Naik wants PS oil firms recast before selloff
Reforms will remain on course: Sinha
Satyam Infoway buys 25% in Cricinfo
Rediff, Aptech issues cleared
Liquidity support facility launched
Rupee dips, stock rally peters out
Foreign Exchange, Bullion, Stock Indices

New Delhi, June 5 
Petroleum minister Ram Naik today said public sector oil companies need to be restructured before the government proceeds with its divestment programme. He added that no decision had been taken on the proposal to divest 10 per cent of the equity in Indian Oil Corporation (IOC) in 2000-01.

�The Cabinet has not yet approved the divestment programme for 2000-01. Divestment of 10 per cent equity in IOC during current fiscal has not yet been cleared. The restructuring of oil PSUs is desirable before divestment so that companies fetch better value,� Naik said. The finance ministry and the divestment department had been pressing for divestment of oil PSUs prior to their restructuring.

The divestments in oil PSUs had been listed along with others for the current financial year and were taken up at a Cabinet meet recently. But no consensus could be reached with ministries unable to agree on the modalities.

Naik said the cabinet decided to defer IOC divestment in 1999-2000 as the market conditions were not favourable. He added no decision on divesting a stake in the Fortune 500 company was taken as government had not decided on a roadmap for divestment in the current fiscal.

The minister said that restructuring of oil PSUs, mainly those relating to mergers of stand-alone refineries with other marketing companies, would be completed during the current financial year.

�The hydrocarbon vision 2025 was finalised under the chairmanship of finance minister and it had clearly reflected the government stand � that stand-alone refineries should be restructured before divestment in oil PSUs.�

Naik said that government should provide a �strategic� status to oil PSUs for the purpose of divestment in view of their importance for country�s defence. �Oil PSUs should be treated like railways, atomic energy and defence. A decision needs to be taken as to what percentage of government holding is required in these companies for country�s defence,� he said.

On the occasion of Environment Day, the government also passed two control orders under the Essential Commodities Act. The Naphtha (acquisition, sale, storage, and prevention of use of automobile) Order, 2000 and The Solvent, Raffinate, Slop Order 2000. Naik said the purpose of these orders was to keep a close vigil on the use of naphtha and solvents and check their misuse.

He said, �I feel some anti-social elements are using naphtha and solvents to mix with transportation fuels thereby decreasing their efficiency and increasing pollution.�    

Bangalore, June 5 
Union finance minister Yashwant Sinha today emphatically declared that the economic reform process was irrevocable and the only way the country could sustain high rates of growth.

Addressing the members of the Federation of Karnataka Chambers of Commerce and Industry (FKCCI) here, he said with the country�s integration into the global economy, any effort to re-introduce the �licence, quota and permit Raj,� would only lead to the introduction of draconian laws.

Sinha said the outstanding feature of the second generation of reforms was that several state governments had joined the Centre in the reforms process as �full and equal partners, and now there is no stopping of the reforms programme.�

Regretting that the national consensus on the second phase of economic reforms was shrinking, he urged trade bodies to start a nationwide debate and forge a consensus.

This was needed as the country needs to maintain a growth rate of 8-10 per cent during the next decade to banish poverty and reduce unemployment.

Sinha said the Centre will meet chief ministers and state finance ministers on June 22 to review the progress in introducing value-added tax (VAT) from April next year. The implementation of the floor sales tax rates by states would also be discussed at the meeting.

Meanwhile, inaugurating a Global Investors Meet organised by the Karnataka government, Sinha announced that the Centre will set up a Foreign Investment Implementation Board (FIIB) to reduce delays in the flow of global capital.

The minister, however, declined to comment on the continuing slide in the rupee. �I will not make any comments on the value of the rupee,� Sinha said. The currency has been falling against the dollar in recent days and hitting new lows everyday.    

New Delhi, June 5 
Satyam Infoway (Sify) today announced the acquisition of a 25 per cent stake in Cricinfo Ltd, owners of the cricket website, in all-stock deal that will be funded by issuing American Depository shares (ADS) worth $37.5 million.

Of the $37.5 million worth ADS to be issued , $21.5 million will go to the seed investor, Indigo, while the remaining $16 million will go to the company towards subscription of fresh equity.

Satyam Infoway will then become the largest shareholder in the company. The number of shares issued will depend on the price Sify is quoting at on the Nasdaq on the day of issuance. This deal will marginally dilute the holdings of the promoter company, Satyam Computers, in Sify from 57 per cent to 56 per cent.

Cricinfo, the London-based cricket portal, has been valued at $150 million by its merchant banker Bank of America. Cricinfo�s operations currently generates 95 million page views per month .

R. Ramaraj, CEO and managing director of Sify, said this is one of the few portals which has earned revenue of about $3-4 million through advertising and e-commerce activity. The revenues are expected to grow at 400 per cent per annum.

Also under a strategic partnership,�s India-centric site will reside in Sify�s portal Satyamonline already has cricket on the web portal and this will be connected to cricinfo under a revenue sharing agreement. Sify will get 20 per cent of top-line revenue from advertising (15 per cent in the first two years) and a 30 per cent share in net earnings from e-commerce.

On Satyam Infoline�s future plans, Ramaraj said the company is likely to break even in the next couple of years. For 1999-2000, the company recorded revenues of Rs 67 crore and losses of Rs 20 crore. The company is listed on the Nasdaq, but it is open to the idea of getting a listing on the BSE.    

New Delhi, June 5 
The government today allowed a slew of infotech and communication companies including, Probity Research and Aptech to tap overseas markets to raise a whopping Rs 1400 crore.

Commerce and industry minister Murasoli Maran also approved proposals of Satyam Infoway to transfer shares worth Rs 217 crore to a foreign collaborator.

Other proposals cleared today included 50 per cent foreign stake worth Rs 860 crore in Indian Oil Corporation�s power project at Panipat and two BPL proposals for power projects envisaging a total foreign investment of Rs 350 crore.

Probity Research, which is in the business of providing information services to individual investors, banks and mutual funds, has been approved to issue ADRs worth about Rs 537.5 crore.

Aptech Ltd has been allowed to issue GDRs worth Rs 550 crore cleared by commerce and industry minister Murasoli Maran today.

FIPB has allowed Hinduja Finance Corporation�s subsidiary, Grant Investrade, to issue 49 per cent stake to Intel Pacific for a consideration of $ 49.23 million.

Grant Investrade will use the issue proceeds to increase its stake in Indusind Media & Communication (IMC) from the current level of 3.5 per cent to 6.7 per cent, thereby giving Intel Pacific an effective stake of 3.3 per cent in IMC, through a merger.

IMC, currently in the process of introducing value-added and broadband services to Indian cable TV homes, is the largest multisystem cable operator in the country with connectivity to around 4 million homes.

It has started delivering internet-on-cable services in Mumbai and Bangalore and proposes to shortly start delivering internet services in its remaining seven cities of operations.    

Mumbai, June 5 
The Reserve Bank of India today introduced the liquidity adjustment facility (LAF) by setting a cut-off yield of 9.05 per cent in the one day reverse repo auction for Rs 10 crore.

The LAF, which was announced by the apex bank in its recent credit policy, provides money at interest rates which is determined by the money market. This is against its earlier practice of providing money at fixed rates linked to the bank rate. The LAF is expected to nudge short-term money market interest rates into a corridor and impart greater stability, thus facilitating the emergence of a short-term rupee yield curve. Under the new system, LAF will be operated through repo auctions (an instrument through which RBI absorbs liquidity in the market) and reverse repos (instrument through which the RBI injects liquidity into the market). It is operated in such a way that if a bank is in need of funds above their entitlements, then the RBI would use the repo rate to determine the rate on such borrowings.

However, here variable repo auctions would be held (unlike the fixed repo auctions being held earlier) to determine the interest rates. In the first auction held under this facility today, the RBI received 13 bids for reverse repo auction amounting to Rs 940 crore. However, it only accepted one bid for Rs 10 crore, fixing a cut-off rate of 9.05 per cent.    

Mumbai, June 5 
The markets were swaying to different tunes today. Even as the Bombay Stock Exchange (BSE) sensex soared to a high of 4705.49, a wobbly rupee was clobbered to a new low of 44.67/68.

On Dalal Street, the initial fervour drove up select technology stocks but the rally lost steam in the post-noon session when operators started squaring off positions and sent shares tumbling.

Dealers said profit-booking by institutions also trimmed the early gains. The sensex, which gained over five per cent in the first half, closed at 4,531.53 in a 78.06-point leap. however, this was much lower than its intra-day peak of 4705.49.

Early in the day, bourses were buoyed by the 231-point upswing in the Nasdaq composite index over the last weekend, which took its total gains for the week to 608 points. Operators stretched their commitments, even as foreign institutional investors (FIIs) and local institutions booked profits.

Trading sentiment turned weak in the second half, influenced mainly by weak Nasdaq futures. The 200-point swing prompted many brokers to say the rally may be difficult to sustain. Another factor that was haunting operators was the end of account on the National Stock Exchange.

Wipro, Pentamedia Graphics and ICICI bank were among the ones locked in their 12 per cent upper-end circuit filter at the close. Satyam Computer was the top traded share, clocking a turnover of Rs 515.93 crore on a volume of Rs 3889.04 crore. Other top traded shares included Zee Telefilms (Rs 390.90 crore), Reliance (Rs 378.30 crore), Himachal Futuristic (Rs 372.62 crore) and Infosys Tech (Rs 324.76 crore).

Satyam Computer, however, ended the day losing Rs 148 at Rs 2470. HFCL dropped by Rs 10 at 1175, Dr Reddy�s Laboratories by Rs 46.60 at Rs 1279.50 and ITC by Rs 29.50. The gainers were Zee Telefilms, which jumped by Rs 44.50 at Rs 592, Reliance by Rs 4.05 at Rs 339.10, Infosys by Rs 483.25 at Rs 8008.25, Gujarat Ambuja by Rs 5.10 at Rs 192 and Lever by Rs 39.25 at Rs 2571.

In the forex market, the rupee�s slump was attributed to a massive demand for dollars from corporates. It opened at 44.63/64 but slipped to 44.67/68 after a scramble for greenbacks. It recovered briefly after speculation that the RBI would intervene by selling dollars in support through state-owned banks. At close, it had lost 5 paise over the weekend finish of 44.6150/6250.    

Foreign Exchange
US $1	Rs 44.67	HK $1	Rs 5.65*
UK �1	Rs 67.58	SW Fr 1	Rs 26.40*
Euro	Rs 42.16	Sing $1	Rs 25.60*
Yen 100	Rs 41.42	Aus $1	Rs 25.50*
*SBI TC buying rates; others are forex market closing rates


Calcutta		Bombay
Gold Std (10gm)	Rs 4515	Gold Std (10 gm)	Rs 4470
Gold 22 carat	Rs 4265	Gold 22 carat	Rs 4135
Silver bar (Kg)	Rs 7875	Silver (Kg)	Rs 7985
Silver portion	Rs 7975	Silver portion	Rs 7990

Stock Indices

Sensex	4531.53	+78.06
BSE-100	2223.86	+54.08
S&P CNX Nifty	1404.60	+15.35
Calcutta	123.04	+0.06
Skindia GDR	902.31	+22.25

Maintained by Web Development Company