Stocks swoon, but survive scare
Industry puts up a brave front
HPL promoters ready to live with Indian Oil
Mirant flashes quit India signal
Nufarm to pick up 14% in Excel unit
Turner tunes in to Zee venture
Retailers lobby for 100% FDI
Foreign Exchange, Bullion, Stock Indices

Mumbai, Dec. 13: 
Shots fired during the terrorists� attack on Parliament minutes before noon ricocheted in the markets today, sending the Bombay Stock Exchange (BSE) sensex on a gut-wrenching roller-coaster, scalding the rupee and clobbering government securities.

On Dalal Street, skittish investors swarmed the counters to sell shares once they heard about the daring raid on the country�s seat of power and the skirmishes that made Delhi and its legislators look so vulnerable.

The 30-share BSE sensex had lost as much as 132 points at one point in the day, felled by a selling wave from foreign institutional investors and speculators. The losses, which came after strong start, rocked exchanges, which turned into a sellers� refuge and a panic zone.

The 30-share benchmark index opened higher at 3412.59 against its previous close of 3412.15, and hovered in the positive territory during the initial hours of trading as buying in a few shares picked up. It hit the day�s high of 3440.52, but plunged when reports of the assault by a suicide squad started to filter through.

The mood suddenly turned into one of fear and foreboding, unleashing a selling wave in almost all counters. �The market had just heard of the attack and the security forces� retaliation. With little information coming out and fears about the safety of legislators and ministers, the rush to offload stocks was overpowering,� a broker said.

Bruised shares, many of which sway the sensex in a big way, took the index below the 3400-mark to the day�s low of 3308.86. The tide turned when there was confirmation that the MPs had come out unscathed. Local institutions returned to the trading ring, picking up stocks like Hind Lever, ITC and Gujarat Ambuja among a few others. This helped the sensex recover on home run and close with a smaller loss of 23.56 points at 3388.59.

In the money market, prices of government securities slumped by more than 90 paise across the board after a mild rally in the first few hours of trading.

For instance, yields � which go up as prices rise, and vice versa � shot up on the benchmark 10-year 2011 11.50 per cent security as its price crashed to Rs 123.50 from Rs 124.25 recorded earlier in the session.

In the forex market, the rupee lost 5 paise against the dollar, finishing at 47.8550/8650 against its previous close of 47.8050. It opened weak at 47.82/83 earlier in the day.


Dec. 13: 
After 911, it�s 1213: it is rare to find such an uncanny sequence of numbers so deeply etched in collective consciousness.

After New York�s World Trade Center collapsed in a huge fireball of dust and smoke back in September when terrorists slammed planes into the most enduring symbol of capitalism in the world, few would have imagined that the foundations of another seemingly-invincible symbol�this one of the world�s largest democracy�would be so shaken by another band of desperadoes. Until 1213.

But on Thursday, Indian industry�which is already trying desperately to fight its way out of a crippling slowdown that has exacerbated since September 11�tried to put on a brave front in the face of fresh adversity.

�Such terrorist attacks will not affect business and industry,� said CII president Sanjeev Goenka even as he struck a business-as-usual demeanour.

CII said the meetings of some of its councils would be held as scheduled in Calcutta on December 14 and 15. The mood in industry was grim, but was tinged by a resolve not to buckle under the withering effects of this �terrorism thing�.

�The deplorable attack on the largest democratic institution in the world should be taken seriously,� Goenka said.

Expressing his shock at the attacks, Goenka pledged industry�s support to the government to face the challenge that the nation was confronted with.

Emphasising the need to build cohesion on the political front and in civil society, he said there was need for quick all-party consensus on an appropriate legislation to combat terrorism.

Federation of Indian Chambers of Commerce & Industry (Ficci) president R.S. Lodha said the business community would not allow today�s unprecedented terrorist attack to affect the morale of the Indian business.

Industry has had to fight the terrorists before, most notably in the north-east where the tea industry has faced the brunt of its ferocity. That baptism by fire has strengthened its resolve to join in the efforts to combat terrorism.

Lodha said there was need to beef up the security and intelligence network in the country. He went a step further and said Ficci�s 500 affiliated chambers and associations were ready to take on any responsibility to help improve security in the country.

�Business prospers only in a climate of certainty and stability. In the short term, the reaction has been one of panic. Hopefully, normalcy will return,� said Rahul Bajaj.

�My view is that not enough is known who is behind the attack. A couple of organisations and the President of Pakistan have condemned the attack, which is heartening. From the face of it, I believe it was poorly organised and our security personnel were alert. God forbid, you can imagine what would have happened if the attack was well planned. The stock markets initially moved southwards as businessmen were apprehensive,� he added.

Assocham president Raghu Mody and several prominent industrialists appealed to the business community to make a special effort to keep their businesses going and shore up confidence in the market.

He urged the government to review and respond with the sternest of measures to curb terrorism and take appropriate steps to instill confidence among the common people.

Fieo vice-president S.K. Saraf, however, said the incident would affect Indian exports and overseas investors.


Calcutta, Dec. 13: 
The three promoters of Haldia Petrochemicals Limited (HPL), including Purnendu Chatterjee, have arrived at a consensus to invite Indian Oil Corporation (IOC) as the fourth equity partner.

The agreement was reached last Friday in IOC chairman M. A. Pathan�s Delhi office at a meeting attended by Chatterjee, state commerce and industry secretary Jawhar Sircar, Firdose Vandrevala, deputy MD of Tisco (new and allied business) and HPL chairman Tarun Das.

A consensus means a willingness to hand over management control of Haldia Petro to the state-owned oil major, though neither the state government, nor The Chatterjee Group (TCG) would say so at this stage.

Senior IOC officials expressed happiness that the long-festering issue could be resolved to mutual satisfaction.

�It is a win-win situation for us. We are happy over the recent developments,� they told The Telegraph.

IOC has now asked KPMG Peat Marwick to work out a new proposal for investing in HPL. �The state government had asked us to take a fresh look at the project�s cost and equity. We have told KPMG that the new proposal should be based on the fact that an agreement between the promoters has emerged. What is clear is that IOC will have management control,� they added.

The consultant had earlier carried out a due diligence of HPL and said it was worth investing in. IOC�s first proposal fixed the project cost of HPL at Rs 4,800 crore and equity at Rs 1,480 crore. The state government, in contrast, fixed the project cost at Rs 5,600 crore for a company with a Rs 2,000-crore authorised share capital.

Sources say the deadlock was broken after Chatterjee, who has been opposed to giving IOC a 26 per cent stake with management control, was persuaded to accept the proposition.

�There was an understanding that a mutually acceptable formula must be worked out immediately. Last week�s agreement helped expand the scope of discussions.,� the sources said.

IOC�s new proposal is likely to be ready in a week or two, but the company has asked the state government to work out ways of stake acquisition. �Bengal is keen to put an end to the impasse at HPL. We would like to help as much as we can,� the sources added.

What has helped matters more is the readiness of HPL�s lenders to accept IOC as the fourth equity partner. �The banks and financial institutions have invested Rs 4,000 crore as loans and advances. We have a say in the project, and prefer IOC as a partner,� senior officials of Industrial Development Bank of India said.

Officials of the state commerce and industry department said: �We would not like to comment until all the pieces of the plan have fallen into place. Hopefully, we should clinch a deal by the end of this month.�

Though no comments came from TCG, Chatterjee is believed to have sought more time from the state government to pay Rs 107 crore in advance against equity. He missed the December 12 deadline for doing so.


Dec. 13: 
The bankruptcy of Enron Corporation has claimed another victim. Mirant Corp, the US energy marketing trader which has suffered a loss of $ 80 million because of Enron�s travails, has decided to pull out of two major projects in India�the 3960 MW Hirma power project in Orissa and the 500 MW Balagarh project in West Bengal. Hirma is the largest power project in the country.

Mirant Corp joins a long list of foreign companies that have opted out of power projects in India either because they were unhappy with the pace of progress and regulatory bottlenecks or because of state governments stonewalling their demands for a tariff revision.

Other multinationals that have walked out of power projects in the country include AES Transpower, Powergen, Unocal, Daewoo Power, Bayernwerk Vew and Electricite de France (EDF).

Mirant Corp attributed its decision to pull out of the two power projects to the losses it suffered following Enron�s bankruptcy.

Mirant Asia spokesperson, Dora Lee said in Hong Kong that Mirant plans to close down its Delhi office by the end of the first quarter of 2002.

Mirant is an equal partner with the Reliance group in the $ 5-billion coal-fired Hirma power project in Orissa. �We feel that there is sufficient uncertainty in the market to keep us from the continued development of the projects,� said Lee.

Sanjay Kapoor, who heads Mirant�s operations in India, said, �While we believe that these projects are sound, we have concluded that there is considerable uncertainty in the market to financially continue the development of these projects.� �Mirant withdrew from the projects due to significant delays in milestones agreed upon by the Government of India concerning the Hirma project,� he added.

However, the company plans to monitor the energy industry in India through an extensive network of relationships that it has developed since entering the Indian market in 1996.

A Reliance spokesperson said the company is examining various options and is in discussions with appropriate authorities.

Last year, the coal ministry had approved a coal linkage of 22.4 million tonnes per annum from Kulda and Garjanbahal coalfields of Mahanadi Coal Ltd for the Hirma power project.

However, a review petition on tariff filed by the Hirma promoters has been under the consideration of the Central Electricity Regulatory Commission (CERC) for more than a year. The Power Trading Corporation (PTC) has finalised majority of the heads of terms for the power purchase agreement.

The Balagarh power project, which is located on a 420-hectare island on the Hooghly river about 70 km north of Calcutta, is for the construction and operation of a 500 MW coal-fired thermal power station, comprising two units of 250 MW each. Balagarh Power Company is scheduled to build, own and operate the plant in accordance with a power purchase agreement signed with CESC. The PPA is for a period of 30 years and CESC will take or pay for all the electricity generated up to a plant load factor of 68.5 per cent.


Mumbai, Dec. 13: 
Excel Industries has roped in Nufarm Ltd, an Australian company, for its agri business division. As part of a restructuring drive, Excel will first demerge its agri business wing. Nufarm will then pick up 14 per cent stake from the promoters� 32 per cent shareholding in the demerged entity.

Consequent to the demerger, Excel will be involved in chemicals, environmental and biotech businesses. However, it will continue to manage the demerged agro chemical company and Nufarm will have representation on the board.

In a communication sent to the stock exchanges today, Excel said the alliance with Nufarm will have several advantages for both the companies.

On the Bombay Stock Exchange today, the Excel scrip shot up to a day�s high of Rs 65 but fell later to close at Rs 58.65. The scrip opened at Rs 62.90 and it saw 217 trades, resulting in a turnover of Rs 7.59 lakh.

Excel currently holds more than 140 product registrations and has been exporting to over 45 countries. The new company is expected to become the exclusive channel for Nufarm to source agrochemical products from India and distribute its crop protection products here.

The notice sent to the stock exchanges further pointed out that the proposed restructuring will ensure an Indo-Australian partnership in crop protection business with a wide product range and extensive marketing network.

Excel said in the environmental & biotech division, it is consolidating its position and expects to encash on the opportunities thrown open by the Supreme Court directive to establish municipal solid waste disposal plants in all large cities.


Mumbai, Dec. 13: 
Zee Telefilms Ltd (Zee) and Turner International India Pvt Ltd (Turner), today announced an agreement to set up a joint venture�Zee Turner Pvt Ltd�for managing the distribution and marketing of a bouquet of channels of the two companies as well as those of third parties, in India and South Asia.

Zee will hold 74 per cent equity and Turner, a subsidiary of AOL Time Warner, the world�s largest media company, will hold 26 per cent in the joint venture, a ZTL statement issued later in the evening said. The partners are currently seeking all relevant regulatory approvals, the statement added.

The board will comprise three directors, two nominated by Zee and one by Turner. D.P. Naganand, director of Zee Telefilms and group head, Access Business for Zee, will be at the helm of affairs of the new company, which will be based in Delhi. However, day-to-day management of the company will be handled by a core team comprising both Turner and Zee executives. Anshuman Misra has been designated as managing director of the venture (and will also continue to head Turner), with Sunil Khanna as CEO, Paresh Karia as CFO and Siddharth Jain as the senior vice president, distribution.

Commenting on the new arrangement, Subhash Chandra, Zee Telefilms chairman said: �This joint venture is in keeping with Zee�s philosophy of associating with world class organisations to deliver better value to its customers and all other shareholders. The joint venture leverages both partners� respective brands and will enhance each party�s distribution strengths.�

Analysts aver that the move will put both the partners on a stronger wicket than its rivals. However, they declined to comment further, since the financial details of the tieup are still in a grey area.

�Zee will continue to explore other strategic co-operation and investment opportunities with AOL Time Warner,� Chandra said, indicating that more was expected from the alliance. �This alliance, the first of its kind for Turner in Asia, is a ground-breaking step for us in India�, he added.

�Partnering with Zee, India�s premier broadcast group, means that together we can offer an unparalleled blend of international and local channels to viewers,� said Steve Marcopoto, president and managing director of Turner Broadcasting System Asia Pacific Inc. �The venture also underscores our commitment to investing and participating in the growth and future development of the country�s cable and satellite industry.�

On the anvil are a number of initiatives in cross-promotions, programming and distribution arrangements. Zee is the largest television network in the country with 14 television channels and is also the largest cable distributor through its wholly owned subsidiary, Siticable. Zee�s channels are widely distributed across many countries, especially for South Asian audiences. Turner International (India) Pvt Ltd is responsible for the distribution, ad sales and marketing of AOL Time Warner�s news and entertainment services in India and South Asia.


New Delhi, Dec. 13: 
Organised retailers are lobbying the government to allow foreign direct investment (FDI) in the retailing industry. They also want the retailing business to be conferred industry status.

At present, the government does not allow FDI in the retailing sector. A few foreign companies have come in through joint ventures where their proposals were cleared on a case-by-case basis or through franchisee agreements as in the case of Marks and Spencers which set up shop in Mumbai and Delhi early this week.

Vikram Bakshi, co-chairman of CII�s national committee on retailing, said many foreign outfits enter the country by technically avoiding being classified as retailers. Bakshi said the government should clearly define who a retailer is.

The northern region chapter of CII is organising a two-day conclave on retailing�Retail Link 2001�on December 17-18. One of the main topics for discussion will be a debate on the need for permitting FDI in retailing.

Bakshi, who is also the managing director of McDonald�s India, said industry and consumers will stand to benefit if the government permits at least 51 per cent FDI in retailing. In April, CII had formed a 22-member national retail committee which is chaired by Bakshi and B.S. Nagesh of Shopper�s Stop.

CII has commissioned a study by KSA Technopack to study the specific needs of the retail industry in India, which will be out in the next two months.

The Indian retail industry is worth $ 180 billion but only 2 per cent of this is in the organised retailing.



Foreign Exchange

US $1	Rs. 47.86	HK $1	Rs.  6.05*
UK �1	Rs. 69.18	SW Fr 1	Rs. 28.75*
Euro	Rs. 42.98	Sing $1	Rs. 25.80*
Yen 100	Rs. 37.82	Aus $1	Rs. 24.55*
*SBI TC buying rates; others are forex market closing rates


Calcutta	  		Bombay

Gold Std (10gm)	Rs. 4610	Gold Std(10 gm) Rs.4540
Gold 22 carat	Rs. 4355	Gold 22 carat	    NA
Silver bar (Kg)	Rs. 7275	Silver (Kg)	Rs.7305
Silver portion	Rs. 7375	Silver portion	    NA

Stock Indices

Sensex		3388.59		- 23.56
BSE-100		1623.49		- 17.69
S&P CNX Nifty	1098.75		-  8.90
Calcutta	 110.59		-  0.76
Skindia GDR	 527.67		+  1.35

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