Diamond business not affected by recession

Despite global downturn diamond prices in the market have seen only a marginal drop and demand for it has not been affected by the ongoing recession.

''In fact, the first two months of the financial year have been very positive for Tanishq as we witnessed a double digit growth. We are looking forward to a 100 per cent growth over the previous year in diamond business,'' Dwaipayan Sen, Regional Buisness Manager, East, Tanishq, told newspersons here yesterday at the launch of a quality checking campaign for diamonds in collaboration with HRD Antwerp (Belgium).

''In India there is hardly any system to check the quality of precious stones like diamonds as customers generally rely on their chosen jeweller even when buying an expensive gem. However, several malpractices are in vogue in the market which is why it is utterly important to get the cut, colour, quality and purity of diamonds checked through a specialist,'' said Sirish Chandrasekhar, Manager, Merchandising and Marketing, Tanishq.

Tanishq, known for its gem set jewellery, had launched this quality checking campaign in collaboration with HRD Antwerp (Belgium), an internationally acclaimed organisation, which accords the international mark of approval for diamonds.

''The response to this quality check campaign has been tremendous. In fact, we had to turn away customers due to dearth of time in Mumbai and Pune. The expereince has also been varied with some diamond pieces turning out to be a mixture of glass and diamond. In other cases the quality of the diamond was inferior and was not worth the value it claimed,'' said Devika Gidwani, Country head, HRD Antwerp.

Customers can walk into any Tanishq outlet during the six-day campaign starting June 5 at any Tanishq outlet in the city.

World's oldest company too cuts jobs

Hudson's Bay Company, which is probably the world's oldest corporation, Wednesday announced to cut 1,000 jobs in Canada as part of its plans to streamline business in tough economic times.

The company said the retrenchment will save it $150 million in 2009.

Incorporated in May 1670 by British royal charter, the company runs the famous mass merchandise chain of Zellers stores and The Bay department stores. The job cuts follow the company's $70-million restructuring plan announced last month.

``We believe this new structure will allow us to better compete during these challenging economic times and ensure our long term success," said company CEO Jeff Sherman.

``These changes allow us to be more responsive to customer needs and expectations while at the same time aggressively implement our business strategy in order to grow sales and earnings,'' he said.

Combined with a $70 million investment announced in January, he said, the ``new initiative'' will contribute to re-position The Bay and Zellers for consumers.

``Each of the banners has world-class executives managing the businesses who will benefit from more focused resources and the ability to drive growth,'' the CEO said.

``We will be better positioned to succeed in the long term.

''The Hudson's Bay Company is Canada's largest general merchandise retailer.

France's Sarkozy seeks to ease fears on crisis

French President Nicolas Sarkozy addresses the nation today to try to convince a sceptical public that his government is doing what is needed to protect it from the ravages of the global financial crisis.

Between 1 and 2.5 million people took part in a nationwide strike last week to protest against Sarkozy's response to the crisis, which has focused on boosting public investment rather than giving direct help to consumers.

Fearing further social unrest, and with little room for manoeuvre, Sarkozy will seek to persuade voters that his 26 billion euro (33.9 billion dollar) stimulus package is the right way to tackle the economic downturn.

In a live television appearance at 0045 IST, Sarkozy is due to be asked questions by four broadcast journalists.

''For the president, this 90-minute explanatory exercise is the most difficult since his election,'' pro-Sarkozy daily Le Figaro said ahead of the prime-time television appearance.

Sarkozy is not expected to announce new measures, but he is under pressure to perform well since several of the country's trade unions will decide whether to hold another nationwide protest based on what he says during the broadcast.

Sarkozy was elected in 2007 on a platform of sweeping economic reforms aimed at optimising growth, which he pledged to fetch ''with my teeth''.

But within months his support had slumped to below 50 per cent as soaring commodity prices increased many people's cost of living and Sarkozy said there was little he could do to help.

The credit crunch has brought further pain, with unemployment rising steadily, budget deficits set to swell due to stimulus spending, and concerns about the future acute.

FEARS ''Sarkozy must address the country's fears tonight,'' Le Parisien said in a headline.

The newspaper also published a CSA poll that showed Sarkozy's approval rating had fallen five points in one month to 39 per cent.

The number of respondents who said they did not trust him rose five points to 55 per cent.

But the government has said it will not change its course on how to respond to the crisis, a message repeated by a senior government official today, who said public sentiment would change when the 26 billion euro package was spent.

''The money hasn't come yet. People will see the impact when it does,'' he told reporters on condition of anonymity.

The government has also brushed aside calls for a second stimulus package. Two reasons cited by officials are that the crisis could last a long time yet and that announcing a second package would increase France's borrowing costs.

''Our number one priority is to find the money (for the first package) at the cheapest price,'' the senior official said, adding that investors were buying French bonds at a price close to benchmark German debt, making it easy to raise capital.

Tata Steel increases salary amidst recession

Despite a steep downturn in the net profit last quarter due to global meltdown, the world's sixth largest steel producer Tata Steel has given yet another salary hike to a section of its India operations employees.

The company, which increased the wages of around 16,000 employees on November 1 last, signed yet another wage revision agreement with the Tata Workers Union (TWU) last evening here to give a minimum guaranteed hike of Rs 1,000 per month in the basic salary of around 700 odd employees under T-grade of its Jamshedpur plant, the sole operational unit of the company in India.

The memorandum of settlement, signed by chief operating officer of the company H M Nerurkar and the president of TWU Raghunath Pandey, will also increase the rates of increment, dearness allowance, house rent allowance, leave travel concession and transport allowance.

Mr Pandey told UNI here today that the hike would be applied with retrospective effect from November 1, 2008. The company had earlier increased the wages of the employees of its subsidiary high precision equipment manufacturer Tata Growth Shop in December last year.

The company has seen a steep decline of more than 54 per cent in its net profit during the last quarter of the current fiscal.

US economy suffers biggest slowdown in 26 years

The US economy suffered its biggest slowdown in 26 years in the last three months of 2008 as consumer spending recorded the worst slide in the post-war era, a trend that's likely to continue in the coming months.

Gross domestic product, the broadest measure of the nation's economic activity, fell at an annual rate of 3.8 percent in the fourth quarter, adjusted for inflation, according to official figures released Friday.

That's the largest drop in GDP since the first quarter of 1982, when the economy suffered a 6.4 percent decline. But the pace of contraction was less than forecast, with a buildup of unsold goods cushioning the blow.

As consumer spending accounts for more than two-thirds of overall economic activity, without the jump in inventories, the decline would have been 5.1 percent, the Commerce Department said.

Hit by tight credit and soaring job losses, Americans slammed the brakes on spending in the quarter and consumer spending fell at a 3.5 percent annual rate, with spending on big-ticket durable goods plunging at a 22 percent pace.

But it wasn't just consumers pulling back. Fixed investment in equipment and software, taken as an indication of business spending, plunged at an annual 28 percent rate. And consumers and businesses outside the United States also had less demand for US goods, as exports fell at nearly a 20 percent annual rate.

Economists warned that the less severe than expected drop in GDP was due to a number of factors that suggested more weakness ahead.

"When the economy is dropping fast it is hard for firms with plummeting sales to halt inventory accumulation," Robert Brusca of FAO Economics was cited as saying by CNN. He said since companies are likely to respond to the excess inventories by slashing production at the start of this year, GDP will be weaker in the next few quarters.

In addition, prices for goods and services fell more than expected during the quarter. That limited the decline in GDP, which is adjusted lower to account for inflation.

The prices paid by consumers during the quarter fell at an annual 5.5 percent rate in the quarter, due primarily to lower gas prices. That's the biggest such decline in that key price measure since the Commerce Department started calculating it on a quarterly basis in 1947.

Canada almost in recession, says bank

The US economic slowdown and global financial crunch have cast their shadow on resources-rich Canada, which has almost entered recession, according to the Bank of Canada.

In its quarterly report released Thursday, the country's top bank says economic growth during the year's second quarter will crawl to just 0.3 percent. Earlier, the bank had pegged it at 2 percent.

It has also downgraded the growth rate from 2.3 percent to 1.8 percent for the second half of the year.

Bank of Canada governor Mike Carney said the downturn in the US would badly hit Canadian exports, leading to recession trends likely to persist till the middle of next year.

The US accounts for more than 80 percent of Canadian exports. The housing sector collapse in the US has led to credit crunch there, hitting Canadian exports.

Further, the rising Canadian dollar has not helped the manufacturing sector, particularly in Ontario, where a large number of jobs have disappeared.

Because of a high Canadian dollar, tourism from the US has declined considerably. Tourism pumps in billions of dollars in the economy of Toronto alone.

The high Canadian dollar - which has remained at par with the US dollar since late last year - has also hit Canadian exports of manufactured goods.

The loonie - as the Canadian dollar is called - has been kept high by rising fuel and metal resources, which Canada has in abundance.

This, coupled with strong domestic demand, will however help Canada weather recessionary trends.

Prime Minister Stephen didn't seem worried when he told a chamber of commerce near Montreal that Canada was in a position to withstand global signs of recession because of its strong economic fundamentals.

Indo-Asian News Service