December 8, 2009

The Economic Times - India

Thomson Reuters to Strengthen Presence in Asia

MUMBAI: Thomson Reuters, the world’s largest financial data and news provider, is moving more jobs to India and other Asian nations as the developed nations are still emerging from the worst recession after the credit crisis, said a senior company executive. “We are moving more international jobs to the region,” Thomas Glocer, CEO of Thomson Reuters said in an interview.  “HSBC and Standard Chartered have done much better than the Royal Bank of Scotland and Lloyds, in part, because of their presence in the Asian markets and developing markets,” he added.

Global companies, dependent on the financial services sector such as Thomson Reuters, Bloomberg, and HSBC, are shifting focus to Asia since the western world is not yet loosening its purse strings despite the governments cutting taxes and keeping interest rates at record lows.  Asian economies, such as China and India, are poised to grow between 8% and 10% per year compared with 2% or even less for most of the developed nations.  “We have more people in India than in any other country, except the US,” Mr Glocer said.

The company plans to increase its presence in the legal services business too as the government plans to improve the judicial system which at times takes decades to dispose of cases.  “Legal business is building up and we have an important role to play with partners in the development of the Indian judicial system,” he said.

The head of Thomson Reuters’ investment advisory and wealth management business, Eric Frank, is relocating to Hong Kong from New York to run the wealth management business from Asia because “the opportunities are so significant” said Mr Glocer.  India has the second biggest operations after the US.  The company employs about 13,500 people across the globe.

The priority for the Asian region comes even as the western financial system is grappling with weak banks, although some such as Goldman Sachs and JPMorgan are making record profits in an economy where policy rates are at near zero, while others are not so strong in terms of capital.  But even those who are earning, are not spending much.  “It is a good period for stronger institutions,” said Mr Glocer.  “That doesn’t mean that any of them are going to go on a spending spree.  But it does overall help, if the financial system improves,” he added.

Financial information industry experienced a sharp contraction in the US and Europe as companies such as Lehman Brothers folded up and others like Merrill Lynch were bought out by rivals leading to a plunge in demand for data and news.

The overall spend on financial information and analysis globally was flat in 2008 compared to a year earlier as the industry was at $23.01 billion versus $22.99 billion in 2007, according to Burton-Taylor International Consulting, a leading financial news and market data research consultant.  While Thomson Reuters’s market share stood at 34%, Bloomberg’s was at 24%.  The global economic recovery would be uneven, said Mr Glocer. He pointed out to the theory of Sir Martin Sorrell, CEO of WPP, an advertising agency, who believes that economic recovery in Europe will be L-shaped, in the US it would be U-shaped — low and slow — while it would be V-shaped, which means a rapid recovery, in countries such as China and India.

Mr Glocer said it was difficult if the world was moving to a new normal, an era of slower growth.  “I don’t want to pretend that all are bouncing back,” said Mr Glocer.  “I also think that the darkest hour before the dawn is not the right time to predict the colours of the next 48 hours,” he added.  Even in 2008, Asia led the growth with a 20.3% increase in spend on financial information, while Europe, Middle East and Africa grew at just under 7%.  In the American continent, it shrank by 10%, according to Burton-Taylor.  But Mr Glocer believes the role government will be stronger after banks such as JPMorgan, Goldman Sachs and the Royal Bank of Scotland were bailed out by their governments following losses and writedowns of more than a trillion dollars due to the credit crisis. “Governments are going to play a more significant role,” he said.