Though majority of Esprit’s business still comes from Europe, economic circumstances are not easy at the moment in the continent, and it is, as Heinz emphasises, an increasingly saturated market. As compared to a decade ago, says Heinz, consumption has shrunk by 20%. The growth will says the chairman have to come from Asia Pacific and countries like China and India.

“Of course this will take time. It’s not like we can push a button and we can conquer Asia but we have a very good start-up position because we have already paid our entrance bill in China while the new players still need to invest huge sums to build it all up. We are already profitable in China. Maybe three to four years down the line, India would be the next growth potential,” says Heinz.

The idea in the end is to first make a better company and then a bigger company because as Heinz concludes, “A better company will become a bigger company; not the other way around.”

• Would like to take one series at a time: Tendulkar
• Inflation leaps to 5%-Australia
• Give yourself a break

NEW DELHI: Batting maestro Sachin Tendulkar said on Friday that he would like to focus on one series at a time rather than thinking too far ahead including the World Cup that will be held in the sub-continent, next year.

“I am not yet thinking about the tour of South Africa and the 2011 Cricket World Cup. My immediate focus is on the upcoming New Zealand series and only when that is over, I will start talking about South Africa,” Tendulkar said on the sidelines of a function that marked his association as a brand ambassador with a high-end watch manufacturer Audemars Piguet.

However, Tendulkar admitted that he would be happy if India can maintain the winning momentum in the coming series.

“The momentum is with us right now and we should not let it go. We are not taking anything for granted and want to be on our toes. We would be looking to keep on producing competitive cricket and stick to the basics.”

When asked whether he is currently enjoying the form of his life, the iconic batsman who recently completed 14,000 Test runs said that although he is happy but he is still not satisfied.

“There is always room for improvement. I am happy with my current performance but not satisfied. I want to get better. In fact, in any profession one must strive to get better and better,” said Tendulkar, adding, “I always want to remain a student of the game because that is when you grasp more and is always keen to improve.”

The 37-year-old, who had one of the most fruitful years of his career in 2010 as he won his first ICC’s Player of the Year Award and returned to the top of the world batting rankings for the first time since 2002.

In February, he scored centuries in successive Tests against South Africa before becoming the first man to reach 200 in an ODI against the same opponents.

When asked what all has remained in his wish list which he still want to achieve, Tendulkar said, “There is no wish list. I play because I always love playing cricket. The only thing I ever wanted to do was to play for my country.

“Now, my track is only cricket, where a lot of stations come and I cherish arriving at all of them. But I personally just want to do something for my country and go on playing. In this journey I want to achieve whatever I can till the time remains,” said the man, who remains just one short of scoring 50 Test centuries.

“It was a fantastic win the Test series against Australia. In fact, it was great to see some guys produced special cricket. (VVS) Laxman is definitely one such special guy, who snatched the victory for us. He was struggling to even jog as he was injured but he went out there and produced such a brilliant innings.

“Even Ishant Sharma, who shared a valuable partnership with him must get a lot of credit. I am extremely glad that we stuck to our No 1 position in Tests.”

Talking about the ICC award that he finally bagged this year by beating South African Hashim Amla, England’s Graeme Swann and teammate Virender Sehwag, the Mumbaikar said, “Whenever an award comes it always feels good.”

He further added, “But no one plays for awards. You always set goals and want to achieve those goals as individuals. And in cricket you always want to achieve goals as an individual and as a team.

“And when you succeed in achieving your goal and get appreciated for your efforts it always feels good.”

The cricketer, who was conferred with the Indian Air Force’s honorary rank of Group Captain to honour his sporting achievements and contribution to the nation last month, said that “it was a great honour.”

“Becoming the group captain with the Indian Air Force was a great honour. It is extremely special because I am associated with a force who protect us. I salute them.”

Read more: Would like to take one series at a time: Tendulkar - The Times of India

• ICC Cricket World Cup 2011 schedule
• ACT (test)
• Give yourself a break

Mangalore based Foradian Technologies Pvt Ltd has created a new font Rupee_Foradian. This way one can download the all new rupee symbol on to the computer for free, according to a report on OneIndia News website. The Rupee font can be downloaded from Foradian blog at
http://blog.foradian.com.

The report says that the company created a vector image of the new rupee sign and mapped the ‘grave accent’ symbol, the key just above the tab button on the keyboard, with it. This keystroke was chosen because most users and programmers don’t use it.

The users can watch a video showing how easy it is to use the symbol in Youtube, report said.

“It was something of an amusement to us in this era of technological advancement that the government of India said it would take more than a year for the symbol to become commercially available. We thought of doing something about it,” said Unni Koroth, CEO Foradian Technologies Pvt Ltd.

• SAP-Leave
• Give yourself a break
• Espirit all set to make a bigger company from better

ACT (test)

From Wikipedia, the free encyclopedia

The Official ACT Logo

The ACT is a standardized test for high school achievement and college admissions in the United States produced by ACT, Inc.^[1] It was first administered in fall 1959 by Everett Franklin Lindquist as a competitor to the College Board’s Scholastic Aptitude Test, now the SAT Reasoning Test.^[2] Some students who perform poorly on the SAT find that they perform better on the ACT and vice versa.^[3] The ACT test has historically consisted of four tests: English, Math, Reading, and Science reasoning. In February 2005, an optional writing test was added to the ACT, mirroring changes to the SAT that took place later in March of the same year. All four-year colleges and universities in the U.S. accept the ACT,^[4] but different institutions place different emphases on standardized tests such as the ACT, compared to other factors of evaluation such as class rank,G.P.A., and extracurricular activities.

ACT, Inc.

ACT, Inc., was originally known as the American College Testing Program, Inc., but changed its name to ACT, Inc. in 1996. In 2002 the company was restructured to include “Education” and “Workforce Development” divisions, each overseen by its own advisory board. Each state also has its own state organization, and the entire company is overseen by aboard of directors made up of 14 members. Act, Inc. created an test called PLAN (test) for sophomores to help decide if they want to take the ACT later in their high school career. The PLAN test is purported to predict student’s scores on the ACT.^[1]

In 2005 the company established ACT International. This organization is composed of ACT Education Solutions, Limited, and ACT Business Solutions, B.V. ACT Education Solutions is directed toward helping non-native speakers learn English in preparation for studying at an English-speaking educational institution. ACT Business Solutions attempts to help employers assess their employees’ level of English proficiency through use of the WorkKeys assessment.^[1]

Following an article in The Des Moines Register in November 2007,^[5] as of Spring 2008, ACT Inc.’s non-profit status was under investigation by the Iowa Attorney General’s office for disproportionate compensation for both its C.E.O. Richard Ferguson as well as members of its board.

Function

ACT, Inc. says that the ACT assessment measures high school students’ general educational development and their capability to complete college-level work with the multiple choice tests covering four skill areas: English, mathematics, reading, and science. The optional Writing Test measures skill in planning and writing a short essay.^[6] Specifically, ACT states that its scores provide an indicator of “college readiness”, and that scores in each of the subtests correspond to skills in entry-level college courses in English, algebra, social science, humanities, and biology.^[7]

To develop the test, ACT incorporates the objectives for instruction for middle and high schools throughout the United States, reviews approved textbooks for subjects taught in Grades 7-12, and surveys educators on which knowledge skills are relevant to success in postsecondary education. ACT publishes a technical manual that summarizes studies conducted of its validity in predicting freshman GPA, equating different high school GPAs, and measuring educational achievement. ^[8]

Colleges use The ACT and the SAT Reasoning Test because there are substantial differences in funding, curricula, grading, and difficulty among U.S. secondary schools due to Americanfederalism, local control, and the prevalence of private, distance, and home schooled students. ACT/SAT scores are used to supplement the secondary school record and help admission officers put local data — such as course work, grades, and class rank — in a national perspective.

Most colleges use ACT scores as only one factor in their admission process. A sampling of ACT admissions scores shows that the 75th percentile composite score was 24.1 at public four year institutions and 25.3 for at private four year institutions. It is recommended that students check with their prospective institutions directly to understand ACT admissions requirements.^[9]

In addition, some states have used the ACT to assess the performance of schools, and require all high school students to take the ACT, regardless of whether they are college bound.Colorado and Illinois have incorporated the ACT as part of their mandatory testing program since 2001. Michigan has required the ACT since 2007, Kentucky will require all high school juniors to take the ACT beginning in 2008 and Wyoming will require all high school juniors to take either the ACT or the ACT WorkKeys.^[10]

Use

Map of states according to preferred test of 2006 high school graduates. States in blue had more students taking the ACT than the SAT.

The ACT is more widely used in the Midwestern and Southern United States, while the SAT is more popular on the East and West coasts, although recently the ACT has been gaining more use on the East Coast.^[11] Use of the ACT by colleges has risen as a result of various criticisms of the effectiveness and fairness of the SAT. The Triple Nine Society is a high IQ society that uses the ACT as one of their admission tests. A score of at least 32 before October 1989, and a score of at least 34 thereafter is required for admission.

Format

The required portion of the ACT is divided into four multiple choice subject tests: English, mathematics, reading, and science reasoning. Subject test scores range from 1 to 36; all scores are integers. The English, mathematics, and reading tests also have subscores ranging from 1 to 18. (The subject score is not the sum of the subscores.) The “composite score” is the average of all four tests. In addition, students taking the writing test receive a writing score ranging from 2 to 12, a “combined English/writing score” ranging from 1 to 36 (based on the writing score and English score), and one to four comments on the essay from the essay scorers. The writing score does not affect the composite score. Sometimes the test includes an experimental section that may be a short version of any of the four major sections.

On the ACT, each question correctly answered is worth one raw point. There is no penalty for marking incorrect answers on the multiple-choice part of the test.

English

The first section is the 45-minute English test covering usage/mechanics and rhetorical skills. The 75-question test consists of five passages with various sections underlined on one side of the page and options to correct the underlined portions on the other side of the page. More specifically, questions focus on usage and mechanics - issues such as commas, apostrophes, (misplaced/dangling) modifiers, the colons, and fragments and run-ons - as well as on rhetorical skills - style (clarity and brevity), strategy, transitions, and organization (sentences in a paragraph and paragraphs in a passage).

Math

The second section is the 60-minute, 60-question math test with 14 covering pre-algebra, 10 elementary algebra, 9 intermediate algebra, 14 plane geometry, 9 coordinate geometry, and 4 elementary trigonometry.^[12] Calculators are permitted in this section only. The calculator requirements are stricter than the SAT’s in that computer algebra systems are not allowed; however, the ACT permits calculators with paper tapes, that make noise, or that have power cords with certain “modifications” (i.e., disabling the mentioned features), which the SAT does not allow.^[13] Also, this is the only section that has five instead of four answer choices.

Reading

The 35-minute, 40-question reading section measures reading comprehension in four passages (taken and edited from books and magazines) one representing prose fiction (short storiesand novels), another representing social science (history, economics, psychology, political science, and anthropology), a third representing humanities (art, music, architecture, dance), and the last representing natural science (biology, chemistry, physics, and the physical sciences), in that order.^[14]

Science reasoning

The science reasoning test is a 35-minute, 40-question test. There are seven passages each followed by five to seven questions. There are three Data Representation passages with 5 questions following each passage, 3 Research Summary passage with six questions each, and one Conflicting Viewpoints passage with 7 questions.^[15]

Writing

The optional writing section, which is always administered at the end of the test, is 30 minutes long. All essays must be in response to a given prompt. The prompts are about a social issue applicable to high school students. No particular essay structure is required. Two trained readers assign each essay a score between 1 and 6, where a score of 0 is reserved for essays that are blank, off-topic, non-English, not written with no. 2 pencil, or considered illegible after several attempts at reading. The scores are summed to produce a final score from 2 to 12 (or 0). If the two readers’ scores differ by more than one point, then a senior third reader decides.

Although the writing section is optional, several schools do require an essay score and will factor it in the admissions decision^[16].

Averages

The chart below summarizes each section and the average test score based on graduating high school seniors in 2006.

Section	Number of questions	Time (minutes)	Average score	College Readiness Benchmark	Content
English	75	45	20.6	18	usage/mechanics and rhetorical skills
Mathematics	60	60	20.8	22	pre-algebra, elementary algebra, intermediate algebra, coordinate geometry, geometry, and elementary trigonometry
Reading	40	35	21.4	21	reading comprehension
Science	40	35	20.9	24	interpretation, analysis, evaluation, reasoning, and problem-solving
Optional Writing Test	1 essay prompt	30	7.7		writing skills

Test availability

The ACT is offered four to six times a year, depending on the state, in the United States, in September, October, December, February, April and June and is always on a Saturday except for those with credible religious obligations.

Candidates may choose either the ACT assessment ($31), or the ACT assessment plus writing ($46).

Students with verifiable disabilities, including physical and learning disabilities, are eligible to take the test with accommodations. The standard time increase for students requiring additional time due to learning disabilities is 50%.^[19] Originally the score sheet was labeled that additional time was granted due to a learning disability, however this was dropped because it was seen as a scarlet letter by some colleges.

Scores are sent to the student, his or her high school, and up to six colleges. ^[20]

Score cumulative percentages and comparison with SAT

Forty-two percent—1,300,599 students—of the 2007 high school graduating class took the ACT.^[21] The average composite score was a 21.1 in 2008 ^[22]. Of 2006 test-takers, 517,563 (or 42.9%) were males, 646,688 (or 53.6%) were females, and 42,204 (or 3.5%) did not report a gender.^[18] Nationwide, 314 students who reported that they would graduate in 2007 received the highest ACT composite score of 36.^[23] Males on average scored 5 points higher on the ACT than females.^[11]

2005 distribution of ACT scores

Although there is no official conversion chart, the College Board, which administers the SAT, released an unofficial chart based on results from 103,525 test takers who took both tests between October 1994 and December 1996; however, both tests have changed since then, and many suggest that the College Board’s analysis is biased in favor of the SAT. Several colleges and test-prep companies have also issued their own charts. The following is based on the The Princeton Reviewconversion chart.^[24] The cumulative percentage are based on the published 2007 ACT distribution.^[25]. Note that ACT percentiles are calculated as the percent scoring the same or lower not as is sometimes the case just those who score lower. Note that these values are approximations; yet the distributions have retained a good degree of stability over the history of these tests.^{[citation needed]} Also note that comparing percentile for the total SAT score to the percentile for the total ACT score is not a good way to compare, as many colleges have yet to start looking at the SAT’s new writing section.

SAT (with writing test addition)	ACT composite score	The percentage of students at or below this score for the ACT (not SAT)
2400	36	100%
2340	35	100%
2280	34	100%
2220	33	99%
2160	32	99%
2100	31	98%
2040	30	96%
1980	29	94%
1920	28	92%
1860	27	89%
1800	26	85%
1740	25	80%
1680	24	75%
1620	23	69%
1560	22	62%
1500	21	55%
1440	20	47%
1380	19	39%
1320	18	32%
1260	17	25%
1200	16	19%
1140	15	13%
1080	14	9%
1020	13	5%
960	12	2%
900	11	1%

• No takers for small B-school graduates India
• Fewer go into older courses
• Give yourself a break

A gap year is all about discovering yourself. Just make sure it fits into your career goal

Maya Agne, 48, is happy to let you know that her 23-year-old daughter, Bhagyashree, isn’t doing anything these days, thank you very much. A computer engineer by training, Bhagyashree isn’t studying; nor has she landed that dream job. When she’s not running off to Goa, Singapore or Malaysia with friends and family, she spends her days in Mumbai, trying to figure out what to make of her life.

Bhagyashree—who gave up a cushy IT job because she didn’t see herself “staring into a computer screen and writing codes for evermore”—is taking a year off and Agne, a Nagpur-based doctor, is willing to indulge her.
“I’d been confused and it took me a while to figure things out. But after I worked on a short-term job with a public relations firm, I planned to do an MBA from a university abroad and get a marketing job. I need a break before I get back to studies so I’m taking some time off now,” Bhagyashree says.
The concept of a gap year, long popular in the West, is catching on among youth here. Kanika Marwaha, the India representative of Warwick University, UK, says that compared to a decade ago, there has been an increase of 25-30% in the number of enquiries from students and parents about gapping and whether it is all right for a student to take time off after graduation. But in this age of structured career plans, does it make sense for parents to allow their children to lose a vital year?
Krithi Rangachari, 21, and her parents are emphatic that it does. This former student of Jesus and Mary College, New Delhi, was at a loose end after completing her BA in English literature. The usual career options of academics and journalism did not appeal to her; nor did she want to take MBA entrance exams like her friends.
“The idea of gapping arose out of a casual discussion. I knew she was not going to go ahead and do postgraduation just because that’s the existing trend. So we let her decide, as eventually it will be her career,” says Krithi’s father T.B. Rangachari, 53.
While she was still trying to zero in on a career, Krithi came across a job vacancy at The Indus Entrepreneurs (TiE), a non-profit global network of entrepreneurs and professionals, and applied for it. Currently an administrative executive at TiE, where her responsibilities include event management and marketing, Krithi realized she did after all have an aptitude for management and is now keen to pursue an MBA. Her decision on a gap year paid off.
“I think my parents supported me because they knew that I wasn’t taking a gap year just to waste my time,” says Krithi. “We all knew I’ll get back to studying.”
“Time-bound” and “well-planned” are the two watchwords for career-conscious gappers. According to A.M. Sherry, chairman, joint admissions committee, Institute of Management Technology (IMT), gapping can be advantageous if it fits into one’s larger career scheme. “B-schools prefer candidates with work experience. If you’re taking a break to hone some talent you have, like music or arts, that’s advantageous too. We like to encourage well-rounded development,” he says.
Marwaha, however, warns against taking a break on a whim. She says very few students or parents understand what gapping is. Gap-year students have a responsibility to demonstrate what they did during the break. “A gap year is time spent away from studies to gain practical knowledge and experience. You could be volunteering, doing some job or just travelling.”
According to Marwaha, Indian educational institutions don’t bother too much about whether you took a year off or not. But foreign universities are another matter. An applicant is judged on the basis of his latest academic results. “So if you’re already enrolled in a BSc programme, but don’t attend class because you want to prepare for IIT, it doesn’t really matter for Indian universities, but a foreign grad school will want to know what you did in the interim. It’s vital to show what you did while gapping—academic pursuits, gained work experience or served community causes.”
As for Agne, she is glad her daughter decided to take a year off. She doesn’t mind the occasional raised eyebrow from inquisitive acquaintances when she fobs off queries about her daughter’s activities with a curt “nothing much”.
Mind the gap
If you’ve decided to gap, here is how you can spend the year gainfully
Learn a language, see the world
What better way to learn Spanish than hear it being sung by a flamenco singer in Barcelona? Websites, such as Abroadlanguages.com, list short-term courses.
Work your way through
This is the perfect way for MBA-aspirants to gain hands-on experience and add an edge to their résumés. Organizations such as AIESEC (www.aiesec.org/india) help students find internships and jobs abroad.
Volunteer
If social causes get you going, then volunteer. Most Indian NGOs encourage volunteers. You could volunteer for Smile Foundation, CRY or Pratham, all of which work for child welfare.
amrita.r@livemint.com
livemint.com

• ACT (test)
• Would like to take one series at a time: Tendulkar
• Immigration to be cut as unemployment soars

UPDATE Inflation rose at its fastest pace in almost 13 years as banking services, transportation and housing costs jumped.

Even so, the 5% annual consumer price inflation rate in the September quarter is unlikely to sway the Reserve Bank from cutting interest rates again next month as it worries more about a stalling economy, analysts say.

”This won’t stop the RBA from easing,” said Rory Robertson, investment rate strategist at Macquarie. ”Any inflation reading that came before the September market meltdown has been surpassed by events.”

”History shows that recessions solve inflation problems, so much of the world is about to have their inflation problems solved, and pretty rapidly.”

The inflation spurt compares with an annual rate of 4.5% for the June quarter. Analysts had tipped an inflation rate of 4.8%, according to a Bloomberg survey.

Treasurer Wayne Swan told a media briefing that he expected price rises to moderate, adding that he doesn’t expect the Government’s $10.4 billion spending plan announced last week to stimulate inflation.

Historic rise

The increase - excluding the aftermath of the introduction of the Goods and Services Tax in 2000-01- is the most since the December 1995 quarter, according to the Australian Bureau of Statistics.

The price spike also set a new record for the RBA’s own twin measures of inflation - which came in at an average 4.7% for the September quarter, up from 4.4% in the June quarter. The inflation level is already well beyond its 2-3% target range.

The Australian dollar initially gained about a quarter of a US cent to 68 US cents, before giving up the advance to trade recently at 67.72 US cents.

The share market was little changed on the inflation news, remaining about 2% lower for the day.

Financial costs leap

According to the ABS, financial and insurance services cost 9.5% more in the September quarter from a year earlier, the biggest increase in the groups it tracks.

Transportation costs were 8.7% higher, while housing rose 6.8%. Food prices rose 3.4% from a year earlier.

On a quarterly basis, inflation rose 1.2%, down from the 1.5% increase in the June quarter, but more than the 1% tipped by economists.

For the quarter, rents gained 2.1%, water and sewerage costs jumped 12.3%, fuel 2%, electricity 4% and house purchases 1.3%, the ABS said.

Against that trend, child care costs shrank 22.9%, pharmaceuticals cost 3.9% less, computing costs fell 3.9% and vehicles prices eased 0.7%.

Changing values

Until the middle of this year, the CPI and other inflation measures were among the most closely watched economic figures. With unemployment near three-decade lows and other capacity constraints, economists were wary that any surge in inflation would be met by interest rate rises by the Reserve Bank.

Those worries have been transformed in the past few months, as collapsing banks and a near-freezing of credit flows has tipped many of Australia’s trading partners into recession and cooled growth in China.

As a result, the RBA and market economists will peer beyond today’s inflation jump towards an expected slowdown in price gains and the wider economy.

“I suspect (today’s CPI) marks the peak in inflation for this cycle, so for policy I don’t think it’s going to stop further rate cuts from the RBA,” said RBC Capital markets senior economist Su-lin Ong.

Macquarie’s Mr Robertson said consumers and businesses can expect lower prices as the slide in commodity prices feeds into a slowing economy.

”The big fall in commodity prices will also help cure headline inflation, while sub-par economic growth and rising unemployment will take care of core inflation.”

Analysts estimate the drop in oil alone could subtract a sizable 0.6 percentage points from the CPI in the current quarter.

Rate cut hopes may dim

Even so, Joshua Williamson, senior strategist at TD Securities, says the combination of the high CPI figures and the slew of Federal Government and RBA policies aimed at stoking demand and thawing credit flows means future interest rate cuts may not be so deep as some expect.

Today’s CPI data would prompt the market to ‘’start paring back a little its expectations for rate cuts before the end of the year,” he said.

”In combination with the higher CPI, we know that money market rates have come down and we’ve got fiscal stimulus and an RBA governor that generally believes that the worst of the crisis is possibly behind us,” Mr Williamson said.

The initial response in interest rate markets, however, has pointed to a modest increase in expectations of more cuts to come.

Investors are betting the RBA will lower rates by half a percentage point, or 50 basis points, to 5.5% when its board next meets on November 4, with the wagers rising slightly after today’s CPI figures came out.
Against that trend, child care costs shrank 22.9%, pharmaceuticals cost 3.9% less, computing costs fell 3.9% and vehicles prices eased 0.7%.

Changing values

Until the middle of this year, the CPI and other inflation measures were among the most closely watched economic figures. With unemployment near three-decade lows and other capacity constraints, economists were wary that any surge in inflation would be met by interest rate rises by the Reserve Bank.

Those worries have been transformed in the past few months, as collapsing banks and a near-freezing of credit flows has tipped many of Australia’s trading partners into recession and cooled growth in China.

As a result, the RBA and market economists will peer beyond today’s inflation jump towards an expected slowdown in price gains and the wider economy.

“I suspect (today’s CPI) marks the peak in inflation for this cycle, so for policy I don’t think it’s going to stop further rate cuts from the RBA,” said RBC Capital markets senior economist Su-lin Ong.

Macquarie’s Mr Robertson said consumers and businesses can expect lower prices as the slide in commodity prices feeds into a slowing economy.

”The big fall in commodity prices will also help cure headline inflation, while sub-par economic growth and rising unemployment will take care of core inflation.”

Analysts estimate the drop in oil alone could subtract a sizable 0.6 percentage points from the CPI in the current quarter.

Separately, Stephen Walter, chief economist at JPMorgan Chase, said today that Australia’s jobless rate will more than double in the next two years in part because of slowing growth in China.

The unemployment rate will surge to 9% late 2010 from 4.3% in September, he said.

Rate cut hopes may dim

Even so, Joshua Williamson, senior strategist at TD Securities, says the combination of the high CPI figures and the slew of Federal Government and RBA policies aimed at stoking demand and thawing credit flows means future interest rate cuts may not be so deep as some expect.

Today’s CPI data would prompt the market to ‘’start paring back a little its expectations for rate cuts before the end of the year,” he said.

”In combination with the higher CPI, we know that money market rates have come down and we’ve got fiscal stimulus and an RBA governor that generally believes that the worst of the crisis is possibly behind us,” Mr Williamson said.

The initial response in interest rate markets, however, has pointed to a modest increase in expectations of more cuts to come.

Investors are betting the RBA will lower rates by half a percentage point, or 50 basis points, to 5.5% when its board next meets on November 4, with the wagers rising slightly after today’s CPI figures came out.

• Immigration to be cut as unemployment soars
• SAP-Leave
• Give yourself a break

Phil Woolas tells Times of urgent need for policy change to ease racial tension

Strict limits are to be imposed on immigration amid fears that unemployment rises in the economic downturn will fuel racial tension.

Phil Woolas, in his first interview since taking over as Immigration Minister, said that he wanted to see a dramatic reduction in the number of migrants coming to Britain.

In what many will see as extraordinary remarks for a Labour minister, he told The Times that the economic backdrop changed everything. “If people are being made unemployed, the question of immigration becomes extremely thorny . . . It’s been too easy to get into this country in the past and it’s going to get harder,” he said.

Ministers intended to introduce changes to allow it to set a limit on migration, he said. “This Government isn’t going to allow the population to go up to 70 million. There has to be a balance between the number of people coming in and the number of people leaving.”

Until now the Government has shied away from curbing levels of immigration, which have reached record levels under Labour.

Keith Vaz, the chairman of the Commons Home Affairs Select Committee, was shocked by the comments. “I would be astonished at a Labour immigration minister in effect changing the policy,” he said. “His predecessor and the Home Secretary have made it very clear they do not support a quota.”

Habib Rahman, of the Joint Council for the Welfare of Immigrants, said: “This could drive a coach and horses through any notion of managed migration through the Government’s new points-based system . . . on which it held long and detailed consultations before unveiling it as the answer to the country’s economic needs.”

With immigration still a big issue of public concern, Labour is under pressure to toughen its approach after the Tories revealed plans for annual limits on numbers entering the country.

The latest figures estimate that net migration – the gap between those entering and those leaving the country – will run at more than 200,000 a year until 2012. About 70 per cent of population growth over the next 25 years is expected to be a result of migration.

Sir Andrew Green, the chairman of Migrationwatch, which argues for balanced migration, described Mr Woolas’s comments as a potential breakthrough. “It is the first time that a government minister has actually linked immigration and population. If they succeed in delivering, they will have done our country a considerable service,” he said.

The Government’s response to public concern about immigration has been to introduce an Australian-style points system linking migrants’ skills to particular jobs. It is likely that curbs would hit such migrants. The Government cannot, however, curb EU migration and has international obligations to accept asylum-seekers. It would also be reluctant to target students because of the money that they provide to universities. It could curb entry for marriage purposes, although this risks an electoral backlash in seats with large Asian communities.

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NEW DELHI: German news site Bild has reported that German software company SAP has plans to send employees on forced leave between Christmas and New Year as part of a cost savings programme.

The software company has also instituted a hiring freeze, is canceling travel and cutting third-party expenses, such as consultants, external training and recruitment.

The company has also issued a freeze on internal IT spend. An email sent by co-CEOs Henning Kagermann and Leo Apotheker to staff last week, reads.

Headcount and hiring freeze: “There is a complete headcount and hiring freeze, and all existing job vacancies will be canceled. This includes any temporary workers, interns, and students. There will be no replacements for employees leaving SAP. No internal transfers may take place. Only those written offers sent to a candidate and/or internal transfers agreed to on or before October 7, 2008, will go forward.”

Third-party expenses: “Since we are not hiring, all engagement with external recruiters must cease immediately. We will discontinue engagement with management consultants and evaluate the impact this has on ongoing projects. Until further notice, all external training is to be canceled. Internal meetings must be held within SAP buildings, and you cannot rent external conference facilities for this purpose.”

Travel: “Cease ALL internal non-customer-facing travel in October…Any non-customer-facing travel already booked should be canceled immediately, even if this incurs penalties.” SAP sales people will also have to fly coach from now on unless they use miles to upgrade.

SAP announced last week that its revenue for the quarter would fall short of its guidance due to a sudden drop in orders at the end of September.

Also, in what it’s calling a “symbolic gesture,” executive committee members will take 10 days less vacation, according to MarketWatch.

• ACT (test)
• Immigration to be cut as unemployment soars
• Inflation leaps to 5%-Australia