Sensex jumps 223 on fresh buying
Zee tunes up for channel war
Paswan thrust to rural telephony
Govt planning integrated hubs for petrochem
Pep pill for managed healthcare
Foreign Exchange, Bullion, Stock Indices

 
 
SENSEX JUMPS 223 ON FRESH BUYING 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, April 10 
The sensex raced 223.66 points to 5442.8 on the first day of trading with four new scrips in a surge driven as much by the bulls as by institutional investors who came back firing on all cylinders to take the Bombay Stock Exchange (BSE) to its fourth-straight day of stellar gains.

Such was the scramble for shares that most infotech majors were locked in their upper-end circuit filters early in the session, halting trading in them for the entire day. The four new scrips in the sensex — Dr Reddy’s Labs, Reliance Petrochem, Satyam Computer and Zee Telefilm — zoomed to the permitted 8 per cent level after which there were no deals in these counters.

Opening with a wide gap of over 262 points at 5481.49, the 30-share index hit its intra-day peak of 5532.54 but later closed 4.29 per cent higher than last Friday’s finish of 5219.20.

The remarkable feature of today’s trading was that the humongous gains came on a very thin volume of Rs 1,898.39 crore — something that was caused by heavyweights hitting their upper price bands moments after the exchange opened. The suspension of trading in a large number of shares provoked criticism from certain quarters in the market about clamping circuit filters so early in the day.

Foreign institutional investors (FIIs) picked up shares of software and media companies while local funds booked profits in Hindustan Lever, sending the FMCG scrip tumbling by Rs 13.50 to Rs 2726.50.

Tuesday is seen as a crucial day for infotech stocks. Investors will have seen today’s trends on the Nasdaq. More important, the announcement of results by Infosys and Satyam will decide which way these shares — and the markets — move.

Brokers said a lower badla rate of around 11 per cent as against 16.5 per cent last week, coupled with a sharp fall (Rs 630 crore) in the net outstanding positions at Rs 2,550 crore, helped in keeping the sentiment on Dalal Street strong.

Meanwhile, the BSE said it was imposing additional volatility margins between Rs 5 and Rs 30 on 295 scrips from today.

Among the 22 scrips which entered the no-delivery segment were Reliance Industries and L&T. In all, 35 shares of the 100 specified gainers closed at their upper-end circuit filters while 39 suffered marginal losses.

Reliance Industries clocked the highest turnover at Rs 574.77 crore followed by State Bank at Rs 193.08 crore, ITC at Rs 105.05 crore and cement giant ACC at Rs 82.72 crore. Prominent gainers were Reliance which flared up by Rs 12 to Rs 363. SBI jumped by Rs 3 to Rs 219, ITC by Rs 4 to Rs 734, HFCL by Rs 109.85 to Rs 1483.60, BSES by Rs 18.95 to Rs 256.50, Dr Reddy’s Labs by Rs 102.05 to Rs 1627, Infosys by Rs 728.75 to Rs 9839.85, Satyam Computer by Rs 289.40 to Rs 3907.35 and Zee Telefilms by Rs 72.55 to Rs 979.70.

Losers included cement giant ACC which fell by Rs 1.10 to Rs 166, Lever by Rs 13.50 to Rs 2726.50 and Tisco by Rs 3.25 to Rs 119.50.    


 
 
ZEE TUNES UP FOR CHANNEL WAR 
 
 
FROM SATISH JOHN
 
Mumbai, April 10 
Media major Zee Telefilms has lined up a series of initiatives which include revamping its existing channels, introducing new ones and packing both with programmes ranging from entertainment to edutainment to gain the vital battle for mindshare.

Zee is convinced that pay channels will fuel further revenue growth. To propel its direct-to-home initiative, Zee will initiate a program to digitise 8-9 channels by June 2000. Its entire network of 18 channels will go digital by December.

Addressing shareholders at the extra-ordinary general meeting (EGM), chairman Subhash Chandra pointed out that as per the network’s agreement with various local cable operators, it was supposed to receive Rs 25 per household connection. However, till date, the network has been successful in generating revenues only up to 4-to-5 per cent of its potential.

Zee is expected to show a growth of 33 per cent in advertising revenues and a jump of 28 per cent in net profits for the year ended March 31, 2000 over the previous year. Other income will increase by 14 per cent and income from TV software exports will show a rise of 37 per cent. Income from its international subsidiaries will rise 46 per cent for the period under review, Chandra said.

Chandra, in his 45 minute meeting with Zee shareholders — which he himself described as the longest ever — unveiled several plans for the company.

He said that Music Asia, the music channel in the Zee stable, will be re-branded as Zee Music and a slew of new music programmes will be introduced.

“We will improve the content to enable it to regain ground as a premier music channel,” he added.

Not content with the recent launch of several channels, which include two English ones, Zee is gunning for more.

Zee will launch a learning channel by next month, which will conduct courses and give out certificates for the same, free of charge. The channel will provide specialised training for certain job profiles.

The company’s resolution for a Rs 6540 crore ADS/GDS program was approved at the EGM.    


 
 
PASWAN THRUST TO RURAL TELEPHONY 
 
 
FROM OUR CORRESPONDENT
 
New Delhi, April 10 
Communications minister Ram Vilas Paswan today said the department of telecom services (DTS) must chalk out a time-bound action plan to provide effective telecom services in rural areas.

Speaking at a conference of the heads of secondary switching areas from the telecom circles of eastern and southern zones, Paswan said in spite of the vast telecom network in the country, there were large rural areas where the waiting list for telephones had not been cleared and there were more than 2.40 lakh villages where there was not a single connection.

Besides meeting the requirement of telephone connections in urban areas, the minster said emphasis should be on increasing tele-density in rural areas. Reliable connectivity should be provided in all exchanges in keeping with the national telecom policy-1999 (NTP-99), he added.

Paswan said the performance of private basic service providers was not up to the mark in meeting the target of providing telephones in the villages.

According to the minister, main reasons for the unsatisfactory performance of telecom services in rural areas are poor commercial power supply and non-availability of manpower.

Speaking at the conference, minister of state for communications Tapan Sikdar called for rooting out corruption in the telecom department in order to provide a flawless customer service. Efforts are on to make telephones available on demand in all states, Sikdar added.    


 
 
GOVT PLANNING INTEGRATED HUBS FOR PETROCHEM 
 
 
BY A STAFF REPORTER
 
Calcutta, April 10 
The Centre has formulated a two-pronged growth strategy for the petrochemical industry under which it will find ways to deal with the excess supply and work on the concept of a comprehensive chemical estate (CCE).

Union fertiliser and chemicals minister Suresh Prabhu told reporters here today that his ministry will address the problems posed by excess supply at a meeting of petrochemical manufacturers in Mumbai at the end of this month.

The minister, who is in the city to address a Japanese delegation that has come to attend the inauguration of Mitsubishi’s PTA plant at Haldia tomorrow, also held an interactive session with industrialists and chambers during which he urged them to invest in Haldia Petrochemicals’ downstream projects.

“There will be a temporary oversupply on account of bunching of investments by Gail in northern India, Reliance’s and IPCL’s units in western India and HPL’s plant in eastern India. This year may see an oversupply to the extent of 8,00,000 tonnes of polymers if all plants operate at their installed capacities. The demand is expected to match supply by 2002,” Prabhu said.

The government, Prabhu said, is also working on plans to set up comprehensive chemical complexes. The concept is similar to an industrial estate, where a refinery serves as a nucleus with petrochemicals, fertiliser, power and disaster management units clustered around it. The estates, which will be connected to a port, will be set up by floating billion-dollar global tenders. Two of them will be set up initially.

The minister said a committee to study the locational advantage of states has been formed and it will submit its report within three months. Talking about Haldia Petro’s downstream projects, Prabhu said his government will provide all assistance, including policy inputs, to help facilitate the growth of the industry.

Earlier, state deputy chief minister Buddhadeb Bhattacharya said state governments looked up to the Centre to help them on all issues that have local, national and international ramifications.

Mitsubishi capacity hike

Mitsubishi Chemical Corporation (MCC) has sought West Bengal Directorate of Industries’ permission to double the capacity of its Rs 1,600-crore purified terephthalic project (PTA) at Haldia but has said it will do so only if it makes a profit in its first year of operations. The present capacity of the unit is 3,50,000 tonnes per annum.    


 
 
PEP PILL FOR MANAGED HEALTHCARE 
 
 
BY RENU M R KAKKAR
 
Calcutta, April 10 
India is getting ready to usher in a brave new world of managed healthcare. General Insurance Corporation is borrowing the concept of HMOs — health maintenance organisations — from the US to launch a desi version of a “managed healthcare product” that will complement Mediclaim, its popular medical indemnity policy.

GIC plans to launch a pilot version of the scheme in Mumbai in July which will be extended initially to corporates as they have a ready database on the health profiles of their employees.

So, what is an HMO? Typically, an HMO provides comprehensive health care services to its members in return for a monthly premium and small payments made after visiting a health care provider. An HMO differs from a standard health insurance provider in that patients are required to see doctor’s within the company’s network of physicians. Also, HMOs require each member to select a primary care physician who then controls which specialists the patient should be referred to.

Unlike the Mediclaim where patients first pay the hospital costs and then claim a reimbursement, the managed healthcare scheme will defray the costs of the patient at the time of discharge.

“Mediclaim has some loopholes. In the new product, there will be a tieup with a provider network — a specialist panel of doctors — which will supervise medical treatment under a managed environment while the insurance company will take care of the bills thereafter,” says B.D. Banerjee, managing director of the General Insurance Corporation (GIC).

A slew of private health insurers with foreign partners are getting ready to enter a sector where there is a vast business opportunity — only 2 million of the country’s estimated 940 million are covered by some form of health cover — and GIC is hoping to get a head start over them.

The new product will rank at par with Mediclaim, which the GIC has decided to retain for individual insurers, and will have a rolling premium rate.

GIC is targeting a premium income of Rs 5000 crore through the new product over the next 5-7 years as compared with the current premium income of Rs 140 crore under Mediclaim which covers 30 lakh clients .

GIC has given a mandate to international consultant KPMG to identify possible third party administrators in the second phase. The consultancy firm is currently re-working GIC’s health insurance portfolio and is slated to submit a five year region-wise business plan report in two months.

The marketing of GIC’s new product will be handled by a new health management services company to be set up by the four General Insurance Companies while the underwriting will be done as also premium earned by the four insurance companies.

The arrangement is being worked out till this health management services company can be turned into a full fledged health insurance subsidiary.

The current General Insurance Business Nationalisation Act, 1972 does not permit GIC to have more than four insurance susidiaries even though it allows ancillary companies like GIC Mutual Fund and GIC Housing Finance. The government plans to amend the relevant clause 25 to remove this legal impediment along with amendments to the Life Insurance Corporation Act 1956.

GIC will then apply for a licence to the Insurance regulatory Authority to set up a fifth subsidiary.

The ultimate plan is then to shift the entire business of Mediclaim to the new subsidiary and turn it into health insurance specialist organisation.

There is, however, a demonic side to the HMOs graphically illustrated in Robin Cook novels: like all other businesses, HMOs seek to earn profits by generating more money than they spend.

Not surprisingly, they aim to keep costs down by restricting access to costly specialists and hospitals.    


 
 
FOREIGN EXCHANGE, BULLION, STOCK INDICES 
 
 
 
 
Foreign Exchange
US $1	Rs 43.61	HK $1	Rs 5.55*
UK Ł1	Rs 69.91	SW Fr 1	Rs 26.20*
Euro	Rs 41.74	Sing $1	Rs 25.10*
Yen 100	Rs 41.03	Aus $1	Rs 25.70*
*SBI TC buying rates; others are forex market closing rates

Bullion

Calcutta		Bombay
Gold Std (10gm)	Rs 4510	Gold Std (10 gm)	Rs 4475
Gold 22 carat	Rs 4260	Gold 22 carat	Rs 4140
Silver bar (Kg)	Rs 7900	Silver (Kg)	Rs 8030
Silver portion	Rs 8000	Silver portion	Rs 8035

Stock Indices

Sensex	5442.86	+223.66
BSE-100	3018.50	+138.78
S&P CNX Nifty	1613.00	+55.85
Calcutta	136.22	+2.29
Skindia GDR	NA	NA
   
 

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