Reliance takes a risky plunge
Mori’s fund pledge to scrap
Rupee closes at new low
Price cuts fail to boost Maruti July sales
Daewoo replaces top-end Matiz with cheaper version
Haldia-Allahabad cargo service by water from Oct
Magor faces Lovelock posers
Silicon Graphics offer for PC buffs
Berger set for Russia foray through buyout
Foreign Exchange, Bullion, Stock Indices

Mumbai, Aug 24 
The Reliance group today took its first tentative step into the domestic insurance sector when it filed two separate applications for an entry into the life insurance and general insurance segments.

Crucially, the group decided to stick by its earlier decision of making a foray into the life and general insurance sectors on its own instead of choosing a foreign partner. The group established two companies — Reliance General Insurance Ltd and Reliance Life Insurance Ltd — for the purpose.

The two companies will have an authorised capital of Rs 200 crore each. This is sharply higher than the norm prescribed by the Insurance Regulatory Authority of India (IRDA) that requires new entrants to have an authorised capital of at least Rs 100 crore.

Sources said the Reliance group filed both these applications with the IRDA in the capital today.

With this move, Reliance becomes the only domestic corporate to go it alone in the insurance sector. Sources indicated that the group is likely to continue with this structure in the future too.

However, it is learnt that Reliance has enlisted the expertise of two internationally renowned management firms to advise the group on its entry into the insurance sector.

Sources said the group hopes to leverage its brand equity and its nationwide distribution channel for the insurance venture. “The group will offer all the products to the consumer and will be launching across the country,” sources close to the group told The Telegraph.

The foray into the insurance business is one of the major diversification programmes proposed by the group. It has already announced a mammoth investment in the new economy arena.

Several leading banks, financial institutions and blue-chip corporates have already announced their entry into the insurance sector. Some of the banks and institutions that have announced such plans include ICICI Ltd which has tied up with Prudential. Similarly, the housing finance major, Housing Development Finance Corporation Ltd (HDFC) has tied up with Standard Life.

The others who have announced similar plans but are yet to zero in on a partner include State Bank of India and the Industrial Development Bank of India (IDBI). In the case of the latter it is expected that it would go along with Principal Financial Services (The Prinicipal) of the US to enter the insurance arena.

Among corporates, the Tatas have announced their intentions to enter the sector in association with AIG; the A V Birla group has entered into an agreement with the Canadian major, Sun Life to enter the life insurance sector and the Delhi-based Max India is tapping the sector with New York International Inc. Similarly, non-banking finance companies have tied up foreign partners: Alpic Finance has tied up with Allianz, 20th Century with Canada Life and Vysya Bank with ING.

With the opening up of the insurance sector, the government has started relaxing norms for investment by insurance companies. In a major relaxation, the government permitted general insurance companies to invest 65 per cent of the proceeds in highly rated corporate debt paper.

In the case of life insurance, the minimum investment of 50 per cent each in government and other approved securities will also include 25 per cent exposure to government securities.    

New Delhi, Aug 24 
Lakshmi is returning to India with sister Saraswati in tow, from the land of the rising sun. Japan is apparently paying India back for the idols it took some 800 years ago, including that of Lakshmi. And the payback, mostly in the form of costly educational initiatives, fellowships and co-operation in technical research, could be in millions, if not in billions of dollars.

Japanese Prime Minister Yoshiro Mori told a gathering of India’s top corporate honchos here that his island nation planned to spend some $ 15 billion over the next 5 years to try and eliminate the global digital divide, with much of it being focused on Asian countries like India.

Mori’s announcement came after the Federation of Indian Chambers of Commerce and Industry (Ficci) chief G.P. Goenka reminded the Premier that India had exported its gods and goddesses in the 13th century. While Lakshmi went there under the name of Seiten, Brahma went on to become Boten, Vishnu found place with the new name Naraenten and Shiva was rechristened Daijizaiten. Ganesha became Benzaiten and Saraswati metamorphosed into Kisshouten.

Obviously, Japan has a method to its madness. It wants the development spend to spur demand for Japanese computer exports world-wide. With China and India identified as among the two biggest potential information technology ware markets, these two can expect to benefit the most from this largesse.

Mori too made it clear Japan was keen to reap its investment in goodwill, with business ties. “The purpose of my visit to Bangalore was to see the current state of India’s information technology industry with my own eyes and to send a strong message of co-operation with India in that field.”

The Premier addressed a full house at Vigyan Bhawan, before boarding a chartered Boeing 737-400 flight for a mandatory trip to India’s royal ode to love — the Taj.

The Japanese Prime Minister was accompanied by the cream of Japanese industry, including the CEOs of Sony, NEC, Toshiba and NTT. Nearly a third of his 120-member strong delegation comprised business leaders.

Japanese business exports to India had been growing steadily till the Pokhran tests, but declined thereafter, a clear indicator that trade flows were often influenced by politics. Indian imports from Japan in fact fell from $ 2.4 billion in 1998 to $ 1.7 billion last year.

Most of the business leaders who came as part of the delegation are hoping Mori’s reconciliatory approach on the nuclear issue and pro-India stance on Kashmir will help their business prospects too.

NEC today took advantage of Mori’s visit to launch a new range of computers in the Indian market which promises voice over IP, open application interface, wireless and fusion networking, today. Toshiba too has similar plans up its sleeves.    

Mumbai, Aug 24 
The rupee today slumped by 13 paise to close at a new low of 45.91/92 per dollar on hectic demand for the US greenback from importers. With limited dollar supplies vis-a-vis its demand, forex circles expect the rupee to pierce the crucial 46 mark tomorrow if the current spate of buying persists.

Dealers now point out that several corporates have been left with no option but to buy dollars as the Reserve Bank of India’s (RBI) decision on the EEFC accounts failed to meet the markets’ expectations as far supplies of the greenback is concerned. “Demand for dollars may keep on coming for the next few sessions. If supplies of the US currency fail to keep pace with this demand, then the rupee may touch the 46 mark at least for a brief while,” said an analyst from e-Mecklai, a local forex firm.

Analysts aver that one encouraging signal that seems to be coming about pertains to the investments by foreign institutional investors (FII) into the country’s equity markets. While these investors have been net sellers till recently, the past sessions have revealed them to have been bringing about a inflow of dollars. In today’s trading, the rupee itself opened weak at 45.87/90 to a dollar against the previous finish of 45.78/79 per dollar. Thereafter, nationalised banks led by the State Bank of India (SBI) was seen buying the greenback on behalf of their corporate clients. This resulted in the rupee touching an intra-day low of 45.95/97 per dollar, a whisker away from the crucial 46 mark.

The rupee had earlier logged a record-low closing quote of Rs 45.89/90 on August 17 and had plunged to historic-lows of Rs 46.05/10 against the dollar in intraday deals on August 11. Dealers said that nervousness was evident in the market, as sustained heavy dollar demand from corporates and importers exerted renewed severe pressure on the rupee. The early dollar bids by the SBI also led the other banks to go long on the dollar, thus further weakening the rupee.

Infotech scrips gain

Bolstered by a smart recovery in the infotech counters following renewed buying by foreign institutional investors (FIIs), the sensex recouped most of Wednesday’s losses on the Bombay Stock Exchange (BSE) today.

At close, the benchmark index was at 4459.07 as against yesterday’s close of 4444.79, a small gain of 14.28 points. The BSE-100 index rose by 38.70 to 2267.03 compared with previous close of 2228.33.

Software bellwethers Satyam Computer and Infosys Tech were the most sought after stocks and mainly helped the sensex to close in positive territory.    

New Delhi, Aug 24 
Maruti Udyog’s reputation took another hard knock in July as sales plunged 26 per cent year-on-year even as Korean automakers Hyundai and Daewoo streaked ahead in a tough market that saw passenger car sales fall 13.3 per cent to 47,375 units from 54,641 units in the same month a year ago.

The country’s largest automaker was unable to derive any benefit from its round of price cuts in June. The result: its market share shrank to 58.39 per cent from 68.45 per cent a year ago.

Maruti Udyog sold 27,665 passenger car units in July this year against 37,404 units in the year-ago period, according to figures released by the Society of Indian Automobile Manufacturers (SIAM).

Hyundai Motor India Ltd firmed up its position in the market, recording a 46.78 per cent growth in sales at 7,265 units in July 2000, as against 4,949 units a year ago. Its market share for the month stood at 15.3 per cent as against 9 per cent a year earlier.

Daewoo Motors India Ltd (DMIL) moved up to the third slot registering a 46.73 per cent growth at 4,110 units as against 2,801 units. It cornered a marketshare of 8.6 per cent for the month.

Maruti Udyog also cut down production from 38,090 units to 28,953 units in July 2000, representing a 23.9 per cent decline.

The home grown carmaker Telco, however, registered sales of 3,583 units during the month, down 14.47 per cent from 4,189 units in the same month last year. Its marketshare stood at 7.5 per cent.

Ford India Ltd registered a near four-fold increase in sales at 1,502 units in July this year as against 302 units a year earlier.

Arch rival General Motors India Ltd also witnesses a surge in sales and ended the month with a 194 per cent growth at 648 units against 220 units in the same month a year ago.

Hindustan Motors, however, saw the prospects of its luxury sedan Lancer slipping, as sales slid by 4.7 per cent at 1,941 units. Honda SIEL Cars India Ltd also witnessed a major demand erosion for its mid-sized city at 606 units.    

New Delhi, Aug 24 
Daewoo Motors India Ltd (DMIL) today replaced its top-end versions of its popular Matiz with cheaper models, knocking up to Rs 30,000 off the price tag, in an attempt to ratchet up sales in an extremely competitive market. The company hopes to sell about 80,000 units by March 2001.

The automaker also decided to put off its foray into the top-end of the car segment till the restructuring exercise at its parent company — Daewoo Motor Company — is finalised, DMIL chairman SG Awasthi told reporters. Daewoo had earlier announced plans to launch Nubira-II in November this year with a sticker price of Rs 11 lakh.

The old Matiz SE, which carried an ex-showroom (Delhi) price tag of Rs 3.74 lakh, has been scrapped from its list of variants and replaced with Matiz SG which will sport a price of Rs 3.43 lakh. The Matiz SP, which was priced at Rs.3.96 lakh, has been replaced by Matiz SA which will now be available for Rs. 3.95 lakh with a new music system and a special security system.

Awasthy said, “We have introduced these two models based on the feedback from our market study.

‘’We have removed certain features like the music system, rear window defogger and power windows from the SE model and introduced a power-steering in the SG version,” he added.    

Calcutta, Aug 24 
While several of its public sector brethren face the spectre of going out of business, the public sector Inland Waterways Authority of India has spotted business potential where none seem to exist.

Surface transport minister Rajnath Singh today told an all-party delegation of West Bengal legislators in Delhi that the government will launch waterway cargo transport between Haldia and Allahabad from October 1.

The IWAI move to launch a regular cargo service on the National Waterway-I Calcutta-Allahabad route has every indication of coming a cropper. This is primarily because inland water transportation on this route is economically unviable.

The vessel, which is scheduled to leave Haldia once a month, will begin its return journey from Allahabad after three weeks. Starting from Haldia the route covers Farrakka, Bhagalpur, Monghyr, Simaria, Patna, Balia, Varanasi and Mirjapur ports enroute to Allahabad.

With the highly efficient rail and road network between Calcutta and Allahabad, inland water transportation on this route becomes totally uneconomic for general cargo, according to officials of the Central Inland Water Transport Corporation (CIWTC), another concern under the MoST.

Against a maximum of four days by rail and two days by road, the riverine route takes 15-18 days to cover the distance.

Further, the cost per tonne to a shipper from Calcutta to Allahabad is around Rs 450 per tonne via railway and Rs 800 by truck, whereas the riverine transportation charge is around Rs 550 per tonne. Adding the local transportation costs at both ends, the plan seems destined for a watery end.

What is more interesting is that cargo service itself is beyond the IWAI’s brief. Its primary job is to create and improve the infrastructure on the National Waterways I, Calcutta-Allahabad and NW II, Dhubri-Sadia in Assam.

Its other job is river conservancy. In fact, last year when the IWAI secured an order for transporting stones from Allahabad to Narayangunj, Bangladesh, it was the CIWTC which executed the job on its behalf.    

Calcutta, Aug 24 
The auditors of Williamson Magor have expressed doubts about certain funds deployment of the company.

In its report on the accounts of B.M. Khaitan-controlled company for 1999-2000, Lovelock and Lewes have raised questions on the recoverability of certain advances and intercorporate deposits amounting to Rs 41 crore.

The principal activities of Williamson Magor are trading, investments, property owning and tea warehousing.

The auditing firm has expressed its inability to comment on the recoverability of an advance of Rs 6.40 crore made towards acquisition of international brands.

It has also questioned certain intercorporate deposits and advances amounting to Rs 34.22 crore (including accrued interests) in view of continuing delay in interest payment, poor financial position of companies and non-delivery of contractual obligations.

The auditors have observed that the company has not made provisioning for an amount of Rs 3.34 crore recoverable from Kilburn Electricals Limited. Kilburn Electricals had taken over the electrical unit at Madras from the company.

Williamson Magor has said that the matter is under litigation and no future adjustment in this regard is ascertainable.

Lovelock and Lewes has further commented that Williamson Magor has not made any provision in regard to the value of investments, debtors and loans and advances totalling Rs 6.85 crore relating to an unnamed company against which liquidation proceedings have been initiated as per court order.

The company has provided its partly-owned subsidiary Woodside Parks Limited a loan of Rs 15.57 crore which remain outstanding at the end of the 1999-2000 fiscal. It holds an equity investment of Rs 5.61 crore in Woodside Parks.

Williamson Magor’s investments and other finances made towards supporting its subsidiary were for developing a property at 22 Camac Street for commercial use and sale of office spaces.

“There has been a long delay in booking of spaces and collection of advance sale proceeds to finance the construction work in view of the continued depression in the real estate market. In the recent months some space has been sold,” a senior official of the company said.    

New Delhi, Aug 24 
PC users who end up with systems that have more features than what they require while at the same time facing the peril of systems turning obsolete in this era of fast changing technology, can now breathe easy.

Silicon Graphics International (SGI) has come up with a new technology that allows high-end computing system users to expand and upgrade only those elements that they need. It also enables them to add new technologies as they come up.

The modular brick style technology is called NUMAflex, which SGI has used to launch two new families of products called the SGI Origin 3000 series and the SGI Onyx 3000 series.

While the technology was first unveiled by its California headquarters a month ago, SGI-India launched the product today.

In NUMAflex, each drawer-like module in a system, having specific functions can be linked through the patented SGI high-speed system interconnect, to many other bricks of varying types to make a totally customised configuration. The same bricks depending on their configuration can be used for expanding high performance computing needs.    

Calcutta, Aug 24 
Berger India Pvt Ltd, the Calcutta-based second largest domestic paint manufacturer, plans to make a foray into the Russian market through an acquisition which is supposed to be the stepping stone for the company in its endeavour to enter the European paints market.

The company already has a presence in the Russian market, having a 50 per cent stake in Fabulac, one of the established players in the paint industry there.

Berger India is also planning an acquisition in Sri Lanka, where the paints market is lucrative because of the higher per capita consumption of paints compared with India. The company has appointed merchant bankers there, to implement their plans.

As the trade between the SAARC countries are scheduled to be unfettered from trade barriers by the next two years, Berger India is heading for expansion into Myanmar and the other SAARC countries excepting Bhutan and Maldives where the market size is too small.

The company is also examining the feasibility of entering Pakistan, provided there is sufficient improvement in the Indo-Pak diplomatic ties.

The domestic paint major has acquired a 100 per cent stake in Jenson & Nicholson (Nepal) Pvt Ltd, a 100 per cent subsidiary of Jenson & Nicholson (India) Pvt Ltd. But it has no future plans of acquiring control of the Indian counterpart.

Berger India is also considering the feasibility of roping in a domestic strategic partner in the field of industrial paints. The market is expected to rise in the near future following the trends of the developed countries.    


Foreign Exchange

US $1	Rs. 45.92	HK $1	Rs. 5.80*
UK £1	Rs. 67.96	SW Fr 1	Rs. 26.30*
Euro	Rs. 41.38	Sing $1	Rs. 26.30*
Yen 100	Rs. 42.85	Aus $1	Rs. 25.95*
*SBI TC buying rates; others are forex market closing rates


Calcutta	Bombay

Gold Std (10gm)	Rs. 4545	Gold Std (10 gm	4500
Gold 22 carat	Rs. 4290	Gold 22 carat	4160
Silver bar (Kg)	Rs.7800	Silver (Kg)	7930
Silver portion	Rs. 7900	Silver portion	7935

Stock Indices

Sensex	4459.07		+14.28
BSE-100	2267.03		+38.70
S&P CNX Nifty	1386.95		+0.90
Calcutta	120.80		-1.09
Skindia GDRNA	776.40		-2.52

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