Friday, January 30, 2015

Company Profile : HALLIBURTON

In these segments, we try to bring forth a small pep-talk about each of the companies that come to Cox school of business for recruiting its MBA students. Dallas, located in Texas- which is the heart of the oil sector, not just for the United States but it possesses a global control in the oil sector. Hence, I start with featuring a major company in this sector- we all know the name !

Brent Crude trading at 49 a barrel and the IMF just announced that the growth forecast will be around 3.4-3.8 and that might mean that the prices of oil can be held around 49-50 mark for some time now. However, Greece still looking in doldrums and Euro zone in a fix. Hopefully, this will get better in days to come, but as a common man, I don't want to see the crude prices going up. If one follows the growth predictions, I will assume that the demand for oil would not rise much. However, Halliburton president Jeff Miller quotes, "Although oil demand growth expectations for 2015 have weakened, it is still growth. Demand is forecast to increase by an estimated 900,000 barrels per day. Keep in mind the steep decline curves are still at work. We estimate the average annual production decline rates for unconventional in North America are in excess of 30%, and much higher in some areas. Depending on the ultimate trajectory of the rig count declines and the backlog of well completions, we believe that North America crude production could begin to respond during the back half of the year. Internationally, decline rates have become more pronounced in several key markets over the last couple of years. In areas like Angola, Norway, and Russia historical growth has given way to net production declines in the last year. While decline rates in markets like Mexico and India have actually accelerated."
To speak in nutshell, underestimating the demand market could probably mean that under investing by the oil companies might irk up some problems in years ahead. 

Halliburton has been in the oil business for a long time.Founded in 1919 in Oklahoma by Erle P.Halliburton and incorporated in Delaware in 1924 with 56 employees as HOWCO, it now houses 68000 employees with two headquarters - Houston and Dubai - to take control of operations in the eastern hemisphere. In 1957, it was $190 million worth. Today, Halliburton stands at the staggering $28 billion total assets and revenues of $24 billions, operating over 80 countries and owing hundreds of subsidiaries, affiliates, branches and brands.

Operating in the Oil services and equipment industry, it is second only to Schlumberger and is followed by Weatherford international and Baker Hughes. However, in November 2014, Hali announced it would acquire Baker Hughes in Cash and stocks for $35 billion. 

Energy services has been its cornerstone, providing technical products and services for natural gas and petroleum exploration and production. Its erstwhile partner - KBR is a major construction company in refinery, chemical plants, oil fields and pipelines.Halliburton severed its ties with KBR in 2007, following KBR's assignments with the Department of Homeland securities. Halliburton acquired KBR- Kellog Brown-Root in 1998 and KBR had been its construction, contracting and engineering unit for a long profitable period.

No big thing comes without glitches and Halliburton has had to face some mire of its own. I would end this article with reference to the episode of the "Deepwater horizon explosion". Something that we all have read in our textbooks about the negative impacts of oil companies on the environment !

Monday, January 26, 2015

Spirit of Techno'craft' : Texas Vs California


(An innovation by Texas Instruments to measure the force of blow sustained by athletes)

I was recently looking out at the spirit of technology and the technology firms based in Dallas where I can find some help in designing my app. In my search, I landed up on a very fine article which I felt like sharing. Personally, yes I come from a techie background and naturally, one can understand my bend towards technology and the numerous innovations taking place in this field. Truly, if 20th century was marked by Industrial Revolution, the 21st shall be remembered as the Technological Revolution.

As a student in Dallas, it gave me confidence while reading 'Texas surpasses California as a top Tech exporter'. Reportedly, Texas exports technology worth $45 billion (just edging past Cali with exports worth 44.4) bucketing orders in semiconductors, telecommunication devices, computers and other related items. Naturally, when there are companies like Ericson, Texas Instruments, At&T etc. I can take the shots .

Tech America foundation,a lobbying and advocacy firm in technology based industry, attributes the shift to rising manufacturing costs in Cali and Texas' business friendly environment. Its true that Silicon Valley emphasizes more on product designing and is associated with higher labor cost- an important factor in making manufacturing competitive.  DF/W started the spur in the technology growth in Dallas. However, with the ingress of these big companies, the growth is now spreading out into the different corners of Dallas.

To me- its a boost for Texas which promises a cheaper base for manufacturing. Texas is now giving a fight not only to the manufacturing hubs in the United States but also to the leading manufacturing hubs across the globe.  However, there is a long way to go. To me, the holders of the next G are the ones who make the environment driven more by creativity and innovation. And Dallas lags there ! California is the hub of that development. What is less happening in Texas is on the product creation front- an ecosystem for start-ups to grow. But then, each place has its pros and cons. Texas has cost benefits but currently the Oil Capital of the United States is less stimulant for the creative types. Yes, I don't argue over TI's contribution but there are many more hi-tech firms and innovations happening in California right now.

But then, Texas is growing strong and hopefully with its cost benefits and the spur of growth around cities like Dallas and with good universities like UTD and SMU, I hope to see my batch-mates opening their own Apple and Facebook and hiring me !

Sunday, January 11, 2015

Merging Technology with Trading in the Classroom


It was interesting to take a note of this improvised project by the SMU Cox school of Business. Something that really showcases the intentions of this business school to contribute to the world of business. Two words - 'Interesting and innovative' - something that really sets Cox apart when it comes to the stream of finances.

The kiit Investing and trading center was recently opened in the year 2011. This 1458 square feet space hosts classes for students who want to learn finances. There is a 110'' LCD video wall aided by 24 Pixel stickers that the professor will regularly use to explain you the if(s) and but(s) of major stock indices. To give students the edge to perform in the Wall Street, the trading room uses Data Bases by Bloomberg, Capital IQ, Thomson One to train the young minds with real time business scenario. Personally, if I have to monitor screens in the Wall Street, I would love to get my hands dirty with these technologies beforehand so that I don't lag behind others ! And then there are trading tools by Morning Star, FactSet, Bloomberg, ideally the closest resemblance one will find with the Wall Street and something that sets Cox apart in the big list of schools recommended for business education. Probably, the only b-school which currently hosts such a classroom where technology is blended with the concepts of trade market, stock exchange -where the share indices of various stocks will rise and fall and I have to make fast decisions, get the phone in my hand and strike a bell to knock a profit in. most of us would love to learn from such a classroom right ? Think of it - "Well I am studying for my MBA but at the same time, I am trading 24x7 in the market. I know which stock is going to get me profits tomorrow and I will be bang on ! and in my trading, I am not alone but using the experiences of my knowledgeable professors to guide me over my moves !"

I think most people will agree here that we learn things better when we first study about it, get our concepts clear and then make fast moves while applying our concepts in a practical environment. This way, not only we get to know What effects the stocks in the markets but also can see how are the stocks getting effecting in a testing environment.

In my last post, I mentioned that Cox promises to be a center where a student can experiment, learn and grow into the future. In this post, I would conclude by mentioning that - Dallas in fact is staring at a bright future laying its trust with the SMU Cox School of business ! I shall grab my chances. Hope many other students and aspirants will be gearing up to be a part of this 'enrich and grow while you learn' environment.                                                

Saturday, January 3, 2015

Looking into the future : Dallas

Rightly put in by the Dean himself - Dallas is THE CITY of hope and optimism and why I agree with that is because the rate of growth of Dallas. When I compare it with corporates across the world, I am reminiscent of Alibaba in China or a Flipkart in India, two of the fastest growing giants in the business of e-commerce. The Bansals have given a stronghold fight to the biggies like Amazon and have rightly set the foot for a new millennium in the segment of e-commerce in India. If I compare Dallas as a product , then in the product life-cycle curve, we can easily put Dallas in the Growth segment whereas put cities like New York or Chicago somewhere in the late phase of maturity. I beg to differ with the Dean on the aspect of population growth of Dallas- we grow by a million in every ten year but I agree that we shall be a metropolitan by 2030 with an expected population of approximately 9/10 million people, drawn from across the globe. And thus, we can see that Dallas is a prospective large market for the future ! Prospects of doing business is high too as there can only be an upward curve for any business in the city. Whereas cities like Los Angeles, New York or Washington are approaching stagnation, Dallas only promises to get bigger and better. I won't say "rivalry" in any sense. Its just the aspect of growth. I hope to see the entertainment industry blooming as well in Dallas, apart from hi-Tech, Retail and finance ! May be the next league of the Katty Perrys and Angelina Jolies may spring up from Dallas :P

However, the fitting competition is between New York and Dallas when it comes to the corporate incentives. No.1 and No.2- the old concept of Champion Vs Challenger ! Remember Australia Vs India in cricket or Brazil Vs Argentina in soccer ;)

Having put in the thoughts above, its quite believable now - why is Dallas considered the largest laboratory for doing business in the United States. Gives me a similar feeling of India - the largest prospective growth market for the world and whenever there are opportunities to experiment, analyse, ideate and grow, there is always a spark of creativity and energy to throttle forward . Even the scope for personal growth, the sense of freedom and satisfaction of putting in their minds at work- its all large. It depends upon us now - to make it large ! Hence, it is quite imperative to find in people with the creative swords for Dallas. That is where SMU COX comes in. an institute of repute and located in the heart of Dallas- not just the alumni want it to grow but also the community as a whole comes in together to see a great business school contributing to Dallas's future and that is where we current students and alumni chip in- with a sense of respect to Dallas, with a sense of pride of being a part of this growing community and an honor to representing a lovely B-school and the people of Dallas. We love you ;)

Surely, we can also get better. We have 18 of Forbes 500 companies there. As Cox, we will see many more by 2030. On a personal note, I hope to see a couple of Entertainment firms too. The likes of Warner Bros or a Disney may be !

A better tomorrow. A stronger tomorrow. Happy Mustangs !