Industry sees heady end to fiscal
Govt weighs longer tenures for bank chiefs
Bills on Trai, debt recovery tabled
Sensex slumps 183 pts, cyclicals back in favour
Boost for real estate, roads
Centre to sell Lubrizol stake this month
Foreign Exchange, Bullion, Stock Indices

New Delhi, March 9 
Industry is poised to round off the financial year on a strong note, say the findings of a survey conducted by Confederation of Indian’s (CII) Association Council (Ascon).

This should silence cassandras who dismiss all indicators of a robust recovery as a statistical sleight of hand to argue that the dog days of the Indian economy are far from over.

Sure, the industry was in the grips of a recession that started earlier but continued for the best part of 1998-99. But now, the Ascon survey offers conclusive proof to the contrary: More sectors are expected to report stories of a turnaround between April ’99 and March 2000 than there were in the gruelling times of April ’98-March ’99. The survey categorises growth rates above 20 per cent as excellent, between 10 and 20 per cent as high, 0 to 10 per cent as moderate, and negative rates.

Heavy and medium commercial vehicles, passenger cars, motorcycles, cement, steel, construction, electric cables and housing finance are expected to turn in positive growth rates this financial year. So are makers of refrigerators, air-conditioners, water-coolers and washing machines.

At the same time, there are others who will not have a smooth ride during the year, and actually end it with negative figures. Their ranks could include wagon, tea, malted food, electric power generation, textile machinery and scooters.

Then, there are some who will fail to keep up with their own pace set in the previous year. The consumer electronics industry, for instance, will see its year-on-year growth decelerate by the end of March.

The report has also released figures which show the performance of the industry for the 10 months ended January this year. Measured against the same period of 1998-99, 18 of the 111 sectors sampled recorded excellent growth rates, 33 registered high growth rates, 45 logged moderate growth rates while 15 reeled under negative rates.

In the key area of exports, the growth rate was excellent in the case of nine sectors, high for an equal number of firms, moderate for 21, and negative for 15.

Ascon’s outlook for the next six months (April to September) is that four sectors — auto components, consumer electronics, housing finance, personal computers — will notch up growth rates over 20 per cent.

Those likely to post good growth rates (10-20%) include wagons, air and gas compressors, vanaspati, telecom equipment, telecom cables, sugar, industrial furnace, electronic components, electrical cables, drugs and pharmaceuticals, consumer durable, construction industry, chemicals, ceramics, cement, cast-iron spun pipes, air cargo and vanaspati.

Moderate growth rates (0-10%) are forecast for industries across a wide spectrum. They are alcoholic beverages, aluminium, cement products, tyres, bearings, boilers, cigarettes, cold rolled steel strips, diesel engines, earth-moving equipment, electrical machinery, fertiliser, electronic components, glass, malted food, oil & natural gases, paints, pig iron, processed food, pumps, refractories, rubber goods, sanitary-ware, soap and toiletries, steel, synthetic fibre, tractors, transmission towers and welding equipment.

However, growth in the machine tools segment will fluctuate between negative and moderate over the next six months.

Hire purchase, tea and textile machinery are among the prominent ones the survey says will continue to suffer from negative rates.    

New Delhi, March 9 
The government is weighing a proposal to appoint those persons as chairmen of public sector banks who have comparatively longer service tenures.

The experiment may well start with Indian Bank whose chairman T.S. Raghavan will retire in a couple of months.

After Raghavan retires, someone could be appointed for a period of five years with a mandate to turn around the weak bank, sources in the banking division of the finance ministry said.

The finance ministry feels that it is important for bank chairmen, especially of weak banks, to continue for long periods so that a proper restructuring package could be created and implemented.

“It becomes very difficult if a person starts some restructuring process and is not able to complete it. The implementation gets affected if chiefs are changed at quick intervals,” sources said.

At present, some bank chairmen are often appointed for short tenures of about a year or so.

According to sources, this move is in line with the Verma Committee recommendations on weak banks.

“Short tenures and frequent changes at the executive director (ED) and chairman and managing director (CMD) levels have compounded the problem of non-performing assets (NPAs),” the report said.

“Because of the management’s continued failure to provide strong leadership and direction, staff unions have arrogated to themselves many management decisions relating to transfer, placement and even promotions, giving rise to a number of restrictive practices,” it added.

Though Indian Bank which has the largest non-performing assets (NPAs) has started taking measures to improve its balance sheet, actual restructuring would commence with the appointment of the new chief, sources said.

Indian Bank’s percentage ratio of gross NPA to gross assets stood at 39 per cent as against an industry average of 16 per cent.

At present, weak banks are operating on a single revenue stream—interest income. They have failed to develop an alternate non-interest, fee-based source of earnings, sources said.    

New Delhi, March 9 
The government today introduced in the Lok Sabha Bills to replace the existing telecom regulator with a restructured Telecom Regulatory Authority of India (Trai) and to empower and expand debt recovery tribunals.

The Trai Amendment Bill 2000 seeks to replace the Trai Ordinance 2000, promulgated earlier this year to amend the Trai Act 1997.

The Bill seeks to bifurcate TRAI: an administrative wing and a judicial wing. While the administrative wing will be known as Trai and will regulate the telecommunication services, the judicial wing will be known as Telecom Disputes Settlement and Appelate Tribunal, which will adjudicate disputes and dispose of appeals. Appeals against the orders of the Appelate Tribunal will be heard by the Supreme Court.

The government also introduced in the Lok Sabha a Bill to empower and expand debt recovery tribunals to ensure expeditious adjudication and recovery of dues of banks and financial institutions and remove legal anomalies in the process.

The Recovery of Debts due to Banks and Financial Institutions (Amendment) 2000 Bill, introduced by finance minister Yashwant Sinha, seeks to correct the legal anomalies pointed out by the Supreme Court that tribunals would continue to function notwithstanding court stays or transfer of petitions.    

Mumbai, March 9 
The Bombay Stock Exchange (BSE) sensitive index plunged 182.63 points on a day when investors rooted for cyclicals and sold infotech in a churning of their portfolios that caused a massive intra-day fluctuation of 329 points.

The 30-scrip index hit an intra-day high of 5607.94 in early-session deals but soon plumbed a low of 5278.68 before closing a touch higher at 5328.79. At the end of the day, it had shed 3.31 per cent compared with its previous finish of 5511.42.

After being ignored, even battered, cyclicals came back with a bang and ended with sharp gains. Brokers say fund managers picked them to diversify their infotech-heavy stock portfolios. This bout of buying, however, was not enough to hold the sensex, which was sent tumbling by operators who scrambled to square off their positions ahead of Friday, the last day of the current settlement.

The fall in the index could have been sharper but for the institutions which stepped in to make heavy purchases towards the fag end of the session. This reversed, to a small extent, the losses inflicted by the infotech selloff and perked up the market sentiment that had turned distinctly bearish by noon. Those who made the late-session purchases and helped ignite a modest recovery in values included foreign and Indian funds.

Earlier in the day, local institutions joined the selloff in infotech shares, as they swapped them for stocks they thought would offer attractive valuations in the long term. According to the market grapevine, big bull already moved out from many of his favourite stocks.

Dealers even ignored positive factors like the relatively low badla rates of 25-75 per cent on the Calcutta Stock Exchange — something that has spooked the BSE into a fall on several occasions in the past. Broking circles feel every fall in the market should be used as a buying opportunity, especially to pick up shares of FMCG and pharmaceutical companies.

In the specified group, sixteen of the 85 losers hit their lower-end circuit filters at the close. On the other hand, seven shares hit their upper price bands.

Satyam Computers, which saw FIIs buying heavily on reports of a stock spilt and a possible ADR issue, was the top traded scrip of the day. It notched up a turnover of Rs 1021.10 crore on a total volume of Rs 4827.21 crore — almost one-fourth of the total turnover on the BSE today. Other top traded shares were HFCL (Rs 613.17 crore), Global Telesystems (Rs 409.16 crore) and Zee Telefilms (Rs 361.97 crore).

Satyam Computer firmed up by Rs 90.75 to Rs 6655. DSQ flared up by Rs 194.90 to Rs 2631.65, HPCL by Rs 6.35 to Rs 109.60 and Hindalco by Rs 22.85 to Rs 635.45.    

New Delhi, March 9 
The government has notified industry status to the construction industry, giving a fillip to the real estate sector and a much needed shot in the arm to the Centre’s national highway project.

The industry status will bring down interest cost by up to 2 per cent which will improve the bottomlines of the sector.

Through the notification, ‘Construction’ is now an approved activity for financing by Industrial Development Bank of India (IDBI) under Section 2(c) (XVII) of the Industrial Development Bank of India Act,1964.

The lowering of interest cost will encourage more investment in the real estate sector and in highway projects.

“The government’s decision to give industry status to the construction sector will allow financial institutions to extend much needed funds to this sector. It will also remove doubts and insecurity among FIs who will be funding various road and highway projects,” P.R. Swaroop, director, Construction Industry Development Council (CIDC) said.

Industry status to the construction sector would also help evolve more scientific, risk assessment and mitigation instruments. This would also result in formulation of more logical regulatory framework for the operation and governance of construction industry, Swaroop said.

The industry status will also make the industry eligible for tax reliefs.

A spokesperson for the Ansal group said: “Availability of finance would be much easier now. It will help the construction industry as it will get the benefit of lower interest rates by a couple of percentage points. It will make the industry more disciplined as we will be regulated by the written law. The government will also consider us more dependable and our projects would be considered on merit.”

CIDC has joined hands with Industrial Credit Rating Agency (ICRA) to rate the companies. This will help the companies when they bid for projects outside the country.

The budget has provided a number of benefits to the housing industry such as increasing the depreciation rate on dwelling units purchased by business sector employees from 20 per cent to 40 per cent.

The budget also increased the number of houses to be built under the Golden Jubilee Rural Housing Finance Scheme in 1999-2000 to 1.25 lakh from 1 lakh during 1998-99.

CIDC has also proposed to set up a construction university to offer specialised courses in this sector.    

New Delhi, March 9 
Lubrizol India, a joint venture between Indian Oil and the US-based Lubrizol Corp, will be restructured before the end of this month. This was decided at a meeting held between the senior executives of Lubrizol Corp, Lubrizol India and Indian Oil Corporation here today.

At present, the government holds a 60 per cent stake while the US company controls 40 per cent in the venture. As part of the restructuring ,government will sell its entire stake to Indian Oil at a price of Rs 1,230 per share. IOC, in turn, will transfer a 10 per cent stake to Lubrizol Corp, which will then hold 50 per cent. Lubrizol Corp chairman W.G. Bares, and Indian Oil chairman M.A. Pathan led today’s discussions. The revamp is expected to facilitate transfer of technology to the joint venture and integrate it better into Lubrizol’s global operations.

Meanwhile, the second international symposium on fuels and lubricants organised by Indian Oil Corporation’s research and development (R&D) centre begins here on Friday.

According to A.K. Bhatnagar, IOC’s R&D director, 500 delegates representing companies, equipment and additive manufacturers, academic and research institutions will participate. The three-day meeting will also be attended by representatives of user industries from India and 25 other countries.    

Foreign Exchange
US $1	Rs 43.57	HK $1	Rs. 5.50*
UK £1	Rs 68.89	SW Fr 1	Rs. 25.75
Euro	Rs 41.96	Sing $1	Rs. 25.10
Yen 100	Rs 40.90	Aus $1	Rs. 26.35*
*SBI TC buying rates; others are forex market closing rates


Calcutta		Bombay
Gold Std (10gm)	Rs 4605	Gold Std (10 gm)	Rs 4570
Gold 22 carat	Rs 4350	Gold 22 carat	Rs 4230
Silver bar (Kg)	Rs 7900	Silver (Kg)	Rs 8025
Silver portion	Rs 8000	Silver portion	Rs 8030

Stock Indices

Sensex	5328.79	-182.63
BSE-100	3201.98	-126.35
S&P CNX Nifty	1646.25	-20.10
Calcutta	119.86	-1.96
Skindia GDR	1446.23	-16.03

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