GSFC net profit falls
NEW DELHI, Sept 20 — Gujarat State Fertilizers and Chemicals Ltd. has attained an all-time high turnover of Rs 1999 crore.

Government to import 10,000 tonnes of onion

NEW DELHI, Sept 20 (PTI) — The government will import 10,000 tonnes of onion and augment supplies to state-run outlets in the Capital to tide over the present shortage and consequent skyrocketing prices of the popular vegetable.

The decision to import onions was taken at a meeting convened by the Secretary to the Prime Minister’s Office recently to discuss various measures to bring down the onion prices, Delhi Government sources said.

“The meeting, attended by top city government officials, also decided to make sufficient budgetary provisions to compensate Nafed for its actual losses in the wholesale procurement of onions and effecting subsidised supply.

At present Nafed is procuring onions direct from Gujarat, Rajasthan and Haryana and supplying them to various government agencies, including Super Bazar, Kendriya Bhandar and the National Consumer Cooperative Federation, which in turn sell them to consumers at Rs 10 per kg compared to Rs 35 to Rs 40 per kg in the open market.

It was also agreed at the meeting to augment the current onion supply of 40 tonnes described by Chief Secretary Omesh Saigal as “inadequate”, to 100 tonnes.

The Indian Council for Agricultural Research too is making efforts to make available to farmers improved varieties of hybrid onion seeds developed by it.

The participants in the meeting also hoped that the prices would go further down with the arrival of the new crops of onion.

Meanwhile, the National Agricultural Cooperative Marketing Federation of India Limited (NAFED) is likely to import 10 to 15 thousand metric tonnes onion to ease domestic prices.

The decision was taken at a meeting of Nafed officials and associated shippers of onions at Nafed’s western region office, convened by Federation Chairman Ajit Kumar Singh in Mumbai yesterday.

It was felt at the meeting that the situation arising out of the steep hike in onion prices could be improved by increasing availability of onions to consumers as there was still a gap of a month before the new crop comes into market, Nafed sources said.

HPCL to go alone if no partner
found for Bathinda refinery

MUMBAI, Sept 20 (PTI) — Hindustan Petroleum Corporation (HPCL) is negotiating with a US oil major for a joint venture tie-up for its Rs 11,000 crore oil refinery in Punjab but could go “alone” in the absence of a foreign partner, HPCL Chairman and Managing Director H.L. Zutshi has said.

Talking to a team of visiting journalists from Delhi about the corporation’s Rs10,300 crore investment plans during the Ninth Plan period, Zutshi admitted that Saudi Arabian oil giant Aramco had formally withdrawn from the proposed 9 million tonnes refinery at Bathinda.

Replying to a question, he said that even Oil and Natural Gas Corporation (ONGC) had evinced interest in partnering in the refinery, now awaiting clearance of the Public Investment Board (PIB), but there were “no firm plans”.

Zutshi, who led a team of officials including Punjab Industry Secretary Ramesh Inder Singh to the USA, early this month to talk to Exxon top brass, said that corporation and the foreign partner would have 26 per cent equity each while the remaining would go to financial institutions and the public.

The talks with the US company had started when the latter showed interest in the project following withdrawal of Aramco and the Punjab State Industrial Development Corporation (PSIDC) would transfer its 26 per cent equity to the foreign partner as per a memorandum of understanding.

Long-term investors can pick up blue-chips

IN general, long-term investments in equity shares are preferable to trading and short-term buy-and-sell business in shares. A long-term investor can hold onto his investments even during periods of long depression in the stock market. Trading on stock exchange terminals is a full-time job and those engaged in various other professions and lines of business cannot afford the kind of distraction that this trading involves.

The term “long-term investments” is not easy to define. According to the income tax law (as it stands at present), any investment in equity or preference shares of a company, units of the UTI and other mutual funds, when held for more than 12 months, are classified as “long-term” investments, and long-term gains are taxed at 20 per cent.

When I recommend long-term investment in equity shares for good returns and substantial appreciation, the term should mean holding of an investment for two to three years (and even longer if prospects appear good). The stock market at present is in deep depression and no revival is expected for at least a year or so. Many blue-chip equities are available at relatively low land attractive market rates. It is, as I see it, time to pick up good blue-chip equities of companies which have good fundamentals, dependable managements and good growth prospects. Maybe, that the market may decline further after the second quarter results are announced in October-November (and incidentally this will be the period of elections to a number of state legislatures) and that may offer better bargains.

At present, the market has stabilised and it is even inching upwards. During last fortnight, the Sensitive Index moved up by 4.75 per cent and the NSE NIFTY was higher by 4.85 per cent. Major gains were made by multinational pharma shares.

What shares may be picked up for long-term investment? In this column, I have been recommending multinational pharma shares, like Novarties, German Remedies, Glaxo. During the past two months or so, Novarties has moved up from Rs 330 to 570 per share. I believe that there is further scope in the appreciation potential of these pharma shares. So, the list should include, Novarties, Glaxo, Burrough Welcome, Pfizer, Parke Davis, E. Merck etc. E. Merck is now available at attractive rates.

It had been stated in this column that as the patent laws are revised to cover both “process” and “product” base of patented drugs and manufactured items etc. (and this has to be done to comply with the World Trade Organisation rules), the profitability, range of products and the market performance of these companies will improve further.

The same may be said of speciality chemical company like Clariant, Bayer India, Ciba Speciality, BASF India and companies which have a strong market brands, like Reckitt and Colman, Hindustan Lever, Nestle, Cadbury, Britannia.

Some companies which are quoting at an attractive market price are:Vardhman Group companies (Vardhan Poly, Vardhman Spinning, Mahavir Spinning), Vikas WSP (quoting around Rs 86 or so) Essel Packaging, Vananvil Dyes, Colour Chem, Tata Tea, Tata Chemicals, Grasim, Larsen and Toubro, Reliance.

The automobile sector is not likely to move up for at least a year or so but some companies are likely to bounce back even earlier: Sundram Fastners, Sundram Clayton, Wheels India, GKN Invel Transmission.

Voltas, Vashisti Det, TVS Electronics are likely to be rewarding even in a year’s time in terms of appreciation.

In case an investor wishes to invest in shares which are likely to give 10 per cent return in the form of dividend and have some scope for appreciation on a long-term basis should invest in GNFC (around Rs 18 with a dividend of 22 per cent) Eurotex (around Rs 14-50 with a dividend of 14 per cent), Nagarjuna Fertlilisers around Rs 15 with 18 per cent dividend), CANFIN Homes (around Rs 15/- with 22 per cent dividend)

For those who wish to patronise the primary market may apply for UTI Bank public issue and also wait for the public issue/sale of some good public sector companies.

Move to hike air fares

The shrinking value of rupee in the international market has played havoc with the aviation industry. Indian carriers have plunged into trouble as expenses on equipment, maintenance, parking and landing have increased considerably.

There is a move to increase fares on the domestic sector by at least 10 per cent in order to improve financial health of operators.

If the government delays an increase in the fares to “please” influential sections of society, domestic operators will run into further trouble. Indian Airlines (IA) may be able to withstand the pressure, but the position of private airlines will be tough.

According to experts, there has not been “sufficient” growth in traffic and it has been adding to the miseries of airlines. Private operators have a seating capacity of only about 13,000 a day.

Regardless of the financial problems, IA’s performance on the ground and in the air has been showing improvement. The flights are operating on time and passengers are being looked after well. Quality of meals and snacks has shown marked improvement. The cabin crew has also been attentive and receptive.

Civil Aviation Minister Ananth Kumar has gone on record saying that the government is keen on privatising IA and AI within a year. He has also talked about “disinvestment” in both airlines.

Aviation experts feel that it is easier said than done. This has been said earlier also. Bulky files were tossed from one corridor to another but eventually nothing happened.

A fine gesture

Scandinavian Airlines System (SAS) not only cares for its reputation for on-time performance but also tries to win friends and influence people. Recently a flight from London to Delhi got delayed at Copenhagen. The ground staff immediately swung in to action and distributed coupons worth about $ 22 to every passenger. The coupons were not for encashment but passengers were free to “shop” from two or three shops.

How one wishes similar gestures are shown by other carriers.

The SAS General Manager (India and Nepal) Bengt Callinggard will shortly provide detailed information about the changing face of the airline that has been one of the pioneers in the concept of business travel.

New incumbent

C.G. Johnson has taken over as District Sales Superintendent of Delhi and Northern India for Cathay Pacific Airways. He succeeds Ravi Manian, who has moved to Mumbai.

Mr Johnson has been with the ariline for the past 16 years.

Party, if CTBT is signed
By Ashok Kumar

Between July 1 and August 28 this year, the domestic institutions led by the UTI have pumped in approximately Rs. 700 crore even as the FIIs have disinvested up to Rs. 432 crore. It is also worth nothing here that, both the BSE sensex as well as the NSE Nifty have dipped by more than 10 per cent. Notwithstanding all this, must also be comprehended that the UTI invested only Rs. 800 crore in equities out of the total sum of Rs. 3,105 crore collected by its flagship scheme, US-64 during the July special offer period. Perhaps some more funds may be deployed were the indices to plunge further on account of another bout of panic selling by the FIIs.

Does this mean that all the FIIs are bearish about the prospects of the Indian stockmarket? Not all of them surely. Some FIIs like HSEB James Capell have done well to note that India has remained relatively unaffected by the latest bout of turmoil in the international financial markets and the crash in gold prices. In fact, there is a growing school of thought that the Indian economy may even benefit from the current global crisis.

This viewpoint is based on the way the Indian economy behaved during the recent South-East Asian currency crisis and emerged as a relatively safer place among the emerging economies to make investments.

Perhaps the other FIIs too may realise it in the long run, but then it might already be too late.

The “EPS” factor is at play at the Indian bourses again. After seeming set to scrape the bottom of the barrel, the economic situation (E) is showing some signs of revival, the political situation (P) now seems less turbulent and thus, the sentiment (S) at the bourses seems to have improved. Resultantly, the BSE sensex too has bounced back from the 2800 points level.

Whether this is a clear cut trend reversal or simply a corrective rally will be known only if the sensex is able to sustain itself between the 3250 points level and the 3400 points level, when the bear operators who are awaiting an opportunity will find prices attractive enough to press sales.

Finally, a lot now depends on whether India signs the CTBT and the Americans lift the economic sanctions imposed on India as a quid pro quo therefore.

If that happens, chances are another party may be on at the Indian bourses, with the bulls leading the chorus this time around. But, will India Sign the CTBT?

Punjab paint units oppose new tax
Tribune News Service

JALANDHAR, Sept 20 — The Punjab Government has been criticised for introducing first point tax on paints from July this year.

The President of the Punjab unit of the All India Paints Association, Mr Sujinder Singh, said here today while briefing the media that this was done without understanding the difficulties faced by the paints industry.

Paint supplies are routed through Chandigarh at 1 per cent CST or from other states at 4 per cent CST against 8.8 per cent in Punjab. While there is recession in the cycle, auto, auto parts, engineering industries, the paint industry will not be able to sustain itself with this extra burden.

In Haryana sales tax charged on paints is first adjusted against Haryana general sales tax and then against CST. The exporter does not pay any tax. There is zero tax on the paint industry in Haryana.

In Punjab paint industries face competition from multinational companies, which are exempted from sales tax. The small-scale industry should be treated on a par with MNCs. Secondly, all organised sector and multinational companies have their offices in Chandigarh and supply materials to Punjab at 1 per cent CST, which gives a tough competition to the local paint industry. So a suggestion has been given to reduce the tax on local paint industry from 8.8 per cent to 2 per cent.

ASEAN likely to begin barter trade

NEW DELHI, Sept 20 (PTI) — The Association of South-East Asian Nations (ASEAN) is likely to begin barter trade in commodities soon to reduce excessive dependence on the U.S. dollar in the wake of the Asian currency crisis.

This is a virtual endorsement of India’s stand for barter trade for which Commerce Minister Ramakrishna Hegde has been campaigning ardently in international fora.

“Malaysian Prime Minister Mahathir Mohammed has discussed the possibility with other ASEAN members and by the year-end, it could start, such a trade,” Manoj Devasan, an official with the Kuala Lumpur commodity exchange, told PTI.

UN report

UNITED NATIONS (PTI): A United Nations report has advocated stricter capital controls to rectify the inherent problems in the international financial system and proposed an investment-export nexus to increase production capacity and competitiveness to left the depressed world economy.

The financial crisis in East Asia is the result of “big bang” liberalisation. Japan and East Asia are likely to witness a prolonged recession and trade imbalances in major industrial countries would increase.

The report proposes a safeguard being incorporated in rules governing international finance which would help a country facing an attack on its currency to impose an automatic, unilateral standstill on debt servicing.

Crime booms

BANGKOK (DPA): The financial turmoil which has wreaked havoc in Asia’s corporate boardrooms for the past year is slowing trickling down to streets and bedrooms, where crime rates are rising throughout the region.

While legitimate businesses have struggled to stay afloat, vice has emerged as the only true growth industry in much of Asia.

In Bangkok, Seoul and Jakarta the governments have noted alarming increases in theft, burglary and street crime.

Record bankruptcies have forced millions out of work and into poverty. In countries which typically lack adequate social security systems. many people have drifted into crime or the old standby industries of the desperate, drug-trafficking and prostitution.

Food crisis

DHAKA (ANI): Bangladesh has decided to buy 350,000 tonnes of rice from neighbouring countries to meet immediate food shortage.

Accordingly, a team will be sent to India, Pakistan, Thailand, Burma and Vietnam soon. India has gifted 20,000 tonnes of wheat a few days ago.

The country has about 700,000 tonnes in buffer stock. “We have now enough supply in the market and we will not need to get rice from the stock out at the moment,” said Industry Minister Tofael Ahmed.

Senseless?

BEIJING (PTI): Hong Kong officials have defended the recent market intervention by the government and rejected claims by U.S. Federal Reserve Chairman Alan Greenspan that such a policy is senseless.

Hong Kong’s Financial Secretary Donald Tsang Yam-Kuen said the unprecedented action by the Special Administrative Region (SAR) government had helped fend off speculative attacks.

Greenspan had said that SAR officials’ bid “to jack up their stock market” would hit the credibility of Hong Kong’s currency and its policies.

Chief Secretary takes up power issue
Tribune News Service

CHANDIGARH, Sept 20 — The Punjab Chief Secretary, Mr R.S. Mann, has directed the Secretary Power to get power connections released in industrial units immediately.“Tell the PSEB to buy material for providing the connections to units without delay”, said Mr Mann at a meeting of the high-powered committee of which he is the Chairman and the Secretaries of Industry, Enviornment, Power, Labour and the Director Industries are its members. The committee has been constituted by the Punjab Government to promote industry and remove hurdles in its way.

Caparo group sets up Indian subsidiary

BONN, Sept 20 (PTI) — Lord Swraj Paul’s Caparo group has set up a wholly-owned Indian subsidiary to scout for investment opportunities in the country. The London-based Labour peer disclosed during a visit here that the £ 650 million group of which he is the Chairman, would consider investments in the industrial field in India.

Lord Paul also spoke of prospects of expanding the Rs 55 crore joint venture he has set up with Maruti Udyog near Delhi for manufacturing automobile ancilliaries. The NRI industrialist was here in his capacity as Britain’s roving business ambassador to promote trade ties between London and Bonn.

GSFC net profit falls

NEW DELHI, Sept 20 (UNI) — Gujarat State Fertilizers and Chemicals Ltd. (GSFC) has attained an all-time high turnover of Rs 1999 crore. The company has earned a profit after tax of Rs 170 crore even after absorbing additional cost of depreciation and interest to the tune of Rs 16 crore. In spite of a marginally lower profit, the company has maintained the dividend at 45 per cent involving a total outlay of around Rs 39 crore. This was stated by Dr K.D. Jeswani, Chairman, GSFC, while addressing the 36th annual general meeting held here at the Fertilizer Nagar yesterday.

Videocon Intl

I sent 100 bonds to Videocon International Mumbai on 19.1.98 bearing L.F. No. S 0003396, distinctive No. 0005445101 to 0005445200 certificate No. 000054452 for redemption in response to their first offer of redemption. Till todate I have not received the amount despite my repeated reminders.

Surinder Kumar Batta
Nabha

DCM Fin

I invested Rs 40,000 with DCM Financial Services Ltd and Rs 20,000 with DCM Ltd, New Delhi, both sister companies in NC debentures, for 18 month maturity period and its redemption was due in June and July. Despite repeated requests and reminders, the said companies did not redeem NC debentures.

J.K. Kapoor,
Ambala city

Sol Pharma

I deposited Rs 12,500 in bonds vide receipt No. 24821 with Sol Pharmaceuticals Ltd for 18 months. It’s date of maturity was 14.2.98. I sent the indemnity bond duly executed in the first week of April, 1998 for repayment. The company is not responding despite many reminders.

Anil Kumar Goel
Jagadhri

US-64

I applied for allotment of 200 U.S.-64 certificates to U.T.I., New Delhi on July 7, 1995 vide application form No 624514. A cheque for Rs 3100 drawn by State Bank of India, Rohtak was also enclosed with the application form. I have not received the certificate despite many reminders.

Subhash C.Taneja,
Rohtak

Okara Agro

I deposited Rs 5,000 with Okara Agro Industries, Delhi. They issued post-dated cheques for the interest payable at PNB Jangpura, New Delhi. The bank returned the cheques with remarks, “the party closed the account”. Despite many reminders to the company office, I have not heard any thing.

Gurdial Singh
Amritsar

Apollo Tyres
NEW DELHI, Sept 20 (PTI) — Apollo Tyres Ltd has launched a voluntary retirement scheme (VRS) for its workers at its Perambra plant in Kerala. “Over 100 workers have already opted for the scheme, which was introduced to face the emerging competition”, the company said today. The VRS will allow the company to optimise manpower utilisation and costs.

Motorol
MUMBAI, Sept 20 (PTI) — Motorol (India) Ltd will focus on the rural market for lubricants, hitherto untapped by most international players, as well as explore niche markets in developed economies for speciality oils, Executive Director Rinki Gandhi told PTI today. Motorol is taking a relook at its distribution network with plans to decentralise its blending units to cater to regional demand. The company expects to put up a blending unit in Bihar in the first phase.

Nainital Bank
NEW DELHI, Sept 20 (PTI) — Nainital Bank, an associate of the Bank of Baroda, is planning to go for a Rs 3 crore rights issue in the current fiscal as part of its plan to increase its capital base to Rs 50 crore in three years.