“Dubai wants to be the next Bangalore ! ” —Fortune Magazine
In the last issue of Brigade Insight, we spoke about how Bangalore has become a global icon and how ‘being Bangalored’ had become a commonplace term in the west. excerpted below is an article from the 17 December issue of Fortune magazine:

With a recent spate of construction that includes dozens of nightclubs, an indoor ski slope, a glitzy residential development shaped like a palm tree, and plans for the world’s tallest building, you might think Dubai is angling to be the next Paris, or Cairo, or Hong Kong.

But no. It actually wants to be the next Bangalore.

The emirate recently announced the Dubai Outsource Zone (DOZ)—a 70-acre commercial park in the southeastern corner of the city that will be designated as a tax-free zone for the next 50 years. The idea is that a combination of cheap labor and modern infrastructure will help Dubai lure hundreds of companies looking to outsource IT-intensive operations from call centers to financial research houses.

Bell Labs plans R&D Centre in Bangalore
Bell Labs, the research arm of the $15 billion Lucent Technologies, is opening an R&D center in Bangalore, and has already begun recruiting people. The focus of the Bangalore division will be on network management, algorithms, data management and network operations software.

— Economic Times, 23 December

Microsoft Research to open lab in Bangalore
Microsoft Research will open a laboratory in Bangalore, the company's third research installation overseas and a sign of India's increasing importance in technology.

The lab, set to open in January 2005, will initially focus on four areas: multilingual systems, technology for emerging markets, geographical information systems and sensor networks. Over time, however, the direction of the lab's research will be largely determined by the people it recruits.

"As a research organization, you want to hire the best and brightest people" said Rick Rashid, Senior Vice President of Microsoft Research.

Although the lab will work on projects with global impacts, two of the initial areas of research—multilingual systems and technology for developing nations—will nonetheless dovetail to a certain extent with some day-to-day tech problems many Indians face. There are 15 official languages in India, and that doesn't count English, one of the most important languages for government and business. The research conducted by the lab will focus on machine translation and on software for allowing users to more easily access information written in different languages on the same computer.

— CNET News.com, 1 December

Managing your home loan
Interest rates on floating-rate home loans have risen by 50 basis points for some major home loan players. It wouldn't result in an increase in EMI (equated monthly instalment) payments since generally home loan players increase the loan tenure to affect an increase in rates.

If you are on an existing floating-rate home loan, you could reduce interest rate risk by switching part or the entire portion of the loan outstanding to a fixed rate. Many housing loan players charge a one-time switching charge of around 1.75%.

Switching fees are levied on the loan outstanding on the date of conversion. So if you had taken a home loan three years ago, with a current outstanding of Rs 12 lakh, you would pay switching fee as a percentage of Rs 12 lakh and not on the original loan amount.

Check whether the lender is offering options for conversion from floating to fixed interest rate. If not, one could also explore options of balance transfer to another housing finance institution. Sometimes the new financier pays for the prepayment charges for foreclosing the loan.

For the risk-averse new home loan takers, there is the option to mix—fixed and floating—to hedge against any interest rate movement. Some home loan players have started giving this option to their customers.

Spreading your loan portfolio between fixed and floating is perhaps the best strategy when one is not sure where the interest rates are headed. Under such circumstances, a diversification strategy could be the best way out. If you are a little risk averse, go for a 30-70 mix for the fixed and floating amount. If you are more risk averse, you could just reverse the above mix.

—www.economictimes.com, 29 November

Hike in interest rates not to hit housing demand: Realtors

The real estate industry feels that the recent marginal increase in interest rates would not adversely impact the demand for housing.

Echoing the industry opinion, Mr Deepak Parekh, Chairman of HDFC Ltd, said that while the 0.5 percentage point increase in interest rates would not have much of an affect, an increase of 3-4 percentage points would hit affordability. He, however, opined that the interest rates were unlikely to go up further in next 3-4 months.

—The Hindu Business Line, 3 Decembe

Housing Loan Schemes

As on 31 December 2004. *Conditions Apply

• Loan amounts that can be availed depend on the housing finance institution
• Loan amount limit depends on the income of the applicant
• Security of the loan is the first mortgage of the property to be financed
• Loans can be availed from leading financial institutions
• Interest rates and EMIs are subject to change without notice, check with the financial institutions for prevailing interest rates
• Calculations are based on loan amount of Rs 10 lakh onwards