31 scrips picked for futures
Difference over PSU offer price persists
BAT stake hike buzz sets ITC share afire
CESC loss mounts to Rs 22 cr in Q2
Sinha wishes away hurdles to reforms
Exports dip 1.95% to $ 20.96 bn in first half
Composite insurance new mantra
Ford unwraps Mondeo
UK lays welcome mat for Indian techies
Foreign Exchange, Bullion, Stock Indices

Mumbai, Nov. 1: 
The Securities and Exchange Board of India (Sebi) today approved the proposal to introduce individual stock futures contract on 31 scrips along with risk management measures to deter manipulation and concentration of market positions. These 31 scrips are the same where options contracts had already been allowed by Sebi.

The stock exchanges (SEs) would introduce futures contract in these scrips according to their preparedness at the earliest, Sebi chairman D.R. Mehta told newspersons after a five-hour long board meeting here.

Sebi has prescribed strict position limits at investor, broker and market level, he said adding, the board had given an �in principle� nod for individual stock futures at its meeting held on September 4.

Touching upon risk management, Mehta said at client level the gross open positions for all derivative contracts should not exceed one per cent of market capitalisation or five per cent of open position.

Mehta said these positions would be applicable for derivatives contracts at specific SEs for the 31 scrips. The trading members limit have been set at 7.5 per cent of the open positions or Rs 50 crore, whichever was higher for derivatives contract at a stock exchange, he said.

On market-wide limits for individual futures trade, Sebi chief said on all derivatives contracts, the limit would be below 30 times the average daily trading of shares during the previous calendar month in cash segment of the exchange or 10 per cent of shares held by non-promoters.

The individual stock futures contract would be settled in cash initially and would have a maximum maturity of 12 months.

However, the contracts with maturity of one, two or three months should be introduced initially, Mehta said.

The initial margins on individual stock futures would be computed on the basis of portfolio margining approach and these requirements are based on worse case scenario to cover 99 per cent of risk considering the price changes and volatility, he added.


Mumbai, Nov. 1: 
The government today explained why it wants an amendment in a takeover code provision that obliges a buyer of its shares in a PSU to pay market-related prices in an open offer after disinvestment.

Holding its brief before the Securities and Exchange Board of India (Sebi) was Pradeep Baijal, secretary in the ministry of disinvestment. Hours of convincing left no indication, however, that he had succeeded. From the way things progressed, it was apparent that few in the regulator�s office had bought the idea.

Sebi chairman D. R. Mehta refused comment on Baijal�s visit, except saying the board was apprised of the ministry�s stand. The ministry calls illogical the clause in the takeover code on offering market-related prices for a scrip. It argues that this reduces the money the government receives from disinvestment even as others, including retail investors, return home with big gains.

Sources close to Sebi confide that amending the takeover code would hurt the interests of small investors. �The fact that the PSUs are being divested is in the public domain. It is not limited to a few,� they said.

Since it is sensitive issue concerning a key ministry of the government, senior Sebi officials are unwilling to talk about it. But, there are signs that the finance ministry would be consulted on a final decision.


Mumbai, Nov. 1: 
The ITC share was set alight on bourses today as rumours swirled that Unit Trust of India (UTI) is in talks to sell its stake in the company to BAT.

The stock turned into the day�s flavour when investors thronged the counter in expectation of gains that could come their way if the Trust decides to sell.

The speculation, an old one among those who play the bourses, was renewed by a perception that the country�s largest mutual fund would have to sell stakes in select firms to tide over a crippling cash crunch.

UTI chief M. Damodaran admitted the buzz had reached him, but was discreet to the point of refusing to say anything. �Even I have heard the rumour. Other than this, I have no comments to make,� he said with a chuckle.

The disclaimer came at the end of a day during which funds and operators, fed on the BAT-UTI story, frantically chased ITC shares. Many in the market did not wait to see if there was a grain of truth in the whispers. On the contrary, they were convinced that the British firm had already closed what they saw as a strategic deal.

Institutions hold around 37 per cent in ITC, while BAT�s controls a little less than 40 per cent. The tobacco titan has said on several occasions it would raise its stake in the Calcutta-based company, but has not been able to do so in the face government�s opposition to the proposal.

The issue of the trust offloading its stake in companies has also come up earlier. The recent crisis over US-64 and its repercussions on the mutual fund major fuelled expectations that it would sell its way out of several firms, including the cigarette-to-hotels major.

The belief was reinforced by past experience that financial institutions often act like a consortia while taking pullout decisions. The sense was that they would offload their entire stake in a company together.

Opening at Rs 692, the ITC scrip vaulted to an intra-day high of Rs 747 before finishing at Rs 737.70 on volumes of 16.71 lakh and a turnover of Rs 120.12 crore. It gained Rs 50, or 7.27 per cent, over its previous finish.

ITC, seen until recently as a single-product cigarette firm, is now repositioning itself into an FMCG company, breaking into areas like greetings cards, food retailing and apparels.

It recently cleared a proposal for the merger for ITC Bhadrachalam with itself.


Nov. 1: 
CESC Limited, the RPG group flagship, plunged deeper into the red, with net loss in the quarter ended September 30 rising 22 per cent to Rs 22 crore, as against a net loss of Rs 18 crore in the previous corresponding quarter. The net sales of the company have, however, shown a marginal increase to Rs 533 crore, compared with Rs 504 crore in the previous year.

Saregama back in black

After suffering losses for two consecutive quarters music major Saregama India Ltd bounced back with a marginal Rs 34 lakh net profit for the quarter ended September 30, despite a 25 per cent dip in its overall net sales. The financial result for the second quarter, approved by the Saregama board at its meeting here today, showed net sales at Rs 30.16 crore against Rs 40.11 crore during the corresponding period last year. The net profit during the period was also much lower than Rs 3.10 crore recorded during the same period last year despite incurring a Rs 2.80 crore expense on account of VRS.

Rediff loss

Rediff.Com India Ltd has posted a net loss of $ 8.81 million for the second quarter ended September 30 compared with $ 0.11 million in the corresponding period last year. The company�s gross revenue in the reporting quarter stood at $ 6.08 million as against $ 1.34 million, Rediff said.


New Delhi, Nov. 1: 
Finance minister Yashwant Sinha today said the government was totally committed to the second phase of reforms in key areas like insurance and the apparent gridlock in Parliament over some key pieces of legislation should not be cause for despair.

�The pace of reforms should not be judged in small time slices of two or three months,� Sinha told the delegates at the sixth insurance summit organised here today by the Confederation of Indian Industry (CII).

He admitted that he hadn�t been able to make good on some of the promises made in his budget speech�notably the promise to introduce a Bill on labour reforms which, he said, was �one of the most difficult areas of reform�.

Sinha said the Bill to amend the Insurance Act had been lobbed to the standing committee in Parliament. �We have to work within a democratic framework where Parliament rules supreme. The agenda for the insurance sector is very clear, but it will take time for us to start the second generation reforms. We have to stick to democratic rules.�

In a later session, senior Congress leader Shivraj Patil, who is the chairman of the standing committee, was very cagey about spelling out the views of the committee on the insurance Bill which, among other things, seeks to create a body of independent insurance brokers who will peddle insurance solutions designed to suit the customers requirements rather than remain beholden to one insurance company and hawk only its products.

When pressed during a question-answer session, Patil said, �As I see it, there is no great difficulty in obtaining consensus on the insurance amendment bill.�

Earlier, Sinha said the insurance sector would emerge as one of the key drivers of the economy since it would harness the immense savings potential that existed within the household sector (where the savings rate is a spry 19.8 per cent) and channel sorely-needed cash into the infrastructure sector.

The finance minister admitted that the growth in the economy would not be as strong as forecast earlier in the year. �We have have had an exceptional year of challenges starting with the Gujarat quake. After September 11 attacks in the US, everything has become uncertain. But of one thing I am certain: the only way forward is the road up.�

�Given the resilience of the Indian economy to overcome the present challenges, we will achieve a growth which is satisfactory,� he said.

, adding higher savings in insurance and pension sectors were necessary for higher investments in infrastructure sector which boost the overall growth rate.

Responding to GE India chief Scott Bayman�s view that China was getting better as an investment destination every year even as India was falling behind, Sinha said this was inevitable because of the nature of the democratic institutions in India. By its very nature, democracy leads to decision-making delays because of parliamentary filibusters, but on the flip side it assures investors of a very stable business environment.

The finance minister said there were six areas of reforms in the insurance sector: greater transparency in operations, the development of good business practices, better regulation, the need to encourage market participants to adopt self-regulatory standards, strengthen the sector so that the contagion of market meltdowns doesn�t spread, and create electronically developed insurance products.


New Delhi, Nov 1: 
India�s export performance continued to reflect the global recession as it dipped by a further 1.95 per cent during the first six months of the fiscal year at $ 20.96 billion compared with $ 21.38 billion in the same period last year.

In rupee terms, exports were 3.07 per cent higher at Rs 98,773.66 crore compared with Rs 95,827.10 crore in April-September 2000-2001.

The trade deficit for the first half of the current fiscal stands at $ 4.96 billion despite a 8.1 per cent fall in oil imports. Oil imports for the period are valued at $ 7.63 billion as compared with imports valued at $8.3 billion in the corresponding period last year.

Non-oil imports during April-September 2001-02 are estimated at $ 18.3 billion, 6.6 per cent higher than the imports in the corresponding period last year which was valued at $ 17.17 billion.

Exports during September 2001 fell 8.61 per cent to $ 3.52 billion as against $ 3.85 billion during the same period last year.

Imports during April-September this year are valued at $ 25.93 billion, representing a growth of 1.81 per cent over the level of imports valued at $ 25.57 billion during the same period of previous year, according to official data released today.


New Delhi, Nov 1: 
You have heard of universal banking; now get ready for composite insurance�an overarching one-stop shop for life and general insurance with pension schemes thrown in somewhere in between.

Unlike development banks which have already started taking their first faltering steps in that direction, this isn�t going to happen overnight. But Insurance and Regulatory Development Authority chairman N. Rangachary sees that as a distinct possibility over a 10-year time horizon.

�The classification of business will probably not be defined the way we do it today as life and non-life sectors. It will depend on the risks and the time period covering those risks,� Rangachary said at the insurance summit.

Traditionally, life insurers cover long-time risks while general insurers typically give one-year covers. That has already started changing with some general insurers now covering three- to four-year risks. Over time, those risk horizons will expand, reckons Rangachary.

The IRDA chief also sees the possibility where insurers will be granted the freedom to fix premia on the risks they cover, rather like the way banks fix interest rates on deposits. Who knows -- over time the sharp divide between the banks and insurers themselves may blur, given the fact that insurers have already started wooing banks to hawk their products.

Rangachary admitted that one of the concerns of the regulatory authority was that private players were shying away from the health insurance sector as they were deterred by the stiff capital norms.

As in the case of life and general insurers, health insurers have to stump up Rs 100 crore. The IRDA has already received several representations urging it to halve the capital requirement for health insurers.

�We will take a decision on this in the next 18 months -- latest by March 2003. Much will depend on how the private sector has responded to the opening up of the sector and their performance,� the IRDA chief said.


Mumbai, Nov. 1: 
The wait is finally over. Ford India Ltd (FIL) today unveiled its much-talked-about Mondeo in Mumbai and expressed the desire to launch its most successful model in Europe in the rest of the country next month.

The Mondeo, manufactured at Ford�s plant in Genk near the Germany-Belgium border, will be imported as completely built units (CBUs) and be available to customers from mid-December, FIL managing director and president David Freidman told newsmen.

While Freidman declined to reveal the price tag, company sources estimated it could be between Rs 15-16 lakh.

The Mondeo, the first car to be imported by Ford India under the new �D� segment, is expected to have the �Accord� and �Sonata� and the yet-to-be-launched Skoda �Octavia� as its rivals.

The Mondeo, both in its petrol and diesel versions, comes in three colours and will be available at 19 Ford dealer outlets in 13 cities across the country, including Delhi, Calcutta, Pune, Bangalore, Chennai, Hyderabad, Ahmedabad, Kochi and Coimbatore, vice-president (marketing, sales and service) Randy Shockley said.

Though there has been a drop in sales by at least 14 per cent so far this year, Ford�s market share increased 2 per cent, Freidman said, adding the new model has been targeted at the �upper crust,� which includes top-bracket executives and industrialists in the 35-50 age group.

Shockley said the car has been designed to meet the tough Indian road and weather conditions.

On the �Ikon,� he said Ford India expects to maintain its production of 20,000 cars by December-end. So far it has sold more than 13,000 units in January-October, which includes exports to South Africa and Mexico.


Bangalore, Nov. 1: 
In a move that may lift the sagging spirits of the Indian IT industry, Britain today announced that it has liberalised visa norms for Indian professionals. Inaugurating Bang-alore.IT.Com 2001, a five-day technology show on Thursday, British e-commerce minister Douglas Alexander said professionals visiting the country for short periods on a regular basis will face a relaxed �multiple entry work permit� system from today.

The move will enable Indian IT professionals visit the UK for short hauls without having to obtain a visa for every visit. �Permit holders can now work as often as they wish,� he said, adding the permit will be valid for two years.

Alexander, however, told The Telegraph that the post-September 11 scenario will not result in tougher screening procedures for Indian software professionals.

Close on the heels of the British announcement, chief minister S.M. Krishna announced that the state has scrapped the 4 per cent sales tax and 12 per cent luxury tax on IT products.



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