Rupee hits new low of 48.95
Diesel sales drop stokes slowdown worries
Maruti back on profit track
Daewoo India to cut more jobs
Colgate scrip spurts on buyback rumours
One-stop Reliance outlets to offer telecom solutions
Foreign holding in HDFC rises 5%
Insurance on Bollywood big screen
Reddy�s vision of RBI role
Foreign Exchange, Bullion, Stock Indices

Mumbai, April 3: 
The rupee today dropped to a new low of 48.95 against the dollar on renewed concerns about the cost of crude and talk of repaying external debts early.

Reserve Bank of India governor Bimal Jalan said on Tuesday that the government should use the swelling forex reserves to repay its overseas loans before time, sparking speculation about immediate dollar outflows.

Cablemen in Sony-block cryThe currency finished at 48.89/90, bouncing back from the troughs due to late-session dollar sales, but still weaker by seven paise over the previous day�s finish. It had tested 48.89/90 in intra-day deals on February 25.

The rupee opened weak amid nagging worries about the flare-up in the cost of crude, and a sense that the government would have to draw down its $ 53-billion forex kitty, if it accepts the advice on retiring foreign loans.

The rupee teetered close to the 49-mark early in the day, before bouts of dollar selling by nationalised banks, presumably at the behest of the RBI, stemmed the slide.

According to dealers, the rupee opened at 48.82/84, off its previous close of 48.81/82. Its initial plunge was blamed on a financial service major�s dollar-buying binge.

This set off a foreign bank-led scramble for greenbacks, much of it speculative in nature, and some short-covering. The spike in demand pulled the rupee down to 48.93/95 even as strong dollar supplies from foreign fund inflows were soaked by the dollar demand.

Opinions differed in the market on how the rupee clawed back from its lowest point in almost two months. An analyst from a leading private sector bank said it was because of a comment from a senior RBI official that the bank wanted �orderly conditions in the forex market.� Sources at RBI denied the statement.

The futures market in forex was also brisk, mirroring the pattern in the spot market. Forward dollar premia shot up as importers rushed to cover forward exposures. For instance, the one-year forward premium rose to 5.20 per cent from 4.96 per cent on Tuesday.

Traders expect the rupee to hover around 48.90 on Thursday. With much of the dollar supplies from foreign fund inflows and export proceeds going to nationalised banks, there is a feeling that the pressure on the rupee will not ease until global crude prices soften.


Mumbai, April 3: 
The demand for high speed diesel (HSD) sold by oil companies fell in the last financial year, a trend seen as a symptom of the economic slowdown.

Sales figures on the fuel, long considered as the barometer of economic health, produced by the refineries of IOC, HPCL, BPCL and IBP show a significant decline in the first eleven months. The last month is not expected to be any different, industry officials say. These refineries account for the bulk of the HSD sales.

By contrast, sales of motor spirit (petrol) have increased, but that is hardly a consolation for many who believe that the slump has gripped the till-now resilient rural economy � where much of the diesel is used.

For the period ended February 28, Indian Oil has reported a decline of 3.4 per cent in HSD sales, HPCL has shown a fall of 2.8 per cent, BPCL 4.2 per cent and IBP 4.5 per cent.

All three have seen an impressive growth in motor spirit sales. HPCL has recorded a rise of 5.7 per cent in the first eleven months of the last financial year, IOC has recorded a growth of 7.8 per cent; IBP and BPCL have clocked an increase of 3.8 per cent and 0.3 per cent respectively.

Several factors are responsible for the decline in HSD sales. Small and medium scale industrial units are feeling the pinch at a time of a tail-off in industrial growth.

Despite a good monsoon, the rural economy is yet to take off. Tractors and commercial vehicles sales are almost dormant, and have not shown the vibrancy seen in other segments of the auto industry, like cars and motorcycles.


New Delhi, April 3: 
Maruti Udyog, the country�s largest automaker, has hit the profit trail again riding a crest of strong B-segment car sales in 2001-02 that helped it rack up a net profit of Rs 55 crore on a turnover of Rs 9295.3 crore.

Last year, the company, which is high on the list of state-run companies in which the government wants to sell its stake, plunged into a loss for the first time in 19 years badly mauled by the slowdown in the economy that saw demand for cars plummet.

The company had registered a net loss of Rs 269 crore in 2000-01 on a total revenue turnover of Rs 9219.6 crore. The automaker says the journey back into the black was possible because of a mix of aggressive cost-cutting steps and improved quality management systems.

The company made a higher depreciation provision this year at Rs 347 crore against Rs 322 crore in 2000-01, a company spokesperson said.

Strong growth in the sales volume of Wagon-R and Alto further enabled the company to ride out the hump. The sale of B segment cars of Maruti represented by Zen, Alto and Wagon-R contributed to 35 per cent of total sales as against 31 per cent last year.

Maruti�s car sales have increased marginally by 1.4 per cent year-on-year as it sold about 3.4 lakh vehicles in the domestic market during 2001-02 against 3.35 lakh units in 2000-01.

�We introduced exciting special editions of Maruti 800, Zen and Esteem and created a strong customer pull through aggressive promotions and advertising. The growth in the sales volume of Wagon-R and Alto also enabled the company to overcome the difficult market situation,� a company spokesperson said.

�During the year, the company adopted several innovative production practices and systems which improved quality substantially. The percentage of defect-free or direct pass vehicles, which was about 20 per cent in 2000-01, went up to over 70 per cent in 2001-02,� the spokesperson added.


New Delhi, April 3: 
Daewoo Motor India Limited (DMIL) is planning to axe another 450 workers at its Surajpur plant.

The troubled automaker, whose fortunes hang in the balance as General Motors of the US goes through tortuous negotiations for the takeover of its South Korean parent, will begin its second round of cost-cutting as soon as it can reach some agreement with the unions.

�This is a tedious process and it will be some time before we can implement the decision,� company sources said.

Daewoo India has a capacity to make 72,000 units a year but it has been operating at barely 10 per cent of its capacity with a monthly production of only 600 cars. The company stopped reporting its production and sales figures to the Society of Indian Automobile Manufacturers (SIAM) last April.

This will be the second phase of job cuts at the Surajpur plant which has a workforce of 1500 at present. Last October, 237 people were struck off the company�s rolls following the closure of the engine and transmission plant.

The present phase of job cuts are part of an earlier plan to trim the workforce. D.W. Kim, deputy managing director of DMIL, had remarked at an earlier meeting that �streamlining of the company is our only hope and we will steadily follow that route.�

The see-saw negotiations between GM and Daewoo Corp over the past year has badly roiled the Indian operations because of the resultant uncertainty over its future.

When GM and Daewoo reached a tentative accord with the creditors last November, the Indian operations were kept out of that deal. But after the talks reopened this year after being bogged down over specifics, GM expressed interest in taking over the Indian operations and carried out a due diligence exercise, raising the hopes of the local Daewoo employees.

Daewoo Corp holds an overwhelming 91.6 per cent stake in DMIL. Unless the first set of deals in the GM-Daewoo Corp talks come through, the future of DMIL will remain uncertain. DMIL has already invested Rs 100 crore in its Indian operations.

�The officials from Korea are still banking on the GM-Daewoo deal instead of concentrating energies on marketing the world class product they have here,� the official said.


Mumbai, April 3: 
Oral-care major Colgate-Palmolive (India) was in the spotlight on the bourses today following speculations that a buy-back offer from its parent was on the cards. Its US parent currently holds around 51 per cent in the domestic subsidiary.

The counter spurted by close to 10 per cent in trades today. In fact, the stock has appreciated from its year�s low of Rs 137.90 that was struck on March 27, a gain of 21 per cent over the past week.

Market circles attributed the strong showing by the scrip to rumours that its parent is likely to follow the pattern set by several MNCs like Philips, Carrier Aircon, Cadbury�s, Atlas Copco, Sandvik Asia, in hiking their stake in their domestic subsidiaries either through an open offer or a buy-back programme. Punters expect a buy-back price of over Rs 200 to be announced by Colgate�s parent in the days to come.

The Colgate scrip, after opening at Rs 154, dipped to a day�s low of Rs 151.50, but showed a northward movement, closing sharply firmer at Rs 166.80, a gain of over Rs 15 against the previous finish. The scrip saw a huge volume of over 5 lakh shares on the BSE, on trades of over 6,100, resulting in a turnover of Rs 8.44 crore.

A few FMCG analysts who were baffled by the scrip�s rise in the past few days, pointed out that �fundamentally� very little has changed for the company for it to merit such a sharp rise. It is feared in some quarters that the company is unlikely to post excellent growth rates, given the fact that consumption in rural areas is yet to show any significant upswing, which however, is disputed by others optimistic about its performance for the fourth quarter.

Even as sources close to the company dismissed reports about the open offer as being mere speculative, market circles point out that the counter may witness profit taking as operators liquidate their positions at higher levels.

The company, which registered a 30 per cent growth in net profit to around Rs 16 crore on sales of Rs 295 crore, has been pruning costs on various fronts. It is the country�s largest toothpaste manufacturer in terms of market share, which is put at close to 50 per cent.


Calcutta, April 3: 
Reliance Infocom will set up over 1,000 retail outlets in all major cities and towns in the country by the first half of the current fiscal to provide a �one-stop-solution� for all telecom needs. Sources said the investment for setting up the massive retail network will be around Rs 750 crore. While about 30 per cent of these outlets will be owned and managed by the company, the remaining will be run by franchisees, they added.

Reliance Infocom is currently looking for suitable spaces in at least 119 cities across the country where it plans to set up retail outlets in the first phase. �The company plans to spread its retail network finally to 500 cities and towns across the country. This network should be completed by the end of the current financial year,� sources said.

A senior company official, however, pointed out that the present endeavour is to identify suitable spaces where these outlets can be set up.

�Once we finalise the places, we will be able to work out our investment needs for the project,� he said. Each outlet should have 800-2000 sq. ft of area in prominent commercial locations. �Going by experience, the outlets in the metro and other major cities will require more investment vis-�-vis the ones in smaller towns,� he explained.

These outlets will provide a whole range of telecom services, ranging from phone and internet connections, to equipment like telephone instruments. The company is in the last leg of setting up a 60,000-km optic fibre network. The network is being built at an investment of around Rs 25,000 crore. Sources said it would be able to provide a whole range of telecom services by the end of next year.

Regarding investment for the retail network, they said the Reliance group has a strong cash flow. �Hence, investment will be mostly from internal generation,� they added.


Calcutta, April 3: 
Foreign holding in Housing Development Finance Corporation (HDFC) has increased by over 5 per cent to 68.71 per cent during the last financial year. The gain was mainly on account of aggressive buying by the foreign institutional investors (FIIs).

The FIIs now hold 46.2 per cent stake in the country�s leading housing finance company as against 38.62 per cent a year ago. Their combined holding increased by close to one crore shares to 5.62 crore during the last financial year.

In addition to the stake held by the FIIs, overseas holding by way of foreign direct investment is pegged at 22.37 per cent. This has gone down by 2.4 per cent or about 25 lakh shares in the last one year.

While the FIIs were bullish on it, the domestic institutions and mutual funds offloaded their holding in HDFC. Their combined holding is pegged at a shade below 12 per cent now, whereas a year ago, it was 16 per cent.

Among the institutions, the sellers mainly were the mutual funds, which have pared down their holding by 3.7 per cent in the last 12 months.

The public holding in the company stands 19.51 per cent now, which includes a small 0.14 per cent held by non-resident Indians.


New Delhi, April 3: 
Indian films, which feature long outstation shoots, are scurrying for insurance cover.

According to a report prepared by Federation of Indian Chambers of Commerce and Industry (Ficci) in assistance with Rabo India Finance, a large number of Indian film makers feel that insurance cover has assumed greater importance due to the higher risks associated with big budget films that require outdoor shooting.

One of the deterrents to film insurance is that while applying for insurance cover, the producer is required to give details of the company profile and the film budget, which they are reluctant to reveal.

This reluctance to seek insurance cover was despite the fact that it accounted for just about 1 to1.5 per cent of the total production budget. However, institutional lenders to film projects are now insisting on insurance cover, as they want to mitigate risks from multiple entities associated with film processing.

Filmmakers had so far ignored the insurance aspect for fear of revealing their financing details. But the high risks now are driving them to seek insurance protection.

Film insurance being rather new to producers, only a few have availed of this facility so far. �Taal� (1998) was the first Indian film to be insured, to cover risks emerging during the production period. Since then, United India Insurance (UII) has insured more than 20 films with a total production outlay in excess of Rs 10 crore.

The films that have availed of insurance cover and have already made it to the big screen include Taal, Snip, Lagaan, Mohabbatein, Dil Chahta Hai, Kabhi Khushi Kabhi Gham, Yaadein and Asoka. Others, which have been insured and are under production, include Mere Yaar Ki Shaadi Hai, Mujhse Dosti Karoge, Saathiyan, Rishte, Aankhein, Chupke Se, Badhai Ho Badhai, and Kuch Na Kaho, among several others.

Sources say that Taal was insured for Rs 12 crore, Mohabbatein for Rs 15 crore, Kabhi Khushi Kabhi Gham for Rs 22 crore, Yaadein for Rs 10 crore, Lagaan and Dil Chahta Hai for Rs 15 crore each, Asoka for Rs 7 crore and Snip for Rs 2.5 crore.

UII covers production risks for films under the �Cine Mukta Policy�. The film insurance cover scheme requires the producer of the film to submit profiles of the company, producer, director, star cast, detailed budget and the shooting schedule of the film, while applying for the policy.

Till date, UII has settled four claims for films insured by it. The first claim was from Yash Raj Films India for a month�s delay in the completion of its film, Mohabbatein, due to postponement of shooting caused by an injury to the heroine Aishwarya Rai. Other films that have received compensation for production delays include Dil Chahta Hai, Saathiyan and Badhai Ho Badhai.

Film insurance schemes cover props, sets and wardrobe, film negatives, personal accident, legal liability insurance, extra expenses and money insurance.


New Delhi, April 3: 
The Reserve Bank of India (RBI) today asked the government to explore possibilities of setting up an advisory board for evolving best practices in the discharge of its duties as banker to both central and state governments. The Reserve Bank may also have to consider shedding retail banking business to maintain only government�s accounts, RBI deputy governor Y.V. Reddy, said at a seminar here.

�In view of the enormous work of the government and complexities and other inter-linkages between the central and state governments and the banking system, it may be possible to explore the setting up of an advisory board,� Reddy said in a speech read out at the seminar organised by Indian Civil Accounts Organisation.

He said the board could meet quarterly for evolving best practices in the overall interest of discharging the RBI�s duties as banker to governments. �This arrangement will be analogous to the cash and debt management group in which the government and RBI are involved,� he said.

Reddy said RBI may also have to consider shedding retail banking business to ensure that it maintained only the principal accounts of the governments. �RBI, being a central bank, for achieving the functional focus, may have to consider in due course, shedding retail banking in relation to governments in favour of agency banks, with a view to ensuring that in the long run, the bank will maintain only the principal accounts of governments, leaving the day-to-day business to the commercial banks functioning as agents,� he said.

At present, RBI and State Bank of India (SBI) and its subsidiaries conduct business relating to governments like treasury, Reddy said.

Pointing out that private banks promoted by the financial institutions, which meet the defined criteria, were also considered for business relating to governments, he said the objective was to help the state governments to get better and quick service with safety of funds.

�The question is to strike a balance between the two and this may have to be decided by the states with the help of RBI, thus there can be competition for government business in the future,� he said.



Foreign Exchange

US $1	Rs. 48.90	HK $1	Rs.  6.20*
UK �1	Rs. 70.22	SW Fr 1	Rs. 28.95*
Euro	Rs. 42.43	Sing $1	Rs. 26.10*
Yen 100	Rs. 36.80	Aus $1	Rs. 25.50*
*SBI TC buying rates; others are forex market closing rates


Calcutta			Bombay

Gold Std (10gm)	Rs. 5145	Gold Std(10 gm)	Rs. 5060
Gold 22 carat	Rs. 4860	Gold 22 carat	NA
Silver bar (Kg)	Rs. 8100	Silver (Kg)	Rs. 8000
Silver portion	Rs. 8200	Silver portion	NA

Stock Indices

Sensex		3462.99		- 42.80
BSE-100		1717.54		- 19.59
S&P CNX Nifty	1123.50		- 13.45
Calcutta	 116.87		-  1.18
Skindia GDR	 651.47		+  6.51

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