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Back to India?

Things aren't looking too hot in India, either. In the FT:

With grim resignation, D.P. Yadav, a driver at Mindspace, an outsourcing hub in Mumbai's suburbs, spits out his paan, the Indian betel leaf equivalent of chewing tobacco. He has seen passengers and fares disappear as the global economic slowdown has made its impact felt on a place that only a few months ago bustled like a university campus.


"I have not got my salary for the last one month," says Mr Yadav, one of hundreds who ferry the information technology park's thousands of young workers between their homes and the office. "Our bosses say that their bills have not been paid by the call centre players. Hence they are unable to pay us."


Even before last week's terrorist attacks on India's financial centre, the country's outsourcing industry was starting to experience something unprecedented: a slowdown.


The sector, which handles everything from the computer systems of its overseas clients to their mortgage processing businesses and customer contact centres, has risen in the past 10 years to become one of the country's main economic drivers. Last year it brought in more than $40bn (£27bn, €32bn), while its relatively highly paid, big-spending workforce whose average age is in the mid-20s has become a mainstay of India's new consumer economy.


"This is one of the most serious [slowdowns] I've seen personally because it's affecting the whole world," says S. Ramadorai, chief executive of Tata Consultancy Services, India's largest IT outsourcing company.


TCS and its peers say the restructuring or collapse of some of their biggest clients in the west is leading to fewer fresh outsourcing contracts. While some may still achieve growth in revenue this year of up to 20 per cent, most expect next year to be worse. Gone are the annual growth rates of the past decade of about 30 per cent or more.


No one will predict what might happen next year, given the uncertainty affecting their overseas clients. The ultimate effect of the terror attacks is also unknown. But the companies fear that growing western protectionism as more people lose jobs could further hurt them.


The larger groups, including TCS, Infosys Technologies and Firstsource, say they are honouring their existing recruitment commitments but are allowing natural attrition to prune headcounts. More severely affected, they say, are smaller operators that are dependent on only a few clients or are owned by overseas institutions.


"Clearly, in a market where the big guys are finding growth hard to come by, the smaller guys will find it very difficult to get growth," says Ananda Mukerji of Firstsource. Staff at Goldman Sachs' centre in Bangalore, which employs young analysts, say meanwhile they have been told they will be affected by the bank's worldwide plans to shed at least 10 per cent of its employees. "Until now, I had thought that we would sail through these turbulent times," says one young Goldman employee.


In October, a unit of the US-based Gridstone that crunches numbers on listed companies for its analysts in the US asked half its 175 workers in Mumbai to leave after clients such as Lehman Brothers went bust. "Just a month earlier, I bought a motorbike, borrowing at an 18 per cent interest rate. I don't know what to do," says one employee, who was given a month's salary for redundancy.


At the Sports Bar in a new mall near Mindspace, a venue that normally caters to crowds of outsourcing workers, only one of the many tables is occupied. "We opened this place in July and business is already down by half," says Ashwini Kumar, the assistant manager. "If things continue like this, we might not continue beyond a few months."
 
Right now, I do not see things hot anywhere. And in this highly correlated world, trying to find such a place is not wise either.

Well, there are two places. The first is Shangri La, somewhere in the Himalayas, and the second is El Dorado, somewhere in South America. Reported correlation with what's happening in the rest of the world is zero.
 
Well, there are two places. The first is Shangri La, somewhere in the Himalayas, and the second is El Dorado, somewhere in South America. Reported correlation with what's happening in the rest of the world is zero.

Perfect places for financial industry to flourish.

I like leaders.
 
Those two sentences mean very different things.:wall
I hope that when you design a model, you dont mean something and model something else entirely different.:-k

I am just emphasizing my original point in both these statements, which is that quant skills that an MFE is supposed to impart are not relevant in India because,

1. Firms are not really doing quantitative work like its done in the US. Not even DE Shaw 'SOFTWARE'. They don't seem to be looking for quant skills at all. They want MBA's and CFA's. There might be some extreme exceptions I am sure, though.

2. Consequently it will be very difficult to find a quant job in India for an MFE.

Getting the MFE and going back to India is a complete waste. Your skills won't really give you an advantage over anyone. And there are literally hundreds of thousands of MBA's graduating in India every year, majority of whom will be looking for finance jobs.

I must admit when I said - ' Well what I meant was that quant employment and recruitment is not nearly at the same level as in the United States.' - I was being a bit ambiguous. But I hope my point is clearer now.
 
Interesting thread. Being a Indian and living in India, what I would like to say is that while the number of Quants are defnitely not even 1/10 of US, there has been some interest.

One of the reasons for not much Quants is the fact that Hedge Funds cannot be opened / started in India, the way they can be started in US due to lack of Guidelines and restrictions of existing laws. Also, a problem is the depth of the market which is quite low when compared to International Standards. This can cause problems for Quant based strategies where slippage cannot be too high for efficient strategies to run.

A couple of Quant Funds which were launched havent given any great hope either,

MutualFundsIndia.com - complete magazine on mutual funds industry in India

MutualFundsIndia.com - complete magazine on mutual funds industry in India
 
Guys, couple quick points:
1. There is interest with regards to hedge funds (and thus the need for FEs) in India -- I know someone in the US that is working on setting up a conference/seminar/training session in India for 2009 focused on raising capital for hedge funds.
2. Here's my personal take on working in India -- I was born and raised in India and I've lived in the US the last several years; if one is planning on moving back to India, you've gotta be prepared for things to be radically different than how they are in the US. I was in India for a few weeks and it was amazing how much effort had to be expended to just get stuff done. I just think there are a lot of inefficiencies with most systems in India, and that can result in fair amount frustrations for someone trying to get things done.

Sameer
 
The Mumbai attack may not have caused as much damage to India's economy as this latest scandal. Anyone cares to say if this is a widespread problem and we are just seeing the tip of the iceberg?
The chairman of one of India's largest technology companies said he concocted key financial results, including a fictitious cash balance of more than $1 billion, sending shock waves across India and likely prompting investors to question other corporate results as the once-hot economy slows.

B. Ramalinga Raju, founder and chairman of Satyam Computer Services Ltd., said in a letter of resignation that he also overstated profits for the past several years, overstated the amount of debt owed to the company and understated its liabilities. Eventually, he said, the scheme reached "simply unmanageable proportions" and he was left in a position,,,
 
but quant modeling/development offshoring is a trend, I know a guy who is running Morgan Stanley's quantitative modeling efforts in Mumbai, focusing on econometric and valuation models for Structured Products businesses.

doing this type of work, you do not have to sit on the trading desk, you could do it in the remote office with 20% of the cost in NY, that's attractive.


Interesting thread. Being a Indian and living in India, what I would like to say is that while the number of Quants are defnitely not even 1/10 of US, there has been some interest.

One of the reasons for not much Quants is the fact that Hedge Funds cannot be opened / started in India, the way they can be started in US due to lack of Guidelines and restrictions of existing laws. Also, a problem is the depth of the market which is quite low when compared to International Standards. This can cause problems for Quant based strategies where slippage cannot be too high for efficient strategies to run.

A couple of Quant Funds which were launched havent given any great hope either,

MutualFundsIndia.com - complete magazine on mutual funds industry in India

MutualFundsIndia.com - complete magazine on mutual funds industry in India
 
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