RBI sets stage for bank rate cut
Badla ban fear sends jitters,sensex tumbles
Operations at Hind Lever factory to resume soon
Decks cleared for options & futures
WiLL nitty-gritty left to regulator
Jogi still keen to buy Balco but Centre says no
CII to strive for 6.6% growth
Transfer pricing rules soon
Gujarat Ambuja net profit jumps 32%
Foreign Exchange, Bullion, Stock Indices

Mumbai, April 27: 
In a move that is widely being seen as a precursor to a fresh cut in the bank rate and even lower interest rate regime, the Reserve Bank of India (RBI) today slashed the repo rate by 25 basis points to 6.75 per cent.

The repo rate, the shortened name for repurchase rate, determines the cost of banks� borrowing from the Reserve Bank. The repo is the instrument through which the central bank mops up the excess liquidity within the system.

Bankers and money market analysts are now anticipating a 25-50 basis point cut in the bank rate in the immediate term. Optimistic circles expect the central bank to announce such a cut in May whereas more cautious observers feel that it may occur before June.

The bank rate, which currently stands at 7 per cent, is the rate at which the apex bank offers refinance to commercial banks and primary dealers in government securities and is used as a benchmark by commercial banks to set their interest rate on advances.

�With the corridor for overnight rates moving down due to the cut in repo rate, it sends a strong signal for a bank rate cut,� said a senior banker reflecting the upbeat mood among the community.

Although the RBI refrained from making any changes either in the bank rate or the cash reserve ratio (CRR) in the recent monetary and credit policy, expectations of an easy interest rate regime gathered pace after the central bank expressed its preference for lower rates.

Speculation about such a cut was generated after the US Federal Reserve chairman, Alan Greenspan made a surprise cut last week, which was the fourth such reduction in the current year.

�We have been expecting a cut in bank rate over the past week. Despite today�s reduction in the repo rate, we still expect the central bank to come up with a 50 basis points cut by June,�� said Sanjit Singh, senior debt analyst at ICICI Securities.

The cut in repo rate by the RBI came at the auction held today when it accepted five bids for Rs 110 crore at a rate of 6.75 per cent, down from 7 per cent at the last auction. The RBI received eight applications for Rs 5,610 crore.

The RBI�s decision on repo rates, which serves as a corridor for the inter-bank call money market (call rates do not breach the repo rate) saw inter-bank rates dipping by over 40 basis points to around 6.90 per cent against the previous close of 7.30 per cent.

The impact was also felt in the secondary debt market with securities at the long-end rallying by 70 paise to Re 1.

However, the lower call rates is not expected to last for long in view of the upcoming auction of Rs 6,000 crore. Liquidity is slated to fall under further pressure due to two more auctions slated for the month of May which could suck out Rs 14,000 crore from the system.

Some money market analysts, however, feel that the reduction in repo rates has been made to assist the changes made by the RBI in the refinance facilities. In the recently announced monetary and credit policy, the apex bank made changes in the standing liquidity facilities available to the system when it split the standing liquidity facilities available from the apex bank into normal facility and �back stop� facility. The normal facility would be provided at the bank rate while the �back stop� through a variable rate linked with a repo rate/NSE-MIBOR.

Earlier, while refinance was available at two levels of 7 per cent which was the bank rate and another two percentage points above the bank rate, the RBI through its credit policy said that it would provide liquidity support to market participants at market-determined rates.

There are others, however, who do not read too much into the reduction in repo rates.

�The repo rate is a means of managing liquidity rather than giving interest rate signals and is determined by market forces. On the other hand, any difference in the bank rate, is the RBI�s view on interest rates,� said a senior banker.


Mumbai, April 27: 
The proposal of the Securities and Exchange Board of India (Sebi)-appointed committee to ban carry-forward trading from July 2, sent tremors across the bourses today, as the BSE benchmark index lay mauled a 134 points.

The Bombay Stock Exchange (BSE) sensex was grounded right from the first bell, opening with a wide downside gap of 168 points to 3389.22, as major momentum stocks met with a flurry of sale orders on the last day of the current settlement.

It later dipped to a low of 3357.83, recovering only marginally to close at 3422.76, as against the previous day�s close of 3557.19, a whopping loss of 134.43 points or 3.78 per cent.

Broking circles affiliated to the premier bourses were highly critical of the decision to introduce rolling settlement in all specified stocks from July 2.

Brokers, who were used to the carry-forward system, said Sebi�s decision was disastrous and is likely to strangle the market, as volumes will decline drastically and indices will turn volatile.

�Sentiments remained negative and the outlook is very uncertain,� said Ramesh Damani, a prominent BSE broker.

Volumes were extremely low at Rs 1173.32 crore, compared with yesterday�s turnover of Rs 1490.13 crore.

Moreover, operators were eager to get out of counters like Reliance Industries, Reliance Petroleum, Infosys Technologies and Glaxo, in view of the impending book closures in the counters from the new settlement.

While foreign institutional investors (FIIs) remained mute spectators to the turbulence that brought back memories of Black Friday, domestic institutions and mutual funds, which reportedly had booked profits in the two previous sessions, made a feeble attempt to salvage the situation by picking up old economy stocks at lower levels.

In the specified group, only 13 scrips, including six index counters registered moderate gains on buying by domestic financial institutions.

Among the 162 losers, HFCL, Global Tele, Zee Telefilms, DSQ Software, PSI Data and Aptech were locked in the 16 per cent lower circuit filter at close.

Infosys recorded the highest turnover of Rs 113.54 crore followed by Satyam Computer at Rs 104.07 crore, Reliance with Rs 76.59 crore, Wipro at Rs 73.25 crore and Digital Equipment with Rs 57.36 crore.


Calcutta, April 27: 
Production at Hindustan Lever Ltd�s (HLL) Garden Reach factory is likely to resume shortly, as the crisis, which erupted with the agitation of the CITU-affiliated Thika Majdoor Union, is expected to be resolved soon.

Chief minister Buddhadev Bhattacharjee said the problems in HLL�s soap and detergent will be resolved by tomorrow.

�I have spoken to the trade union leaders and my officials are in touch with the management. The problems will be resolved tomorrow,� Bhattacharjee said.

Confirming the development, Debashis Roy, manager, corporate communications, said discussions with the agitating union have evoked a positive response and the dispute may be sorted out very soon.

�We held two sittings with the concerned union and discussions are on.�

The seven workers, who were debarred from entering the factory by the HLL management on disciplinary grounds are also likely to be allowed to resume work.

The union had launched an agitation on April 25 to protest the suspension of seven contract labourers, which saw the factory on the verge of a complete shutdown.

The problem originated from the company�s inability to successfully conclude a wage revision agreement, negotiations for which had been going on for the past three months.

Roy said the state government had intervened very quickly to restore proper industrial relations in the factory.

�We have very strong faith in the state government and hope it will continue its support to maintain a proper industrial culture in the state,� he said.


Mumbai, April 27: 
Speculators may grudge the Securities and Exchange Board of India�s (Sebi) decision to snuff out carry-forward deals from July 2, but investors who use this mode of trading to hedge positions can do so with options and futures which will be introduced in a handful of stocks.

By the time the proposed ban on carry-forward instruments like National Stock Exchange�s Automated Lending and Borrowing Mechanism (ALBM) and Bombay Stock Exchange�s Borrowing and Lending of Securities System (BLESS) takes effect, facilities for futures and options will be ready.

Sebi chairman D.R. Mehta said stock derivatives will be available by July 2 in 10-15 scrips to be selected on the basis of liquidity. The other condition will be that these shares should be part of the BSE-30 sensex or the NSE CNX Nifty-50.

The Sebi-constituted committee on rolling settlement, headed by full-time board member J R Varma with representatives from key bourses, was against a net settlement system supposed to be introduced as part of rolling settlement. The Bombay and National stock exchanges already conduct mock trading in rolling carry-forward mode in 15 stocks.

Sebi said on Thursday a phased programme it has drawn up for the introduction of derivative products, such as options and futures, from July 2 will require it to work with exchanges. These products can be used for hedging purposes currently being served by deferral instruments, but dealers fear the ban will drain out liquidity from the market.

The committee on rolling settlement proposed a ban on approved deferral products like ALBM, BLESS, MCFS, CFRS, ALBRS, CNS in all scrips from July 2. The capital market regulator said its board will discuss the recommendations which have been made by the panel at its next meeting.


New Delhi, April 27: 
Prime Minister Atal Bihari Vajpayee has accepted the proposal that Telecom Regulatory Authority of India (Trai) should have the final say on inter-connectivity charges and revenue-sharing in limited telecom mobility. The suggestion was made by the Group on Telecom and IT (GoT-IT), which felt that the two sticking points should be resolved by a regulator which has fixed the portion of revenues cellular operators share with long-distance carriers.

The group recommended that the present ratio of 60:40 for basic operators should be reduced to 5:95 if they offer WiLL-based limited mobility to subscribers through hand-held sets.

Trai has said earlier that limited mobility is part of the basic service licence and, therefore, should not have a different entry fee, revenue share/licence fee. GoT-IT wants the regulator to decide whether an entry fee should be levied on WiLL services under the Trai Act.

�These issues fall within the jurisdiction of Trai and the Telecom Disputes Settlement Appellate Tribunal (TDSAT). Our suggestions have been made under the terms of reference given to us, and take into account observations made by TDSAT in its April 17 order,� the group said in its report. The tribunal, which had been waiting for the government to settle the row, will hear the issue again on May 9.

Sources in the communications ministry said the minister and Telecom Commission will decide next week whether Trai should review the recommendation it made earlier.

Rajive Mehrotra, chairman Association of Basic Telecom Operators, reiterated that existing licences entitle member-firms to limited mobility. �Unlike cellular operators, we will offer handset limited mobility without airtime charges.�

T. V. Ramachandran, executive vice-chairman of Cellular Operators Association of India (COAI), said his forum will mount a legal offensive, possibly in the Supreme Court, if the issue is not settled at the tribunal.


New Delhi, April 27: 
Chattisgarh chief minister Ajit Jogi today again attacked the Balco selloff, terming it as �smacking of corruption� and reiterating his offer to buy the aluminium company if the Centre is willing.

His offer, of course, found no takers. Disinvestment minister Arun Shourie made it clear today in Parliament that the Centre had no such desire.

�The government has already sold the shares to the strategic partner. The question of selling the shares once again to the state of Chhattisgarh does not arise,� he said.

Shourie absented himself from a plan panel meeting today that was convened to decide on Chattisgarh�s annual plan size. Jogi, who attended the meeting, also decided not to call on Shourie whose office was on the same floor where the meeting was held.

Terming the deal as �dubious�, he said the sale was illegal because it was against the law of the land to transfer tribal land to non-tribal entrepreneurs. Alleging that his state was never consulted on the issue, Jogi said he would continue to sympathise with the Balco workers as he felt their cause was just.


New Delhi, April 27: 
The Confederation of Indian Industry (CII) will actively push for a 6.6 per cent growth in gross domestic product (GDP) during the current financial year that would set the stage for 7 per cent growth thereafter.

Making the immediate objective of the apex chamber clear, Sanjiv Goenka, in his first media interaction as the president of CII, said �at the time of recession if India can achieve a growth rate of 6.6-7 per cent it will be one of the two highest growing countries.�

In order to achieve the 6.6 per cent growth, CII will focus on five identified key areas�enhanced competitiveness, infrastructure and regulatory reforms, focus on banks and capital markets, governance, privatisation and labour reforms and learning the tricks of the WTO game.

Goenka, who is also the vice-chairman of RPG Enterprises, said India should understand the implications of WTO and try to become more competitive by slashing production costs.

CII�s initiatives for the current year will be to focus on aspects that are internal to companies and those that concern the external world and policy changes.

Goenka said industrial scenario, at present, is bleak but �the slowdown of the American economy can have a positive impact on Indian economy as foreign investors could turn to India as a marketing and investing base.�

He called for complete transparency in corporate governance and said, �we will definitely encourage our members to follow the rules.�

Talking about the stock market, Goenka said, �a task force will be formed that will make an objective assessment of the regulatory performance of the Securities and Exchange Board of India.�

Goenka suggested that the government should raise the salaries and perks of ministers and other politicians in order to bring down the level of corruption.

He wanted Parliament to be treated like a multinational company. While arguing that �pay packets of ministers should be at par with the highest multinational corporate chief,� the Calcutta-based industrialist made it clear that �they (the ministers) must deliver similar kind of services.�

�Like profit-making corporations, Parliament too should encourage quality and better talent and go in for staff cuts,� he added.

While outlining new initiatives, Goenka said CII will identify six national infrastructure projects, track their progress and report it every quarter in the national press to institute a system of accountability in implementation of infrastructure projects.

The confederation will also help develop a roadmap for convergence and recommend policies on power sector reforms. It will prepare a policy paper on a new restructuring funds for taking forward PSU reforms.

On the internal front, Goenka said CII would strengthen its corporate advisory services. These involve saving energy costs, TPM, TQM, lean production, QS 9000, greening the supply chain, environment audits and waste minimisation he added.


New Delhi April 27: 
The new transfer pricing guidelines will be announced in two to three months, revenue secretary S. Narayan said. Addressing a Ficci-seminar today, Narayan said the draft will be sent to chambers for comment and feedback before being given a final shape.

In order to check the transfer of profits out of the country by multinationals, Narayan said income generated by companies in India must be taxed here. He said clear and transparent documentation, and verifications by the assessing officer, are two steps to remove the anomaly in the matter.


Mumbai, April 27: 
Gujarat Ambuja Cements Ltd (GACL) has posted a 32 per cent rise in net profit at Rs 65.69 crore for the third quarter of the financial year ending March 31 compared with Rs 49.90 crore in the corresponding period of the previous year.

During the quarter, GACL sold 15.42 lakh tonnes of cement against 14.98 lakh tonnes in the corresponding previous quarter. The cement major�s turnover increased by 17 per cent at Rs 386.25 crore against Rs 331.38 crore.

GACL said that the profit was arrived at after charging much higher interest of Rs 31.95 crore against Rs 22.81 crore and depreciation at Rs 34.38 crore (Rs 30.90 crore).

With the commission of its half million tonne cement grinding unit at Bhatinda, Punjab, GACL will be able to cater to the south Punjab market. Further, work on its 2 million tonne cement plant at Chandrapur, Maharashtra is expected to be completed in December, 2001.

Hero Honda net up

Hero Honda Motors Ltd reported a 28.5 per cent rise in net profit at Rs 246.87 crore during 2000-01 compared with Rs 192.08 crore last fiscal. The company announced a dividend of 150 per cent, said Ravi Sud, director finance.

Net revenue increased by 40.7 per cent at Rs 3192.96 crore during the fiscal over Rs 2268.56 crore in the previous fiscal, he said.

VST net at Rs 27.5 cr

VST Industries recorded a net profit of Rs 27.50 crore in the last financial year compared with Rs 15.70 crore in the previous fiscal.

The turnover of the company also increased to Rs 755.82 crore, from Rs 745.98 crore in 1999-2000.

Managing director Raymond Noronha said the strong restructuring efforts to concentrate on the core business of cigarettes has paid handsome dividends for the second time.

According to the audited financial results, VST has incurred an expenditure of Rs 717.13 crore, provided Rs 3.59 crore towards interest charges and Rs 5.02 crores for depreciation.

Hoechst Marion Roussel

Hoechst Marion Roussel Ltd has recorded a 59.84 per cent rise in net profit for the quarter ending March 31, 2001.

Net profit jumped to Rs 21.1 crore against Rs 13.2 crore in the corresponding period of the previous year.

During the reporting quarter, net sales of the company rose to Rs 129.8 crore over last year�s Rs 117.2 crore. Hoechst said that the higher revenue was driven by growth of the strategic products and export initiatives. It is now planning aggressive growth in the new products area.

For the quarter, net sales of the company shot up by 15 per cent to Rs 117.8 crore against Rs 102.8 crore. Other income stood at Rs 4 crore.



Foreign Exchange

US $1	Rs.46.85	HK $1	Rs. 5.95*
UK �1	Rs.67.57	SW Fr 1	Rs. 27.20*
Euro	Rs.42.30	Sing $1	Rs. 25.40*
Yen 100	Rs.37.82	Aus $1	Rs. 23.70*
*SBI TC buying rates; others are forex market closing rates


Calcutta		Bombay

Gold Std (10gm)	Rs.4400	Gold Std(10 gm)	Rs.4320
Gold 22 carat	Rs.4155	Gold 22 carat	Rs.3995
Silver bar (Kg)	Rs.7425	Silver (Kg)	Rs.7435
Silver portion	Rs.7525	Silver portion	Rs.7440

Stock Indices

Sensex			3422.76		-134.43
BSE-100			1624.76		- 81.57
S&P CNX Nifty	        1101.30 	- 42.45
Calcutta	 	117.92		- 3.05
Skindia GDR	 	638.82		+ 2.18

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