NSE sets June 4 date for options debut
Singhania to move human rights panel
Sensex sheds 80 points
JPC for removal of Rathi, Mehta from CSDL
Dr Reddy’s net jumps to Rs 134 cr
ITC posts Rs 1006 cr net profit
Grain output target raised to 212 mt
Sales of airconditioners grow at scorching pace
Fight for top job at Gail hots up
Foreign Exchange, Bullion, Stock Indices

Mumbai, May 30: 
The National Stock Exchange (NSE) today announced it will commence trading in Standard & Poor’s CNX Nifty-based options from June 4.

Not to be left behind, arch rival, the 126-year old Bombay Stock exchange (BSE) said its plans for trading in options on the popular 30-share BSE sensex is almost ready and will be announced shortly. In fact, mock trading on both bourses is currently in full swing, officials said.

Meanwhile, anxious on a smooth transition to a cash market, the Securities and Exchange Board of India (Sebi) has called a meeting tomorrow of representatives from the leading stock exchanges for a first-hand view of their preparedness for a cash-market-sans-carry-forward instruments from July 2. Sebi member J. R. Varma will chair the meeting, Sebi officials said.

As per the Sebi diktat, all equities on the specified list can only trade through the rolling mode, as the ban on deferral products like the Borrowing and Lending of Equities Scheme (BLESS) and Automated Lending and Borrowing Mechanism (ALBM) will take effect from July 2.

The NSE, in a statement, alluded to the fact that it had commenced trading in futures on S&P CNX Nifty from June 12 last year. The options contracts shall be European style and cash-settled, the NSE said today.

The options contracts would have a maximum three-month expiration cycle and at any point of time there will be three contracts available for trading, with one, two and three-month expiry, the exchange said. Thus on June 4, three contracts expiring on June 28, July 26 and August 30, 2001, respectively, shall be introduced.

Contracts will expire on the last Thursday of the expiry month and if the last Thursday is a trading holiday, it will expire on the previous trading day, it added. NSE explained a new contract will be introduced on the trading day following the expiry of the near month contract. Thus, on expiry of the near-month contract on June 28, a new contract of three months will be introduced on June 29, which will expire on September 27, 2001. Similarly, another new contract of three months will be introduced on July 27, which will expire on October 25, 2001.


Calcutta, May 30: 
Dinesh Singhania, one of the prime defaulters on the Calcutta Stock Exchange and former president of the bourse, is moving the Human Rights Commission against Mumbai police, for illegally detaining him.

According to Singhania, the crime branch of Mumbai police, in connivance with Ashoke Mittal of Claridges Investments and Finance Pvt Ltd, illegally detained him on May 25 for 60 hours and forced him to sign on stamp papers and other documents.

“I went to Mumbai to organise funds so that I could pay up my dues to the CSE. But I was trapped by Mittal who invited me to lunch and got me picked up by the police,” Singhania said.

The former president of the CSE has also filed an FIR against Mittal.


Mumbai, May 30: 
Heavy sales in new economy counters, prompted by apprehensions of profit warnings from US firms in the approaching earnings season, derailed the fortnight-long market rally today, plunging the 30-share BSE sensex into an 80-point tailspin.

The market’s fears seem to have been confirmed later, with reports that Sun Microsystems, the network, workstation and server giant, flashed a profit warning for its fourth quarter. Sun said on Wednesday that its fourth-quarter results will fall short of already low expectations.

Brokers also attributed the rough ride on the domestic bourses today to profit booking at higher levels. “It was also the result of a technical correction in many technology stocks, which had appreciated over the past few days,” an analyst said.

Apart from profit booking, fears of mutual fund major Unit Trust of India (UTI) facing tough times saw operators embark on a selling spree with gusto.

Sources added that while foreign funds had a feeble buying presence, domestic institutions led by UTI were seen selling with a vengeance.

The sharp slide in the Nasdaq composite index, which dipped about 76 points last night, also had a psychological impact on the market.

The 30-share BSE sensitive index opened positive at 3745.57, later fell to the intra-day low of 3653.31 as it met with strong resistance, before closing at 3662.04, as against yesterday’s close of 3742.07, a net loss of 80.03 points, or 2.14 per cent.

Lay-offs at First Global

Banned from taking fresh business by the Securities and Exchange Board of India (Sebi), leading stock broking group First Global will retrench 100 employees and close down eight-to-nine branches.

“We are in process of laying off close to 40 per cent of our workforce (staff strength of 250 people) and close down 60 per cent of the total 16 branches spread across the country,” First Global director (sales) Shankar Sharma said here today.

Sebi’s April 19 order has brought the group’s capital market activities to a halt, for alleged involvement in the stock market crash of March 2 and “First Global has no alternative but to effect large scale closure of branches and lay-offs,” Sharma said.


New Delhi, May 30: 
The Joint Parliamentary Committee (JPC) probing the stock market scam today criticised Central Stock Depository (CSDL) chief M.G. Damani for letting scam-scarred brokers and former BSE presidents Anand Rathi and Dina Mehta continue on the board of directors of the major depository.

JPC members pointed out that broker-directors could, if they wished, misuse sensitive market information to which they would be privy.

For instance, they would know which stocks the major FIIs and mutuals were selling or buying and could use this information to “indulge in insider trading.” As a depository director, they were privy to almost all transactions.

The MPs wanted them removed as Rathi and Mehta were under a cloud for their role in the stock scam that was triggered by a cartel of bears soon after the budget.

Damani, himself a broker, reportedly told the panel he had requested scam-tainted brokers to resign their directorships, but Rathi had apparently said he would contest any such move.

The CSDL president said he had asked for directions from the Securities and Exchange Board of India (Sebi) on the issue.

The financial institutions have, in fact, been long being arguing against broker directors on depository boards.

When contacted, SBI Mutual’s vice-president Sameer Bhargava said, “We have long felt brokers should be kept out ... it could lead to insider trading. It would be fairer to have non-partisan directors in such sensitive posts.”

The JPC which had called the three depository organisations — CSDL, National Stock Depository Ltd and Stock Holding Corporation — today also decided to haul up any regulatory institution which has not implemented the recommendations of the previous JPC which probed the 1992 security scam involving big bull Harshad Mehta.

“The committee will scrutinise the action taken report on the recommendations of JPC on the 1992 securities scam and will issue notes for any non-implementation,” Tripathi said after the meeting. Sources said finance secretary Ajit Kumar has given instructions to all departments concerned to quickly implement any of the recommendations of the 1992 JPC scam which the government promised to implement but did not.


Hyderabad, May 30: 
Dr Reddy’s Laboratories reported a 54 per cent rise in net profit at Rs 134.2 crore during 2000-2001 compared with Rs 87 crore in the previous fiscal. The turnover increased 25 per cent to Rs Rs 899 crore compared with Rs 717 crore in 1999-2000.

Total income of the company in the reporting year was Rs 848 crore compared with Rs 442 crore in the previous year.

The board has recommended a dividend of Rs 4 per share for the reporting year.

Speaking to newsmen chief executive G.V. Prasad said “We have filed six abbreviated new drug applications with the US and also gained 76 per cent increase in bulk drug exports to the US.”

Meanwhile, American Remedies Ltd, which is yet to be merged with DRL, reported a turnover of Rs 85 crore for the last fiscal as against Rs 94 crore of the previous corresponding period. Net profit of the company was Rs 11 crore as against a Rs 12 crore loss in the previous year.

IPCL net up 32%

Indian Petrochemicals Corporation Ltd (IPCL) today reported 32 per cent rise in net profit at Rs 249 crore for the fiscal ended March 31 as against Rs 189 crore in the previous year.

Revenues increased by 18 per cent at Rs 5,818 crore over the previous fiscal, an IPCL release said.

The board has recommended a 30 per cent dividend to the shareholders for the last fiscal. IPCL’s export turnover rose by 70 per cent at Rs 291 crore as against Rs 171 crore in 1999-2000.

Operating margins went up to 24 per cent during 2000-01 from 22 per cent in 1999-2000. The company attributed this to strong growth in volumes.


Calcutta, May 30: 
ITC Limited today announced an impressive performance for the 2000-01 fiscal, with a 27 per cent increase in post-tax profit at Rs 1,006.26 crore, up from Rs 792.44 crore a year ago.

Gross income rose to Rs 8,816.11 crore, up from Rs 8,069.37 crore, while net income stood at Rs 4,341.59 crore, as against Rs 3,935.48 crore in 1999-2000. Pre-tax profit soared 30 per cent to Rs 1,600.30 crore from Rs 1,228.95 crore.

The board today recommended a 100 per cent dividend for the year ended March 2001, as against 75 per cent paid last year. Dividend payout, including tax on dividend will account for Rs 282.50 crore, against Rs 224.55 crore last year.

“These impressive results were achieved despite sluggish business conditions, through continuous value addition to products and services, quality upgradation, strengthening of the goodwill of the company’s trademarks, improvements in productivity and continuous focus on cost management,” a company release noted.

The company will convene its 90th annual general meeting on August 3 for approval of accounts by shareholders.

Net trading margins increased to 40 per cent from 35 per cent recorded last year. Earnings-per-share (EPS) touched a new high of Rs 41, up from Rs 32.91 last year.

ITC continued with its debt retirement policy, which was reflected in reduction of the company’s interest burden by Rs 28 crore. It paid a total interest of Rs 84.91 crore, as against Rs 112.55 crore last year.

The release noted the company continued its conservative approach to income tax provisioning relating to certain state taxes, whose collection had been stayed by the courts.

ITC’s leadership position in the cigarette industry was consolidated by pursuing a strategy of continuous value addition, resulting in an enriched product mix, while its contribution to the exchequer grew by over 10 per cent to nearly Rs 5,100 crore during the year.

After various adjustments, a total of Rs 1,255.95 crore was available for appropriation against Rs 985 crore the previous year, and as much as Rs 700 crore was transferred to the general reserve, against Rs 600 crore last year.


New Delhi, May 30: 
The Union government has set a foodgrain production target of 212 million tonnes for 2001-02, about 16 million tonnes higher than last year. The revision in the target comes in the wake of reports of a favourable monsoon.

“The Union agriculture ministry has set a target of 212 million tonnes of foodgrain output, including kharif and rabi this year. We should be able to achieve the goal with the possibility of a good monsoon,” said agriculture secretary J.N.L. Srivastava while inaugurating the annual conference of state relief commissioners here today.

The Planning commission had suggested a target of 218 million tonnes of foodgrain production but the agriculture ministry has agreed to achieve 212 million tonnes, Srivastava added.

He said that the government would try to boost the production of deficit crops, including oilseeds, pulses and horticultural products by encouraging farmers to go in for diversification through incentives and special facilities.

He mentioned that the increase announced recently in minimum support price (MSP) for oilseeds and pulses was higher and more attractive than that for traditional crops like wheat and rice.

Srivastava also referred to the steps being taken to strengthen the post-harvest infrastructure all over the country for proper storage, transportation and marketing of agricultural products and to ensure timely availability of farm inputs and equipment.

Last year, despite normal monsoon, unequal distribution and adverse weather led to a sharp fall in foodgrain output to about 196 million tonnes from 209 million tonnes in 1999-2000. Srivastava said that monsoon rains are likely to be evenly spread this year.

It may be mentioned here that wheat procurement has crossed 18.5 million tonnes recently, against last year’s total procurement of 16.35 million tonnes. The total foodgrain stock in coffers is about 60 million tonnes. The value of the grains locked up in warehouses is worth about Rs 59, 000 crore.

With the target of 212 million tonnes of foodgrain in the year 2001-2002, the foodgrain mountain and its storage problems may get compounded in the absence of suitable policy decisions on the issue.

The subsidy given for foodgrain subsidy in the current fiscal is likely to overshoot the budgetary provisions of Rs 13,670 crore. This seems set to happen even if the government is able to meet its target of exporting 5 million tonnes of wheat and 2 million tonnes of rice this year.


New Delhi, May 30: 
It’s one of the hottest consumer durable segments with a growth rate of 20 per cent last year, third in the pecking order after personal computers (25 per cent) and motorcycles (22 per cent). Take the first four calendar months of 2001 and growth is absolutely incandescent at 32 per cent.

The airconditioning market is reporting mind-popping numbers at a time when the slump in demand brought on by the industrial slowdown has crimped sales in the other segments like colour televisions (a negative 15 per cent growth last year according to CII’s Ascon study) and refrigerators (a negative 5 per cent growth).

Not too long ago AC sales were pretty frigid with a penetration level of less than one per cent. But with changing lifestyles, easy instalment plans and a wide array of choices, the market is becoming more competitive.

Says Suresh Khanna, secretary general of Consumer Electronics and TV Manufacturers Association, said, “The sale of these type of products depend on sentiment of people rather than the state of the economy.”

The air-conditioning market has seen two types of change over the last year. Firstly, the segment has got more organised, thus encouraging new players to come in. And as a consequence, the price gap between the organised and unorganised sector has also decreased.

The new technology and after-sales service has also attracted the customers. Khanna says, “The demand has in general been pushed by the big retailers and middle income households. As specialised retailing and independent office spaces are becoming commonplace, the demand scenario is getting better.”

“Even the middle class consumer has started to think that one air-conditioner in the house is a good investment,” he added.

LG Electronics of South Korea is the market leader in this segment with a market share of almost 22 per cent. The company already has an AC manufacturing plant in India, but has plans to set up a second unit in 2002. In the meantime, the company has ratcheted up production capacity from 150,000 units to 250,000 units.

Samsung’s market share has gone up to 17 per cent from 10 per cent last year. R Zutshi, vice president (sales) of Samsung India, says, “Air-conditioners are no more looked on as a luxury item in India. With affordable branded products available in the market, the response has been tremendous.”

S.S. Lee, managing director of Samsung India says, “The success in this category has been so overwhelming that the company has decided to invest Rs 20 crore to set up a manufacturing plant in India. It will be operational from July and will cater to domestic needs only.”

Carrier, the specialised AC manufacturer, has seen its marketshare fall from 17 per cent to 11 per cent with the entry of a couple of new kids on the block like Electrolux and Daikin of Japan.

A Carrier spokesman said, “We will be spending around Rs 17-18 crore in building the brand name and try to capture over 20 per cent of the market.”

National of Japan has also gained market share in 2001 and now commands 17 per cent of the organised market against 11 per cent in the previous year. Amtrex Hitachi has virtually maintained its marketshare at around 12 per cent.

Voltas, the white goods maker which is currently concentrating only on air-conditioners, wants to slough of its fuddy-duddy image and add a little zing to its brandname. With 8.2 per cent of the marketshare, it aims at capturing 15 per cent by the year-end.

Videocon, a small player in this market has increased its market share to 5.5 per cent compared with 4 per cent it had in 2000.

Daikin started operations only last year and it has already captured 4 per cent in the up-market segment. Though fully out-sourced now, it has plans to set up an assembling capacity in India.

Electrolux has also introduced its air-conditioning products two months back. Although its ACs are completely imported now, it hopes to open up a production plant in India very soon.


New Delhi, May 30: 
The battle for the post of chairman and managing director of the public sector Gas Authority of India Ltd (GAIL) has taken a new turn.

The candidates recommended for the post are Prashant Banerjee, Indian Oil’s executive director, and J.K. Jain, GAIL’s director (finance). The panel has been before the ministry for over seven months.

The ministry of petroleum and natural gas differs with the Vigilance Commission that there is a case against J.K. Jain. It is asking the Vigilance Commission to reconsider its views on the matter.

Prashant Banerjee is staking claim to the post on the strength of the recommendation of the Public Enterprises Selection Board (PESB). Though the same PESB recommended him last month for the job of IOC director (marketing), Banerjee is keen on the GAIL job as it is a rung above the recommended post in Indian Oil.

The Vigilance Commission’s views are normally not contested. But in the case of J.K. Jain, the ministry feels that injustice is being done to him. His crime is that he along with three others approved a proposal way back in 1992-93 to import air-spotted structures by the project group implementing the Lakwa LPG plant. It was approved because the project group argued that the imported item would quicken the pace of implementation of the project by six months. The project was delayed on account of rains. The item was procured through international competitive bidding. Jain was neither on the tender committee nor was he in the project implementation group.

The project group did not install the imported item in time. This is now considered a wasteful expenditure. The ministry maintained that there is no case against Jain. So did the internal vigilance of GAIL.

Prashant Banerjee maintains that the post legitimately belongs to him. He denies that Ram Naik advised him to appear for IOC interview. Sources in the ministry assert that the minister did advise him. However, the fact remains that the PESB interview for the IOC’s marketing director’s job was postponed by a few days to accommodate Banerjee who would not have been able to appear for the interview without the GAIL panel completing six months. Banerjee is considered quite dynamic and IOC is keen to retain him.

It is now for Naik to decide who should be where. In the past also he had exercised his discretion. Naik is keen that the selection process should be transparent. He is expected to take a decision shortly.



Foreign Exchange

US $1	Rs.46.96	HK $1	Rs. 5.95*
UK £1	Rs.66.75	SW Fr 1	Rs.26.05*
Euro	Rs.40.19	Sing $1	Rs.25.60*
Yen 100	Rs.39.09	Aus $1	Rs.24.05*
*SBI TC buying rates; others are forex market closing rates


Calcutta			Bombay

Gold Std (10gm)	Rs.4540		Gold Std(10 gm) Rs.4470
Gold 22 carat	Rs.4285		Gold 22 carat	Rs.4135
Silver bar (Kg)	Rs.7575		Silver (Kg)	Rs.7610
Silver portion	Rs.7675		Silver portion	Rs.7615

Stock Indices

Sensex		3662.04		- 80.03
BSE-100		1780.55		- 45.54
S&P CNX Nifty	1177.55		- 20.90
Calcutta	 123.21		-  1.77
Skindia GDR	 675.07		-  1.83

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