Automobile shares zoom on hopes of policy boost
Morgan Stanley recasts key index
What’s in a name? A fortune for a cyber squatter
Bengal SEB in deficit control mode

 
 
AUTOMOBILE SHARES ZOOM ON HOPES OF POLICY BOOST 
 
 
FROM VIVEK NAIR
 
Mumbai, Dec 10: 
Hopes of a favourable policy that could put theminto high gear have set the shares of auto companies and ancillary firms on fire in recent weeks after months in the doldrums.

The price spurt, ranging from 3 to 10 per cent, has been the result of some aggressive buying by institutions and operators. They were fired by a statement from heavy industry minister Manohar Joshi that the new policy to be considered by the Cabinet this month-end will restrict second-hand car imports. There were indications of other incentives for local firms.

“There is a feeling in the market that the sector will look up after the automobile policy is cleared by the government. In such a case, the fortunes of the auto ancillary sector will improve in tandem. This has rekindled buying interest in the sector as a whole,” a broker said.

On Friday, MRF, Escorts, Eicher Motors, Sundaram Fasteners, Apollo Tyres, Bajaj Auto, Exide, LML, Mahindra & Mahindra, Telco, TVS Suzuki and Ashok Leyland ended with good gains. The Telco scrip shot past the Rs 100-mark during the day to touch a high of Rs 102, before closing lower at Rs 99.55. On Thursday, the scrip had finished at Rs 96.70.

The buying binge spread to other scrips like Bharat Forge and Premier Auto. The Escorts scrip, which closed at Rs 104.75 on Thursday, finished 10 per cent higher at Rs 115 on Friday; the MRF counter also closed with a gain at Rs 1,230.40

Most of these scrips were hammered in the recent past because investors saw little hope in clinging to them amid a general economic slowdown that throttled sales growth. According to market circles, barring some stock-specific interest seen in the recent past, most of them had few takers.

Telco, for instance, has captivated investors in the last couple of weeks because of the speculation that it is in tieup negotiations with Daimler Chrysler, or General Motors.

The key question is whether the entire industry will see an upturn, but many analysts do not share the market’s confidence. “After all, it boils down to the demand for vehicles. Present figures do not show the Indian economy in better shape. Therefore, a marginal slowdown in demand is possible,” says Aman Badhwar, auto analyst at Khandwala Securities.

According to analysts, not all segments of the industry are doing well. Commercial vehicle makers and tractor companies have not seen gains. The two-wheeler industry has been showing reasonable growth rates in the recent past, but sources say growth in the motorcycle segment (it has outperformed the two wheeler industry as a whole in terms of growth) has revved up the growth rate for the entire sector.

What is worrying analysts is the intense competition being witnessed in the motorcycle segment. Experts say that the two-wheeler industry is now a buyers market, thus putting pressures on the operating margins of the players. The manufacturers have therefore forced to come out with new models and variants to cater to the customer.

   

 
 
MORGAN STANLEY RECASTS KEY INDEX 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, Dec 10: 
Morgan Stanley today said it will adjust its equity indices for free float and increase the target market representation of its Standard Index series from 60 per cent to 85 per cent in a move that could force many Indian companies to raise the level of FII investments they now allow.

The MSCI index is respected by fund managers all across the globe, and MSCI weightages sway key investment decisions. “A free float is defined as the proportion of share capital deemed to be available for purchase in equity markets by international investors,” an FII analyst said.

The new system means weightages of many Indian companies in the index will find their weightages altered drastically. They might even be shunned by foreign investors as the Indian laws cap FII holding in a company at 40 per cent. However, many companies are yet to pass board resolutions to raise the investment limit from 24 per cent limit to 40 per cent. Many Indian companies have still not revised their limits. The MSCI India Index has around 61 stocks. It is significant for companies that command a large market capitalisation, but have low floating stock.

However, many like Infosys and Reliance have raised their investment limits. MSCI calculates the free float of an equity security as the number of shares outstanding, minus strategic shareholdings, and shares otherwise restricted from trading by international investors.Shares excluded from free float are those held by governments, corporations, controlling shareholders and their families, the management and shares, subject to foreign ownership restrictions.

   

 
 
WHAT’S IN A NAME? A FORTUNE FOR A CYBER SQUATTER 
 
 
FROM M RAJENDRAN
 
New Delhi, Dec 10: 
What is it that belongs to you but is used by others? Your name, of course. If you are wondering what’s in a name, think again. A rose called by any other name may not be as sweet, especially in the virtual world, where having others use your name may mean spending anything between $ 1,500 and above in getting it back.

Ask the Tatas who have faced the predicament, as has Maruti Udyog Limited. While Maruti is still fighting the case with a 14-year-old boy from Hyderabad has been squatting over the name of India’s largest car manufacturer, the Tatas have had to a pay huge sum to get its squatter evicted.

‘Cyber-squatting’ is emerging as a major scourge of the infotech age. It is a scary scenario that companies, countries and individuals will face in cyberworld. A cyber-squatter is one who registers some other individual or company’s name as his own domain name on the worldwide web (internet) and then sells it for a price. These domain names are designed to serve users to locate sites on the internet in an easy manner.

According to Manoj Pillai, intellectual property attorney, Lex Orbis, “Many Indian companies and even individuals are struggling to evict cybersquatter who are not only holding on to their names but are also demanding a hefty sum to leave. And they have to make a choice between fighting the case for a minimum three years in Indian courts or pay $ 1,500 to World Intellectual Property Organisation. At WIPO the cases get sorted out in a maximum of 60 days.”

In the absence of well defined cyber laws in this area, governments worldwide, including in India, are facing this menace. A few countries like Singapore have made considerable progress in the area of cyber laws.

“In Singapore to register a domain name a fee has been made compulsory. A first time registration fee of Singapore $ 60 and for additional domain name a fee of Singapore $ 120 has been made compulsory. Further, an annual renewal fee of Singapore $ 60 is to be paid to maintain the name,” said Gladys Mirandah, an Intellectual Property Attorney from Singapore.In India too, the National Centre for Software Technology under the ministry of information technology registers domain names for a fee.

The Geneva-based WIPO has prepared report for all the countries and the registration authorities to follow certain guidelines to minimise the problem of cyber squatting. WIPO made recommendations to the Internet Corporation for Assigned Name a and Numbers, the technical management of the domain name system.

   

 
 
BENGAL SEB IN DEFICIT CONTROL MODE 
 
 
FROM SUTANUKA GHOSHAL
 
Calcutta, Dec 10: 
The West Bengal State Electricity Board (WBSEB) has reviewed its financial position and suggested that it will take another seven to eight months’ time to meet its current monthly gap of Rs 67.69 crore between revenue earning and corresponding payment.

“We can improve our financial position provided the government allows the securitisation of the dues of the SEBs towards CPSUs. I have learnt that the central government is currently in the process of giving a final shape to the securitisation scheme. The scheme will be ready within a fortnight,” said G. D. Gautama, chairman of WBSEB.

The board has submitted its tariff revision proposal to the state electricity regulatory commission. “The tariff proposal, if formulated, will bring in an additional revenue of Rs 35 crore per month,” a senior official of WBSEB said. The official said even if the accumulated dues of Rs 3980.48 crore up to September 30 2000, are taken care of through securitisation and the debt servicing liability is shouldered by the state government, yet some Rs 400 crore will accumulate till WBSEB reaches a zero-zero position on the current account.

The review report says that as on October 31, WBSEB is to receive Rs 950 crore from CESC, Rs 108 crore from the SEBs of Assam and Bihar, and about Rs 70 crore from various state and central government departments and undertakings.

   
 

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