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No beating about the bush.
The Internet search engine giant has said that the censorship and increasing cyber attacks on its sites from China may well mean having to shut down Google.cn, and potentially its offices in China
Internet search engine giant Google has said it has decided that it is no longer willing to continue censoring its results on Google.cn, and will be discussing with the Chinese government over the next few weeks the basis on which it could operate an unfiltered search engine within the law, if at all.
"We recognize that this may well mean having to shut down Google.cn, and potentially our offices in China,” said Google on its blog.
"The decision to review our business operations in China has been incredibly hard, and we know that it will have potentially far-reaching consequences. We want to make clear that this move was driven by our executives in the United States, without the knowledge or involvement of our employees in China who have worked incredibly hard to make Google.cn the success it is today. We are committed to working responsibly to resolve the very difficult issues raised," said David Drummond, senior vice president for corporate development and chief legal officer, Google.
Google said that like many well-known organisations, it also faces cyber attacks of varying degrees on a regular basis. In mid-December, Google detected a highly sophisticated and targeted attack on its corporate infrastructure originating from China that resulted in the theft of intellectual property from Google. "However, it soon became clear that what at first appeared to be solely a security incident—albeit a significant one—was something quite different," the search engine giant said.
Google said as part of its investigation it discovered that at least 20 other large companies from a wide range of businesses—including the Internet, finance, technology, media and chemical sectors—have been similarly targeted. Google said it is currently in the process of notifying those companies, and the company is also working with the relevant US authorities.
Google has taken an unusual step of sharing information about these attacks with a broad audience not just due to the security and human rights implications of what it has unearthed, but also because this information goes to the heart of a much bigger global debate about freedom of speech.
In the past two decades, China's economic reform programs and its citizens' entrepreneurial flair have lifted hundreds of millions of Chinese out of poverty. Indeed, this great nation is at the heart of much economic progress and development in the world today.
Google.cn was launched in January 2006 so as to provide benefits of increased access to information for people in China. At that time, Google had said that it will carefully monitor conditions in China, including new laws and other restrictions on its services. If it determines that it is unable to achieve the objectives outlined, it will not hesitate to reconsider its approach to China, Google had said.
Google said that it has evidence that the regular attacks on its sites, especially on its mail service, suggest that the primary goal of the attackers was to access the Gmail accounts of Chinese human rights activists."Only two Gmail accounts appear to have been accessed, and that activity was limited to account information (such as the date the account was created) and subject line, rather than the content of emails themselves," Google said.
Google further said as part of its investigation, which was independent of the attack on Google, it has discovered that the accounts of dozens of US, China and Europe-based Gmail users who are advocates of human rights in China appear to have been routinely accessed by third parties. These accounts have not been accessed through any security breach at Google, but most likely via phishing scams or malware placed on the users' computers, it said.
The search engine service provider said that it used information gained from this attack to make infrastructure and architectural improvements that enhance security for Google and for its users. In terms of individual users, Google said, it would advise people to deploy reputed anti-virus and anti-spyware programs on their computers, to install patches for their operating systems and to update their Web browsers. Always be cautious when clicking on links appearing in instant messages and emails, or when asked to share personal information like passwords online.
Whether Google exits China or not will be known in the next few weeks, there was other interesting story regarding a search engine from China. According to media reports, Baidu.com, China's biggest search engine with 60% share was hacked by the ‘Iranian Cyber Army’. The same hacker group was responsible for hijacking social messaging service provider Twitter a few weeks ago.
SGX Nifty Futures volumes have been falling even before the NSE extended its trading hours. So the latest move by the Singapore exchange to extend its trading session may not impact NSE Nifty volumes at all.
Following the National Stock Exchange's (NSE) extension of trading hours, the Singapore Stock Exchange (SGX) has also extended the trade timings of its Nifty futures segment, the SGX CNX Nifty. Nifty futures on the SGX will be traded for 16 hours on that exchange while the Nifty now trades for six-and-half hours on the NSE. While concerns are being raised as to whether this move would snatch away the volumes of the NSE, it is not a cause for worry because there is essentially no correlation between the NSE Nifty and SGX Nifty. The dynamics of the two markets are completely different.
There are a couple of reasons for this. One, the market timings are such that NSE Nifty trading remains closed while the SGX Nifty futures are traded. As such, although the SGX Nifty opens before the NSE Nifty starts trading, it does not get the benefit of higher volumes. This is because any movement in the SGX Nifty is based on the market direction of the Nifty, which itself is a function of the news doing the rounds on that particular day. If the NSE Nifty is not trading, what would be the basis of price movement in the SGX Nifty? Only in the case of a major global event would foreign investors stand to benefit from the difference in trade timings. As attentive traders know, the SGX Nifty virtually does not trade before the Indian market opens.
Second, the volatility in the SGX Nifty volumes is quite high compared to that of the NSE Nifty, and it depends on factors that have nothing to do with the Indian market. Such volatility is not the mainstay of the NSE Nifty or the Indian stock markets, for that matter. On 4th January 2010, the total number of SGX Nifty contracts traded was 9,712, which increased more than tenfold on 5th January 2010 to 50,546. On the other hand, the total number of traded contracts in NSE Nifty Futures on 4th January was 237,231, which increased to 339,132 on 5th January, a much smaller change of 43%. Moreover, such volatility is noticed in the NSE Nifty only in case of any major domestic or international event.
The major reason cited by the NSE for extending trading hours was that the SGX Nifty was eating away at its volumes, and that this move would help it win back some of the volumes. However, it seems that the strategy has not proven effective for NSE, if the volumes are anything to go by. When the NSE opened early from 4 January 2010, the NSE Nifty futures volumes fell sharply instead of going up.
The Singapore Nifty was a sleepy futures product right until 2007. In October 2007, the daily average number of traded contracts was 22,645, but it increased by a whopping 1,102% to 2,72,291 contracts in November 2007, following the ban on participatory notes by the Indian government. However, the volumes shrank dramatically from October 2008 and have not gained momentum since then. The SGX Nifty futures average traded volumes in CY2009 fell by 46% compared to CY2008. Compared to this, the Nifty futures traded contracts have fallen by only 16% in CY2009. During this period, the Nifty has risen by 80% but this has not made any difference to the SGX Nifty volumes.
Clearly, this adverse movement in the SGX Nifty volumes in the last two years has no correlation with the NSE Nifty. The SGX Nifty appears to be influenced by a completely different set of dynamics.
A new Moneylife study has identified consumer durables as the cheapest among 49 sectors
A new Moneylife study of 49 sectors covering 1,252 stocks has identified consumer durables, cement, paper & paper products, plastics and packaging as the top five sectors that are attractively valued, based on four key valuation parameters.
Investors are perennially looking for low-value stocks and often go by such conventional uni-dimensional formulae such as Price to Earnings ratio. The Moneylife study combines four key parameters: Price/sales; price/operating profit; earnings yield and Return on Equity (RoE). While the valuation of the first two (price/sales; price/operating profit) parameters is based on the sales and profits of the past three quarters; RoE and earnings yield have been calculated on a yearly basis. Earnings yield is the reverse of P/E and measures the earning capability of a company (in this context, a sector) per rupee of investment.
Among the top five sectors, the consumer durables sector scored with the highest RoE (37%). Its valuation is also considerably low with price to sales being 0.64 and price to operating profit being 5.27 times. Another high RoE yielding sector is cement (23%) with its market cap at 1.44 and 4.48 times its sales and operating profit respectively. Out of the five sectors selected, paper & paper products is currently trading at the lowest valuation. Its market cap is 0.58 times and 3 times its sales and operating profit respectively. Paper stocks also enjoy the highest earnings yield of 11%. However, its RoE is at the lowest level (11%), a reason why the sector is going cheap.
Which was the most expensive sector going? It is the electronic media, a sector that earned just 4% of RoE and is valued at an astronomical level of 5 times revenues and 25 times operating profit.