Summit Notebook

Exclusive outtakes from industry leaders

from Sakthi Prasad:

From coffee beans to brick buildings

M.R. Jaishankar of Brigade EnterprisesM.R. Jaishankar, chairman and managing director of real estate firm Brigade Enterprises, the youngest of 12 siblings, started his career in the family business of growing coffee beans.

 But after a nasty labor dispute, which resulted in the burning down of his factory in 1984, he saw an opportunity in the real estate business in the then sleepy Bangalore city -- and tasted big success.

Jaishankar said his first real estate loan of 10 million rupees in 1984 was considered so large that it had to be approved by the bank’s board of directors.

 In contrast, he said in today’s IT-driven Bangalore, a loan of 10 million rupees could be approved at the level of a branch manager.

from Sakthi Prasad:

Real Estate – To invest or not

Abhijit Mukherjee of Dr Reddy'sEveryone of us has our own ideas about a dream home and usually wonder if it makes a good investment or not. 

But for Abhijit Mukherjee, president of the pharma firm Dr. Reddy’s, the choice is very clear -- He is not a big fan of real estate investment. 

from Sakthi Prasad:

The brave new world of Ideas

Rostow Ravanan of MindtreeThe world was built on ideas and in the absence of innovation, mankind would have continued to live in stone age.

Of course, Rostow Ravanan, chief financial officer of Mindtree, would subscribe to the view that new ideas are absolutely necessary to promote business growth. Well, who wouldn’t? While talking to journalists at Reuters India Investment Summit, he vigorously defended his company’s foray into designing smart phones saying it is a new idea, which may as well pay off.

from Sakthi Prasad:

New Contracts are like honeymoon

L.Ravichandran of Tech MahindraAs the old adage goes, it is easy to build a new house as compared to remodeling an old one. If one would like to extend this adage to the new-age IT industry, then we could use what L. Ravichandran, president, IT Services of Tech Mahindra, told the Journalists at Reuters India Investment Summit in Bangalore: it is easy to negotiate new contracts with the clients rather than renegotiating old ones. He likened the new contracts to that of a honeymoon -- both the customer and the service provider are happy. But, of course, he did not extend his metaphor to old contracts by likening it to a marriage gone vinegary.

Ravichandran also pondered over the fate of fixed lines telephones. According to him, the fixed line phone will not be done away with altogether. Instead, it will be increasingly used to deliver other digital services like broadband internet, IPTV etc.  So in a perverse way, landlines may continue to be used, but not much to make phone calls though.

from Sakthi Prasad:

Old business in New bottle

J.C. Sharma of Sobha DevelopersWhen the term “real estate” is mentioned, people immediately get images of bricks, cement, sand, gravel, dusty construction sites and so on. And the business is rightfully termed as “brick-and-mortar” or categorized as “old economy.”

 Many youngsters nowadays would prefer to work in swanky offices of a software company or an investment bank instead of sweating it out in dust and heat at construction locations.

from Sakthi Prasad:

India Investment Summit comes to Bangalore

After completing the Mumbai leg, the 2010 India Investment Summit is set to arrive in the garden city of Bangalore on Wednesday. Long known as the pensioner’s paradise, Bangalore is fast morphing into a global, multicultural city. The city is also emerging as a favourite destination among young Indian professionals aspiring for a blue-chip career in the information technology business. But despite Bangalore’s success in the IT industry -- the showpiece of a rising India -- the city’s infrastructure has not been able to keep pace with its phenomenal growth over the last decade or so. Frequent power cuts, traffic-choked roads and lax urban planning often leave city dwellers and foreign investors in mute frustration. However, despite these issues, multinational companies have kept their faith in the city.

Executives of real estate, technology and pharmaceutical firms will be exclusively talking to Reuters journalists about their companies’ growth plans, challenges they face and business opportunities that are available within the wider context of India investment story.

Stay tuned.

Ritholtz: I zig when everybody zags

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INVESTMENT-SUMMIT/RITHOLTZ

The U.S. economy is experiencing an ongoing but slow recovery, says Barry Ritholtz, director of equity research at Fusion IQ. But that’s not stopping him from enjoying discounted prices in a low-inflation environment, at least when it comes to his personal spending habits. The world is on sale if you’ve got the money to spend, he told the Reuters Investment Outlook summit in New York when asked, for example, if he might spend less while on a vacation or forego a purchase or two.

“I am an enormous counter-cyclical spender. At the top of the bull market I don’t want to buy anything. I am a seller into a bull market. We have been buying a ton of stuff over the past year. We got two new cars long before the May…. so we picked up two new cars. We’re doing work on the house. We’re adding a kitchen. I got my wife a very lovely birthday gift. She got me a very lovely birthday gift. We’ve been buying artwork. We’ve buying jewelry. I love to buy stuff when it is on sale. I hate to buy top dollar for it.

from Funds Hub:

Here’s lookin’ at you KIID

The vexing question of how much to tell retail investors about what exactly they are buying has been exercising industry participants at the Reuters European Funds Summit. Although the sentiment is for more transparency and simplicity, as exemplified by the EU's new two page marketing document, some managers feel this won't fully reflect the risks and processes involved in a product.

The Key Investor Information Document (KIID), to be rolled out under UCITS IV, will replace the little loved "simplified" prospectus as the primary document via which fund promoters communicate with prospective clients - something that makes some managers very uneasy.

Brazil on everyone’s lips (and in pockets too)

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Forget China, at least for now. That “B” in BRICs is really gaining momentum. Many investment managers attending the “Reuters Investment Outlook Summit 2010″ in New York this week mentioned Brazil as a hot destination to park money next year.

There is a growing perception among decision makers that Brazil is on the right track for dynamic growth.
Pimco’s founder Bill Gross, who helps oversee $940 billion in fixed-income securities, says both China and Brazil have big domestic markets with relatively low consumption levels, around 30 percent of GDP, and still room to grow.

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