Oil price fears scald rupee
Bharti, SingTel to spend $ 650m on under-sea link
Ashok Leyland, Sterlite in buyback mode
Govt backs limited mobility demand of basic operators
WBIDC clears fresh equity for Haldia Petro
PMO drops plan to shift finance secretary
Maruti, Telco slower in slowing market
Foreign Exchange, Bullion, Stock Indices

 
 
OIL PRICE FEARS SCALD RUPEE 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, Oct 24: 
Concerns over the impact of mounting West Asia tensions on crude prices and a sudden spike in the month-end dollar buying sent the rupee tumbling to a new closing low of 46.43/44. The slide rekindled fears that the currency would remain under pressure over the next few days.

As the ceasefire deal between the Palestinians and Israel fell apart, analysts said a fresh spurt in global crude prices, which scaled $ 33.5 a barrel in New York on Monday, appeared imminent.

Coupled with dollar supplies that could at best be described as sparse at the moment, a surge in month-end demand for the US currency could deal a double whammy to an already weak rupee. Till then, it is likely to oscillate in a 5-10 paise range. “We may see the rupee hovering around the 46.40 mark. However, if negative developments were to occur, it might decline gradually to the 44.50-60 levels,” said N Subramanian of e-Mecklai, a local forex brokerage.

The rupee opened weaker at 46.38/40 against its previous finish of 46.36/37, but hit the skids after the State Bank of India — the single largest mover in the inter-bank forex market — stepped in and started bidding for greenbacks. The decline continued for the best part of the day, as foreign banks scrambled for dollars in what brokers said was a fairly active session. However, trading was marked by low volumes ahead of a shorter week, interrupted by a Diwali holiday on Thursday.

For much of the day, the rupee was trading in a narrow range of 46.41/43. However, the situation took a turn for the worse late in the afternoon when the currency plumbed an intra-day low of 46.44/45. It finally ended the day at 46.43/44, having declined by 7 paise compared with its overnight finish of 46.36/37. The rupee had plunged to historic lows of 46.44/46 in early intra-day deals on October 13.

According to bankers, the rupee could come under tremendous pressure later in the week — when the month-end dollar demand is expected to be even stronger — if dollar supplies remain thin.

The futures market was moderately active and forward dollar premiums ended lower. Meanwhile, the RBI fixed the rupee-dollar reference rate at 46.43, down from 46.38 set on Monday.    


 
 
BHARTI, SINGTEL TO SPEND $ 650M ON UNDER-SEA LINK 
 
 
FROM OUR CORRESPONDENT
 
New Delhi, Oct 24: 
Bharti Enterprises and Singapore Telecom (SingTel) today announced the formation of Bharti Aquanet, a joint venture that will implement a $ 650 million under-sea cable project between Chennai and Singapore.

The investment is in addition to its previous equity investment of $ 400 million in Bharti Televentures and Bharti Telecom by SingTel. Bharti Enterprises will hold a majority stake of 65 per cent in Bharti Aquanet while SingTel will control the rest. The fibre-cable project is the largest venture ever undertaken between India and the City State.

“Bharti Aquanet symbolises our commitment to improve the state of Indian telecommunications infrastructure and is a strategic fit for our domestic long distance, and international long distance ambitions, apart from the booming internet operations. With a growing need for multimedia telecommunications, we intend to put India on the world map with the project,” Sunil Bharti Mittal, chairman and group managing director, Bharti Enterprises said here today.

The link will have a dry-dock landing station — the point where cables come on shore — at Chennai and Singapore. With the world’s largest capacity, its cables will have a bandwidth of 8.4 terabits per second each. It will be able to carry more than 100 million conversations simultaneously.

The increased bandwidth will help carry infinitely more, and different kinds, of voice and data. Broadband services that will be offered because of the high-speed link will make it possible to set up internet exchanges in the country.

A consortium consisting of Alcatel Submarine Networks of France and Fujitsu Limited of Japan, leaders in the deployment of under-sea fibre links, has been selected to design, manufacture, install and commission the Singapore-Chennai cable project. The contract is valued close to $ 250 million. Construction has commenced, and the cable is expected to start carrying commercial traffic by the end of 2001.

With the opening up of the national long distance and international long distance services to private operators, there are plans to sub-let bandwidth in the project. For instance, several Bharti Group companies, including those that are set up for offering long-distance telephone services, could use the cable.

“The venture goes some way to meet our promise to the Bharti Group and Indian consumers to offer better and more advanced telecommunications services. With this, the first of our ventures, we hope to kick-start a series of technological developments with the Bharti Group in the Indian telecom sector,” SingTel president and CEO Lee Hsien Yang said.

Bharti plans $ 200 m issue

Bharti Televentures Ltd plans to mop up $ 200 million from the Indian or the US market, around March 2001, reports PTI.    


 
 
ASHOK LEYLAND, STERLITE IN BUYBACK MODE 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, Oct 24: 
Taking advantage of the current downturn in the stock markets with share prices plumbing new lows and wary of raiders doing a Bajoria on them, two companies today announced their plans to buyback equity.

While Hinduja group flagship Ashok Leyland has announced a price not exceeding Rs 60 per share, the board of Sterlite informed the bourses that it will meet on October 31 to fix the price of the issue.

Brokers expect Sterlite to fix the buyback price at Rs 175-180. The scrip of the copper coil maker, which recently saw a vertical split with its metals and telephone cables businesses being recast into two companies, has seen a sharp decline. The scrip, which got listed at Rs 220, fell sharply in the recent past to touch rock-bottom at Rs 130. The metals business of the company recorded a net profit of around Rs 107 crore for the year ended September 2000.

Meanwhile, the board of directors of Ashok Leyland today approved buyback of the company’s fully paid-up equity shares up to 15 per cent of the present paid up equity capital, not exceeding 1.78 crore equity shares, to be bought through the ‘tender offer’ method.

The Chennai-based truckmaker said it will seek shareholder’s approval at an extra-ordinary general meeting. “Our objective is to enhance value and returns to our shareholders in the long term, through a reduced equity base,” managing director R Seshasayee said.

The company, which is struggling to keep its neck above the long-drawn recession in the industry has declared that the entire outflow will be met through internal accruals. Says Seshasayee, “The company has the liquidity to meet the outflow and the residuary capital offers adequate debt leverage to meet our future fund requirements.”

The Ashok Leyland board today also took on record its second quarter results. The company posted a net profit of Rs 14.91 crore in the second quarter of 2000-01 as against Rs 18.19 crore in the previous corresponding quarter.    


 
 
GOVT BACKS LIMITED MOBILITY DEMAND OF BASIC OPERATORS 
 
 
FROM M RAJENDRAN
 
Jaipur, Oct 24: 
The communications ministry will support the demand of fixed line telecom service providers to offer mobile services in a limited area.

Union minister for communications Ram Vilas Paswan today said, “We are inclined to allow them limited mobility, but they will have to pay the spectrum charges. The issue is with the Telecom Regulatory Authority of India.”

Inaugurating Shyam Telecom’s Rs 5,000 crore basic fixed telecom services project in Rajasthan here today, Paswan said, “The limited mobility via wireless in local loop (WiLL) technology will help bring down cellular service charges.”

Paswan also came down heavily on six basic telecom service providers for their inability to roll out village telephones and asked Shyam Telecom to provide telephones in all villages in Rajasthan in the next two years.

Rajiv Mehrotra, chairman Shyam Telelink, said, “The company has already provided telephones in 51 villages and will provide telephones in another 500 villages by March 2001.”

Shyam Telelink will offer basic fixed line services under the ‘Rainbow’ brand name.

“We have already invested about Rs 275 crore in the project and will invest Rs 5,000 crore in another three-four years,” he added.

ICICI has pledged a debt of Rs 1,000 crore for the project.

K.V.Kamath, managing director and chief executive officer of ICICI said, “We will leverage the broadband network of Shyam Telelink to extend our reach to remote areas with the our range of banking and financial products. We would also use the network to enter the agricultural finance and insurance sectors,”

“The bank has found the telecom project undertaken by Shyam Telelink best suited for the various projects it plans to undertaken in Rajasthan,” he added.

While Lucent Technologies and IIT Chennai have provided the equipment, Cincom USA is the software solution provider for billings.

Shyam Telecom also plans to launch a low cost solar-powered terminal for use in villages for internet surfing, bringing the common man with no access to a PC, closer to the wired world.    


 
 
WBIDC CLEARS FRESH EQUITY FOR HALDIA PETRO 
 
 
BY SUTANUKA GHOSAL
 
Calcutta, Oct. 24: 
West Bengal Industrial Development Corporation (WBIDC), one of the promoters of the Rs 5,170-crore Haldia Petrochemicals (HPL), has cleared a proposal to invest Rs 107 crore as additional equity in the project. Sources at Writers’ Buildings said WBIDC had taken a government-guaranteed loan of Rs 107 crore from West Bengal Infrastructure Development Finance Corporation (WBIDFC) as an advance against equity. “A resolution was passed at WBIDC’s board meeting held last week to pump in the additional funds in Haldia Petrochemicals,” the sources said.

HPL’s project cost has been pegged at Rs 5,170 crore. Of this, Rs 2,000 crore will be in the form of equity while the debt component will be Rs 3,170 crore. It had secured a Rs 962-crore loan from the Industrial Development Bank of India (IDBI).

The three promoters — WBIDC, Tatas and The Chatterjee Group — had decided at a board meeting in early September that they would provide Rs 500 crore to reduce HPL’s loan burden. Early this month, the promoters said they will initially bring in Rs 250 crore. Of this, WBIDC and the Chatterjee group will contribute Rs 107 crore each, while the Tatas will chip in with Rs 36 crore. The Chatterjee group and the Tatas are yet to bring in the additional equity but top sources in HPL said the Tatas are expected to release Rs 8 crore soon. Sources said WBIDC’s decision to invest Rs 107 crore has come as a breather to the project, which is currently going through a financial crisis.

Meanwhile, a five-member working group of HPL said it will find ways in which Indian Oil Corporation can be accommodated as an equity partner. The committee comprises representatives from the three promoters, IOC and IDBI. Initially, there were differences among members of the group on the oil major’s participation. One of the promoters proposed that the naphtha cracker plant could be hived off into a new company with an equity base of Rs 200 crore. IOC would be a given a majority stake in the proposed outfit, which would assume HPL’s entire debt. However, state finance minister Asim Dasgupta opposed the proposal, saying Haldia Petro would not be split.    


 
 
PMO DROPS PLAN TO SHIFT FINANCE SECRETARY 
 
 
FROM R. SASANKAN
 
New Delhi, Oct 24: 
The Prime Minister’s Office (PMO) is understood to have shelved the plan to shift Piyush Mankad from the finance ministry.

He will continue in his present post of finance secretary till July next year and will then take up the country’s executive director’s job in the Asian Development Bank (ADB).

The PMO has been looking for an articulate bureaucrat with a better grasp on financial matters to be the finance secretary. Though known for his personal integrity and rated competent in the posts he held earlier, Mankad could not make an impact in his present job.

The NDA government is committed to continue with the economic reforms. It is natural to expect the finance secretary to have a vision about the task ahead.This is precisely what is found to be lacking in Mankad.

However, Mankad is no lightweight to be shifted so easily. He has his supporters in the Bharatiya Janata Party (BJP) and they continue to back him. This probably prompted the PMO to shelve its plan to shift him.    


 
 
MARUTI, TELCO SLOWER IN SLOWING MARKET 
 
 
FROM OUR CORRESPONDENT
 
New Delhi, Oct 24: 
Passenger car sales increased by a modest 4 per cent in September at 60,528 units but the big two auto companies which account for much of the country’s output — Maruti and Telco — sold fewer vehicles than they did in the same month of last year.

Maruti, which has been in choppy waters for some time, saw its sales shrink 16.07 per cent at 1.68 lakh units compared with 2 lakh units sold in the same period last year. It sold 35,959 units compared with 36,121 in the same month last year.

According to Society of Indian Automobile Manufacturers (Siam), Maruti’s market share shrivelled to 59.4 per cent compared with 62 per cent a year ago. Telco also had a poor September, with sales plummeting to 3,609 units compared with 5,116 units in the same month of 1999. Fiat’s sales plunged to 901 units compared with 2,334 units last year.

However, the Korean chaebols kept up their growth momentum. Daewoo’s sales jumped to 4,720 units in September 2000 as against 3,166 units last year. Hyundai sold 8,283 cars during the month as against 7214 units. Hyundai sold 43,845 units in the first six months (April-September), up 37.7 per cent over the same month last year, while Daewoo clocked sales of 29,129 units, an increase of 98.6 per cent.

The magic of the Josh machine seemed to be working for Ford as the company sold 1817 units compared with a measly 220 units last September. Hindustan Motors’ sales machine revved up, selling 2865 units in September as against 2676 units sold during the same month of the last financial year. General Motors’ sales raced 276.3 per cent at 1163 units.

On balance, car sales grew by a marginal 1.4 per cent to 3.4 lakh units during the first six months of the current fiscal from three lakh units in the year ago period.

Sales of multi-utility vehicles sales went up 8.2 per cent in September at 10,909 units, mainly on account of robust figures registered by Toyota Kirloskar Motors. Commercial vehicles sales, one of the better indicators of economic growth, fell 17 per cent at 13,437 units even as light commercial vehicles sales went up 7 per cent during the month of September.

Scooters and three-wheelers continued to reel under tough times with a 33.7 per cent and 17.1 per cent during September. However, motorcycles and mopeds posted a positive 33.3 per cent and 3.7 per cent growth in sales during the month.    


 
 
FOREIGN EXCHANGE, BULLION, STOCK INDICES 
 
 
 
 

Foreign Exchange

US $1	Rs. 46.44	HK $1	Rs. 5.85*
UK £1	Rs. 67.60	SW Fr 1	Rs. 25.50*
Euro	Rs. 38.91	Sing $1	Rs. 26.10*
Yen 100	Rs. 42.98	Aus $1	Rs. 24.15*
*SBI TC buying rates; others are forex market closing rates

Bullion

Calcutta			Bombay

Gold Std (10gm)	Rs. 4575	Gold Std (10 gm	4550
Gold 22 carat	Rs. 4320	Gold 22 carat	4210
Silver bar (Kg)	Rs. 7950	Silver (Kg)	8055
Silver portion	Rs. 8050	Silver portion	8060

Stock Indices

Sensex		3651.99		+32.46
BSE-100		1855.36		+22.11
S&P CNX Nifty	1152.45		+8.50
Calcutta	100.95		+0.43
Skindia GDRNA	561.65		-9.69
   
 

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