Decks cleared for internet stock trading
Ordinance on Trai powers full of knots
Sensex sheds 90 points as institutions turn seller
Modis get more time to rival offer
SSI Ltd plans overseas flotation
Ennore port to be corporatised
Basu knocks at Purnendu’s door
Foreign Exchange, Bullion, Stock Indices

 
 
DECKS CLEARED FOR INTERNET STOCK TRADING 
 
 
FROM OUR CORRESPONDENT
 
New Delhi, Jan 25 
The Securities and Exchange Board of India (Sebi) has allowed trading of shares on the internet.

The board, which met here today, also permitted high-net-worth foreigners and companies to invest in Indian stock markets. However, the total investment made by all investors in this category should not exceed 5 per cent of the cap on aggregate FII holding in Indian firms, which is now 24 per cent for some companies and 30 per cent for others.

NRIs and overseas corporate bodies (OCBs) will not come under this category since they already have a separate investment limit of 10 per cent. Current Sebi regulations permit portfolio investment by FIIs either on their own account or on behalf of broad-based funds.

“We have decided to allow net trading in stocks even before cyber laws are put in place. Investors can route orders through brokers. However, exchanges have to be ready with the technology to kick off internet trading,” Sebi chairman D R Mehta said.

The board, he said, also considered a list of recommendations on the technical standards required to ensure safety and security of transactions between clients and brokers on the Net. These parameters will have to be enforced by stock exchanges. However, brokers will have to undertake the full responsibility on deals, including compliance with margin norms.

The market regulator approved the recommendations made by the Chandrasekhar committee on venture capital investment in a move that is expected to make it easier for first-time entrepreneurs to raise funds.

Besides, proposals to harmonise multiple regulatory requirements and bring them under Sebi were also cleared. These norms are meant to clear the way for tax concessions, flexibility in investment and exit and free entry of foreign venture capital investors on the lines of FIIs.

The market regulator permitted IPOs from new companies which have ten per cent of their project cost funded by a venture capitalist. Till now, the norms allowed IPOs only from firms which borrow from banks and financial institutions.

The board also approved amendments to Sebi regulations to facilitate derivatives trading. The Securities Contracts (Regulations) Act had recently been amended to permit derivatives trading.

Mehta said the board accepted, in totality, the Kumar Mangalam Birla committee report on corporate governance.

Under the norms, companies in group A of BSE will have to comply with the norms by March 31, 2001. Listed companies with a paid up share capital of Rs 10 crore and above, or companies which have, or have had, a net worth of Rs 25 crore will have to comply with these norms in 2001-2002.

Those with a paid up capital of Rs 3 crore and above will have to so a year later. The degree of compliance with corporate governance norms will have to shown in annual balance-sheets.

Brokers happy

Sebi’s announcement relating to internet trading was greeted by NSE chief R H Patil as a ‘welcome move’. He said his exchange was ready to introduce internet trading as soon as we get the clearance from the market regulator. “Some broking firms already have the software. Geojit Securities, a Kochi-based brokerage, is one of them,” he added.

Leading BSE broker and a member of the exchange’s board, Motilal Oswal. Said it was a ‘progressive step’ but was not ready to fix a date for the launch of Web trading.    


 
 
ORDINANCE ON TRAI POWERS FULL OF KNOTS 
 
 
FROM OUR CORRESPONDENT
 
New Delhi, Jan 25 
The government has left room for a legal quibble over whether or not the tariff-setting recommendations of the reconstituted Telecom Regulatory Authority of India (Trai) will be binding on the government. The Trai Ordinance, which was promulgated yesterday, laid down four broad categories of functions for the telecom regulator: (a) make recommendations relating to licensing terms and conditions; (b) oversee inter-connection between the service providers and regulate arrangement among the service providers for the sharing of revenues derived from various telecom services; (c) levy fees and other charges at such rates and and in respect of such services as may be determined by regulations within the regulations; and (d) perform whatever administrative and financial functions are entrusted to it by the the government. The Ordinance says that the recommendations relating to licensing terms and conditions ‘shall not be binding on the government’. But the Ordinance is delightfully vague about whether or not the recommendations pertaining to the other three functions will ipso facto be binding on the government. Before the Ordinance was promulgated, communications minister Ram Vilas Paswan, Trai chairman S.S. Sodhi and DoT secretary Anil Kumar had been emphatic that the tariff-setting recommendations would be binding on the government. “I am looking at it positively,” said a Trai legal expert. “By saying that only the recommendations relating to licensing terms and conditions are not binding on the government, I feel it indicates that the government will be bound to accept the other recommendations. But yes, it does leave things open to interpretation.” “We don’t need another round of litigations which would slow down the process of reforms in the telecom sector,’’ the expert said. An Ordinance to amend the Telecom Regulatory Authority of India Act 1997 was promulgated by the President K.R.Narayanan on January 24, 2000. The government is likely to introduce the Telecom Regulatory Authority of India (Amendment) Ordinance 2000 in the budget session of Parliament. The Ordinance has bifurcated Trai into two, an administrative wing and a judicial wing. While administrative wing will be known as Trai and will regulate the telecommunication services, the judicial wing will be known as Telecom Disputes Settlement and Appellate Tribunal, which will adjudicate disputes and dispose of appeals. Appeals against the Orders of the Appellate Tribunal will be heard by Supreme Court. Though it will be mandatory for the government to seek Trai’s recommendations, relating to matter on licensing and policy issues, the government will not be bound to accept them. According to the Ordinance, the reconstituted Trai will not be responsible to the Parliament for the tariff set by it. The Ordinance amending the Trai Act 1997 states, while the tariff set for telecom service providers by Trai can be appealed to Appellate Tribunal, the same, “shall not be subject to audit under this section.” On Monday secretary Department of Telecommunications Anil Kumar had said, “Trai is a quasi-judicial authority and has statutory functions to perform and its tariff setting powers cannot be audited.” The amendment to the Trai Act 1997, has reduced the cooling off period from two years to one year for chairperson of the authority, to accept any commercial employment after relinquishing office.    

 
 
SENSEX SHEDS 90 POINTS AS INSTITUTIONS TURN SELLER 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, Jan 25 
The Sensitive index (Sensex) of the Bombay Stock Exchange (BSE) lost 90.27 points today on heavy selling by local institutions and mutual funds and squaring-up of long outstanding positions.

Infotech scrips, however, swam against the tide with foreign institutional investors (FIIs) purchasing shares of select IT companies like NIIT, SSI Ltd and Wipro.

Share prices displayed a weak tendency from the beginning of trade showing losses over a broad front. Indian institutions and mutual funds were reported to have sold shares of some index-based companies on poor working results for the third quarter of current year.

Dealers said operators were hesitant to carry forward their long outstanding positions as there will be no trading tomorrow on account of Republic Day.

The sensex opened lower at 5412.49 and moved in a range of 5430.29 and 5351.22 before closing at 5367.79 as against yesterday’s close of 5458.06, registering a heavy loss of 1.65 per cent. The BSE-100 index eased by 7.28 points to 2875.52.

In the specified group, Telco was a heavy loser following the announcement of poor third-quarter results yesterday with the scrip touching the upper circuit filter.

NIIT, SSI, Wipro, HDFC Bank, ICICI Bank and Tata Power were the most sought after stocks.    


 
 
MODIS GET MORE TIME TO RIVAL OFFER 
 
 
FROM SATISH JOHN
 
Mumbai, Jan 25 
The Modis have been allowed more time to pitch a counter-bid for the stake held by financial institutions in Modi Rubber after German tyre major Continental AG made a conditional offer to buy their holding in the company.

Senior officials of a financial institution said here today the Modis have been permitted to make a competitive counter-bid for the FIs’ stake in the beleaguered tyre company even though the deadline for submission of bids expired on January 15.

“We have extended the deadline on previous occasions,” one of the officials said, referring to the repeated extensions, first from November 15 to December 15, and finally to January 15.

However, this time around, the financial institutions and the SBI Capital Markets, which was appointed by them to work out the modalities of the stake divestment, have not fixed a date.

While Continental AG has to secure several approvals from the government, Modi group is facing an acute cash-crunch and, therefore, is finding it difficult to raise money for buying the FIs’ stake.

On the other hand, the FIs have made it clear to the Modis that they are not interested in funding their bid. “We are keen on getting out of the company after recovering our money, so there is no question of extending credit to the group,” the official said.

One of the conditions laid down by financial institutions for bidders was that they should have a net-worth of Rs 100 crore and an annual turnover of at least Rs 500 crore from tyre sales.

Earlier, Continental AG had indicated to the financial institutions that it would be interested in their stake only if the non-tyre businesses of Modi Rubber are separated from the core area. The officials had sought a meeting with the FIs on this score. The German tyre major had made it clear that it would not pick up the FIs stake unless Modi Rubber divested its 55 per cent holding in Modistone, a group company which has been under a lockout since October 1997.    


 
 
SSI LTD PLANS OVERSEAS FLOTATION 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, Jan 25 
The board of SSI Limited will meet on January 28 to consider an overseas offering of equity shares of up to $ 100 million. At its meeting today, the board also approved plans to acquire Indsoft Systekh Ltd, a computer based training (CBT) marketing company.

The company will buy 100 per cent of Indsoft at Rs 3.14 crore to be funded by internal accruals.

Kalpathi S Suresh, chairman and CEO of SSI Limited said: “Indsoft will work in tandem with SSI’s content development group for designing and marketing CBT’s in India and abroad”.

The acquisition will give a thrust to SSI’s plans to emerge as a key player in the global CBT markets for high-end education content, the company in a press release said. Indsoft is a closely held limited liability company run by T K Iyer who is also the promoter and managing director.    


 
 
ENNORE PORT TO BE CORPORATISED 
 
 
FROM OUR CORRESPONDENT
 
New Delhi, Jan 25 
The government will soon corporatise Ennore port, with Haldia and Jawaharlal Nehru Port Trust to shortly follow suit.

Announcing this, minister of state for surface transport Rajnath Singh today said, “We plan to corporatise ports and will introduce a Bill in this regard in the Budget session of Parliament. We also plan to provide more autonomy to the National Highway Authority of India (NHAI).”

The corporatisation of ports would allow them to have joint ventures with smaller ports in India and with other ports world-wide. This will also bring in new technology and better managerial practices. The government will also shortly come up with a maritime policy to improve the existing standards.    


 
 
BASU KNOCKS AT PURNENDU’S DOOR 
 
 
BY SUTANUKA GHOSAL
 
Calcutta, Jan 25 
West Bengal chief minister Jyoti Basu has urged Haldia Petrochemicals (HPL) co-promoter Purnendu Chatterjee to consider setting up a new downstream project in the port town.

The Chatterjee Group (TCG), the main private promoter of the Rs 5,170-crore HPL, had earlier dumped its massive polypark project after the state government failed to provide the necessary 500 acres of land for building the complex.

The state government has been unable to attract significant investments in downstream projects. Only three companies — Neelkamal, Supreme Industries and Marcus Oil — have so far committed themselves to setting up plants in the state.

The state government task force on Haldia infrastructure, ready with an action-plan for the promotion of downstream activities near HPL, has come out with several project proposals.

Sources said Chatterjee, who has invested Rs 433 crore in Haldia Petrochemicals, has asked senior officials of his group to study these projects and formulate a techno-economic feasibility report.

The state government, on its part, has constituted a high-powered cell to monitor the progress of downstream projects at Haldia Petrochemicals as the project nears its February 15 commissioning date.

According to a report prepared by the HPL management, 1,350 downstream projects can be set up in the next five years. Of these, 859 are small-scale while the rest are large scale. The total investment required for setting up these units will be Rs 1,915 crore.

Chatterjee, sources pointed out, may not like to make huge investments in the downstream project. “Senior officials of TCG have already started examining project proposals. A final decision will be taken when Chatterjee visits Haldia at the inauguration of HPL. Since the state government is eager to involve TCG in the downstream projects, he is now showing interest in them,” sources further added.

Senior officials of West Bengal Industrial Development Corporation (WBIDC) said they have received around 13 proposals from companies which want to set up downstream plants based on chemical intermediates like benzene, butadiene, C6 raffinate.

“There is considerable interest from the plastic processing firms in eastern India and from other regions in setting up new units. These will use HPL’s range of polymers and tap markets in eastern India and adjoining regions,” the sources said.    


 
 
FOREIGN EXCHANGE, BULLION, STOCK INDICES 
 
 
 
 
Foreign Exchange
US $1	Rs 43.58	HK $1	Rs. 5.55*
UK Ł1	Rs 71.66	SW Fr 1	Rs. 26.95*
Euro	Rs 43.69	Sing $1	Rs. 25.60*
Yen 100	Rs 41.20	Aus $1	Rs. 28.20*
*SBI TC buying rates; others are forex market closing rates

Bullion

Calcutta		Bombay
Gold Std (10gm)	Rs. 4600	Gold Std (10 gm)	Rs 4550
Gold 22 carat	Rs. 4345	Gold 22 carat	Rs 4210
Silver bar (Kg)	Rs. 8050	Silver (Kg)	Rs 8160
Silver portion	Rs. 8150	Silver portion	Rs 8165

Stock Indices

Sensex	5367.79	-90.27
BSE-100	2875.52	-7.28
S&P CNX Nifty	1586.40	-27.20
Calcutta	140.34	-3.82
Skindia GDR	1207.50	-7.43
   
 

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