BACK in the early ’80s, when the Zagat Survey was still just a single sheet of legal-size paper that Nina and Tim Zagat gave to friends and colleagues, they learned that their list of the best restaurants in New York had been reproduced — en masse — inside Citibank.
“I had a friend there who called me and said he’d just gotten one of these things on his desk,” Mr. Zagat recalls. “Printed across the top, it said, ‘To all officers of the bank.’ And when I asked how many officers there were, he told me there were 3,000.”
For the Zagats, this was one of the first signs that their hobby of tabulating restaurant ratings might have wide appeal. In fairly short order, the New York survey, and the narrow maroon books for other major cities that the couple assembled in its wake, became indispensable for gourmands on the go in the late 1980s and throughout the 1990s.
And up until a few years ago, the release of the coming year’s Zagat (pronounced zuh-GAT) ratings was a hotly anticipated event among the status conscious and the merely hungry — with results that would often go viral. When a humble Brooklyn establishment called the Grocery scored an almost perfect Zagat score of 28 — on a zero-to-30 scale — for its food in 2003, for example, it made the front page of this newspaper.
Today, however, “viral” is hardly the first word that pops off of people’s tongues when you ask about Zagat Survey, the company’s official name. They talk about the power of the Zagat brand; that maroon color is now trademarked, for instance. And they give the Zagats credit for having invented, or at least popularized, user-generated content.
But in the next breath, most of them wonder why Zagat hasn’t won on the Web. The review site Yelp, for example, which made its debut in 2004, draws much more traffic.
In early 2008, at a time of high valuations for many emerging Web companies, the Zagats tried and failed to sell their company, to the disappointment of some of the venture capitalists who had invested in Zagat in 2000.
“We’ve now been at it for 10 years, so of course we’d like to have an exit,” says Bill Ford, the C.E.O. of the venture capital firm General Atlantic, which has invested in Zagat. “It’s my belief that the brand has not been fully leveraged.”
Mr. Ford, who was once a Zagat board member, is quick to note that the things that attracted General Atlantic to Zagat in 2000 are still there today. “They had outstanding and differentiated content, and the opportunity to migrate it from offline to online, both on the Web and on mobile,” he says.
Yet that migration has been neither as dexterous nor as profitable as Zagat backers had hoped. Perhaps the biggest reason is that the Zagats have kept their ratings and their reviews behind a pay wall on their Web site.
The cost was high in terms of lost traffic, for just as the Zagats were digging in their heels, Google was rapidly gaining market share among Web users. Google penalizes sites that keep content behind a pay wall. As a result, Zagat listings usually didn’t appear on the first page of a Google search result for specific restaurants. Because of that, fewer people came to Zagat.com, which meant that it didn’t have the opportunity to convert them to paid subscribers.
While online traffic comparisons are never exact, Zagat.com had 570,000 unique domestic Web visitors in September, according to the Nielsen Company, versus 9.4 million for Yelp. The Zagats say they actually have more than 1.2 million unique users worldwide.
None of this means Zagat is in any immediate financial danger. While the Zagats refused to provide much specific financial information for this article, they did say their company is still profitable.
They are also quick to point out that it’s not at all clear that Yelp’s strategy of having dozens of salespeople selling local ads is superior to their approach of asking Web and mobile users to pay for listings. Zagat, meanwhile, still sells its paper books and operates what the couple describe as an extremely profitable unit that creates custom guides for corporate clients.
The digital wheel has also turned in a new direction, with more consumers using smartphones and other mobile devices to find content and services through apps. While Zagat.com has met resistance from desktop computer users when it comes time to whip out their credit cards, mobile customers have shown more willingness to pay for apps.
So now Zagat is racing to prove that it’s worth paying $9.99 a year for its smartphone app — and that it can persuade enough customers to fund its existence for another three decades — even while Yelp and other competitors are offering their apps free.
Even after the failed sale in 2008, the Zagats profess no regrets about their Web strategy. In fact, they think the world is finally catching up to them.
“When I think back on the business model, with our books designed to fit in a pocketbook, there we were at the beginning with all three things that we’re all talking about today,” Ms. Zagat says. “Mobile, social and local. That is in the D.N.A. of Zagat.”
TIM ZAGAT and Nina Safronoff got to know one another in 1963, in a study group they joined as first-year students at Yale Law School.
“I liked her for plenty of reasons, in part because she took such great notes but also because she knew how to cook,” Mr. Zagat says.
Saturday, November 13, 2010
Monsoon-Sown Oilseeds Output May Jump 12.4% as Area Increases, Group Says
India, the world’s second-largest buyer of vegetable oils, may harvest 12.4 percent more monsoon- sown oilseeds from a year ago because of an increase in area planted to soybeans and peanuts, a processors’ group said.
Output of oilseeds, including sunflower and sesame seeds, may climb to 15.4 million metric tons in the year to June 30, 2011, from 13.7 million tons, the Central Organization for Oil Industry & Trade said today. The forecast compares with 17.3 million tons estimated by the farm ministry.
Imports of vegetable oils by India probably totaled 9.2 million metric tons in the year ended Oct. 31, Sushil Goenka, president of the Solvent Extractors’ Association of India, said in an interview yesterday.
Farmers planted oilseeds on 17.55 million hectares (43.4 million acres), up from 17.44 million hectares a year earlier, according to the farm ministry.
The monsoon crop is sown in June and harvested starting middle of September.
Output of oilseeds, including sunflower and sesame seeds, may climb to 15.4 million metric tons in the year to June 30, 2011, from 13.7 million tons, the Central Organization for Oil Industry & Trade said today. The forecast compares with 17.3 million tons estimated by the farm ministry.
Imports of vegetable oils by India probably totaled 9.2 million metric tons in the year ended Oct. 31, Sushil Goenka, president of the Solvent Extractors’ Association of India, said in an interview yesterday.
Farmers planted oilseeds on 17.55 million hectares (43.4 million acres), up from 17.44 million hectares a year earlier, according to the farm ministry.
The monsoon crop is sown in June and harvested starting middle of September.
Indian Oil Profit Surges, Surpassing Estimates, After Subsidy Compensation
Indian Oil Corp., the nation’s biggest refiner, posted a more than 18-fold increase in second- quarter profit, beating analysts’ estimates, after the government compensated it for selling fuels below cost.
Net income rose to 52.9 billion rupees ($1.18 billion) for the three months ended Sept. 30, from 2.8 billion rupees a year earlier, the state-run refiner said in a statement to the Bombay Stock Exchange today. That compares with the average 10.6 billion rupee estimate of 16 analysts surveyed by Bloomberg.
The profit gain may bolster efforts by Prime Minister Manmohan Singh’s administration and the company to sell shares in the first quarter of next year as record overseas investments pushed the benchmark Sensitive Index to a record this month. The government freed gasoline prices from state control in June while continuing to set rates for other fuels, including diesel.
“State-run refiners depend too heavily on government support,” Alex Mathews, head of research at Geojit BNP Paribas Financial Services Ltd. in Kochi in southern India, said before the earnings were announced. “The government supported them this quarter and we don’t know what will happen in the next.”
Shares of the refiner have gained 32 percent this year, outpacing the 15 percent increase in the benchmark Sensitive Index. The stock fell 1.3 percent to 402.55 rupees in Mumbai trading yesterday. The stock market is closed in India today.
Below Cost
Indian Oil, based in New Delhi, sells diesel, kerosene and cooking gas below cost to help the government curb inflation. State refiners are partly compensated by the government and oil producers including Oil & Natural Gas Corp. and Oil India Ltd.
The government gave Indian Oil 72.2 billion rupees as compensation in the quarter, according to today’s statement. The refiner didn’t account for any payment a year earlier.
Gasoline prices were increased four times since the price controls were removed on June 25, according to the company’s website.
“This is a step in the right direction as it helps reduce the refiners’ dependence on subsidies,” Mathews said.
Crude oil in New York gained 12 percent to an average $76.20 a barrel in the quarter, boosted by demand from India and China, Asia’s two fastest-growing major economies. Oil rose to this year’s high of $88.63 a barrel on Nov. 11. The December contract fell $2.93 to settle at $84.88 a barrel on the New York Mercantile Exchange yesterday.
Refining Margins
Indian Oil’s average gross refining margin for the quarter was $6.63 a barrel compared with $3.62 a year earlier, the company said. Sales rose 15 percent to 693.4 billion rupees.
Hindustan Petroleum Corp. reported second-quarter profit of 20.9 billion rupees and Bharat Petroleum Corp. posted net income of 21.4 billion rupees. Both state refiners had losses a year earlier.
The government plans to sell a 10 percent stake in Indian Oil in the three months ending March 31 as part of an asset-sale program aimed at cutting the budget deficit. The refiner will simultaneously offer fresh shares equivalent to a similar stake to reduce debt as it builds a new refinery and looks for possible ventures overseas.
Indian Oil operates about 33 percent of the nation’s refining capacity and is building a new 15 million metric ton-a- year plant in the eastern state of Orissa. The company added 3 million tons of capacity at its Panipat refinery this month. Before the expansion, Indian Oil and its unit had a combined capacity of 61.7 million tons a year, according to its website.
The government holds a 79 percent stake in Indian Oil.
Net income rose to 52.9 billion rupees ($1.18 billion) for the three months ended Sept. 30, from 2.8 billion rupees a year earlier, the state-run refiner said in a statement to the Bombay Stock Exchange today. That compares with the average 10.6 billion rupee estimate of 16 analysts surveyed by Bloomberg.
The profit gain may bolster efforts by Prime Minister Manmohan Singh’s administration and the company to sell shares in the first quarter of next year as record overseas investments pushed the benchmark Sensitive Index to a record this month. The government freed gasoline prices from state control in June while continuing to set rates for other fuels, including diesel.
“State-run refiners depend too heavily on government support,” Alex Mathews, head of research at Geojit BNP Paribas Financial Services Ltd. in Kochi in southern India, said before the earnings were announced. “The government supported them this quarter and we don’t know what will happen in the next.”
Shares of the refiner have gained 32 percent this year, outpacing the 15 percent increase in the benchmark Sensitive Index. The stock fell 1.3 percent to 402.55 rupees in Mumbai trading yesterday. The stock market is closed in India today.
Below Cost
Indian Oil, based in New Delhi, sells diesel, kerosene and cooking gas below cost to help the government curb inflation. State refiners are partly compensated by the government and oil producers including Oil & Natural Gas Corp. and Oil India Ltd.
The government gave Indian Oil 72.2 billion rupees as compensation in the quarter, according to today’s statement. The refiner didn’t account for any payment a year earlier.
Gasoline prices were increased four times since the price controls were removed on June 25, according to the company’s website.
“This is a step in the right direction as it helps reduce the refiners’ dependence on subsidies,” Mathews said.
Crude oil in New York gained 12 percent to an average $76.20 a barrel in the quarter, boosted by demand from India and China, Asia’s two fastest-growing major economies. Oil rose to this year’s high of $88.63 a barrel on Nov. 11. The December contract fell $2.93 to settle at $84.88 a barrel on the New York Mercantile Exchange yesterday.
Refining Margins
Indian Oil’s average gross refining margin for the quarter was $6.63 a barrel compared with $3.62 a year earlier, the company said. Sales rose 15 percent to 693.4 billion rupees.
Hindustan Petroleum Corp. reported second-quarter profit of 20.9 billion rupees and Bharat Petroleum Corp. posted net income of 21.4 billion rupees. Both state refiners had losses a year earlier.
The government plans to sell a 10 percent stake in Indian Oil in the three months ending March 31 as part of an asset-sale program aimed at cutting the budget deficit. The refiner will simultaneously offer fresh shares equivalent to a similar stake to reduce debt as it builds a new refinery and looks for possible ventures overseas.
Indian Oil operates about 33 percent of the nation’s refining capacity and is building a new 15 million metric ton-a- year plant in the eastern state of Orissa. The company added 3 million tons of capacity at its Panipat refinery this month. Before the expansion, Indian Oil and its unit had a combined capacity of 61.7 million tons a year, according to its website.
The government holds a 79 percent stake in Indian Oil.
Friday, November 12, 2010
‘Smart’ Meters Draw Complaints of Inaccuracy
NOLANVILLE, Tex. — Sgt. John Robertson 2nd, an Army mechanic at nearby Fort Hood, is fuming about the so-called smart electric meter his local utility has installed on the side of his tidy, 1,800-square-foot home.
Like thousands of consumers with the new meters around the country, Sergeant Robertson suspects the device is not as smart as advertised.
In his case, he says it is inaccurately measuring his family’s power use and driving up his bills — some months by as much as 50 percent, to as high as $320 — since it was installed in December. This, he said, is despite his efforts to cut back on energy use.
“I’ve done two tours in Iraq, and when I come home I’m getting ripped off by my electric meter,” said Sergeant Robertson, who with his wife, Kim, is raising four children on a tight budget.
Whether he and others are indeed getting ripped off is now a matter of national debate.
Over the last year, as utilities around the country have installed an estimated two million of the new digital meters, power companies have received plenty of complaints — and in some states have been hit by class-action lawsuits — most of them from consumers saying the smart meters are overstating their electrical usage.
This is not the smooth rollout envisioned last year, when the Obama administration included money for utilities to install smart meters as part of a $3.4 billion injection of federal stimulus spending to modernize the nation’s power grid. By 2020, there could be as many as 65 million smart meters, by various makers, installed in this country, according to one estimate.
Using digital technology and computer networking, smart meters can transmit real-time data that is supposed to enable utilities to conserve electricity and better allocate power during parts of the day when overall demand is high. Utilities can also then vary the price for power, by time of day or time of year, based on when it is being used; some are already offering this option to customers.
Meanwhile, for customers with the right training and additional equipment, the meters can give households a much more detailed picture of the amount of electricity they are using, down to individual appliances. That, in theory, can help people reduce their electric bills and become greener citizens.
But because of faulty technology in some cases, and more often through general shortcomings in consumer education and customer-service support by many utilities, smart meters are leaving many customers dumbfounded.
In Maryland earlier this year, state regulators, aware of the discontent around the country, temporarily blocked a utility’s smart-meter proposal, citing inadequate planning and the potential cost to consumers.
In California, Michael Kelly, a lawyer handling a class-action suit against the state’s dominant utility, Pacific Gas and Electric, over billing disputes, said the problems probably had less to do with faulty devices and more to do with a hasty rollout. Old billing systems were merged with the new smart-meter technology, he said, too frequently resulting in erroneous charges.
“We’re just saying we want an evaluation done and that we want anyone who was overcharged to get their money back,” Mr. Kelly said.
A state-ordered analysis by the independent research firm Structure Consulting Group, released in September, agreed with the utility’s assertion that its new meters were accurate for the most part. The study also supported its conclusion that most of the complaints could be traced to a heat wave, changes in personal behavior or old meters that were actually malfunctioning and undercharging before the new ones were installed.
But the Structure report also said the utility had done a poor job of educating consumers and addressing their concerns. In basic terms, the smart digital meters are simply replacing the old analog meters, with their inscrutable dials and counters, found on the sides of homes all over America. But unlike those “dumb” devices, which are often read once a month by utility employees going house to house on foot, the digital meters can provide utilities with remote, real-time measurements of kilowatt-hours being used.
A recent analysis by the nonprofit Electric Power Research Institute, a utility-financed research organization based in Palo Alto, Calif., estimated that creating an intelligent electricity grid of this sort in the United States could reduce electricity use by more than 4 percent annually by 2030. Nationally, that could mean annual savings of roughly $20.4 billion for utilities and their customers, according to the institute.
Like thousands of consumers with the new meters around the country, Sergeant Robertson suspects the device is not as smart as advertised.
In his case, he says it is inaccurately measuring his family’s power use and driving up his bills — some months by as much as 50 percent, to as high as $320 — since it was installed in December. This, he said, is despite his efforts to cut back on energy use.
“I’ve done two tours in Iraq, and when I come home I’m getting ripped off by my electric meter,” said Sergeant Robertson, who with his wife, Kim, is raising four children on a tight budget.
Whether he and others are indeed getting ripped off is now a matter of national debate.
Over the last year, as utilities around the country have installed an estimated two million of the new digital meters, power companies have received plenty of complaints — and in some states have been hit by class-action lawsuits — most of them from consumers saying the smart meters are overstating their electrical usage.
This is not the smooth rollout envisioned last year, when the Obama administration included money for utilities to install smart meters as part of a $3.4 billion injection of federal stimulus spending to modernize the nation’s power grid. By 2020, there could be as many as 65 million smart meters, by various makers, installed in this country, according to one estimate.
Using digital technology and computer networking, smart meters can transmit real-time data that is supposed to enable utilities to conserve electricity and better allocate power during parts of the day when overall demand is high. Utilities can also then vary the price for power, by time of day or time of year, based on when it is being used; some are already offering this option to customers.
Meanwhile, for customers with the right training and additional equipment, the meters can give households a much more detailed picture of the amount of electricity they are using, down to individual appliances. That, in theory, can help people reduce their electric bills and become greener citizens.
But because of faulty technology in some cases, and more often through general shortcomings in consumer education and customer-service support by many utilities, smart meters are leaving many customers dumbfounded.
In Maryland earlier this year, state regulators, aware of the discontent around the country, temporarily blocked a utility’s smart-meter proposal, citing inadequate planning and the potential cost to consumers.
In California, Michael Kelly, a lawyer handling a class-action suit against the state’s dominant utility, Pacific Gas and Electric, over billing disputes, said the problems probably had less to do with faulty devices and more to do with a hasty rollout. Old billing systems were merged with the new smart-meter technology, he said, too frequently resulting in erroneous charges.
“We’re just saying we want an evaluation done and that we want anyone who was overcharged to get their money back,” Mr. Kelly said.
A state-ordered analysis by the independent research firm Structure Consulting Group, released in September, agreed with the utility’s assertion that its new meters were accurate for the most part. The study also supported its conclusion that most of the complaints could be traced to a heat wave, changes in personal behavior or old meters that were actually malfunctioning and undercharging before the new ones were installed.
But the Structure report also said the utility had done a poor job of educating consumers and addressing their concerns. In basic terms, the smart digital meters are simply replacing the old analog meters, with their inscrutable dials and counters, found on the sides of homes all over America. But unlike those “dumb” devices, which are often read once a month by utility employees going house to house on foot, the digital meters can provide utilities with remote, real-time measurements of kilowatt-hours being used.
A recent analysis by the nonprofit Electric Power Research Institute, a utility-financed research organization based in Palo Alto, Calif., estimated that creating an intelligent electricity grid of this sort in the United States could reduce electricity use by more than 4 percent annually by 2030. Nationally, that could mean annual savings of roughly $20.4 billion for utilities and their customers, according to the institute.
Sensitive Index Slides As Factory Output Slows; Hindalco, Mahindra Drop
India’s benchmark stock index dropped the most in five months as growth in the nation’s industrial production unexpectedly slowed to a 16-month low.
Mahindra & Mahindra Ltd., the largest maker of sport- utility vehicles and tractors, declined the most since May. Output at factories, utilities and mines rose 4.4 percent in September after a revised 6.9 percent increase a month earlier, the statistics office said today. The median estimate of 27 economists in a Bloomberg News survey was for a 6.4 percent gain. Hindalco Industries Ltd., the biggest aluminum producer, slid as metal prices slumped on speculation China, the biggest consumer, may attempt to rein in inflation by raising interest rates.
“The numbers have clearly disappointed,” said Aneesh Srivastava, the Mumbai-based chief investment officer at IDBI Federal Life Insurance Co., who manages about $325 million. “We will be a little conservative and cautious in our investing. We will not increase our exposure to the capital goods sector.”
The Bombay Stock Exchange’s Sensitive Index, or Sensex, lost 432.20, or 2.1 percent, to 20,156.89, as of the 3:30 p.m. close in Mumbai, completing its steepest one-day slide since June 1. The gauge declined 4 percent this week, the most since the five-days ended May 7. The S&P CNX Nifty Index on the National Stock Exchange dropped 2 percent to 6,071.65. The BSE 200 Index retreated 2.1 percent to 2,562.61.
Mahindra, Hindalco
Stocks on the Sensex are valued at 19.2 times earnings after jumping 15 percent this year. The gauge is the best performer and the most expensive among the ten biggest markets in the world.
Mahindra & Mahindra plunged 5 percent to 773.15 rupees, its biggest drop since May 19. Tata Motors Ltd., the biggest truckmaker and owner of Jaguar Land Rover, fell 2.3 percent to 1,246.25 rupees, its lowest close since Nov. 5.
Hindalco sank 4.6 percent to 223.1 rupees, its steepest drop since June 8. Sterlite Industries (India) Ltd., the No. 1 copper and zinc producer, slumped 2.3 percent to 181.95 rupees. Tata Steel Ltd., the biggest producer of the alloy, slid 3.8 percent to 606.95 rupees.
Commodities tumbled today, with copper falling from a record and oil slipping from a two-year high, on speculation China may attempt to rein in inflation by raising interest rates, curbing demand in the world’s biggest consumer of metals and energy.
DLF, Bharti
The MSCI Asia Pacific Index dropped the most in more than two months and completing its biggest weekly loss in three months.
DLF Ltd., the biggest developer, plunged 5.6 percent to 327.2 rupees, its biggest drop since June 7. The shares were cut to “underperform” from “neutral” by Anand Agarwal and Abhishek Bansal, analysts at Credit Suisse Group AG, who said “disappointment” on volumes and cash flow will continue after “weak” second-quarter results.
Bharti Airtel Ltd., the largest mobile-phone operator, retreated for a third day after profit dropped, slumping 3.5 percent to 305.55 rupees, its lowest close since July 22. Reliance Communications Ltd., the second-largest mobile-phone operator, fell 3.5 percent to 169.9 rupees.
‘Weak Sentiment’
State Bank of India sank 4.7 percent to 3,026.8 rupees, its sharpest drop since Jan. 27. The nation’s largest lender’s rating was lowered by the Reserve Bank of India after the regulator inspected accounts for the year through March 2009, the Mint reported, without saying where it got the information. S. S. Ranjan, chief financial officer of State Bank, didn’t immediately respond to calls to his cell phone.
“Investor sentiment is weak,” said Kishor Ostwal, managing director of CNI Research (India) Ltd., a publicly traded equities research provider in Mumbai. “Some of the results have disappointed. Cues from other Asian markets have not helped either.”
Overseas investors bought a net 1.08 billion rupees of Indian stocks on Nov. 10, taking this year’s record flows to 1.3 trillion rupees, according to data on the website of the Securities and Exchange Board of India.
Mahindra & Mahindra Ltd., the largest maker of sport- utility vehicles and tractors, declined the most since May. Output at factories, utilities and mines rose 4.4 percent in September after a revised 6.9 percent increase a month earlier, the statistics office said today. The median estimate of 27 economists in a Bloomberg News survey was for a 6.4 percent gain. Hindalco Industries Ltd., the biggest aluminum producer, slid as metal prices slumped on speculation China, the biggest consumer, may attempt to rein in inflation by raising interest rates.
“The numbers have clearly disappointed,” said Aneesh Srivastava, the Mumbai-based chief investment officer at IDBI Federal Life Insurance Co., who manages about $325 million. “We will be a little conservative and cautious in our investing. We will not increase our exposure to the capital goods sector.”
The Bombay Stock Exchange’s Sensitive Index, or Sensex, lost 432.20, or 2.1 percent, to 20,156.89, as of the 3:30 p.m. close in Mumbai, completing its steepest one-day slide since June 1. The gauge declined 4 percent this week, the most since the five-days ended May 7. The S&P CNX Nifty Index on the National Stock Exchange dropped 2 percent to 6,071.65. The BSE 200 Index retreated 2.1 percent to 2,562.61.
Mahindra, Hindalco
Stocks on the Sensex are valued at 19.2 times earnings after jumping 15 percent this year. The gauge is the best performer and the most expensive among the ten biggest markets in the world.
Mahindra & Mahindra plunged 5 percent to 773.15 rupees, its biggest drop since May 19. Tata Motors Ltd., the biggest truckmaker and owner of Jaguar Land Rover, fell 2.3 percent to 1,246.25 rupees, its lowest close since Nov. 5.
Hindalco sank 4.6 percent to 223.1 rupees, its steepest drop since June 8. Sterlite Industries (India) Ltd., the No. 1 copper and zinc producer, slumped 2.3 percent to 181.95 rupees. Tata Steel Ltd., the biggest producer of the alloy, slid 3.8 percent to 606.95 rupees.
Commodities tumbled today, with copper falling from a record and oil slipping from a two-year high, on speculation China may attempt to rein in inflation by raising interest rates, curbing demand in the world’s biggest consumer of metals and energy.
DLF, Bharti
The MSCI Asia Pacific Index dropped the most in more than two months and completing its biggest weekly loss in three months.
DLF Ltd., the biggest developer, plunged 5.6 percent to 327.2 rupees, its biggest drop since June 7. The shares were cut to “underperform” from “neutral” by Anand Agarwal and Abhishek Bansal, analysts at Credit Suisse Group AG, who said “disappointment” on volumes and cash flow will continue after “weak” second-quarter results.
Bharti Airtel Ltd., the largest mobile-phone operator, retreated for a third day after profit dropped, slumping 3.5 percent to 305.55 rupees, its lowest close since July 22. Reliance Communications Ltd., the second-largest mobile-phone operator, fell 3.5 percent to 169.9 rupees.
‘Weak Sentiment’
State Bank of India sank 4.7 percent to 3,026.8 rupees, its sharpest drop since Jan. 27. The nation’s largest lender’s rating was lowered by the Reserve Bank of India after the regulator inspected accounts for the year through March 2009, the Mint reported, without saying where it got the information. S. S. Ranjan, chief financial officer of State Bank, didn’t immediately respond to calls to his cell phone.
“Investor sentiment is weak,” said Kishor Ostwal, managing director of CNI Research (India) Ltd., a publicly traded equities research provider in Mumbai. “Some of the results have disappointed. Cues from other Asian markets have not helped either.”
Overseas investors bought a net 1.08 billion rupees of Indian stocks on Nov. 10, taking this year’s record flows to 1.3 trillion rupees, according to data on the website of the Securities and Exchange Board of India.
India's Industrial Output Growth Unexpectedly Slows to Least in 16 Months
India’s industrial production growth unexpectedly slowed to a 16-month low in September, signaling consumer demand is waning after Asia’s fastest round of monetary policy tightening this year. Stocks and bond yields fell.
Output at factories, utilities and mines rose 4.4 percent after a revised 6.9 percent increase in August, the statistics office said in a statement in New Delhi today. The median estimate of 27 economists in a Bloomberg News survey was for a 6.4 percent gain.
Consumption may find support from the Indian central bank’s statement on Nov. 2 that it may refrain from raising interest rates in the next three months after boosting them six times in 2010. Part of the reason for the pause is to reduce the risk of an inflation-stoking capital influx from the U.S. and Japan, countries that are injecting additional monetary stimulus.
“This data strengthens our view that the central bank may hold rates at current levels in the near future,” said Sujan Hajra, chief economist at Anand Rathi Financial Services Ltd. in Mumbai. “It may assess the impact of previous rate hikes on growth and inflation, and keep an eye on capital inflows.”
The Bombay Stock Exchange’s Sensitive Index extended declines, falling 0.8 percent to 20,423.28 as of 12 p.m. in Mumbai. The yield on the 12-year government bond slid two basis points from the day’s high of 8.07 percent, while the rupee declined 0.8 percent to 44.64 against the dollar.
Manufacturing Growth
Industrial production was dragged lower by manufacturing, which grew 4.5 percent in September after gaining 7.5 percent in August, today’s report showed. Mining output rose 5.3 percent, while electricity production expanded 1.7 percent. Production of capital goods such as turbines and machinery fell 4.2 percent, according to the report.
Reserve Bank of India Governor Duvvuri Subbarao has room to pause the rate-increase cycle as manufacturing inflation slowed to a nine-month low of 4.59 percent in September.
The benchmark wholesale-price inflation rate may have dropped to 8.5 percent in October from 8.62 percent in the previous month, the median forecast of 21 economists in a Bloomberg News survey showed. The commerce ministry will announce the inflation data on Nov. 15 in New Delhi.
Rate Differential
The Reserve Bank’s benchmark repurchase rate is 6.25 percent. By comparison, the U.S. Federal Reserve’s target for overnight interbank loans is zero to 0.25 percent, where it has been since December 2008. The Fed Nov. 3 left unchanged its pledge to keep rates low for an “extended period” and said it will buy an additional $600 billion of Treasuries through June.
The Bank of Japan last month unveiled a 5 trillion-yen ($61 billion) fund that will buy government and corporate debt, as well as invest in real-estate investment trusts and exchange- traded funds to spur growth.
In China, where industrial output grew 13.1 percent last month, officials are grappling with inflows of money from bets on yuan gains and a surging trade surplus. Consumer prices rose 4.4 percent in October in China, the most in two years, building the case for the central bank to add to last month’s rate increase.
The interest-rate differential between India and the advanced countries spurred an unprecedented $10 billion inflow into rupee debt this year, strengthening the currency by 5.2 percent to 44.3 against the dollar since Sept. 1. Overseas funds also invested a record $28 billion into Indian stocks on prospects of faster economic expansion in the South Asian nation, driving the stock index to near a record.
The Sensitive Index has gained almost 20 percent since Jan. 1, making it the best performer among the world’s 10 biggest stock markets.
Consumer Demand
Industrial output may benefit through the rest of the year from consumers buying cars and new housing.
Companies including the local unit of Ford Motor Co. and Maruti Suzuki India Ltd. sold a record 182,992 cars in October, up 38 percent from the same month a year earlier, the Society of Indian Automobile Manufacturers said Nov. 10.
Cement production by companies such as Ambuja Cements Ltd., a subsidiary of Holcim Ltd., the world’s second-largest maker of the building material, rose 5.2 percent in September from a year earlier after a 1.6 percent gain in August, according to government data.
“There is no compelling evidence to suggest that industrial production is capitulating in a big way,” said Vishnu Varathan, an economist at Capital Economics Ltd. in Singapore. “There is no reason to be overly pessimistic.”
Output at factories, utilities and mines rose 4.4 percent after a revised 6.9 percent increase in August, the statistics office said in a statement in New Delhi today. The median estimate of 27 economists in a Bloomberg News survey was for a 6.4 percent gain.
Consumption may find support from the Indian central bank’s statement on Nov. 2 that it may refrain from raising interest rates in the next three months after boosting them six times in 2010. Part of the reason for the pause is to reduce the risk of an inflation-stoking capital influx from the U.S. and Japan, countries that are injecting additional monetary stimulus.
“This data strengthens our view that the central bank may hold rates at current levels in the near future,” said Sujan Hajra, chief economist at Anand Rathi Financial Services Ltd. in Mumbai. “It may assess the impact of previous rate hikes on growth and inflation, and keep an eye on capital inflows.”
The Bombay Stock Exchange’s Sensitive Index extended declines, falling 0.8 percent to 20,423.28 as of 12 p.m. in Mumbai. The yield on the 12-year government bond slid two basis points from the day’s high of 8.07 percent, while the rupee declined 0.8 percent to 44.64 against the dollar.
Manufacturing Growth
Industrial production was dragged lower by manufacturing, which grew 4.5 percent in September after gaining 7.5 percent in August, today’s report showed. Mining output rose 5.3 percent, while electricity production expanded 1.7 percent. Production of capital goods such as turbines and machinery fell 4.2 percent, according to the report.
Reserve Bank of India Governor Duvvuri Subbarao has room to pause the rate-increase cycle as manufacturing inflation slowed to a nine-month low of 4.59 percent in September.
The benchmark wholesale-price inflation rate may have dropped to 8.5 percent in October from 8.62 percent in the previous month, the median forecast of 21 economists in a Bloomberg News survey showed. The commerce ministry will announce the inflation data on Nov. 15 in New Delhi.
Rate Differential
The Reserve Bank’s benchmark repurchase rate is 6.25 percent. By comparison, the U.S. Federal Reserve’s target for overnight interbank loans is zero to 0.25 percent, where it has been since December 2008. The Fed Nov. 3 left unchanged its pledge to keep rates low for an “extended period” and said it will buy an additional $600 billion of Treasuries through June.
The Bank of Japan last month unveiled a 5 trillion-yen ($61 billion) fund that will buy government and corporate debt, as well as invest in real-estate investment trusts and exchange- traded funds to spur growth.
In China, where industrial output grew 13.1 percent last month, officials are grappling with inflows of money from bets on yuan gains and a surging trade surplus. Consumer prices rose 4.4 percent in October in China, the most in two years, building the case for the central bank to add to last month’s rate increase.
The interest-rate differential between India and the advanced countries spurred an unprecedented $10 billion inflow into rupee debt this year, strengthening the currency by 5.2 percent to 44.3 against the dollar since Sept. 1. Overseas funds also invested a record $28 billion into Indian stocks on prospects of faster economic expansion in the South Asian nation, driving the stock index to near a record.
The Sensitive Index has gained almost 20 percent since Jan. 1, making it the best performer among the world’s 10 biggest stock markets.
Consumer Demand
Industrial output may benefit through the rest of the year from consumers buying cars and new housing.
Companies including the local unit of Ford Motor Co. and Maruti Suzuki India Ltd. sold a record 182,992 cars in October, up 38 percent from the same month a year earlier, the Society of Indian Automobile Manufacturers said Nov. 10.
Cement production by companies such as Ambuja Cements Ltd., a subsidiary of Holcim Ltd., the world’s second-largest maker of the building material, rose 5.2 percent in September from a year earlier after a 1.6 percent gain in August, according to government data.
“There is no compelling evidence to suggest that industrial production is capitulating in a big way,” said Vishnu Varathan, an economist at Capital Economics Ltd. in Singapore. “There is no reason to be overly pessimistic.”
Wednesday, November 10, 2010
Drug Lawsuits Raise Questions for Doctors, and Juries
Judith Graves, a 67-year-old retired investigator for the United States Army, developed a rare medical condition called jawbone death after taking Fosamax, a drug used by millions of American women with thinning bones.
In a civil trial now under way in Manhattan, Mrs. Graves is suing Merck, the maker of Fosamax. Her lawyer, Timothy M. O’Brien, told the jury that Fosamax had caused such debilitating jawbone deterioration that Mrs. Graves required five major operations, including a lengthy surgery to replace her broken jaw with bone from her left arm.
Merck has argued that Fosamax is not the culprit. In its defense, Merck contends that Mrs. Graves took other prescriptions — like steroids to treat rheumatoid arthritis — that weakened her immune system, leading to her jaw infection and healing problems, said Paul F. Strain, outside counsel for the company.
The lawsuit is one of a handful of bellwether cases against Merck representing litigation involving about 1,400 people across the country who say they developed jawbone ailments after taking Fosamax, Mr. O’Brien said. Merck won an earlier case; but in another, a judge proposed to reduce a plaintiff’s jury award to $1.5 million from $8 million (both sides plan to appeal).
In Mrs. Graves’s case, the trial is providing a palpable backdrop for a broadening debate among many doctors and researchers who are rethinking Fosamax and similar bone medications known as oral bisphosphonates, particularly as a treatment for women who have not yet developed osteoporosis.
An advisory issued last month by the Food and Drug Administration, which first approved Fosamax in the 1990s to treat and prevent osteoporosis, along with reports in medical journals linking bisphosphonates with some rare medical problems including unusual thigh fractures, has heightened scrutiny of the long-term use of these medications.
While the F.D.A. cautioned that it was not clear that oral bisphosphonates had caused the rare thigh breaks, it said these kinds of bone fractures might be related to lengthy treatments with the drugs. The agency will now require the labels on Fosamax, Actonel, Boniva, Reclast and Atelvia and generic alternatives to state that the optimal period for using the drugs is unknown.
That uncertainty has shadowed the debate over how and when to prescribe these bone drugs, especially because they have been successful, by most accounts, in significantly reducing fractures over several years in postmenopausal women with osteoporosis. From 1999 to 2009, Fosamax and a newer drug, Fosamax Plus D, had worldwide sales of more than $23.8 billion, according to IMS Health, a health information company that tracks drug sales.
But the drugs’ popularity and effectiveness for generally healthy women without osteoporosis or broken bones have become a source of increasing argument in doctors’ offices and in courtrooms.
Doctors had already started to review the unlimited use of oral bisphosphonates, said Dr. Elizabeth Shane, a professor of medicine at Columbia University College of Physicians and Surgeons. Fifteen years ago, she said, the medical community hoped that if women took the drugs before they developed osteoporosis, they would be protected from breaking bones later in life. But doctors have begun waiting longer before prescribing the drugs, she added.
“We are moving much more to targeting people later in the development of osteoporosis when they are at high risk of fracture, since we’re not entirely clear yet how long is the most appropriate length of time to treat a person,” said Dr. Shane, who has received research grants from Merck, Eli Lilly and Novartis.
Adults generally lose bone mass as they age. But the process accelerates in menopause when cells called osteoclasts start breaking down a larger amount of older bone than can be replaced by other cells, called osteoblasts. Bisphosphonates work by inhibiting that breakdown, thereby conserving bone density.
In one arm of a study called the Fracture Intervention Trial, or FIT, sponsored by Merck and involving about 2,000 women ages 55 to 81 with an existing vertebral fracture, Fosamax cut the risk of a new vertebral fracture by about half compared with a placebo.
“Before these drugs came on the market, we really had nothing,” said Dr. Margaret Seton, a rheumatologist at the Massachusetts General Hospital in Boston. “When you have no drug and you’ve seen a patient and watched their spine crumble, that’s heartbreaking.”
But for those whose bones have not thinned enough to be classified as having osteoporosis, potential treatments are in real flux.
In the FIT trial, for example, Fosamax significantly reduced the risk of clinical fractures in women with osteoporosis but not among those with higher bone mineral density, according to an analysis published in 1998. In a separate analysis of the FIT data that year, Anthony Mucci, a statistical reviewer at the F.D.A. wrote that, for women without osteoporosis, there was no measurable benefit shown “for any category of fracture.”
Karen Riley, a spokeswoman for the F.D.A., said that the subgroup of women without osteoporosis in the FIT trial was too small to produce significant results, and that the Mucci report was one document in a much larger effort by the agency to assess the drug. She added that the F.D.A. approved Fosamax to prevent osteoporosis because it proved to conserve bone mineral density and had previously shown it could avert breaks.
Dr. Michael Rosenblatt, the chief medical officer at Merck and a former dean of Tufts University School of Medicine, pointed to the real goal: preventing osteoporosis, which carries a high risk of serious fractures, among people with thinning bones and stopping their progression from pre-osteoporosis, also known as osteopenia.
Dr. Shane of Columbia disputed the blanket use among patients without osteoporosis.
In a civil trial now under way in Manhattan, Mrs. Graves is suing Merck, the maker of Fosamax. Her lawyer, Timothy M. O’Brien, told the jury that Fosamax had caused such debilitating jawbone deterioration that Mrs. Graves required five major operations, including a lengthy surgery to replace her broken jaw with bone from her left arm.
Merck has argued that Fosamax is not the culprit. In its defense, Merck contends that Mrs. Graves took other prescriptions — like steroids to treat rheumatoid arthritis — that weakened her immune system, leading to her jaw infection and healing problems, said Paul F. Strain, outside counsel for the company.
The lawsuit is one of a handful of bellwether cases against Merck representing litigation involving about 1,400 people across the country who say they developed jawbone ailments after taking Fosamax, Mr. O’Brien said. Merck won an earlier case; but in another, a judge proposed to reduce a plaintiff’s jury award to $1.5 million from $8 million (both sides plan to appeal).
In Mrs. Graves’s case, the trial is providing a palpable backdrop for a broadening debate among many doctors and researchers who are rethinking Fosamax and similar bone medications known as oral bisphosphonates, particularly as a treatment for women who have not yet developed osteoporosis.
An advisory issued last month by the Food and Drug Administration, which first approved Fosamax in the 1990s to treat and prevent osteoporosis, along with reports in medical journals linking bisphosphonates with some rare medical problems including unusual thigh fractures, has heightened scrutiny of the long-term use of these medications.
While the F.D.A. cautioned that it was not clear that oral bisphosphonates had caused the rare thigh breaks, it said these kinds of bone fractures might be related to lengthy treatments with the drugs. The agency will now require the labels on Fosamax, Actonel, Boniva, Reclast and Atelvia and generic alternatives to state that the optimal period for using the drugs is unknown.
That uncertainty has shadowed the debate over how and when to prescribe these bone drugs, especially because they have been successful, by most accounts, in significantly reducing fractures over several years in postmenopausal women with osteoporosis. From 1999 to 2009, Fosamax and a newer drug, Fosamax Plus D, had worldwide sales of more than $23.8 billion, according to IMS Health, a health information company that tracks drug sales.
But the drugs’ popularity and effectiveness for generally healthy women without osteoporosis or broken bones have become a source of increasing argument in doctors’ offices and in courtrooms.
Doctors had already started to review the unlimited use of oral bisphosphonates, said Dr. Elizabeth Shane, a professor of medicine at Columbia University College of Physicians and Surgeons. Fifteen years ago, she said, the medical community hoped that if women took the drugs before they developed osteoporosis, they would be protected from breaking bones later in life. But doctors have begun waiting longer before prescribing the drugs, she added.
“We are moving much more to targeting people later in the development of osteoporosis when they are at high risk of fracture, since we’re not entirely clear yet how long is the most appropriate length of time to treat a person,” said Dr. Shane, who has received research grants from Merck, Eli Lilly and Novartis.
Adults generally lose bone mass as they age. But the process accelerates in menopause when cells called osteoclasts start breaking down a larger amount of older bone than can be replaced by other cells, called osteoblasts. Bisphosphonates work by inhibiting that breakdown, thereby conserving bone density.
In one arm of a study called the Fracture Intervention Trial, or FIT, sponsored by Merck and involving about 2,000 women ages 55 to 81 with an existing vertebral fracture, Fosamax cut the risk of a new vertebral fracture by about half compared with a placebo.
“Before these drugs came on the market, we really had nothing,” said Dr. Margaret Seton, a rheumatologist at the Massachusetts General Hospital in Boston. “When you have no drug and you’ve seen a patient and watched their spine crumble, that’s heartbreaking.”
But for those whose bones have not thinned enough to be classified as having osteoporosis, potential treatments are in real flux.
In the FIT trial, for example, Fosamax significantly reduced the risk of clinical fractures in women with osteoporosis but not among those with higher bone mineral density, according to an analysis published in 1998. In a separate analysis of the FIT data that year, Anthony Mucci, a statistical reviewer at the F.D.A. wrote that, for women without osteoporosis, there was no measurable benefit shown “for any category of fracture.”
Karen Riley, a spokeswoman for the F.D.A., said that the subgroup of women without osteoporosis in the FIT trial was too small to produce significant results, and that the Mucci report was one document in a much larger effort by the agency to assess the drug. She added that the F.D.A. approved Fosamax to prevent osteoporosis because it proved to conserve bone mineral density and had previously shown it could avert breaks.
Dr. Michael Rosenblatt, the chief medical officer at Merck and a former dean of Tufts University School of Medicine, pointed to the real goal: preventing osteoporosis, which carries a high risk of serious fractures, among people with thinning bones and stopping their progression from pre-osteoporosis, also known as osteopenia.
Dr. Shane of Columbia disputed the blanket use among patients without osteoporosis.
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