Rupee teeters close to 46-mark
Sensex leaps 116 points
October date set for telecom corporatisation
SEB plans optic fibre network
Veerappan shadow over north India tea planters
Govt raises authorised capital of NHPC
Peerless staff reject exit package, to meet Sinha
WBIDC loss at Rs 86 lakh
IIBI drive to put its house in order
Foreign Exchange, Bullion, Stock Indices

Mumbai, Aug 8 
The rupee was teetering at another low of 45.73/74 against the dollar today amid faint signs that a recovery was around the corner.

Today’s fall, like all others in the recent past, was triggered by a scramble for dollars, the supplies of which remained too sparse to meet an upsurge in demand that many say has been caused by a strong wave of panic purchases.

The currency opened close to Monday’s finish of 45.75/77, dropped to first to 45.65 due to inter-bank buying of dollars. Later, a surge of corporate demand for greenbacks sent the currency tumbling to a new low of 45.74/75 in pre-noon trading.

For some time after that, the rupee hovered in a tight range, largely on account of the Reserve Bank’s one-day and three-day repo auctions, which soaked up Rs 5,970 crore from the market. The auctions were conducted at a higher cut-off yield of 14 per cent and 15 per cent. At the end of trading, the currency lost 18 paise over its previous finish of 45.55/56.

However, the decline in forward dollar premia across the board offered a glimmer of hope. This gave many analysts the feeling that the rupee was oversold. The six-month benchmark premium was quoted at 4.90 per cent, down from 5.21 per cent on Monday.

“If FIIs remain net buyers in the stock markets and there is good inflow of funds, the slide of the rupee could be halted,” said an analyst with e-Mecklai, a local currency firm.

However, there are others who say the rupee is likely to slide to the 45.80-90-mark if the demand for dollars continues to rise, and the Reserve Bank of India (RBI) keeps off the market. They say the new low plumbed by the rupee today should not be seen as an indication that the demand for dollars has petered out.

“The market is waiting for a clue from the central bank. If it does not intervene at this point, the rupee may touch 45.80-90. If it does not mount a rescue at this point, it could even test the 46-mark,” said a dealer with a private sector bank.

Sources said if FII inflows are strong in the next couple of days, and there is an RBI intervention, the rupee could strengthen in the range of 30-40 paise. “If there is an intervention, it will be for dollar sales of $ 100-200 million. If this is accompanied by a fall in demand for greenbacks, the rupee could be in for big gains,” an analyst with a foreign bank said.    

Mumbai, Aug 8 
Breaking a spell of tepid trading, the Bombay Stock Exchange (BSE) sensex today raced 115.97 points to close at 4317.22 in a surge driven by software star Infosys Technologies.

The big booster that perked up stock markets came from reports about renewed buying by foreign institutional investors (FIIs). The funds were estimated to have made net purchases to the tune of Rs 78.2 crore today. “At these levels, a lot of stocks have turned attractive,” said an FII fund manager.

Infosys, the leader in the pack, thrilled denizens on Dalal Street when it racked up a gain of Rs 900 at Rs 7,400, up from Monday’s close of Rs 6,500, a massive gain of 15.46 per cent. One of the reasons for the impressive rise in the Infosys counter was the expectations that a major announcement would be made at the meeting of its analysts, slated for Thursday.

However, dealers, weary of low-key trading for weeks, were not willing to bet whether today’s stock rally will continue. “This is because of overriding concerns about the depreciation of the rupee,” one of them said.    

New Delhi, Aug 8 
The department of telecom services (DTS) will be corporatised by October, based on a blueprint submitted by global consultant A F Ferguson to communications minister Ram Vilas Paswan today. The road-map to will be prepared by the department of telecommunications (DoT).

Inaugurating the seminar on Electronic Commerce Strategies for the Asia Pacific Region here today, the minister said the necessary steps for corporatisation were being taken to ensure that the process is completed on schedule.

Paswan said his department is gearing up to provide all block headquarters telephone facilities, and all district headquarters internet connections, by Independence Day. Domestic long distance telephony will also be opened by next week. There will be no restriction on the number of players who can offer services after paying the stipulated entry fee and revenue sharing.

Calling for concrete steps to extend the benefits of e-commerce to the rural areas, Paswan said: “There cannot be a situation of haves and have-nots, and a digital divide in e-commerce, if we really want to advance in this direction.”

E-commerce applications will open up a larger market for rural producers, and help them get better prices. He said the problems of language in accessing the internet need to be addressed, but the availability of computers and their penetration and affordability are more important factors.

According to Nasscom, e-commerce transactions in India will increase from Rs 450 crore this year to Rs 3,500 crore by 2001 and Rs 15,000 crore by 2002. Paswan said the Net must be spread to all parts of the country for this to happen.

The purpose of opening up of an international gateway for private internet service providers (ISPs) is to cause a big boom in e-commerce.

Nearly 400 licences have already been issued, of which more than 80 have launched their services.

He said steps are being taken to allow ISPs to set up their own landing stations across the country in collaboration with international sub-marine bandwidth carriers. Besides, the government-executed projects such as national internet backbone (NIB), Sanchar Sagar and Sankhya Vahini, will increase the availability of bandwidth further.

He said 1,75,000 route kilometres of optical fibre has already been laid, of which one lakh kilometres will be added in the current financial year. The Railways is also going to set up a similar network of 25,000 route kms along its tracks.

The three-day seminar will focus on developments in electronic commerce in the Asia-Pacific region. The seminar has been organised by the Asia Pacific Telecommunity (APT) and United Nations’ Asia-Pacific Centre for Technology Transfer (APCTT). It has been co-sponsored by the department of telecom services and the department of telecommunications.    

Calcutta, Aug 8 
The West Bengal State Electricity Board (WBSEB) has decided to build a optic fibre cable network along its overhead transmission line in the state.

The project will require an investment of over Rs 300 crore. It will be implemented jointly with a private sector partner which will have the controlling stake in the project.

I-Win, a joint venture between ICICI and West Bengal Industrial Development Corporation, was commissioned to conduct a feasibility study for the project. I-Win managing director D Sengupta said the electricity board had set a population benchmark of 75,000 at any given area where the optic-fibre project can be implemented.

“We studied the 2,560-km long WBSEB transmission line to ascertain the project feasibility. The study shows that there is a potential for 1,600-km long optic fibre network while rest of the areas can be connected through micro-wave cables,” Sengupta said.

He further pointed out that the West Bengal government is weighing options to expand the scope of the project at the Panchayat level.

The state government ultimate aim is to introduce e-governance through this network.

“Setting up of the 1600-km optic fibre network will require around Rs 210 crore. But if the project is expanded to the Panchayat level, the project cost will go up by another Rs 100 crore,” Sengupta said.

I-Win has suggested the WBSEB to float a tender in October for the selection of the private partner.

“Our proposal is that the private partner, which has to be technically sound, should pick up a 74 per cent equity in the project. However, this depends on the state government’s decision,” Sengupta said. He indicated that ICICI may take a “comfort equity” to the tune of around 10 per cent in the project.

Meanwhile, sources said two major telecom players, Bharti Telenet and Reliance Telecom have made presentations before I-Win to become the joint venture partner in the project.    

Calcutta, Aug 8 
From the jungles along the Karnataka-Tamil Nadu border where he holds a celebrity hostage, Veerappan is casting his shadow over the largest tea gardens across the Vindhyas, in distant Assam and north Bengal.

Planters in north India are worried that they will have to pay their workers more after the Tamil Nadu and Karnataka accepted, in principle, the brigand’s demand that pickers in the coffee and tea estates of the Nilgiris must get a minimum daily wage of Rs 150.

Even though the states have insisted that the final wage-deal will be clinched after talks between the unions, garden owners in the north India represented by the Tea Association of India (TAI) are worried that the move will spark a chorus of pay-hike demands from workers in the gardens of the region.

A wage-agreement in Assam has just been concluded, under which a tea worker gets a daily wage of Rs 34.80. But when fringe benefits, such as free ration, are added, the final figure shoots up to Rs 67 per day.

Wage negotiation with trade union representatives in north Bengal garden is now under way. The union is adamant that they be paid a daily wage of Rs 73 per kg, plus fringe benefits.

Planters fear that if Tamil Nadu and Karnataka accept Veerappan’s demand, and peg the minimum wage in the Nilgiri gardens, at Rs 150, they will have little leeway in their talks with trade unions. They even harbour fears that tea workers in Assam may want to prise open their just-concluded wage deal, if Veerappan has his way for the cause Nilgiri workers.

Veerappan’s other demand that the Tamil Nadu government should buy tea from the small growers at a reasonable price may strike a chord among small tea estate owners in upper Assam. TAI sources say the small tea growers in Assam hardly get right price, and sometime nothing, for their produce.

Besides, the frequent looting of tea leaves by militant groups, dacoits, and thugs force them into distress sales.

Whatever the denouement of the Veerappan’s hostage drama, his sudden concern for the tea industry workers in the Nilgiri Hills has raised a scare in the gardens of the north.    

New Delhi, Aug 8 
The government has allowed the public sector National Hydroelectric Power Corporation (NHPC) to increase its authorised share capital to Rs 7,000 crore from the present level of Rs 5,000 crore.

An NHPC release issued here today said the company was taking necessary action to amend the memorandum of association and articles of association accordingly. As on March 31 this year, NHPC’s paid-up capital stood at Rs 4,439.01 crore.

The corporation had sought an increase in the authorised share capital as it had taken up a number of new projects which had been approved by the government. These include Teesta stage-V, Loktak downstream and infrastructure work on Parbati.

Apart from this, many other projects are in the pipeline which shall require equity support from the government.

The new hydro policy announced by the government provides a major role for the NHPC for accelerating the pace of hydro power generation in the country.

NHPC has recently set up a joint venture company for the execution of 1000 mw Indira Sagar and 520 mw Omkareshwar hydroelectric projects in Madhya Pradesh. The corporation was also negotiating with the Uttar Pradesh government to jointly take up work on the 420 mw Lakhwar Vyasi project.

In view of such a large number of projects in hand and a number of expansion projects to be executed by NHPC, the company requested the government to allow it to increase its authorised share capital from Rs 5000 crore to rs 10,000 crore.

The company’s asset value is placed at Rs 12,000 crore. It ranks among the top 10 companies in the country in terms of investments.    

Calcutta, Aug 8 
All the 4600 employees of Peerless General Finance and Investment Company Limited have rejected the voluntary retirement scheme introduced by the management on August 1.

They will meet Union finance minister Yashwant Sinha next Friday to request him to take a look at the proposed VRS. Earlier, Sinha had assured the employees that he would look into the matter.

Senior representatives of the Citu-affiliated All India Peerless Employees Union said, “If the management has any genuine problem in running the organisation and wants to make it more viable, we are prepared to offer our suggestions in this regard. It is needless to point out that the employees of this company had crucial role in resolving the problems in the past and we are sure that if the management takes the employees and their unions in confidence it will not be difficult to overcome the problem.”

They further alleged that though RBI governor Bimal Jalan had asked Peerless chairman D.N. Ghosh to hold discussions with the employees on the voluntary retirement issue, the management has not made any effort .    

Calcutta, Aug 8 
West Bengal Industrial Development Corporation (WBIDC) has suffered a net loss of Rs 86 lakh for the year ended March 31, 2000.

Though the corporation posted an operating profit of Rs 63 lakh, it had to make a provision of Rs 1.5 crore on depreciation. Hence, it suffered a net loss of Rs 86.78 lakh. The WBIDC board, which met last Friday to finalise the accounts, had approved the appointment of Webel and IBM to set up a net accounting system.

It had also decided to approach the Union government for a financial help of Rs 50 lakh for the project from the Centre’s e-governance fund. WBIDC will put in Rs 50 lakh for this.

Webel and IBM have also been asked to automate the office operations of WBIDC. WBIDC had appointed Icra Advisory Services to analyse the performance of loan and investment portfolio and make a study of the underlying processes, systems and structure of the asset creation and management functions.

Icra has observed that more than 50 per cent of the term loan exposure is in metal, agriculture, chemical, paper and packaging industries — a major portion of which is non-performing asset (NPA). Icra has further warned WBIDC about future investments in these sectors. The total term loan portfolio of WBIDC is Rs 142.31 crore.

The growth in loan portfolio had been steady till 1993 followed by a fall during 1994-95. The term loan portfolio started growing 1998 onwards. WBIDC disbursed Rs 36 crore loan in 1999-2000.

Icra has observed that 43 per cent of the accounts represent 80 per cent of the disbursed loans. According to the rating agency, WBIDC should focus on these accounts.

The accumulated loss of WBIDC stands at Rs 55 crore. While the total investments of WBIDC is Rs 502 crore, the dividend earned on these investments is Rs 17 lakh. WBIDC also had to bear an interest charge of Rs 12.6 crore in 1999-2000.    

Calcutta, Aug 8 
The Industrial Investment Bank of India (IIBI) has undertaken an asset reconstruction exercise to unlock non performing assets (NPAs) for productive purpose.

IIBI wants the nine branch offices and four zonal offices to become profit centres. These centres should maintain their own profit and loss accounts and balance sheets,” said Basudeb Sen, chairman and managing director of IIBI.

For this purpose, IIBI which is burdened with high levels of non-performing assets, is setting up departments for asset reconstruction, risk assessment and risk management.

This is in addition to a human resource department, which has been set up recently.

“We will also ask for one time settlement (OTS) from defaulting companies. If the defaulters do not take the OTS route, then IIBI would have no option but to take legal action,” Sen said.

“Whether it is standard or sub-standard asset, our aim is to make assets better,” he said. Sen was speaking at a seminar organised by the Calcutta Chamber of Commerce.

Apart from setting up three risk management departments, IIBI with a paid-up capital of Rs 72 crore is setting up an asset liability department. “We are redesignating some of the existing departments and setting more clearer goals in front of them,” Sen said.

Talking about West Bengal and the eastern region, Sen said that IIBI would like to have a better share in the savings and investment market here.

“We would also like to develop closer links with growing and emerging sectors in the region. We would like to provide complete financial solutions to the potential investors and develop a vibrant financial infrastructure in West Bengal,” Sen said.

The financial institution is keen to invest in companies who are willing to continuous rating of the instruments where it has invested, he added. “At IIBI, we are gradually shifting the emphasis on collaterals to future cash flows of the company as the main criterion for investment,” Sen further added.    


Foreign Exchange

US $1	Rs.45.75	HK $1	Rs. 5.75*
UK £1	Rs.68.98	SW Fr 1	Rs. 26.40*
Euro	Rs. 41.42	Sing $1	Rs. 26.10*
Yen 100	Rs. 42.32	Aus $1	Rs. 26.40*
*SBI TC buying rates; others are forex market closing rates


Calcutta	Bombay

Gold Std (10gm)	Rs. 4500	Gold Std (10 gm	4510
Gold 22 carat	Rs. 4270	Gold 22 carat	4170
Silver bar (Kg)	Rs. 7950	Silver (Kg)	8015
Silver portion	Rs. 8000	Silver portion	8020

Stock Indices

Sensex		4317.22		+115.97
BSE-100		2165.58		+65.88
S&P CNX Nifty	1345.60		+34.80
Calcutta	121.96		-0.30
Skindia GDR	-731.47		+7.08	

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