All-pervading gloom as war threat looms
Hard knock for software stocks
Rupee crashes to 47.86
Amrit Banaspati rules out takeover bid
IOC refuses to budge on Haldia Petro
Foreign Exchange, Bullion, Stock Indices

Sept. 14: 

Sensex plunges 157 points

Bourses at home were today overrun by sellers unnerved by the sharp decline of the rupee against the dollar and the threat of a US offensive in Asia, The Bombay Stock Exchange (BSE) sensex lost 157 points, or 5.2 per cent, when it closed at 2830.12, while NSE’s nifty closed 50 points lower at 921.

Investors stayed away ahead of what looks like an uncertain weekend, while FIIs switched to safer assets like bonds.

With today’s slide, shareholders’ wealth worth over Rs 51,250 crore has evaporated. In all, 13 sensex scrips have hit new lows in the last five trading sessions. The sensex’ closing quote of 2830 was the lowest since December 4, 1998. The benchmark index has lost 319 points, or 10.11 per cent, in the three sessions since the terrorist attack on landmark buildings in the US.

At the opening bell on Monday, the market capitalisation of all stocks listed on BSE was Rs 5,12,850 crore. At close of business today, it stood at Rs 4,61,600 crore.

The sensex opened lower at 2,986.86 today, but as the day progressed, investors and operators swarmed the counters with sell orders . The broader indices like the BSE-100, BSE-200 and BSE-500 were down by about 6 per cent. In today’s trading, only 156 stocks advanced, 1,055 declined and 102 remained unchanged.

In the last two trading sessions, the FIIs have sold equities worth Rs 125 crore. “The volume of FII selling has topped Rs 400 crore in the past. The selling pressure seen in the last couple of sessions was not high, but with a rather threatening weekend ahead, few investors seemed interested in taking fresh risk,” Shailendra Bhandari, managing director of ICICI Prudential mutual fund said.

Among the worst losers were the technology and pharmaceutical counters, apart from index heavyweights like Reliance, ITC, State Bank and Hindustan Lever. Infosys declined by Rs 251 to close at Rs 2,909, while from among the pharmaceutical companies, Cipla lost Rs 97.50, Ranbaxy, Rs 39, and Dr Reddy’s, Rs 22.70. While Cipla closed at Rs 1,113, Ranbaxy and Dr Reddy’s closed at Rs 583.60 and Rs 1815.30 respectively.

Reliance Industries and Reliance Petroleum both lost 10 per cent to close at Rs 261 and Rs 28.75 respectively. Both the stocks hit 52-week lows. There are concerns among analysts that the rise in petroleum prices may affect the business of the Reliance group.

The only gainers among the index stocks were Nestle and BSES, both advancing marginally.

Sebi board meet

The Securities and Exchange Board of India (Sebi) board will meet early next week to consider the introduction of margin trading. This is a mechanism of financing third party trades, which is expected to infuse liquidity in the markets, and improve sentiments.

The Sebi board deliberated the matter in its last meeting in Delhi on September 4, but could not reach a consensus. There were some deficiencies in the draft model, which the Sebi board is now understood to have thrashed out. The market expects Sebi to approve its introduction in the next board meeting. However, even if Sebi approves margin trading, banks will require permission of the Reserve Bank to infuse funds through this mechanism.


Mumbai, Sept. 14: 
Concerns that the crisis in the US will hit exports sent the shares of software companies through the shredder today.

Majors and second-rung firms faced the heat as operators and institutions sold heavily in a setback for an industry which has already scaled down growth forecasts for this year to 30 per cent.

Experts say US companies usually place 60-70 per cent of their orders in the last 10 to 15 days of a quarter. “With the second quarter ending this month, infotech companies may lose out as their customers in the US are still coming to terms with Tuesday’s terror strikes,” an analyst said. Though analysts say it would take over 3 months for a clear picture to emerge, they are bullish about the long term. Others said the focus of US companies on cost-cutting could lead them to outsource more of their requirements — a boon for countries like India. If that were to happen, frontline companies led by Infosys, Wipro, Satyam Computers and HCL Technologies could turn out to be the biggest gainers.

Sources close to Infosys Technologies said though there would be a marginal impact of the terrorist attacks in the US on India’s software exports, they expect their growth rates to be close to the industry average. “For the long term though, it is too early to comment at this stage,” he added.

In today’s trading, NIIT was whipped 8.63 per cent to end the day at Rs 125.50, Infosys Technologies plummeted 7.95 per cent at Rs 2,909 and Satyam Computer was down 3.89 per cent at Rs 141. With much of the shares in these companies with FIIs — who appear to be a in a hurry to sell out — software firms are in choppy waters.

In April this year, Infosys shocked the industry when it signalled a sharp downturn in revenues and profits. It projected a revenue growth of only 30 per cent for the year and a rise of only two to four per cent for the current quarter ended June 30.


Mumbai, Sept. 14: 
Buckling under fears that terror-scarred America would pull the trigger soon, the rupee plunged to 47.83/86 against the dollar before clawing back a little and ending the day at 47.82/84, its lowest close ever.

The jitters in the inter-bank foreign exchange market were compounded by the selloff on stock exchanges amid concerns over the flow of foreign investment.

Companies and banks acting on behalf of importers accounted for much of the dollar buying. Dealers said the odds of the rupee hurtling below the 48-mark were short. Some see a slide beyond that crucial psychological threshold when trading resumes on Monday.

“The rupee is now in an uncharted territory and I won’t be surprised if it sinks to a new low on Monday itself,” said an analyst with a nationalised bank. Even if things do not get worse, the rupee has already lost a whopping 25 paise over Thursday’s close of 47.56/57 and an alarming 65 paise from its levels two weeks back.

“It could even touch 48 per dollar if the demand for greenbacks remains as strong as it was today. However, everything will depend on the Reserve Bank of India (RBI),” said N Subramanian, senior analyst at e-Mecklai.

The comments reflected jangled nerves in the market over massive sales of shares by foreign institutional investors (FIIs). With dollar supplies unable to sate the voracious appetite, dealers said the Reserve Bank held the key to the future course of the rupee.

There anxiety over FIIs is how they would react to a possible US retaliation in the Asian region to the terrorist attacks in New York and Washington. That was evident when the rupee, opening weaker at 47.56/60, hit the day’s trough of 47.86 within minutes. Later, dollar sales by state-run banks helped it to 47.68/69.

However, news about the stock tumble unsettled players, leading to a dollar-buying binge and sending the rupee into a tailspin.

Gold zooms

Gold prices soared by Rs 125 per ounce to this year’s highest level of Rs 4700 on the bullion market here today.

Stockists started buying the yellow metal in huge quantity fearing scarcity of stocks in the immediate future. With the cancellation of many international flights, arrival of gold through official channel had fallen drastically, traders said.


New Delhi, Sept 14: 
The Javeris of Mumbai have snapped up a 10 per cent stake in Ghaziabad-based Amrit Banaspati, the Rs 321-crore vanaspati and edible oil maker.

The company has informed the Bombay stock exchange that the Javeris have applied for the transfer of 9,07,740 equity shares which they bought from the market.

Little is known about the Javeris or their intentions, though Amrit Banaspati’s company secretary J.C Rana told The Telegraph they did not fear a takeover threat “as the promoters hold 45 per cent of the paid-up capital”. He said the financial institutions hold another 18 per cent and the remaining portion is with the public.

Rana claimed they learnt about the Javeris’ interest in the company only when they sent in their share transfer deeds.

The Javeri family which bought the shares consists of Harsha Hitesh Javeri, Hitesh Ramji Javeri, Ramaji Pragji Javeri, and Radhabai Ramaji Javeri.

Amrit Banaspati is owned by N.K. Bajaj, who is also the chairman of group company Amrit Agro Industries which sold its Uncle Chipps brand to Pepsi last October.

A few years ago, Amrit Banaspati was referred to the Board for Industrial and Financial Reconstruction which cleared a Rs 691 crore rehabilitation package that is currently being implemented.

Rana said the financial institutions are not providing any funds toward the revival package.

The company, which has accumulated losses of Rs 34 crore, has just started to claw its way into the black. In the year ended March 31 this year, it reported a gross profit of Rs 2.03 crore against a loss of Rs 3.6 crore in the previous year.

However, sales were down slightly at Rs 324.31 crore (Rs 324.74 crore in the previous year).

The company was able to bring down the net loss from Rs 7.69 crore to Rs 2.20 crore.

Amrit Banaspati has some well-entrenched brands in the market like Gagan vanaspati, Ginni Gold sunflower oil and a few other edible oils. Reports indicate it has a market share of around 40 per cent in north India.


New Delhi, Sept 14: 
Indian Oil Corporation Ltd has refused to dilute any of the pre-conditions it has set for its equity participation in Haldia Petrochemicals.

The oil major is insisting on a 26 per cent stake and majority control in HPL, but said it was open to talks with the West Bengal government and HPL’s other equity partners.

IOC has tagged on two other pre-conditions: first, it is insisting on a write-down of HPL’s equity capital by Rs 500 crore which, it says, can be converted into redeemable bonds; second, it wants a 100 per cent naphtha supply contract.

“We are not going to dilute our demands,” said IOC chairman M.A. Pathan. “In fact, our current position marks a change from our earlier one. We are awaiting their response.”

Asked how long IOC would wait for a reply from the state government, Pathan said, “It is difficult to say how long, but for now we are prepared to wait. My office is in constant touch with the HPL stake sellers and, as soon as we hear from them, we will carry the process further.”

The reiteration of IOC’s stand creates a sticky problem for the state government which is now being pushed into a situation where it may have to choose between the state-owned oil giant and The Chatterjee Group, one of the original promoters of the project.

Purnendu Chatterjee of TCG has already indicated to the state government that he will not accept a situation that gives IOC complete say in the running of HPL.

Under the original proposal, HPL’s equity capital was supposed to be Rs 1,979 crore and the debt component was around Rs 3,200 crore. However, the three partners brought in only Rs 1,010 crore and only 51 per cent of the equity capital were issued with the Bengal government holding 22 per cent (Rs 433 crore), The Chatterjee Group 22 per cent (Rs 433 crore) and the Tatas 7 per cent (Rs 144 crore). The remaining Rs 969 crore came in the form of a bridge loan from IDBI (Rs 500 crore), over Rs 300 crore worth of optionally convertible debentures, and advance against equity (Rs 100 crore by WBIDC and Rs 36crore from the Tatas; TCG refused to pay up last November until several issues surrounding the project were resolved).

Commenting on the impact that surging oil prices would have on India after the recent terrorist attacks in the US, Pathan said, “We are still assessing the situation to see how much of fuel products are available with us. It would be safe to say that we have sufficient quantities for a “reasonable time period.”

Pact with State Bank

Indian Oil Corporation has joined hands with State Bank of India (SBI) to issue 50,000 petrocards under a pilot project to be implemented in Delhi and Mumbai.

Schlumberger, the German manufacturer of smart cards, has bagged the contract to provide the cards and equipment.

The cards will use Java technology licensed by Sun Microsystems, the US-based software services company.

IOC officials said, “It is a pilot project which will be expanded to cover other cities depending on the response. Initially, it can be used to purchase oil and oil products from our franchised outlets in the two cities. Later, we plan to bring in value added services through tieups with various institutions.”

Bhaskar Pramanik, managing director of Sun Microsystems India, said, “We are discussing with a number of companies in the telecom, financial services and government sectors to introduce these cards.”



Foreign Exchange

US $1	Rs. 47.84	HK $1	Rs.  6.00*
UK Ł1	Rs. 70.51	SW Fr 1	Rs. 28.45*
Euro	Rs. 43.88	Sing $1	Rs. 27.00*
Yen 100	Rs. 40.29	Aus $1	Rs. 24.20*
*SBI TC buying rates; others are forex market closing rates


Calcutta			Bombay

Gold Std (10gm)	Rs. 4720	Gold Std(10 gm)	Rs. 4700
Gold 22 carat	Rs. 4455	Gold 22 carat	NA
Silver bar (Kg)	Rs. 7200	Silver (Kg)	Rs. 7285
Silver portion	Rs. 7300	Silver portion	NA

Stock Indices

Sensex		2830.12		-157.38
BSE-100		1337.02		- 86.00
S&P CNX Nifty	919.70		- 52.00
Calcutta	 97.66		-  4.65
Skindia GDRNA	491.99		-  4.03

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