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SALARIES D-street Blues They're not cutting jobs, but most brokerages are asking their people to work for less.
There simply isn't enough work on the street. On September 8, 2000, when the market was on a roll, average daily-trading volumes on the Bombay Stock Exchange were as high as Rs 4,628 crore; by September 8, 2001, this figure had shrunk to Rs 3,198 crore. And with most stocks trading near all-time lows (or a little better than that), analysts aren't really sought after by anyone other than the bored scribe looking for a hot story. As members of an industry-segment, that's usually shown itself to be trigger-happy when it comes to laying people off (remember the original bloodbath in the financial sector a few years ago, when companies mercilessly haced numbers?), the response of brokerages has been uncharacteristic: less pay, and not just in terms of slimmer bonuses. There isn't an analyst in India today who can hope to take home a 2001-bonus that's as high as the 2000-one. Rues one analyst at Prabhudas Lilladhar: ''Not only can we expect to get a smaller bonus, our salary has been cut substantially.''
There hasn't been a wage-cut at Kotak Securities, at least, not yet, but CEO S.A. Narayan warns of a bonus that could be 25 to 30 per cent lower than last year's one . ''When the markets are down, we are the first to be hit. We are in the frontline'' The industry is also making a large-scale shift to compensation packages with a high variable-pay component. ''We are not reducing salaries,'' explains Motilal Oswal, Chairman, Motilal Oswal Securities, ''but earlier we used to have (a compensation structure built around), 100 per cent fixed pay; now, in some cases 100 per cent is variable''.
In good times, such changes would have provoked employees to look for better prospects, but now, there simply are none. Moans an analyst who who's just taken a 20 per cent cut in pay: ''I've looked for jobs everywhere; there are none going.'' Actually, there are some jobs going in the insurance business, but with most finance pros making a beeline for them, the competition is intense and supply far exceeds demand. Some people, like Sunit Mehra, the Managing Partner of executive search firm Horton, believe there is nothing surprising about the correction in salaries. ''In the past five years, salaries in several industry segments in India, particularly financial services, had gone up way too high; a correction was imminent.'' Well, if this is just a correction that's happening, it couldn't have found a worse time to happen. -Seema Shukla GDR TRACKING
They may not be as popular with investors as they were in the early nineties, but that's not the reason behind the Skindia GDR Index-an index composed of 23 Global Depository Receipts and American Depository Receipts-crashing to a two year low of 511.47 on September 6. That was over 70 per cent below the two-year high of 1,723.09 that the index registered on February 11, 2000.
One reason for the crash could be the state of stockmarkets around the world. Over the past two years, the Skindia GDR Index has dipped 45 per cent, the NASDAQ composite index, 39 per cent, the FTSE, 17 per cent, and the Sensex, 34 per cent. Most Indian GDRs and ADRs have underperformed their underlying shares (the Skindia index premium over the underlying sharers has dropped by 7 per cent). That can be attributed to the lower premia commanded by the ADRs of tech companies like Infosys. ''Lower market prices, the cancellation of GDRs, and the transfer of some larger GDR programmes to ADRs have caused the level of trading activity in the GDR market to remain low,'' explains Gautam Chand, the chairman and chief executive of Instanex Capital Consultants. The result? Neither investors nor traders are keen on the GDR market. The other problem with GDRs is that investors have shown a marked preference for stocks that are listing directly, or issues being made by companies in the ADR market. Today, just seven out of the 60 GDRs issued by Indian companies are actively traded. These include those of Hindalco, Reliance, MTNL, and L&T. Maybe this is a money-raising mechanism whose time has gone. -Roshni Jayakar INNOVATION
Vibhu Agarwal, an alumnus of IIT Kanpur, has nursed a dream since the days he was a budding engineer: to be able to hear what you can see. Four years after graduation, he is ready to carry out field trials of his software product, which converts text to speech in Hindi. So, if you call up the bank, the automated system can interact or read out your last few transactions in Hindi. Or the new rates for farm produce could be rattled off in Hindi for a caller from anywhere. The applications for the product are varied: education, telecom, voice portals, or information from any public interface. With a tyro's candidness, Agarwal admits that he did not carry out any basic research of similar products available in the market when he started working on the product. All he knew was that he wanted to make a product. ''It was only later that I realised that there was no competing product in the market,'' admits the 27-year-old Agarwal. Starting as a self-funded bootstrap organisation, Agarwal's company has now grown into a 25-person team over the last 30 months. And the moolah is now beginning to flow in. On the cards is a deal with a Brazilian company for the VXML browser, which helps browse a voice portal (VXML is to voice what html is to text). Over the next three to four months, the speech engine, which will make the computer's voice sound just like that of an average person, is expected to be ready. Given the $1,000-$2,000 per user licence that Nuance, the leader in voice text to speech software charges, if you see Agarwal running to the bank, you will know he has played his cards right. -Ashutosh Sinha
FOOTFALLS
Marketers couldn't ask for a better way to cut through the clutter. Every year Shoppers' Stop's six outlets play host to over 1 crore visitors. Just around 35 per cent to 40 per cent of them may buy anything at all, but 40 lakh is still a significant number for any marketer worth his cost per contact. That piece of marketing jargon is what marketers use to assess the efficacy of their communication strategies. The retail chains, themselves late to realise this, are now seeking to leverage their ability to deliver a captive audience to marketers for financial gain. ''Once we have a critical mass in terms of footfalls, I see no reason why we shouldn't enter into mutually beneficial relationships with marketers who want to position products, run promotions, or just put up a touch-screen kiosk, in our outlets,'' says Mahesh Patel, Director, Lifespring, an international health and beautycare chain, whose five outlets in Delhi attract 2.5 lakh footfalls a year Adds K. Dasaratharaman, CEO, Music World: ''More than the direct financial benefits, such initiatives help us to build a strong store loyalty.'' Music World has already run experimental programmes in association with M&M and Sony Music, and is quite pleased with the results. Will these initiatives work in the long-term? ''Maybe,'' says Vivek Mathur, Associate Director (Retail Practice), KSA Technopak, ''but only if the retail chains don't overdo it''. -T.R. Vivek
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