Index-based trigger for SEs
BSE brokers give go-ahead to corporatisation
Zee Tele net vaults 132% in 4th quarter
ITC ups ante for VST control
Govt okays award of 23 oil blocks
Microsoft unwraps Office XP
Foreign Exchange, Bullion, Stock Indices

Mumbai, May 31: 
In its bid to embrace the practices followed by stock markets of the developed countries, the Securities and Exchange Board of India (Sebi) today announced a system of index-based circuit breakers in the rolling settlement that will trigger a nationwide halt in trading if the major indices of the National and Bombay stock exchanges swing either way by 10 per cent, 15 per cent, and 20 per cent.

The major indices that will serve as the benchmark are the 30-share BSE sensitive index and the S&P CNX Nifty of NSE.

In case of a 10 per cent swing in the indices, there will be a one-hour halt if it happens before 1 pm. But if the movement is noticed between 1 pm and 2.30 pm, the stoppage will be for 30 minutes only. However, if a swing of 10 per cent is noticed after 2.30 pm it can be ignored by the market.

For 15 per cent swings either way, the breather will be for two hours if it is before 1 pm and for one hour if it is after 1 pm. If the 15 per cent trigger is hit on or after 2 pm, trading will stop for the remaining part of the day. In case of a 20 per cent movement, trading will stop irrespective of the time when the indices breach the limit.

However, a look at the movement of the sensex between January 1984 and May this year shows that the BSE bellwether index has moved 10 per cent either way only on five occasions. The Sebi sub-group on risk management for equity markets, however, raised the individual scrip wise price bands to 20 per cent either way, instead of the present 16 per cent price bands.

The sub-group deemed that this will be for all scrips in the compulsory rolling settlement except for scrips in which derivative products are available. For scrips that are not in compulsory rolling settlement, the existing price bands will continue, Pratip Kar, executive director of Sebi, said.

Further, for scrips in the compulsory rolling settlement, the 99 per cent VAR (value at risk) based margin system would be introduced with effect from July 2.

For the additional 251 scrips which will be included in the compulsory rolling settlements from July 2, the exchanges will calculate scripwise VAR and index-based VAR. The calculations will be done by taking exponentially weighted moving average methodology used in the index futures market and the scripwise daily VAR will be calculated as 3.5 times the volatility so calculated.

The VAR calculations will be based either on the sensex or S&P CNX Nifty and will be disseminated by the BSE and NSE daily on their websites by 6.30 pm, Kar said. Other stock exchanges can make their own VAR calculations based on Sensex and S&P CNX Nifty or freely adopt the VAR calculations available on the sites of BSE and NSE.

The sub-group deemed that in addition to the margin calculated on the VAR basis, exchanges shall continue to collect mark-market margin. Further exchanges have been given the discretion to impose additional margin on scrips wherever necessary to contain the risks in the market.

In another significant move, Sebi has advised a system of direct debit/credit of the members settlement account should be in place for margin payment and the practice of payment of margin by cheque shall be completely done away with.


Mumbai, May 31: 
Moving with the times, the 126-year old Bombay Stock Exchange (BSE) today adopted a resolution to convert the bourse into a corporate entity.

The extra-ordinary meeting held today in the BSE’s Rotunda hall, saw the over 700 members of the exchange approve two critical resolutions that may even enable the stock exchange to list its shares on the bourses at a later date.

While the first resolution adopted today converts the bourse into a corporate entity, the second proposal will see the exchange spinning off functions pertaining to surveillance and risk management either to a separate subsidiary, or outsourcing it.

However, the success of the bourse’s move to transform itself from a ‘closed club’ of brokers, to a corporate entity, depends on whether market regulator — the Securities and Exchange Board of India (Sebi), which is empowered to consider the proposal — gives its assent.

“The exchange will soon write to Sebi regarding today’s meeting and seek its approval,” said a senior broker affiliated to the exchange.

Interestingly, Deena Mehta, former president of the BSE who was unceremoniously ousted from the position, chaired today’s meeting.

The meeting saw some members raise doubts on whether the exchange should first value itself and then convert itself into a corporate entity. Mohan Vijan, who heads the BSE brokers’ forum, was of the opinion that a proper valuation of the assets owned by BSE should be done first.

The exchange will shortly appoint merchant bankers to value its worth, which includes, among other things, its brand value, premier indices like the BSE 30-share index and the market value of the brokers’ trading cards.

“We would not like to speculate on the real value,” a source close to the brokers’ forum said.

Analysts, keeping a close watch on the moves initiated by the BSE brokers, felt that Sebi will be in a bind to decide on the proposals, as it had only recently barred the broker-directors from playing any role in the management of the exchange.

Sebi’s main grouse has been the brokers’ interference with the bourse’s surveillance functions, which came to light recently.

The brokers hope to quell the market watchdog’s fears by spinning off the function to a separate arm.


Mumbai, May 31: 
Zee Telefilms Ltd’s (ZTL) fourth quarter net profit soared 132 per cent to Rs 47.29 crore compared with Rs 20.39 crore in the previous corresponding quarter.

The rise in net was primarily due to other income of the company which quadrupled and because of zero tax provisions. Other income shot up to Rs 16.63 crore from Rs 4.35 crore in the previous year.

Earlier, the company had provided for taxation in view of the deductions permissible under US 80 HHC of the IT Act. Such deductions relating to earlier years aggregating Rs 42.18 crore have been disallowed and the company is disputing the same, though it has paid Rs 33.80 crore on this account. ZTL added, further tax provision of Rs 14.17 crore was made for earlier years on account of MAT liability.

ZTL’s sales during the quarter rose to Rs 119.81 crore up from Rs 73.74 crore in the previous corresponding quarter, yielding an income of Rs 136.44 crore as against Rs 78.09 crore in the previous year.

In the last fiscal, the company’s net profit rose to Rs 138.18 crore compared with Rs 82.25 crore in the previous fiscal. The board has offered 55 per cent dividend.

ZTL’s annual sales was at Rs 384.66 crore as against Rs 286.96 crore and total income at Rs 435.77 crore as against Rs 297.06 crore in fiscal 1999-2000.

The consolidated net profit of Zee Network, including its subsidiaries, rose 78 per cent to Rs 39.82 crore in the fourth quarter against Rs 22.34 crore in the previous corresponding quarter.


Calcutta, May 31: 
The battle for VST is fast turning into a gripping, edge-of-the-seat thriller, as both suitors vie with each other to woo the shy bride.

In another twist today, Russel Credit, the investment arm of ITC Ltd, raised its offer price to Rs 125 from Rs 120 per share, for a 20 per cent stake in VST Ltd. This is the second time in less than two weeks that it has revised its offer price upwards for the Hyderabad-based tobacco company.

The move is in response to the stiff competition provided by Mumbai-based contender Bright Star Investment, promoted by R. S. Damani and G. S. Damani.

Bright Star created a flutter in corporate circles by making a hostile takeover bid for the Rs 750-crore VST on February 13 this year, at Rs 112 per share.

However, sensing the tough challenge posed by the ITC subsidiary, the company subsequently revised its offer price on May 14 to Rs 118.

Today’s move by Russel has added a new dimension in the take-over drama, with the Damanis preferring to keep their cards close to their chest.

“We will consider our response carefully,” said John Band, CEO of AskRaymond, lead managers of the Bright Star open offer.

As per the regulations of the Securities and Exchange Board of India, no further price revision will be allowed after June 3.

The investment vehicle sent a notice today to the Bombay Stock Exchange (BSE) through its lead manager Kotak Mahindra Capital Company, informing the bourse of its intent. Meanwhile, the VST scrip shot up to Rs 124.5 on the BSE today.


New Delhi, May 31: 
The Cabinet committee on economic affairs (CCEA) today approved the award of 23 new oil and gas exploration blocks. It has also approved the finalisation and signing of the production sharing contracts with the awardees. Of the 23 blocks, 12 received multiple bids.

CCEA has decided to induct joint venture partners for RailTel Corporation of India Ltd. Railway’s equity in RailTel will be 51 per cent or more. The public sector telecom companies will be RailTel’s first choice for partnership, to be followed by private telecom players. RailTel will provide internet service and national long distance telephony.

In a string of steps, the government also constituted a group of ministers headed by finance minister Yashwant Sinha to prepare a fertiliser policy. The government is already working on the revival package for Hindustan Fertiliser Corporation, Fertiliser Corporation of India, Project and Development India Ltd and Pyrites Phosphate and Chemicals Ltd. The group will make recommendations in this direction, Pramod Mahajan, parliamentary affairs minister, told reporters after the Cabinet meeting.

The government approved a Rs 71.52 crore voluntary separation scheme for employees of Elgin Mills and Cawnpore Textiles Ltd, subsidiaries of British India Corporation, for one year and agreed to examine the feasibility of restarting at least one of these mills.

The wages and salaries from August, 2000 to June, 2001 will be paid to workers who opt for the scheme and at a cost of Rs 17.38 crore.

The Cabinet also cleared the Rs 5,000-crore Media Lab Asia in India, a joint project of MIT Cambridge’s media lab and the Union IT ministry, for developing latest technologies for rural India. In the first year, the investment is pegged at Rs 65 crore, Mahajan said.

The lab, expected to incur a cost of Rs 5,127.50 crore and spread over a period of 10 years, will be located at the Mumbai-Pune belt.

While industry and other sponsors will provide 80 per cent of the cost amounting to Rs 4,257.50 crore, the balance 20 per cent (Rs 870 crore) will come as grant-in-aid from the government.

CCEA accepted the proposal for delinking the coal preparation plant from Kalinga integrated mine-cum-benefication project of Mahanadi Coalfields Ltd. The revised cost estimate stands at Rs 344.63 crore.


New Delhi, May 31: 
Next time you send an email to your insurance agent he will not have to pore over the files in his computer to retrieve them and compute the premia that you have paid and that which is due to be paid. Just a click on the mail will roll out the full details about you.

Microsoft today launched worldwide its new software Office XP—which is being touted as its biggest software launch since its extremely popular Windows 95—which attempts to make life easier for corporate offices, municipal corporation and your insurance agent. ‘Smart Tag’, a set of buttons shared across the Microsoft Office applications, will help your insurance agent to get whatever details of any given period, by just a click on your mail. These buttons just prop up when the user needs them (as when a user makes an error or when a word automatically corrects a user’s action) and gives users the options they need to change the given action or error.

The product is pretty pricey with the basic version priced at Rs 25,500 and the advanced version at Rs 40,000. The company plans to target corporate houses with large clientele, small office and home office (SOHO) segments. It has already distributed evaluation copies to 300 corporate houses.

About 30,000 customers were involved in the development of Office XP. More than 20,000 customers provided the responses about the existing drawbacks in Microsoft Office while 10,000 evaluated the Office XP.

“The users of Microsoft Office felt the current version helped increase productivity but were aware that the full potential of the software was not being exploited. The functionality was too difficult to find or to use. Even if they found it, they were not confident of using it,” said Rajiv Kaul, managing director of Microsoft India.

“Office XP integrates other products and services from Microsoft and streamlines the users’ communications process. The introduction of new wizards will help deployment and make maintenance easier,” he added.

The beta version of Office XP was developed at Redmond, Washington. The company’s development centre in India is currently developing ad-on for the software, which will be released at a latter date. Office XP is XML-enabled and is, therefore, an ideal platform for customised enterprise solutions.

One of the special features of Office XP is that it provides handwriting and speech recognition—but only in English, Japanese Chinese and Korean. “Currently, we have no plans to bring out this software in other languages,” Kaul said.

Users can dictate text, make direct formatting changes and navigate menus using speech and voice commands. They can also write directly in word format and keep the document in handwriting or convert it into typed text.



Foreign Exchange

US $1	Rs. 47.01	HK $1	Rs.  5.95*
UK £1	Rs. 66.58	SW Fr 1	Rs. 26.05*
Euro	Rs. 39.93	Sing $1	Rs. 25.65*
Yen 100	Rs. 39.47	Aus $1	Rs. 23.70*
*SBI TC buying rates; others are forex market closing rates


Calcutta			Bombay

Gold Std (10gm)	Rs. 4430	Gold Std(10 gm) Rs.4350
Gold 22 carat	Rs. 4185	Gold 22 carat	Rs.4025
Silver bar (Kg)	Rs. 7475	Silver (Kg)	Rs.7500
Silver portion	Rs. 7575	Silver portion	Rs.7505

Stock Indices

Sensex		3631.91		- 30.13
BSE-100		1763.35		- 17.20
S&P CNX Nifty	1167.90		-  9.65
Calcutta	 122.79		-  0.42
Skindia GDR	 662.15		- 12.92

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