Hint of quake levy scares market, sensex slips 96
Ashok Leyland puts buyback plan on hold
Raymond to buy HGI unit
Birla Sun Life in talks with banks to market schem
Biggies vie for basic pie
EU softens stand on labour issue
More crude from Iraq
RBI priority to market efficiency
IDBI after-tax profit up 10%
Foreign Exchange, Bullion, Stock Indices

Mumbai, Jan. 29: 
The tremors in Gujarat reverberated on Dalal Street today, sending the BSE sensex plunging 95.65 points as reports about the devastation, and allusions to a tax surcharge to help pay for reconstruction work, prompted investors to sell their way out of vulnerable stocks.

Today’s loss ended 10 uninterrupted days of gains in the 30-share index, which opened the day a whopping 171 points lower at 4158.86 compared with last Thursday’s finish of 4330.22. After hitting the day’s high of 4262.76, it fluctuated in a narrow range before closing at 4234.57 in a 2.21 per cent decline.

“The jitters at the start of the session were calmed with the progress of trading, but the undertone remained weak,” said Ajay Menon from Geojit Securities. The tepid opening was blamed on a bull rush to square off anticipated losses.

Cement stocks bucked the downtrend, flaring up on hopes that reconstruction work in quake-ravaged areas will drive up demand. They gave up some of those gains when analysts said the rise in orders will come with a time lag.

Marketmen say the shares of banks, many of which have advanced loans to small and medium firms knocked down or driven to the brink after Friday’s seismic catastrophe, will feel the heat. There are fears these companies will ask for rescheduling of their loans, some of which will turn into NPAs.

The importance of Gujarat to the stock markets can be gauged in the figures provided by BSE. According to exchange officials, almost 10 per cent of a normal-day turnover comes from Gujarat; 6 to 7 per cent of its outstation trading terminals are in the state. According to a top broker with a sizeable exposure to the state, most brokerages have advised their clients to square off their open positions.

Foreign institutional investors (FIIs), who had been pouring in money since the new year, remained silent spectators, assessing the full impact of the tragedy on the economy.

Financial institutions tried to contain the slide by picking up some old-economy shares, but squaring up of net outstandings by speculators wiped away these gains. The sentiment remained bearish for the entire session amid uncertainty, though there was no evidence of panic selling.

Refinery stocks, a big draw in the past couple of weeks, took a beating as investors worried about the fate of their plants in Gujarat. In the specified group, 115 shares recorded sharp to moderate losses while 26 others advanced./p>    

Mumbai, Jan. 29: 
Ashok Leyland today decided to put its share buyback plan on hold even as the Chennai-based commercial vehicle major recorded a whopping 104 per cent rise in net profit for the third quarter ending December 31 last year.

Net profit for the quarter vaulted to Rs 19.38 crore as against Rs 9.51 crore in the same period last year.

The company has not set any revised date to launch its buyback offer, indicating that it may have other priorities for the near future.

T. Ananthanarayanan, finance director of Ashok Leyland, said the company was advised by its merchant bankers that the buyback price would not evoke a good response from Ashok Leyland shareholders.

“Why embark on something, when you know that the response would be tepid,” he added.

For the third quarter, net sales of the company decreased marginally to Rs 606 crore as against Rs 645 crore during the same quarter of the previous year. As a result, the company’s earning per share inched up to Rs 1.63 as against 80 paise during the last fiscal.

The Ashok Leyland scrip was one of the stocks to gain on the market today. The scrip opened at Rs 44.50 from the previous day’s close of Rs 45.95 and jumped to close at Rs 49.55.

Ananthanarayanan said the rise in profits was mainly on account of a better product mix. The company changed the product mix in favour of heavy-duty freighter and tractor trailers, multi-axle trucks and passenger buses. “This improved our margins coupled with a stringent cost realisation and better fund management,” he said.

The board of Ashok Leyland had approved the buyback of equity shares up to 15 per cent of the paid up equity capital.


Mumbai, Jan. 29: 
Armed with surplus cash raised from the sale of its cement and steel divisions, Gautam Singhania’s Raymond said today it has signed an agreement to acquire the steel files division of Aditya Birla Group’s HGI Industries in Calcutta.

J K Files and Tools, a division of Raymond, is already the largest manufacturer of files in the world with a 27 per cent market share. If the deal goes through, the acquisition will give it more strength and a big lead in the global market.

The files and tools division contributes over 10 per cent to the company’s turnover of Rs 1,356 crore. Raymond has entered into a marketing alliance with Starrett, an American tool company, to market a whole range of hi-tech hole saws in India. It has acquired the distribution rights from Joran to sell high-speed steel drills, which are hardened and tempered to ensure rigidity and appropriate wear-resistance.

The company has drawn up plans to improve its range of hand-tools. It currently makes screw drivers, and will soon manufacture a variety of spanners and other masonry tools. These will be sold under the Sun Flower brand name.

Raymond plans to enter the market for tool spares as well. It already makes diamond-coated needle files, which fetch better prices and are in great demand in the jewellery market.

Earlier, there were reports that HGI Industries had sold off its carbon-monoxide unit to S K Enterprises and its oxygen unit to Rizvi Trading. According to the company, the high cost of technology used in the carbon dioxide unit made it unviable. Firms which came into the industry later could lower their cost of production because they use cheaper fuel.

Last week, Raymond said completed all formalities related to the sale of its cement undertaking to Lafarge India.

The division had been sold by the Singhanias last year for Rs 751 crore.


Mumbai, Jan. 29: 
Birla Sun Life Insurance Company, a joint venture between A.V. Birla group and Sun Life Financial Services which plans to commence operations by March this year, is in talks with various banks to distribute its products.

This was stated by A.V. Birla group chairman Kumar Mangalam Birla while formally announcing the christening of the insurance joint venture.

The current capitalisation of the venture stands at Rs 120 crore and the Birla group holds 74 per cent with Indian Rayon and Birla Global Finance holding 69 per cent and 5 per cent respectively.

The insurance venture would fully utilise the group’s extensive presence throughout the country as well its network of employees, shareholders and distributors, Birla said.

In the first phase, the venture will concentrate on setting up fully networked branches in Mumbai followed by Delhi.

According to senior officials of Birla Sun Life, the company is planning to start with three to four products.

Denying that the group has plans to enter the non-life segment, officials said the company is likely to have a market share of around five per cent of the new business in five to six years.


New Delhi, Jan. 29: 
Reliance, Essar, Fascel, Himachal Futuristic Communications, AirCel Digilink and Sterling are among the companies which have filed applications for more than 50 licences to operate basic telecom services in 21 circles. The government had invited bids for it on January 25.

The licence fee for basic service providers, new and existing operators, have been fixed at 12 per cent of the revenues for A (metros) circles, 10 per cent for B circles and 8 per cent for C circles. This does not include spectrum charges, which have been fixed at 2 per cent of the revenues for 4.4 MHz and 3 per cent for 6.2 MHz.

There is no limit on the number of companies which can offer services. Licences will be issued for a period of 20 years.

Foreign equity has been capped at 49 per cent. The net worth requirement for companies varies from Rs 20 crore to Rs 1,000 crore in the various categories of telecom circles.

The paidup equity has been fixed at 10 per cent of the net worth. The entry fee varies from Rs 1 crore to Rs 115 crore. The network will have to be rolled out in four phases, for which the performance bank guarantee varies from Rs 4 crore to Rs 460 crore.


New Delhi, Jan. 29: 
European Commissioner for external relations Chris Patten today suggested a separate round of talks on labour standards outside the ongoing World Trade Organisation discussions even as he made it clear that environmental standards will, however, have to feature in any future WTO talks.

India has been vehemently opposing the linking of environmental and labour standards with trade issues. Patten’s suggestion seems to indicate that the European Union is prepared to partially accommodate India’s views.

Patten said since the issue of labour standards was going to be pressed by other nations it was best India agreed to a separate round outside the WTO as a pre-emptive move.

Indian officials have earlier suggested that this can be done under the aegis of the International labour Organisation or some other appropriate UN body.


Mumbai, Jan. 29: 
The government plans to import one million tonnes of crude from Iraq under the food-for-oil programme. The minister of petroleum and natural gas, Ram Naik, said a proposal to this effect has been made to the United Nations (UN) and Iraq.

He said 1.5 million tonnes of crude has already arrived under a UN-approved arrangement. He did not specify the price — or terms of exchange — at which the fresh consignment will be purchased. Naik was talking to reporters here today about the encouraging response to the second round of New Exploration Licensing Policy (NELP) during road-shows in Delhi, London and Houston recently.


Mumbai, Jan. 29: 
The Reserve Bank of India (RBI) has cautioned against what it calls ‘noise traders’ because it feels they undermine market efficiency.

In its Report on Currency and Finance 1999-2000 released here today, the central bank says the efficiency of markets and institutions have improved over the years as a result of competitive pressures arising from the deregulation of financial markets, advances in technology, blurring of distinctions in financial services and integration of markets.

It says there is evidence of the stock and foreign exchange markets in India becoming more efficient in terms of information, but expresses fears that the presence of noise traders could undo the good work. However, advances made in the electronic payment system will lower transaction costs significantly and improve efficiency, the RBI says.

The report, which has made integration its main theme, says the financial markets in India are behaving like their foreign counterparts like never before as a result of reforms launched in the 1990s.

It cites the median capital to risk-weighted asset ratio (CRAR) of more than 11 per cent for nationalised and private sector banks in 1999-2000 as an evidence that the domestic financial system is healthy enough. Though the high level of non performing assets (NPAs) is a matter of concern, regulators are working on ways to enforce a tougher regime of supervision and market surveillance, the RBI says.

The report says RBI’s decision to permit new private sector banks in 1992-93 ushered competition in the industry, and forced many existing players to respond with better performance. “However, there is scope to improve the markets, especially the debt and forex marts,” it said.


Jan. 29: 
The Industrial Development Bank of India (IDBI) has recorded a 10.2 per cent higher after-tax profit of Rs 154.80 crore for the third quarter ended December 31, 2000 compared with Rs 140.5 crore in the same period last year.

The after-tax profit was remarkable as gross profit for the period under review was lower than the corresponding period of last year. The financial institution said operations during the quarter resulted in a gross profit of Rs 225.8 crore as against Rs 304.99 crore during the corresponding period of the previous year.

The decline is attributed mainly to the higher provisioning for bad and doubtful debts and lower capital gains.

BSES posts lower net

BSES LTD has posted a lower net profit at Rs 76.87 crore for the quarter ending December 31 against Rs 80.89 crore in the corresponding period of the previous year mainly due to higher cost of electricity purchased from bulk suppliers. Income had gone up by 22.82 per cent to Rs 701.16 crore as against Rs 570.87 crore in the corresponding period of the previous year, BSES said in a statement here today.

Tata Power profit leaps

Tata Power Company Ltd (TPCL) has posted a 107.39 rise in its net profit of Rs 101.56 for the third quarter ended December 2000 compared with Rs 48.97 crore in the same previous period. The sales rose by 136.89 per cent at Rs 884.57 crore compared with Rs 373.94 crore in the year-ago period.

LML’s Q3 net loss at Rs 6.23 cr

Two-wheeler maker LML Ltd today reported a 179 per cent rise in its third quarter net loss at Rs 6.23 crore over Rs 2.23 crore in the same period of the previous fiscal.

Net sales were down by 5.1 per cent at Rs 146.5 crore in the quarter ended December 31, 2000 against Rs 154.46 crore in the year-ago period, LML said in a statement to the Bombay Stock Exchange (BSE).

The company’s four-stroke motorcycles Adreno and Energy have been launched all over the country during January this year. The vehicles have received excellent responses from the domestic market, LML said.

LML had registered a 40.4 per cent dip in scooter sales in December at 11,830 units while it sold 7,050 motorcycles during the month.

Ceat in the red

Ceat Limited today reported a net loss of Rs 5.21 crore during the quarter ended December 31, 2000 as against a net profit of Rs 3.77 crore in the same period of the previous year.

The company said the third quarter performance continued to witness lower demand for automotive tyres in the industry in view of sluggishness in the economy.

“During the current fiscal, increase in input costs could not be passed on to the market and as such net loss during the nine-month period stood at Rs 12.11 crore against a net profit of Rs 10.93 crore during the corresponding period of the previous fiscal,” it added.



Foreign Exchange

US $1	Rs. 46.49	HK $1	N.A.
UK £1	Rs. 67.85	SW Fr 1	N.A.
Euro	Rs. 42.82	Sing $1	N.A.
Yen 100	Rs. 38.98	Aus $1	N.A.
*SBI TC buying rates; others are forex market closing rates


Calcutta			Bombay

Gold Std (10gm)	Closed	Gold Std (10 gm)Rs. 4430
Gold 22 carat	Closed	Gold 22 carat	Rs. 4100
Silver bar (Kg)	Closed	Silver (Kg)	Rs. 7930
Silver portion	Closed	Silver portion	Rs. 7935

Stock Indices

Sensex		4234.57		-95.65
BSE-100		2165.45		-51.79
S&P CNX Nifty	1342.05		-28.05
Calcutta	126.96		- 2.04
Skindia GDRNA	747.43		+ 1.69

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