Sensex reacts to Nasdaq tremor with 254-pt slide
BPCL forced to hike stake in Numaligarh
Philips eyes set-top route for Net connectivity
Govt allows increased export of onions
TEC bags Rs 200cr Mumbai port deal
Max India lifts stake in 2 US software firms
ICICI to securitise home loans
Foreign Exchange, Bullion, Stock Indices

Mumbai, April 13 
Dalal Street presented a mirror image of events that unfolded last night in New York’s Times Square — home to Nasdaq, the world’s biggest exchange for technology shares. The Bombay Stock Exchange (BSE) plummeted 254.69 points to 5172.13 today as investors scurried out of stocks in reaction to Wednesday’s selloff on the Nasdaq that drove its composite index below the key 4,000-mark for the first time since January.

Today’s slump on the BSE— its seventh largest — chipped away a staggering Rs 40,280 crore from the exchange’s total market capitalisation, which stood at Rs 8,74,624 crore at the close of trading.

It all began on a weak note. The 30-share index opened 296 points lower at 5130.18 and later moved in a range of 5205.69 and 5106.23 before ending the session 4.69 per cent lower than Wednesday’s closing of 5426.82.

Though it was the trend on the Nasdaq that set off the slide, broking circles cite two other factors that strengthened the bearish grip on the market: a truncated trading week, and Reliance’s announcement of the price at which it intends to buy back its shares.

The long week-end ahead led to the curtailment of settlements on all major exchanges. Both the Calcutta and the Bombay stock exchanges ended their current settlement today. While CSE’s settlement ends on Thursday in any case, the BSE advanced its cycle in view of Friday’s public holiday.

Brokers were also let down by Reliance’s announcement of what they say is a ‘very conservative floor price’ for its buyback plan. Their expectations that the price would be fixed between Rs 350 and Rs 400 were belied when the Ambanis said they would purchase the shares at a maximum price of Rs 303.

Quite predictably, the company’s scrip was pounded by brokers for the second straight day to Rs 307.30 compared with previous day’s close of Rs 334. What was also worrying was the poor volumes recorded at the counter.

The selloff left pivotals like Infosys, DSQ Software and Wipro bruised. Brokers said it most of the index-heavyweights like Infosys, Satyam, Reliance, State Bank, Zee Telefilms, ITC, Hindustan Lever and MTNL hit their lower end circuit filters.

Among the ones which bucked the trend and recorded gains were shares of NIIT and Aptech, largely on buying support from several foreign institutional investors.    

New Delhi, April 13 
Bharat Petroleum Corporation (BPCL) has been forced to acquire the 19 per cent equity stake held by IBP in the 3-million tonne per annum Numaligarh refinery in Assam.

According to official circles, the BPCL board cleared the acquisition proposal at its meeting last week. The sudden decision ,however, has not been announced so far.

Despite strong reservations about enhancing its stake in the refinery, the BPCL management finally fell in line with the wishes of the ministry of petroleum and natural gas. BPCL already holds a 32 per cent stake in Numaligarh refinery. With the proposed acquisition, its holding will go up to 51 per cent.

The government will put up IBP for sale by December this year. The stage is now set for prospective bidders to purchase this junior trading company without the liability of Numaligarh refinery.

BPCL agreed to be one of the original promoters of this refinery at the instance of the Centre, which was committed to set it up under the Assam Accord.

This land-locked refinery is facing serious marketing problems because the north-eastern region does not have much of a demand for petroleum products.

At one stage, the refinery was exploring the possibility of exporting its products to Bangladesh. For IBP, the refinery is practically a dead investment. It does not make business sense for BPCL to make further investments in the Numaligarh refinery.

It has no marketing infrastructure in the north-east. The Nitish Sengupta Committee report on stand-alone refineries recommended that IBP be merged with BPCL.

Later, long after its report was submitted, Sengupta wrote a letter amending the report’s earlier recommendation, and favouring open disinvestment of IBP.

It is unlikely that any other company than the Reliance group will bid for IBP. Its 2,000 and odd retail outlets can be used by Reliance Petroleum to enter direct marketing.

The company has been urging the government to advance the deadline for giving marketing rights to private parties. The government seems to be, more or less, in agreement with it. IBP, without the Numaligarh refinery, is considered to be an attractive business proposition. The refinery started commercial production only this month.    

Calcutta, April 13 
Philips India Ltd is exploring possibilities to usher in internet connectivity through television sets by using set-top boxes.

Talking to newspersons after the company’s 70th annual general meeting, K. Ramachandran, vice-chairman and managing director said, “We are currently examining whether we can use the existing TV sets and cable connections and move content through satellites. The concept is at a very preliminary stage. If we find the project commercially viable, we will come up with our plans by the end of this year or early next year. Our basic concept is to use TV for mass access.”

Philips has already demonstrated this new concept before the Andhra Pradesh government, in collaboration with IBM and Schoolnet.

“Our idea is to sell the set-top boxes to the cable operators, who in turn can supply them to the consumers. India, at present, does not allow the consumers to directly buy set-top boxes through which one can get satellite connection. Besides, it is expensive, costing about Rs 10,000 to Rs 15,000,” Ramachandran said.

Philips is the world’s leading manufacturer of set-top boxes.

Replying to a question he said, “We are weighing several options like setting up a portal, ISP and other related areas. No decision has been taken yet.”

The company also has plans to introduce e-commerce. “Before introducing e-commerce we have to ensure proper delivery of our products to our customers through the Net,” Ramachandran said. The company has under taken a four-pronged strategy to bring in a major growth in its consumer electronics business. These are: brand positioning, strengthening of the entire supply chain, product introductions and better cost management.    

New Delhi, April 13 
The Cabinet committee on prices today permitted export of another 50,000 tonnes of all varieties of onions for the months of April and May this year, owing to the adequate availability of domestic stocks and reduced the central issue price (CIP) of palmolein by Rs 2000 per tonne.

The government had earlier approved the export of 2 lakh tonnes of onions between December 1, 1999 and March 31, 2000. The exports will be through government agencies like Nafed, Karnataka State Agriculture Marketing Federation, and Maharashtra State Agriculture Marketing Federation.

The production of onions is expected to touch 47.5 lakh tonnes during 1999-2000 as against the consumption of 39 lakh tonnes.

The CCP has also decided to allow the free export of Bangalore rose onions and Krishnapatanam onions, an official spokesperson said.

The CIP of palmolein sold in bulk to various state governments has been brought down from Rs 20,000 per tonne to Rs 18,000 per tonne. The CCP also reduced the price of palmolein oil sold in 15 kg tins from Rs 22,000 per tonne to Rs 20,000 per tonne with immediate effect, due to a decline in international prices.

In order to ensure fair price to rubber growers, the government has authorised the State Trading Corporation (STC) to procure 20,000 tonnes of international rubber at the prevailing market price not exceeding Rs 34.05 per kg against advance licence of the actual users. The CCP, chaired by Prime Minister Atal Behari Vajpayee, also reviewed the availability and price situation of essential commodities and found the stocks adequate and price stable.

International status to airports

Meanwhile, the Cabinet today granted international status to the Hyderabad, Ahmedabad, Goa, Amritsar, Guwahati and the new Cochin airports and has also approved the construction of a new international airport at Hyderabad under the joint sector.

The Andhra Pradesh government will select a private consortium through international competitive bidding to finance, design, build, operate and maintain the new airport. It will be granted international status on its commissioning, subject to the required infrastructure facilities provided there, while the old one would be closed for traffic.    

New Delhi, April 13 
Tata Electric Companies (TEC) has been awarded a Rs 200-crore project to construct the second berth at Pirpau in the Mumbai port under build-own-operate-transfer (BOOT) scheme.

The ministry of surface transport is likely to hand out eight such projects worth Rs 35,000 crore to private firms. These projects will handle about 34 million tonnes of cargo per annum. The eight ports which the government intends to privatise are Calcutta, Haldia, Paradip, Chennai (Ennore), Visakhapatnam, Tuticorin, New Mangalore and Marmagoa.

Announcing the award of Pirpau project to TEC, secretary in the surface transport ministry, S.Vasudevan, said: “The project will be completed within three years from the day of signing the agreement. The port, with a 30-year licence, will handle about 500,000 tonnes of cargo in the first year, one million tonnes in the second and 1.5 million tonnes in the third.” The cost of the project is estimated at Rs 200 crore.

The TEC contract is part of a massive modernisation plan undertaken by port authorities to expand capacity. An outlay of Rs 860 crore has been set aside to be invested during the current five-year plan for the replacement of equipment and flotila.

Vasudevan also said the 11 major ports in the country handled 271.87 million tonnes of cargo in 1999-2000 as against 251.72 million tonnes in the previous financial year.    

Mumbai, April 13 
The New Delhi-based Max India Ltd is investing $ 11 million to pick up equity stake in two US-based software companies—AltaCast LLC and MindCrossing. This is part of the company’s plan to focus on the knowledge business.

In AltaCast, which is an advanced information solutions company, Max will invest $ 7 million for a 22 per cent stake. In MindCrossing, which is an infrastructure and content provider, it is investing $ 3 million to set up Max MindCrossing India Ltd (MMIL), a 51:49 joint venture to develop software solutions and web enabled services.

Max India managing director Vivek Jetley said the company’s strategy was to partner and support IT corporations that provide path-breaking software solutions.    

Calcutta, April 13 
ICICI is set to securitise its home loans portfolio after the Securities and Exchange Board of India (Sebi) permitted mutual funds to invest in securities backed by real-estate mortgages.

ICICI Personal Finance Services (PFS), the retail finance arm of the financial institution, which handles its home, auto and consumer loans will be the vehicle for the securitisation.

In the first year of its operations, ICICI-PFS has registered a Rs 900-crore turnover in 1999-2000. Of this, a hefty Rs 378 crore is in the form of sanctions in the home loan portfolio.

Atul Jog, business head of ICICI mortgages, told The Telegraph that the company will monitor its home loan portfolio closely over the next 12 months, after which it will start cherry picking — the process of selecting assets — for securitisation.

ICICI will use its expertise in securitising auto loans but has pointed out that the high stamp duties in most states is the single biggest impediment. “This has to be resolved before the process can really take off. While Sebi’s announcement has resolved some of the problems, stamp duties have to be reduced because housing finance firms operate on margins that are too thin to withstand these high levies,” Jog said.

Earlier, the National Housing Bank (NHB) had announced plans for a pilot project to securitise Rs 100 crore worth of assets owned by five housing finance companies. However, the project did not succeed because of the high stamp duties.

In a fresh initiative to push the securitisation project through, NHB is now believed to have included the assets of housing finance companies in the two states that recently reduced their stamp duties.

Last week’s announcement by Sebi has is another impetus. The regulator’s move has been widely welcomed by housing finance companies since it virtually opens for them a new avenue from where funds can now be accessed.

Jog said ICICI Housing Finance company — to which all its assets were booked — had sought a refinancing arrangement with the NHB. Its Rs 20-crore capital base makes it eligible for the facility. In 1999-2000, it disbursed home loans worth Rs 178 crore.

The quality of the assets is important because Sebi has specified that the securities backed by real estate mortgages should have a credit rating not below the investment grade.    

Foreign Exchange
US $1	Rs 43.65	HK $1	Rs 5.55*
UK £1	Rs 69.36	SW Fr 1	Rs 26.20*
Euro	Rs 41.78	Sing $1	Rs 25.05*
Yen 100	Rs 41.25	Aus $1	Rs 25.75*
*SBI TC buying rates; others are forex market closing rates


Calcutta		Bombay
Gold Std (10gm)	Closed	Gold Std (10 gm)	Rs 4500
Gold 22 carat	Closed	Gold 22 carat	Rs 4160
Silver bar (Kg)	Closed	Silver (Kg)	Rs 8090
Silver portion	Closed	Silver portion	Rs 8095

Stock Indices

Sensex	5172.13	-254.69
BSE-100	2820.24	-145.56
S&P CNX Nifty	1518.65	-74.05
Calcutta	125.42	-5.16
Skindia GDR	1136.78	-56.03

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