Morgan shocks India, cuts weight to 4.49%
Tall-boy WagonR stands tall
Assocham for changes in wheat export norms
LIC gameplan to grow locally and abroad
Philips banks on big-screen TVs
Ministry seeks funds to aid NIFT research

Mumbai, May 19: 
In a rude shock to the wobbling stock markets of the country, Morgan Stanley Capital International (MSCI) today cut India’s weightage in its emerging markets free float (EMF) index to 4.49 per cent from the present 7.5 per cent. The more-than-anticipated reduction of over three percentage points in case of India is the largest decline in the EMF index accounted for by any country.

MSCI has also brought down India’s weightage in all-country worldwide index to 0.12 per cent from 0.35 per cent.

As a knee-jerk reaction to the downgrade, experts feel that the stock markets are likely to open weak on Monday and the bourses may witness heavy selling pressure.

Stock market watchers were disappointed as they were largely expecting India’s weightage to be brought down to around 5-5.5 per cent. The MSCI indices are significant as foreign institutional investors (FIIs), who now occupy a prime position in the domestic bourses, take into consideration the weightage before making an an investment decision.

Market observers are now keenly awaiting the reaction of the FIIs following the announcement.

MSCI indices based on free-float take into account only the number of shares freely available to investors when calculating the weightage. It leaves out stakes held by governments, families or management.

For the Indian index, MSCI has pruned the number of stocks to 59 from the present 73. It is learnt that Reliance Petroleum, Videsh Sanchar Nigam Ltd, Sterlite Opticals, HDFC Bank and Dabur have been the new additions, while Aptech, DSQ Software, Videocon International and Jaiprakash Industries have been pushed out. Among the 59 scrips, the old economy has a strong grip accounting for more than 40 stocks.

Some of the market observers feel that the reaction on the bourses may not be widespread and may be confined to certain stocks.

“Though the reaction will be negative, markets will look for details such as which scrips have been added or deleted and whether the weightage of a particular company has gone up or not,” said an analyst with a foreign brokerage.

According to experts, some of the stocks in the index whose weightage is likely to go up include Infosys, Satyam, Reliance Industries and HDFC. This expectation stems from the fact that most of these companies have recently announced plans to hike the FII holding in their companies to 49 per cent. On the other hand, stocks that are likely to show a fall in their weightage include Hindustan Lever and ITC Ltd which have not raised the FII limit.


New Delhi, May 19: 
The ugly duckling has had the last laugh. The Suzuki WagonR is not exactly the kind of car to take your breath away, but it just left its more flamboyant rivals panting, zipping ahead to bag the top slot.

The latest JD Power survey rates the WagonR as the best in the multi-purpose vehicles category. Besides, the Suzuki WagonR has made it to the top 25 models, ranking 21st in the latest Top Gear-JD Power survey for the UK market. The survey, covering 182 models, is the most comprehensive one ever undertaken by JD Power.

It scores the highest points (83) in the multi-purpose vehicles (MPV) category, ahead of the likes of Toyota Picnic, Mazda Demio, Mitsubishi Space Wagon, Mercedes A-class, Daihatsu Grand Move, Mitsubishi Space Star and Honda Shuttle, among others.

Moreover, the Suzuki WagonR is rated fifth among the 182 cars on running cost parameters.

Topping the charts on all parameters was the Toyota Lexus LS400. Following it were the Toyota Yaris, Lexus GS300, BMW 7-series, Rover 75 and Lexus IS 200, Jaguar XJ series, the Mercedes Benz E class, BMW 5-series and the Toyota Camry.

The survey notes that the “Suzuki Wagon R just misses the top 20. The WagonR’s comfy cabin is practical and built quality is superb. It is cheap to run, reliable and easy going.”

Hyundai’s Accent was rated way down at 102 in the report, while three contenders from the General Motors stable bagged the top honours in their respective segments: Chevrolet Corvette (premium sports car); Saab 9-5 (mid luxury car); and the GMC Sonoma (compact pickup).

The Suzuki WagonR has been the largest selling model in the Japanese car market for over 70 months running.

The comprehensive survey gives 34 per cent weightage to vehicle quality and reliability, 30 per cent to vehicle appeal, 17 per cent to dealer service (service satisfaction) and 19 per cent to ownership cost. The JD Power and Associates study measures the number of problems consumers experience during the first 90 days of vehicle ownership.

The survey was conducted through 100,000 questionnaires mailed to car owners. The number of models covered was also increased from 115 last year to 182 this year.

The study is significant as its results are also used by consumers when making a decision on what make and model of vehicle to buy.


New Delhi, May 19: 
The Associated Chambers of Commerce and Industry (Assocham) has urged the government to amend the Food Corporation of India’s (FCI) wheat export tender norms.

The industry chamber has asked that established exporters be exempt from the conditions imposed by the FCI for participation in wheat export tenders, to realise full benefits of the new policy that allows private trade to directly buy wheat from FCI.

In a note to Shanta Kumar, minister of food, consumer affairs and public distribution, Anil Aggarwal, chairman of the Assocham International Trade Committee, said the conditions laid by FCI for exporters’ participation in the tenders are cumbersome, time-consuming and expensive and some need to be scrapped.

As against the minimum tender quantity of 50,000 tonnes for participation in the FCI tenders, Assocham has suggested a floor amount of 15,000 tonnes.

For established exporters, Assocham has also asked for abolition of the tender norms of an earnest money deposit of 2 per cent, security deposit of 5 per cent and a bank guarantee, which is now at Rs 2,700 per tonne for the difference in FCI export sale price and the domestic sale price.


Calcutta, May 19: 
Life Insurance Corporation of India (LIC) has decided to enhance its presence in the overseas market as part of its strategy to increase global business from one per cent to five per cent in the next five years.

To expand its area of operations in the domestic market, the insurance major will take a decision on its entry into the banking sector in a month.

Talking to newspersons here today, LIC chairman G.N. Bajpai said, “We have yet to decide whether we will become a strategic partner in a bank, take over a bank or float one on our own. A final picture will emerge within a month’s time.”

He was in the city to address an interactive session on life insurance organised by the Bengal Chamber of Commerce and Industry.

There is a rumour in the market that LIC will take over Corporation Bank but Bajpai said, “Nothing has been decided.”

Talking about its global business, Bajpai said LIC is currently restructuring its office in London and is scouting for a local partner who will market its existing products and the new ones that are to be introduced. “We expect to clinch a deal with the local partner within another six months,” he said.

LIC has opened an insurance company in Nepal where its holds a 55 per cent stake and the remaining portion is with the local Vishal group. Similarly, in Mauritius the insurance major has registered a company called LIC Mauritius Offshore Limited which takes care of business growth in Africa.

LIC has a subsidiary company in Bahrain where it holds 98 per cent. The subsidiary handles the insurance business in Middle East countries (except Oman) through local partners. “We are looking for local partners in Oman,” the LIC chairman said.

In the current financial year, LIC has decided to invest Rs 50,000 crore from its premium earnings. “We will invest 50 per cent of the amount in central and state government securities. Another 25 per cent will be invested in infrastructure, 20 per cent in corporate sector and the rest five per cent in other assets,” Bajpai said.

“In 2000-01 we have sold 2 crore policies, which is almost 10 per cent of the 20 crore insurable population of the country,” he said.

This year the company aims to achieve an 18 per cent growth in the number of policies sold.

The LIC chairman added that by end of the current financial year all the cities will be connected through its wide area network (WAN). At present 41 cities are connected through WAN.

“We have already made a soft launch of premium collection through internet. By the end of the year we expect to provide this facility to a large number of our customers,” Bajpai added.


New Delhi, May 19: 
Philips India has decided to focus on large-screen colour television (CTV) models as the company has identified this to be the fastest growing industry segment.

“In the current situation, large-screens of above 29 inches are the growth drivers. Philips India has decided to focus on these categories to build volumes,” senior vice-president (consumer electronics) Philips India Rajeev Karwal said. According to him, the large-screen models contribute as much as 25 per cent to the total CTV turnover of the company against an industry share of 10 per cent.

“Later in the year, we will cover up some weaknesses of the 14-inch and 20-inch models by Philips. I see Philips pushing the growth button in CTVs by the end of the year and we hope to more than make up the lost market share position,” Karwal said.

He also asserted that the loss-making consumer electronics (CE) division of Philips was well on the growth path, “with losses in the first four months of this year being one-tenth of what they were in the same period last year. The Philips CE division has grown by 30 per cent.”

Meanwhile, Philips India today introduced Matchline, its third generation range of flat-screened colour televisions. The new range boasts of 43-inch rear projection home theatre system. Targeting the high-end premium market, the company also launched colour televisions with integrated technology.

Suresh Sukumaran, senior general manager, marketing, consumer electronics, said, “With the third generation technology we have left Sony and Samsung behind and hope to give Indian customers more choice in the years to come.” Claiming that the new range is based on digital natural motion (DNM) technology, which is superior even to the latest digital reality creation (DRC) launched by technology leader Sony, Philips officials said DNM was a third generation 100 hertz product.

“With the introduction of the Matchline range we will become the only consumer electronics company to offer the widest range of CTV products in India.”

“India has always been one among the top three focus countries for Philips Worldwide. Being one of our priority markets, we have launched this new Matchline range at the same time as its global launch,” Karwal said.


New Delhi, May 19: 
The textiles ministry is seeking funds from the corporate sector to aid research and development in the National Institute of Fashion Technology (NIFT). The research and development will be undertaken in ready-made garments.

Dharmendra Batra, chairman, apparel marketing and merchandising management department NIFT, is confident of mobilising corporate funds for research. “The interest level among apparel companies in sponsoring research is on the rise in wake of the competitive times ahead,” said Batra. “R&D builds the capability in an industry and that is the aim of both NIFT and the government,” he added.

“Recently, NIFT has come up with a CD presentation on competitive challenges in textiles and the fashion industry. Though this particular study was funded by the textile ministry, it has generated a lot of interest among the corporates.”

NIFT, established in 1987 at Delhi under the ministry of textiles, is an autonomous body registered under the Societies Act. NIFT has six regional branches.

The institute has already conducted a study in collaboration with the Fashion Design Council of India, a non-profit organisation consisting of private entrepreneurs and fashion designers. NIFT itself is also a member of this society.

The Rs 20 lakh project covering 26 cities was titled ‘Distribution potential of designer pret-a-porter in India.’ The project was partly funded by the FDCI, with the ministry pouring in the major funds.

“The apparel marketing and merchandising management department has trained about 1,000 salesmen for more than 500 retail outlets of Raymond’s across the country and for a few franchisee stores,” Batra said.

The course is a six-day one, where four batches of 40 salesmen are trained. NIFT offers this grassrooots level training for a stipulated fee.

This year too, NIFT’s this division has provided training to smaller staff members of departmental store Ebony.

NIFT has earlier undertaken training programmes for Weekender, Madura Garments, apart from imparting export marketing training to the International Trade Centre, Geneva.

NIFT also conducts regular courses for senior managers and vice-presidents. The merchandising department runs a programme for executives and entrepreneurs of export sectors.

“To increase the industry-NIFT interface, we have started a programme for students under which they will conduct a survey of the fashion industry cutting across regions and sectors. The programme will be in addition to our internship programmes with companies,” said Batra.


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