Recast of four refineries cleared
New Economy scrips rally, sensex leaps 125
Reliance raises polymer prices
VSNL to cut bandwidth rates, extends Net pacakage
Broadband is the new buzzword in e-world
Ford revs up for sporty look
Mumbai breezes ahead in ad race
Foreign Exchange, Bullion, Stock Indices

 
 
RECAST OF FOUR REFINERIES CLEARED 
 
 
FROM OUR CORRESPONDENT
 
New Delhi, Sept 4: 
The Cabinet today cleared the restructuring of four stand-alone refineries, two of which will be taken over by Indian Oil Corporation (IOC) and an equal number by Bharat Petroleum Corporation (BPCL), for an estimated Rs 2,000 crore.

In another significant move, it extended the purchase-price-preference scheme (PPP) for domestic power equipment makers for two years, along with the existing parameters. The minimum value of the purchase order has been fixed at Rs 1 crore, down from Rs 5 crore earlier.

Petroleum minister Ram Naik told reporters that Chennai Petroleum Corporation (formerly Madras Refineries) and Bongaigaon Refinery would be made subsidiaries of IOC while Cochin Refinery and Numaligarh Refinery would go to Bharat Petroleum.

Naik said the two public sector oil companies would shell out about Rs 2000 crore to pick up stakes in stand-alone refineries. The ministries of finance and petroleum would jointly work out the pricing by the end of the year.

The government now holds 55.04 per cent in Cochin Refinery with a book value of Rs 701.15 crore; 52.5 per cent equity in Chennai refinery with book value of Rs 601.38 crore; 74.46 per cent in Bongaigaon refinery with a book value of Rs 460.97 crore.

However, it does not hold any equity in Numaligarh refinery. BPCL, which holds 32 per cent in the venture, will buy out IBP’s 19 per cent stake which has a book value of Rs 173 crore.

Naik said the restructuring, to be completed in this financial year, will ensure that major marketing companies get adequate supplies. He ruled out using the money raised from its stake sale to meet the government’s revenue expenditure.

“The finance minister has said proceeds from disinvestment will not be used for revenue expenditure. The end use will be decided after we calculate the exact value,” said Naik.

The two-year extension in the PPP scheme aims at utilising the capacities created in the public sector enterprises. The move comes at a time when many PSUs are passing through a period of transition, restructuring and adjustment to the new economic environment. Heavy industry minister Manohar Joshi said the survival of several marginally profit-making PSUs depends on getting adequate orders.

The cabinet today also cleared a revival strategy for the loss making public sector National Textiles Corporation (NTC), but decided to close down its 119 non-viable mills.

According to the minister for information and broadcasting, Arun Jaitley, a three-pronged strategy has been submitted by the textiles ministry. Potentially viable sick NTC mills would be revived, while non-viable units would be closed down.

Workers of the closed down mills would be given an attractive voluntary retirement scheme, he said, adding operational details would be worked by the government in due course.

The Cabinet also approved the proposal in respect of the Convention and Protocol on behalf of the government of India and the Republic of Ireland for avoidance of double taxation and the prevention of fiscal evasion with respect to income tax and capital gains tax.    


 
 
NEW ECONOMY SCRIPS RALLY, SENSEX LEAPS 125 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, Sept 4: 
Aggressive buying in New Economy stocks today propelled the 30-share BSE sensex to cross the crucial 4600-mark and close at 4602.43, a gain of 125.12 points. Foreign institutional investors (FIIs) were also present but they made made small and selective purchases.

That the FIIs are back to business had a positive influence on the market today. According to the Securities and Exchange Board of India’s (Sebi) statistics, foreign investors have been net buyers in August after being net sellers in June and July.

The recommendations of the Sebi-RBI panel on banks’ exposure in stock markets also fuelled the sentiment.

Brisk buying in technology, media and telecom (TMT) stocks helped the sensex to open above the crucial 4550-resistance level at 4571.89. It later closed at 4602.43 as against last Thursday’s close of 4477.31. The Bombay Stock Exchange is reported to have been influenced by a strong trend on the Nasdaq, where the composite index shot up by about 130 points.

Dealers estimate that while the market is likely to consolidate at the present level, it is set to witness a long rally after the sensex crosses another resistance at 4662-levels.

Both frontline and second rung counters in technology stocks showed marked improvements in today’s trading. Of the 140 specified shares, 98 registered sharp to moderate gains while 42 showed losses.

Satyam Computers’ scrip shot up by 51.75 to Rs 623.65, Infosys up by 215.70 at Rs 8,588.85, Zee Telefilm by 31.55 at Rs 549.35, Global Telesystems by 142.30 at Rs 1,254.60, HFCL by 80.30 at Rs 1,498.55, Dr Reddy by 29.10 at Rs 1,354.55, L&T by 6.95 at Rs 210.70, NIIT by 28.75 at Rs 1,914.05, RIL by 19.65 at Rs 356.70.

Satyam Computers clocked the highest turnover of Rs 808.85 crore on a total business volume of Rs 5,964.91 crore. Other most active scrips were Infosys Technologies (Rs 560.19 crore), Zee Telefilms (Rs 546.21 crore), Global Tele-systems (Rs 523.43 crore) and HFCL (Rs 488.38 crore).

Rupee closes higher

The rupee ended sharply higher against the dollar today on renewed exporter dollar sales and unwinding of long positions by banks in the absence of adequate demand for greenbacks.

In moderate activity at the Interbank Foreign Exchange (forex) market, the rupee closed at Rs 45.71/72 per dollar, higher from last Thursday’s finish of Rs 45.76/77.

The rupee opened on a strong note at Rs 45.70/72 and moved in a band of Rs 45.7100 and Rs 45.7400 with dollar sellers mostly dominating the forex spot trade.

Offloading of long dollar positions by banks in the absence of adequate demand for the US currency from corporates and importers strengthened the rupee.    


 
 
RELIANCE RAISES POLYMER PRICES 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, Sept 4: 
Reliance Industries Ltd today raised the prices of its products following a spurt in international crude oil prices. The price increase, which will have retrospective effect from September 1, varied between 1.5 per cent and 10 per cent with polymers accounting for the steepest rise.

With crude prices going through the roof, sources said, it had become difficult for companies like Reliance to maintain their prices at the old level. For instance, international prices of naphtha, which is a crucial input, have surged to over $ 300 per tonne from $ 120 per tonne a year ago. Similarly, ethylene, another important raw material, has climber to over $ 650 per tonne.

In such a situation, sources did not rule out the possibility of further increase in domestic prices by Reliance as the entire costs are yet to be passed on to the consumers. Reliance, the largest petrochemical company in the country, has a history of following an aggressive policy of keeping the domestic prices a shade lower than the landed cost of the products.

In the current round of increase, polypropylene (PP) price has been raised to Rs 45.65 per kg from last month’s Rs 41.15 per kg, a jump of 10.84 per cent. While polyethylene (PE) price has been raised by 6.9 per cent to Rs 51 per kg from Rs 47.5 per kg, poly vinyl chloride (PVC) will cost Rs 44 per kg against the previous price of Rs 42 per kg.

In the fibre intermediates category, purified terepthalic acid (PTA) has become costlier by 1.5 per cent at Rs 33.6 per kg (Rs 33.1 per kg) and linear alkyl benzene (LAB) at Rs 53.9 per kg (Rs 51.9 per kg).

Apart for the crude price spurt, another factor which prompted Reliance to raise prices is the strong demand for polymers. According to industry analysts, demand pull can be cited as a factor responsible for the strong surge in polymer prices.

According to current estimates, while the global demand for polymers have risen 13-18 per cent annually, polypropylene prices have risen by 23 per cent. The domestic demand for polymers, which is used in the plastics industry, is slated to grow by 25 per cent in the current year.

The latest round of price increase had a positive impact on the stock market, with the Reliance scrip closing firmly at Rs 356.70 after opening at Rs 331.05. The counter traded 96.27 lakh shares with a total turnover of Rs 337.59 crore.    


 
 
VSNL TO CUT BANDWIDTH RATES, EXTENDS NET PACAKAGE 
 
 
BY A STAFF REPORTER
 
Calcutta, Sept 4: 
Videsh Sanchar Nigam Ltd (VSNL) is set to cut bandwidth prices again, while extending the monsoon tariff package till September 30.

VSNL cut bandwidth prices by 50 per cent in January this year. Besides, it has also decided to further extend the monsoon package, introduced in June, to September 30. The scheme was initially extended to July and then to August 14.

Shyamal Ghosh, secretary, department of telecommunications (DoT), who was in the city to address members of the Merchants’ Chamber of Commerce, said the government is preparing a package for VSNL to enable it to survive competition once its monopoly over international voice calls ends in 2002.

Ghosh hinted that the package may constitute a cash compensation and an all-India licence to act as an internet service provider (ISP).

He said VSNL has been directed to provide bandwidth on demand on an urgent basis and to clear all applications within seven days, from the present 30 days. VSNL has also been asked to put the applications on its website which will enable customers obtain information on their status.

Further, with the hotting up of the telecom war, DoT has decided to provide more than 30 million new telephone connections to domestic subscribers during the next five years to improve the country’s tele-density from 2.7 now to above seven per 100 persons by 2005.

Ghosh informed that the government had earmarked $ 100 million for implementing the project which would ultimately take the country’s tele-density to over ten per 100 persons by 2007, to bring it at par with that of China, whose tele-density now hovers around 9.4 with around 104 million telephone lines.

Referring to the long-pending proposal for drastic reduction of charges for long distance and international calls, Ghosh said the proposed balancing of tariffs for different types of calls will be completed soon.

Replying to another query on the impact of telecom corporatisation, Ghosh said even after the formation of the Bharat Sanchar Nigam Limited (BSNL) the interests of all its employees will be ‘fully protected’ at all costs.    


 
 
BROADBAND IS THE NEW BUZZWORD IN E-WORLD 
 
 
FROM OUR CORRESPONDENT
 
New Delhi, Sept 4: 
Robert Bishop, chairman and CEO, SGI loves to dwell on the story of big data.

Outlining his views and vision on broadband and media commerce here today, Bishop said rapid development and convergence in internet and media is creating a new world of gigantic content. “The limitations of the present system has necessitated the move from narrow to broadband,” he said.

Bishop implied, SGI has a key role to play in the important aspect of management of broadband. He said, “As the world gets inducted into the digital mould, especially streaming media, contents would form various combinations to create new knowledge.” As a result, half of the world trade will involve digital intellectual property.

Bishop added that SGI is focusing on dynamic content creation, management and distribution as the key areas.

According to him, broadband would be integral to the concept of dynamic contents including text, audio, streaming video, interactive elements along with new dimensions coming up with evolving technology.    


 
 
FORD REVS UP FOR SPORTY LOOK 
 
 
BY A STAFF REPORTER
 
Calcutta, Sept 4: 
Ford India says it will launch two sports models in India, but would not reveal the timing or the price.

It has introduced what it calls ‘teaser tactics’, as part of which the company first showcases a customised version and invites response from prospective buyers, including the features they would like to have, and the price they would be willing to pay for it.

Bothra Ford, dealer of Ford cars in the city, today displayed prototypes of two Dilip Chabria-designed IKON variants, including IKONcept 2003, the first indigenously manufactured convertible two-seater sports car. IKON GT, the other model positioned as rally sport car, was a also big draw.

Ford India is now working on the engineering and safety aspects of the new models, to be launched sometime around the year-end, or the beginning of 2001, Bijay Bothra said. The two-seater car designed by Chabria uses fibre-reinforced plastic materials extensively in its interior and exterior designs, built on an IKON chassis.

IKON GT, on the other hand, stresses on comfort in interior designing, including installation of audio-visual gadgets as special attractions. The small television screen, hidden in a special slot, comes out of only when the car is not in motion. Both these models, available in a range of bright colours, are petrol-driven, Bothra said.    


 
 
MUMBAI BREEZES AHEAD IN AD RACE 
 
 
FROM NITHYA SUBRAMANIAN
 
New Delhi, Sept 4: 
It’s all about where the bucks roll and how. The Mecca of advertising in the country still retains its pride of place steeped in mega bucks, despite stiff challenges from contenders to the title. The best in the ad world still ‘go west.’

Interestingly enough, while ‘amchi Mumbai,’ remains the hot spot for ads, bagging a business of Rs 1292.08 crore in 1999, close on its heels is Delhi, which leads in advertisement growth rates.

However, though Delhi grew by 15.55 per cent last year compared with Mumbai’s 11.26 per cent, Delhi’s total business at Rs 406.42 crore is just one-third of what Mumbai churned out.

The secret why Delhi came up with better growth figures than Mumbai lies in the presence of a number of big budget multinationals in the former.

“The Pepsis, the Cokes, the Daewoos, Samsungs and LGs of the world are here. And all of them have big money to spend on advertising. That spells boom time for Delhi and the city is poised to grow further,” said senior media specialist Sushil Pandit.

But Delhi has way to go before it can catch up with Mumbai, as the latter still retains its faithful flock.

“Mumbai still has Hindustan Lever, Cadbury’s, Procter & Gamble and other traditional big spenders,” said an adman.

Overall advertising for the print medium grew by 9.78 per cent in 1999 with a total business of Rs 2471.61 crore, compared with Rs 2251.34 crore in 1998.

However, the big surprises last year were Kerala and Andhra Pradesh whose businesses grew by 36.92 per cent and 32.86 per cent, but on very small volumes.

Calcutta, meanwhile, did business worth Rs 140.50 crore, registering a growth of 5.73 per cent. The metro has turned out a more or less steady growth, despite the recession last year. The marginal increase in growth rate has been in line with the overall increase in advertising.

Admen said the growth in Andhra Pradesh stemmed from the infotech boom while that in Kerala was due to the inflow of Gulf money, but the base was still very small as compared with Mumbai or Delhi.

“Andhra Pradesh is seen as an infotech centre and that could be the reason for growth in business,” said Samit Sinha, vice president of Mudra.

Pandit added, “Hyderabad has emerged as a new destination for corporates. A lot of software companies like Satyam and Oracle have moved in there. And when companies move, agencies follow suit, increasing the billings.”

On the other hand, the Kerala boom stems from the rise in advertising for real estate, property and even gold.

“All the Gulf money flowing into the state encourages spending by consumers,” said Suhel Seth of Equus Advertising.

The purchasing power flowing out of the Gulf into the state have forced sectors like automobiles to do a rethink on their spends for the state.

States which have seen a decline in advertising include Gujarat, Karnataka and Madhya Pradesh. Except for Gujarat, which saw a positive growth in 1998, the others seem to be consistently losing advertising business.    


 
 
FOREIGN EXCHANGE, BULLION, STOCK INDICES 
 
 
 
 

Foreign Exchange

US $1	Rs.45.72	HK $1	Rs. 5.80*
UK £1	Rs. 66.91	SW Fr 1	Rs. 26.15*
Euro	Rs. 41.24	Sing $1	Rs. 26.20*
Yen 100	Rs. 43.21	Aus $1	Rs. 26.00*
*SBI TC buying rates; others are forex market closing rates

Bullion

Calcutta	Bombay

Gold Std (10gm)	Rs. 4585	Gold Std (10 gm	4550
Gold 22 carat	Rs. 4330	Gold 22 carat	4210
Silver bar (Kg)	Rs.8025	Silver (Kg)	8120
Silver portion	Rs. 8125	Silver portion	8125

Stock Indices

Sensex	4602.43	+125.12
BSE-100	2371.81	+65.64
S&P CNX Nifty1427.75	+33.65	
Calcutta	124.32	+3.53
Skindia GDR768.39	-15.02	
   
 

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