Sensex dips below 5000, rebounds
RBI to frame norms for asset recast company
100% Bajaj Auto interim
Price war in domain name market
SEB losses seen at Rs 30,000 cr next year
Mobilink to levy charges on internet paging
Satellite mail
Longview Tea loses taste for Darjeeling flavour
Admen feasting on dotcom splurge
Foreign Exchange, Bullion, Stock Indices

Mumbai, March 14 
It is the old-timers who heal wounds inflicted by new-found favourites. Cyclicals, pharmaceuticals and FMCG shares sparked a strong rally on a day the Bombay Stock Exchange (BSE) sensex slipped below the 5,000 mark for the first time this year, and lifted it to 5175.71 in a modest 46-point gain.

FMCG major Hindustan Lever was at the forefront of the rescue bid after the 30-scrip index tested 4943.30, its intra-day trough. Infotech share values tumbled across the board as institutions and operators dumped them for old-economy shares. Most computer companies saw their scrips remaining locked in the lower-end circuit filters for the best part of the day.

�Software stocks are falling under their own weight,� said Ramesh Damani, a prominent BSE broker who had once said �the prices of software scrips have touched obscene levels�.

A section of the dealers said the meltdown in infotech stocks will force weak operators to move out of the fray while there are others who feel the market has already bottomed out, and that there are no fears of a further fall in values.

During the early-session selloff, a few pharmaceutical scrips like Pfizer and Parke Davis were picked up by foreign institutional investors (FIIs) but that was not enough to reverse the decline.

After the sensex plumbed its low, punters made fresh commitments to cyclicals and helped stage a smart recovery. There was also some shortcovering on what was the last day of the current settlement on the National Stock Exchange (NSE).

The lifting of a series of additional volatility margins by market watchdog Securities and Exchange Board of India (Sebi) on Monday evening also came as a relief to operators who turned their attention to old-economy stocks and enlarged positions.

Foreign investors and financial institutions led by the Unit Trust of India (UTI) were seen picking up these shares at their lows while offloading their holdings of software and media shares after Monday�s losses in the Nasdaq index. As a result, several pharmaceutical and cyclical shares made impressive gains at the end of trading.

Despite the slump, dealers were optimistic the sensex will recover further, given that 5000 was serving as the key resistance level today. �The gap has been filled and now the market should improve,� said a technical analyst, referring the fact that the sensex had opened the new year with a massive gap.

Unlike the sensex, the BSE-100 index declined by 13.30 points to 3043.53 compared with its previous close of 3056.83 points. The BSE-200 index and the dollex were quoted lower at 652.28 and 249.19 compared with their previous close of 653.62 and 249.70 respectively. The BSE-500 index dropped by 12.76 points to 1983.87 from Monday�s close of 1996.63.

Hindustan Lever closed at Rs 2721.55, up from Rs 2520 on Monday, while SBI jumped to Rs 178.70 from Rs 165.50. Among the pharmaceutical majors, Pfizer closed at Rs 933.05, up from Rs 800 while Parke Davis gained Rs 21 to finish at Rs 320.

Satyam Computer remained the most active scrip with a turnover of Rs 747.37 crore. Satyam plunged by Rs 442.15 to Rs 5367.85 while HFCL dipped by Rs 135.55 to Rs 1777.40.    

New Delhi, March 14 
The government has asked the Reserve Bank of India (RBI) to formulate the guidelines on setting up an asset reconstruction company (ARC) to restructure the banking sector.

�So far, the ARC was just a subject of discussion. Now the government has started the process of setting up one. The RBI has been mandated to work on the guidelines. Based on the guidelines suitable legislations would be made and will be introduced in the Parliament,�� officials in the banking division of the finance ministry said.

The RBI will soon submit its regulations to the government on the ARC which would have to be constituted through an Act of Parliament.

While formulating the recommendations, the RBI will go through its previous reports on the banking sector such as the Narasimham committee report on restructuring the sector and the Verma committee report on weak banks.

RBI�s main objective is to frame the appropriate rules to enable the ARC to recover money quickly by speedy disposal of assets. �The legal system takes a very long time to settle claims,� sources said.

The RBI would also look at funding options to start an ARC. �Whether the ARC would be funded by the government or by individual banks would be decided by the RBI,� the sources said adding that the asset reconstruction fund (ARF) would be set up only after the ARC is in place.

�Also, whether there would be a single ARC for all the weak banks or separate ARC for each one would have to be decided,� sources said.

Sources said bad assets of weak banks could be transferred to the ARC at a discounted price, while in some cases the management of weak banks may also be changed.

To start with, the government may consider handing over the management of the three weak banks � United Bank of India, Uco Bank and Indian Bank � to the Financial Reconstruction Authority (FRA) which was proposed in this year�s budget.

The process of setting up an ARC is part of government efforts to revitalise the banking sector. It has decided to go ahead with recapitalising weak banks if they come up with viable restructuring strategies. �The management as well as the unions of the banks have to approve a restructuring package. Only then will the government be able to recapitalise the banks,� said sources.

Meanwhile finance minister Yashwant Sinha today said in Parliament that the government will set up a Financial Reconstruction Authority (FRA) to deal with NPAs in public sector banks.    

Mumbai, March 14 
The board of directors of the two-wheeler major, Bajaj Auto Ltd today decided to pay an interim dividend of 100 per cent (Rs 10 per share) for the year 1999-2000. The dividend will be paid to members who are on the register as of April 13 this year.

On the Bombay Stock Exchange (BSE) today, the Bajaj Auto scrip witnessed some volatility, to close higher from yesterday�s figure. After opening at Rs 312, the scrip fell to an intra-day low of Rs 307, only to rise back to Rs 325.90. It finally closed at Rs 320.70.

Bajaj Auto posted a 20.85 growth in income and 31.84 per cent growth in net profit for the quarter ended December 31, 1999. The company consolidated its position in the motorcycle segment where it recorded a 38 per cent growth in production and 30 per cent growth in sales.    

New Delhi, March 14 
Internet company Net4 has triggered a price war in the domain name registration market by offering the service at Rs 650 compared with the rates of rivals which are between Rs 2,000 and Rs 3,000.

Net4�s move will benefit small entrepreneurs to launch startup net companies.

The domain name registration market in the country is projected to increase by almost 200 per cent this year. The user has to undergo a simplified process of registration.

Announcing the launch of, Jasjit Sawhney, CEO of Net4 India said, �The domain registration market is expected to go up exponentially this year and India is one of the biggest markets in the Asia-Pacific region with a growth of rate of as high as 267 per cent. A total of 89,000 registered domain names were recorded in 1999.�

He said: �The first step in establishing an Internet presence is to book a domain name, which should be secured as soon as the idea is conceived, even if there is no immediate requirement.�    

New Delhi, March 14 
The annual commercial losses of of all state electricity boards (SEBs) will shoot up to Rs 30,000 crore next year against the projected loss of Rs 20,000 crore this year.

State governments have been putting off a decision on raising tariffs in the hope that the regulatory authorities being set up will do this hatchet job. These regulatory agencies are unlikely to become operational till the end of next year. At the current level of tariffs, the losses will mount by another Rs 10,000 crore.

The Centre has been impressing upon states administrations to rein in the mounting subsidies by raising power tariffs for agriculture. On an average, the agriculture sector pays 20 paise per unit as against Rs 2-4 by industry. The industry, in effect, cross subsidises the agriculture sector to a certain extent. Consider all this against the fact that the average cost of power works out to Rs 2 per unit.

The Centre is convinced that states� finances will continue to be in a shambles as long as SEBs fail to perform. The World Bank-prescribed solution is that the state governments will have to absorb the cumulative losses as a prelude to restructuring SEBs.

The performance of SEBs is related to the character of the political leadership in power. States like Maharashtra, Tamil Nadu and Himachal Pradesh are performing reasonably well. Andhra, which once had a well-managed SEB, is in the red because of the populist policies of late N.T. Rama Rao. Power boards in Karnataka, Haryana and Punjab are also neck-deep in losses.

The SEB in Orissa was the first to be taken up for restructuring. On the recommendation of the World Bank, it was trifurcated into generation, transmission and distribution companies. The experiment, however, failed because the government used the money from disinvestment for current consumption. The distribution company was to be privatised, but in the absence of takers for it, the state government could not go ahead with its privatisation programme.

The World Bank is now wiser. It is not recommending the Orissa model to other states. The Andhra government, which is restructuring its SEB, has been advised to take over the liabilities by injecting funds annually.

The regulatory agencies cannot be expected to work wonders. They cannot do away with subsidies in one stroke. It has to be a gradual process. In some north Indian states, SEB officials do not dare to even inspect the metres installed in houses. The situation is better in the western and southern states.    

New Delhi, March 14 
DSS Mobile Communications Ltd, which provides e-mail links through its paging services in Calcutta and six other cities, has decided to levy a charge on the service.

The company, which offers paging services under the brand name Mobilink, plans to introduce a minimum charge of Rs 50-100 for its internet paging service, currently available free.

The company introduced the internet paging service earlier this year in Calcutta, Chennai, Mumbai, Bangalore, Ahmedabad, Pune and Hyderabad.

To send an internet paging message, a caller has to log on to the Mobilink web site,, key in the subscriber�s city, pager number, type out the message and send it. The message is sent to the subscriber�s pager anywhere in the world, through the internet.

According to Dilip Pall, director sales and marketing Mobilink, �Internet paging is a cost effective medium of communication. Senders can save on the long distance call charges. We have also tied up with private internet service providers (ISPs) and Videsh Sanchar Nigam Ltd (VSNL) to offer e-mail notifications on pagers. Soon there will be many more web-based messaging services catering to a cross section of users.�

Simultaneously, the company also plans to offer specialised value added services to corporates.    

Calcutta, March 14 
Delta Innovative Enterprises Ltd (Delta), is set to introduce countrywide satellite mail services by setting up earth stations connected through the Insat-3B. The company, which has already connected 200 towns through 35 earth stations, plans to invest Rs 150 crore to spread the network in 3000 towns and 40,000 villages in India.    

Calcutta, March 14 
The Longview Tea Company has sold the Phugri tea estate in Darjeeling to the Bagarias of AHW Steels.

Phugri is the fourth tea garden that the company has sold in recent months. The other three gardens are Rohini, Avongrove and Longview Tea Estate.

While Rohini was taken over by Sona Tea, Avongrove and Longview Tea Estate were sold to Avon Tea and Ambari Tea respectively, sources said. The Orange Valley is the only garden that Longview now has in the Darjeeling district.

Confirming the deal, Longview managing director, P. K. Daga said the company was no longer interested in tea gardens at Darjeeling.

�We are finding it difficult to set our gardens in the hills of West Bengal on targeted growth levels. This is the reason why we have decided to come out of this region,� Daga said.

Daga said that Darjeeling tea needed personalised care and attention, which is a tall order for corporates like Longview.

�It is individual garden owners who are thriving in Darjeeling, compared with the big corporates, because they can afford to give complete attention right from the production to marketing of the tea produced by them,� Daga said.

Daga however refused to comment on whether Longview would totally come out of the tea business.

�The only thing I can say is that we don�t have any interest in Darjeeling, where the tea is suffering both in terms of quality and quantity and is thus becoming a losing proposition for us,� he added.

Daga said he was more interested now on his spinning business and is scouting for new business opportunities.

S.S. Bagaria, managing director of AHW Steels which bought the Phugri garden, said the company viewed tea as a key area where it will concentrate in the coming years.

Bagaria said negotiations were on to acquire two more gardens, one in Darjeeling and another in the Dooars. He has set up a company, Phugri Tea Estate Pvt Ltd, and all the tea gardens will be brought under its aegis.

The Phugri tea garden situated in Mirik, currently produces around 1.5 lakh kg of tea, which commands a price of around Rs 2000 per kg.    

New Delhi, March 14 
Call it the millennium bonanza or the Net rush, but admen are laughing all their way to the bank. As the Rs 10,000-crore industry tries to make sense of the cataclysm in the information age, it is also being churned and stirred.

In many ways, it is a big melting pot. Clients and accounts are switching sides in reaction to what is happening elsewhere in the world. It is a sign that the forces of globalisation are sweeping the abodes of pony-tailed creative directors like never before. Finally, the winds of global mergers and acquisitions are reshaping the landscape of Indian advertising.

But, amidst all the change, no one�s complaining. Not, when the transformation brings with it the kind of growth and money the industry lost to a recession that savaged their clients who squeezed their budgets in a spending purge.

However, what is fuelling excitement is the spurt in business. The industry is expected to better the 18 per cent growth it recorded in 1998-99. Guesstimates put it at a buoyant 22 per cent while individual agencies trot out rosier numbers of 40 to 45 per cent.

Things look even brighter this year. �From our micro-perspective, we are expecting to grow at 50 per cent,� says Sunil Sachdeva of Capital Advertising, the Rs 30-crore agency which handles accounts like LG Electronics� microwave oven, Electrolux�s washing machine and Associate Financial Services.

O & M Delhi has acquired a bunch of new accounts including J K Tyres, the number one radial tyre company which has an adspend of more than Rs 20 crore. Not a bad deal for a company that already has the big-ticket Pulse Polio account.

O & M Delhi�s Vibha Desai says the current surge is being driven by new-economy players like internet companies and old-time clients like automobile and pharmaceutical firms. Jayaram Easwaran of Maadhyam agrees with Desai, saying the bottomlines across industry are improving.

�The growth is driven by new businesses such as dotcom companies. But, the traditional clients are also bullish. Today, they take the initiative and demand market research and customer-satisfaction audits. The accent is no longer on promotional advertising. Clients understand the importance of brand-building,� says Easwaran.

Sachdeva says the feel-good factor is also at work. According to him, the downsizing in the corporate sector had left few assignments to be picked up. �Today, in contrast, you just cannot find professionally competent people any more,� he adds.

Apart from dotcoms and automobiles, some of the major adspends now cover pharmaceuticals, white goods like microwave ovens, televisions and audio equipment, financial advertising like mutual funds and IPOs and social marketing. Waiting in the wings are insurance firms and realtors.

There is but one element that appears to have pooped the big ad party: Yashwant Sinha�s budget. It has sparked a great deal of anxiety and apprehension about how companies affected by it will react. �It is best to wait a little before forecasting growth,� says a cautious Anita Nayyar of Lintas.    

Foreign Exchange
US $1	Rs 43.58	HK $1	Rs. 5.55*
UK �1	Rs 68.43	SW Fr 1	Rs. 25.75
Euro	Rs 42.99	Sing $1	Rs. 25.20
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Stock Indices

Sensex	5175.71	+46.49
BSE-100	3043.53	-13.30
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