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Sunday,
November 3, 2002, Chandigarh, India
  
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Microsoft
deal with US govt gets nod
Banks
flouting Credit Policy In the
wonderland of investment |
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WWICS
offers incentive
Will
Divali light up market?
Forex
reserves fall $ 19 m
Learn a
lesson from Sri Lankan Airlines
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Microsoft deal with US govt gets nod Washington, November 2 The settlement imposes no financial penalty but it forces billionaire Bill Gates’ software giant to disclose some technical information and bars anti-competitive agreements on Microsoft products. “The court is satisfied that the parties have reached a settlement which comports with the public interest,” District Court Judge Colleen Kollar-Kotelly said in her ruling. “Accordingly, the court will conditionally approve the proposed consent decree as the final judgment in this case.” Nine out of 10 personal computers in the world use Microsoft’s Windows operating system. Microsoft was convicted last year of flouting competition rules by abusing its worldwide dominance. Kollar-Kotelly’s decision was restricted to remedying the damage and curbing future abuse. As a condition to approving the settlement, she demanded the power to enforce the decree. The judge rejected the demands of nine hold-out states and the District of Columbia which had demanded tougher action to rein in Microsoft’s vast power. Many of the battling states’ proposals required drastic changes to Microsoft products and to some aspects of its business that were not illegal, the judge said. “Plaintiffs present little, if any, legitimate justification for these remedies,” she said. Gates hails decision Microsoft and the Federal Government, which reached the accord along with nine states in November last year, welcomed the court decision. “Its a major milestone,” Gates said at the Microsoft headquarters in Redmond, Washington. “This settlement puts new responsibilities on Microsoft and we accept them,” he told a news conference. Attorney General John Ashcroft agreed. “The court’s decision is a major victory for consumers and businesses who can immediately take advantage of the final judgment’s provisions,” Ashcroft said. “The final judgment provides certainty and stability to the vital computer sector of our economy,” he said. The hold-out states — California, Connecticut, Florida, Iowa, Kansas, Massachusetts, Minnesota, Utah, West Virginia and District of Columbia — said it was too early to decide on an appeal. They fought in vain for more stringent measures, including forcing Microsoft to produce a type of build-your-own operating system, which could include competitors’ software applications such as Internet browsers. “It is far too early to decide whether an appeal is appropriate,” California Assistant Attorney General Tom Greene said by telephone. Rivals disappointed But Microsoft rivals were bitterly disappointed. “This represents a systemic failure of the legal system, a failure to protect consumers, competition, and companies like Netscape whose innovations literally changed the world,” said Mike Pettit, president of the trade group ProComp. The settlement is to be enforced over five years, with a possible two-year extension of Microsoft systematically flouts the terms.
AFP
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Banks flouting Credit Policy THE RBI’s Credit Policy has more debt than credit if seen from the angle of lower segments of the industry. No doubt the RBI is striving for sustaining a soft interest regime but ranks seem to be functioning in isolation of its policy. The banks are charging anything from 3 per cent to 4 per cent above the PLR from bulk of the borrowers in the small scale sector. In the last credit policy the RBI had taken a serious note of this glaring fact. The various borrowers for the sake of transparency. Simultaneously the banks were asked to reduce the spread. The Credit Policy has asked the banks to cut their PLR. Will it take place in the light of old experience? In fact the PLR has become redundant as bulk of
the amount is being lent at the sub PLR rates. The percentage of borrowers getting the sub PLR benefit has increased 17 per cent to 37 per cent. The banks hardly take any time to cut the deposit rate and sleep over corresponding reduction in the lending rate. The ground reality is that the small and medium sectors of the industry and the agriculture sector and subsidising the large borrowers. The upper end of the industrial borrowers are getting bank finance at as low as 6.5 per cent. Then there is an invisible way also i.e. commercial paper market. The C.P. market is now worth Rs 7000 — 8000 crore and C.P. issuances peaked at Rs 2074 crore in July this year. The banks are purchasing CPs at rates as low as 6.1 per cent. Apart from higher interest rates, the banks are burdening the small borrowers with service charges. The banks are charging money for every activity done for the borrower. So much so that a heavy rectical fee is being charged for placing any document in the file. The banks devised a way to enhance the interest rates through the indirect route. Earlier, the interest was collected on a quarterly basis. This mode has been changed to a monthly basis. The costs the borrowers 0.33 per cent more by way of interest. So is the reduction of interest rate by 0.25 per cent which more than off set by this change of mode. Is the RBI helpless? In the policy the RBI has stated that in consultation with the banks an information system on maximum and minimum interest rates to borrowers has been prescribed. It is merely an eyewash. a reduction in deposit rates has been enforced. To gain time at a heavy cost to small borrowers the banks have motted yet another delay tactics. The concept of segmented PLRs for various sectors has been mootted. On the face of it this seems plausible. But why the banks have been sleeping for the past at least one year over this. Different PLR levels for different sectors shall be fixed. There should be a rider that is any particular segment all borrowers should be charged PLR with no discretion to the banks. A bank often extends the plea that lending to smaller and medium industrial borrowers is more risky compared to those in the upper end. This cannot withstand the truth of facts. The Finance Ministry IBA has stated that 40 per cent of the total NPA of the banks have some collateral security. A major portion of the bank dues are recoverable from such mortgaged assets. In the case of borrowers with say Rs 200 crore the recovery percentage is very low. Financial experts have revealed that the NPA level in India in the lowest in South East Asia. The root cause of higher NPA is the steel and telecom sectors. In the public interest the banks should reveal their total exposure to these sectors. This alone will tell the story tale. In Punjab Chamber has strongly taken up the issue of higher interest rates to the SSI sector. It has written to all quarters, including the RBI. The good news is that a writ petition on the issue has been filed in the Madras High Court to challenge the discrimination. The reduction of CRR and release of about Rs 300 crore in the market has little meaning for the SSI sector. The banks prefer to route their money through bigger pipes and smaller pipes always remain chocked. |
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In the wonderland of investment Q: On October 1, 2002, Reliance Industries announced its annual results for the year 01-02 declaring a hiked dividend of 47.5 per cent for its shareholders. The dividend declared earlier was 42.5 per cent but it was held back due to announcement of merger of RPL with RIL. The news of the hike came as a pleasant surprise to the RIL shareholders. However, it was nowhere explained that it had been done at the cost of RPL shareholders. Simultaneously, a dividend of 5 per cent was also announced for RPL. Later, this dividend was withdrawn because of announcement of merger of RIL and RPL. Now the dividend of 47.5 per cent shall be paid to RPL shareholders also but for the converted RIL shares. RPL shares are to be converted to RIL shares in the ratio of 11 : 1. So, the net dividend for RPL will be 47.5 / 11 = 4.3 per cent only instead of 5 per cent announced earlier. This is no doubt a clever and unfair move of RIL. RIL was always known for its fairness. Such a dirty move was not expected of RIL authorities atleast. — Vidhu Goyal, A: I strongly feel that the difference is marginal. What is more important to the shareholders of both the companies is whether the merged unit will increase its profitability and emerge stronger. Q: You advise to invest least in PPF and instead choose ICICI TSBs. The interest received on PPF is tax-free while on TSBS it is taxable (specially when it crosses 80L limit) Also TDS is applicable on TSBs and it is difficult to get refund from ITO. In view of this, I would like to know why you still prefer TSBs. — Vijai Kumar Jain, A: This query has surfaced at my table many times. Therefore, let me make an attempt to answer it in detail. My observation was addressed to all those who find that they cannot afford to contribute to Sec. 88 to the hilt since they need the money for their day to day expenses. The advantage of the rebate is so very heavy that one should contribute upto Rs. 1 lakh (or so much as brings their tax to nil level). Such persons should beg-borrow-steal and contribute to TSBs only for 3 years, if such contribution attracts the tax rebate. Thereafter, it becomes a self-sustaining scheme. If you can afford to contribute the full amount without affecting your life style, you may go in for PPF. I am scared of PPF on yet another count. The authorities have realised that they can save a large interest burden by reducing the rate of PPF unilaterally. People like you had built up a large corpus in PPF because of the same reasons as advanced by you. The interest rate was reduced from 12 per cent to 11 per cent and then to 9.5 per cent and then further to 9 per cent. Traditionally we are tolerant to all nonsense. No one protested against such atrocity. I am very much afraid next budget will slash down the interest on PPF further. I and when this happens I am not allowed to shift to greener pastures because my large part of my PPF corpus gets locked. Therefore, I prefer to build up my corpus in an extremely liquid avenue such as, Pure-growth, Open-ended, Debt-based schemes of UTI/MFS (PODs). Being pure-growth, these are so much tax efficient that you can earn as much take-home (= tax-free) income as Rs. 5 lakh on a corpus of Rs. 50 lakh. Being open-ended, these are like an SB account where you can deposit and withdraw at will. The only difference is that the banks require 5 minutes or more to effect a withdrawal but PODs need 5 working days or less. Being debt-based, the safety of the capital as well as the income (around 10 %+ at this juncture) is implicitly certain but not explicitly assured. Therefore, I prefer to earn rebates from Tax-saving Bonds of ICICI in spite of the interest being i) fully taxable after the limit of Sec. 80L ii) lower than that of PPF and iii) subjected to TDS. I like to build corpus in
PODs.
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WWICS offers
incentive Chandigarh, November 2 Highlighting the company’s achievements Col Sandhu said WWICS had now added immigration services to Australia, New Zealand, USA and overseas educational
services. The firm will hold seminars from November 6. Col Sandhu announced an incentive of Rs 5,000 in the professional fee from November 1 to 3 to all prospective candidates for immigration as an anniversary gift. |
by Ashok Kumar Will Divali light up market? DIVALI is round the corner and as has been the case for the last couple of years, the broking fraternity hopes that the new Samvat year will herald a new boom and all round prosperity. The recessionary trends worldwide coupled with an ill-conceived Budget blow further aggravated by crass politicking that derailed the disinvestments process, all but crippled the markets during the current Samvat year. The fact that its last legs too ( read as Sensex pivotals ) are now falling off suggests that we might well be in for a longer haul. Historically though, the Sensex has been at its resilient and mercurial best when confronted with a seemingly hopeless situation. And it is therein that hope lies rather than any sign of imagined economic recovery. A recent pink paper report suggested that the LIC has been a net buyer in the quarter ending September 30, 2002, as far as the BSE stocks are concerned. The firm the report suggested, has scaled up its stake in as many as 17 Sensex companies in the last quarter against the dilution of stake in only two firms. More importantly, the LIC’s net investment for increasing its stake would be around Rs.400 crore plus if the market purchase was bench-marked at the current price levels. It must be noted here that the Sensex has lost 10 per cent between July and September this year. The company scaled up its stake, during July 1 to September 30, in ACC, Bajaj Auto, Cipla, Gujarat Ambuja Cement Dr Reddy’s
Laboratories, Tata Steel, BSES, Castrol, Glaxo, Grasim Hindustan Lever Ltd, HPCL, ITC, L&T, Satyam Computers and Tata Engineering. The LIC diluted its stake in the two companies, Nestle and Ranbaxy. Its shareholding in ICICI Bank, Reliance Industries and Colgate remained unchanged. Of the balance nine firms, either they have not furnished shareholding details as on September 30 with the BSE or the LIC has no investment in them. The LIC has increased its stake the most, by 2.68 per cent, in ACC and least in Satyam Computers, from 2.68 per cent to 2.70 per cent. Apart from ACC, there was no other company in which the LIC increased its stake by over 2 per cent during the period. While the LIC’s recent equity orientation might cause some worry for its investors, given the UTI fiasco, the fact is that the LIC has been among the more prudent investors in the market. Furthermore, bottom-fishing in such despondent market conditions where mutual funds and FIIs are bailing out, licking their redemption wounds, can just prove to be a carpet-bagger idea over a longer time-frame. After all, the stocks they have picked rank among the finest and at present valuations most of them do offer an upside opportunity as soon as the tide turns. But, the million dollar question now is, when will the tide turn? Hopefully, in the New Samvat year - the season of hope!
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Forex reserves fall $ 19 m Mumbai, November 2 The foreign currency assets of the country decreased to $ 60,729 million, registering a fall of $ 19 million in the period under review, according to the RBI’s weekly statistical supplement issued here today. New UK website to woo Indians In a bid to tap the “huge Indian market” in a better way, Britain has launched a comprehensive website providing topical insights into the opportunities and attractions the country has to offer. “i-uk.com is perhaps the most comprehensive website on UK. We are not aiming to project an ideal image of Britain but what our country actually is,” acting British High Commissioner Mark Runacres said at the launching of the portal here last night. The huge Indian market was the main reason for the launching of the portal in Delhi, besides in London, he said.
PTI TVS Motor chosen for Deming Award TVS Motor Company has been chosen for the Deming Award for “having achieved distinctive performance improvement through the application of total quality management’. TVS is the first two wheeler company in the world to get this award, which is a recognition of the principles that TVS Motor Company has always stood for, said Mr Venu Srinivasan, Managing Director of the company. The prize has been instituted by the Union of
Japanese Scientists and Engineers. Aurobindo Pharma net rises 41 pc Aurobindo Pharmaceuticals Ltd has reported 41.12 per cent rise in its net profit at Rs 20.52 crore in the second quarter of the current fiscal from Rs 14.54 crore in the same period last year. The profit before tax for the period stood at Rs 29.13 crore from Rs 17.07 crore in the corresponding period last year.
Agencies
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by K. R. Wadhwaney Learn a lesson from Sri Lankan Airlines WHATEVER may be Sri Lanka’s internal political problems, it runs its airline professionally. It has a very meagre fleet but it utilises its aircraft to the optimum utilisation. Its tourism concept is based on realities and it achieves its targets. Air-India and Indian Airlines should take a leaf out of its book as to how to run the airline. Sri Lankan Airlines is fully aware that its neighbouring countries, particularly India, offer ready-made avenues for earning huge profits. After evaluating the market, it has decided to launch new flights to Chennai and Delhi. It will also operate a flight to Gaya (via Delhi). Its concentration, however, is on Southern India and the flights from Colombo and back are very popular. It operates 39 flights to India. Sri Lankan Airline has six frequencies ex-Delhi. The timings are convenient and it offers immediate connections to Bangkok, Hong Kong, Singapore and Kuala Lumpur in South East and London, Zurich and Frankfurt in Europe. Sri Lankan Airlines flies to 20 countries. As fares are competitive and in-flight service excellent, the passenger-load on flights is remarkably high. It is one of the few carriers which has not been much affected because of terrorist incidences worldwide. Winner of several awards for top-class services on board and on ground, it has been recently judged as a best long haul airline from the UK to the Indian subcontinent for 2002. British Airways is one of world’s premier carriers. It is planning to operate additional flights from Chennai, Bangalore and Hyderabad. New machine The new currency dispensing machine will soon be operational at IGIA. Programmed to provide rupees for 15 foreign currencies, it will greatly facilitate the arriving passengers to change their currency into rupees. Bought from a company in France, the machine will be operated by Thomas Cook. |
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Syndicate Bank Muhurat trading |
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A judge has approved a hotly disputed deal between Microsoft and the US
Government to settle a four-year battle over the software titan’s
illegal squelching of competitors. The settlement imposes no financial
penalty but it forces billionaire Bill Gates’ software giant to
disclose some technical information and bars anti-competitive agreements
on Microsoft products.
