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Wednesday,
June 25, 2003, Chandigarh, India  
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Interest
rate futures trading launched
CII signs
pact with Chinese trade body Set up
SEZs soon, Punjab urged Banks hint
at 0.5 pc cut in PLR |
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India
cautious at WTO meet $50m IFC
loan for Tata Engineering
10 pc dividend for
UTI Masterplus
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Interest rate futures trading launched New Delhi, June 24 “Today’s launch of interest rate derivatives is a milestone in our efforts to reform the capital market, provide scientific risk management and protect the interests of small investors,” he said, launching the trade on the NSE. As a first step, he launched trading in futures on 10-year government bond and 91-Treasury Bills, which would be available for a maximum maturity of one year. “The products will be continuously refined and expanded based on market needs,” he said. Reserve Bank Deputy Governor Rakesh Mohan said interest rate options would be introduced shortly after regulatory mechanisms are put in place. Interest rate derivatives - futures and options - are tools through which investors can manage volatility better and provides “insurance” to investors against unfriendly events. With the introduction of interest rate derivatives, he said “our institutions will be on a par with the international standards. It will also provide market protection to PFs, insurance companies, banks and corporates which have long-term liabilities that tend to be susceptible to volatility.” As derivative trade opened up immense opportunities to FIs and individuals to manage interest rate exposure, he expressed confidence that the market would grow rapidly and constitute yet another “landmark” in building a vibrant financial market. SEBI redefines retail investor Meanwhile SEBI Chairman G N Bajpai said today the market regulator had made changes in the definition of a retail investor and stated that in a book-built issue institutions would not withdraw their bids. The retail investor would, from now onwards, be defined as those who make an investment up to Rs 50,000. Till now it was quantified at 1,000 shares. Speaking to reporters on the sidelines of a function to launch the interest rate derivatives, Mr Bajpai said from now on all book-building issues would have to be listed in six days. The current time limit is two weeks. Besides, the institutional portion of an initial public offer issue would be brought down from 60 per cent to 50 per cent. “In a book-built issue, institutions cannot withdraw their bids but they can only revive their bids,” Mr Bajpai said. SEBI has also put retail investors at a par with institutional investors. SEBI has also made it mandatory for companies to declare share value of employees stock options (ESOPs). The companies will have to inform investors about the impact of this step. SEBI has come out with guidelines on how to expense ESOPs, which would make the balance-sheet more transparent. Book building is a facility given to issuers and merchant bankers to ascertain the demand and indicative price before the actual opening of the issue. SEBI has reviewed the exitsing book-building guidelines to make price discovery process more realistic, immune from artificial demand and more responsive to the market demand. The other main amendments proposed in these guidelines pertain to introduction of the concept on “movable price band” in place of existing “fixed floor price” and widening the definition of QIBs by including insurance companies registered with the Insurance Regulatory and Development Authority. In the recently-concluded Maruti Udyog initial public offer reservations were expressed about the definition of retail investors and the discretion allowed to institutional investors in the book-building process. Experts said it was incorrect to have a limit on the number of shares without any reference to the amount issue price. Experts said institutions would earlier bid at a particular price and then lie low with an eye on the price the book would be built. They would then accordingly either withdraw completely or revise their bids.
— PTI, UNI |
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CII signs pact with Chinese trade body Beijing, June 24 As part of the MoU, inked by CII President Anand Mahindra and CCPIT Chairman Wan Jifei, the council committed support to CII’s “Hi-Tech” and “Made in India” shows to be held in China in October this year. The MoU was signed after the address of Prime Minister Atal Bihari Vajpayee at a business seminar here. The show will serve as a focal point for highlighting the scope of cooperation in high-end technology sectors and research and development, which has come to provide an unprecedented impetus to the economic growth in China and India. The show, which derives its nucleus from the concept of complementing competencies, is the first initiative of its kind and aims to build mutual synergies in terms of breakthrough research, world-class service and building economies of scale. The CCPIT will also support a business information Web site — www.indiachina.org — launched by the CII to facilitate economic cooperation between India and China. The site includes resources, sectoral information and trade statistics, business directories and news about Indo-China bilateral developments. On the occasion, Mr Mahindra welcomed the agreements signed by Mr Vajpayee and Chinese President Hu Jintao on comprehensive cooperation between the two countries. The CII president also hailed the agreement inked by External Affairs Minister Yashwant Sinha and Chinese Commerce Minister Lu Fuyuan on reopening the ancient trade pass at Nathu La in Sikkim.
— UNI
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Set up SEZs soon, Punjab urged Chandigarh, June 24 The Punjab government is still struggling to prepare a feasibility report to set up three special economic zones SEZs and the industry is awaiting the implementation of the SEZ projects in the state. A number of officials of the Department of Industries, Punjab, and the PSIDC were impressed today with the progress made by MP in the execution of the SEZ project. A meeting was organised by the PHDCCI and the MP State Industrial Development Corporation to attract the region’s investors in the Indore SEZ. Industrialists said while the Punjab Government was merely talking about the potential benefits from the industrial policy and its efforts to develop the agro-processing industry the MP Government had come up with a blueprint of largescale incentives. They said instead of wasting scarce financial resources, the state government should focus its energy on projects that would help us emerge as a global player. Said an industrialist, a number of industrialists from the textile, auto-parts and light-engineering sectors were contemplating to invest in Indore or other SEZ to avail tax exemptions. A senior official of the Industry Department admitted that the SEZ projects in the state was unnecessarily delayed as the state government was still pleading with the Centre to relax the condition of keeping at least 1,000 hectares for each SEZ. The state government could boost exports from the state, currently around Rs 4,500 crore annually, besides creating employment for the educated employment youth if it pursued the process sincerely. Otherwise, he said, like the online lottery the state would miss the bus. Mr Amarjit Goyal, President, State Committee of the PHDCCI, felt that state government must provide an environment that was conducive to enhance production to the internationally comparable levels. |
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Banks hint at 0.5 pc cut in PLR New Delhi, June 24 “The rate (PLR) can be cut by another 0.5 per cent,” IBA Chairman Dalbir Singh said here inaugurating a seminar organised by the PHDCCI. He, however, said such a reduction would depend on the markets and cost of funds of the banks. “If the cost of funds permit me, I will do it,” Dalbir Singh, also the Central Bank of India Chairman, said, adding that it was dependent on the individual banks to decide since they had been empowered to determine the PLR on their own. Earlier, the banks used to wait for the Reserve Bank’s Credit Policy to announce their lending rates, but at present, the banks need to weigh the costs before taking any decision. At present, PLR averages around 11-11.5 per cent and only a few banks charge over 11.5 per cent. There had been considerable reduction in interest rates in the six to seven years with almost 10 per cent cut in the PLR to the present industry average of 11-11.5 per cent. Banks like the SBI, PNB and Bank of Baroda had recently cut their PLRs. Ruling out any uniform PLR across the banking industry, he said there should be “unique” PLR for each bank. On the VRS, he said, it was “round the corner” for reducing the transaction costs of the banks and that only Bank of India had so far applied to the Government for cutting its excess flab. He said the bank’s increased focus on the retail customers had paid rich dividends both to the banks and economy since it led to picking up of demand in the core sectors and the automobile sectors. Housing loans at present stood at mere 8.5-9.0 per cent and it had spurred demand in the construction sector and in cement and steel, he said. NPAs around 1,00,000 cr The IBA said the total non-performing assets (NPAs) rest at about Rs 100,000 crore and most of the banks had made provision up to 85 per cent of their bad loans. Dalbir Singh said with the level of NPAs of public sector banks coming down to 4-4.5 per cent, the banks had been able to control the problems of NPAs. “Even though a number of accounts are still slipping into NPAs, the amounts are being recovered at a much faster pace and therefore, NPAs are not increasing as earlier,” he said. Dr Dalbir Singh said from March 31, 2004, the banks would make provision for reducing their NPAs norms from the existing 180 days to 90 days.
— PTI, UNI |
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India cautious at WTO meet New Delhi, June 24 Participating in the informal meeting of WTO trade ministers at Sharm El-Sheikh in Egypt, the Indian delegation cautioned on Singapore issue by stating that the structure and content of the Singapore issues were still unclear and hence has reservations about entering into negotiation of any kind without a full understanding of the nature and structure of the agreement that would result from such negotiations, a statement issued here said today. The Singapore issues deal with investment transparency in government procurement, competition policy and trade facilitation.
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$50m IFC loan for Tata Engineering New Delhi, June 24 As part of the agreement, IFC, the private sector lending arm of the World Bank, will invest $50 million in Tata Engineering to support the latter's new product development initiatives, said an IFC press statement issued here. Tata Engineering features among the top 10 commercial vehicle manufacturers globally. The company's hatchback, Indica, controls a 15-per cent market share in the domestic passenger car market.
— IANS |
10 pc dividend for UTI Masterplus MUMBAI: UTI Mutual Fund has announced a 10 per cent dividend for its Masterplus unit scheme of Rs 10 each. The record date for income distribution of Re 1 per unit is July 7 and the actual return to the
unit holders will work out to be much higher as dividends are tax free, a UTI MF release said here on Tuesday. The net asset value of the scheme as on June 20 was Rs 18.55 per unit, it said. —
PTI Apple unveils
G5 computer SAN FRANCISCO:
Apple Computer Inc introduced on Monday its “G5” computer chip, a design by the International Business Machines Corp that can handle twice as much data at once as compared to traditional PC microchips. The Cupertino, California-based computer maker also said at a developer conference in San Francisco that its new online music store had sold 5 million song downloads since its inception eight weeks ago, or an average of 6,25,000 songs a week or more than 89,000 song a day.
— Reuters Online MBA for Indian students NEW DELHI:
Singapore-headquartered Universitas 21Global on Tuesday announced online MBA courses for Indian students. MBA aspirants can register with Universitas 21 Global, an e-university which integrates the Internet to provide e-education. The e-university offers a holistic approach to education online. It will provide students with a global perspective and an opportunity to network with peers from around the world.
— UNI Govt clears VRS in ONGC, IOC NEW DELHI:
The government today approved the proposals of the ONGC and the IOC to offer voluntary retirement to their surplus staff. The ONGC is expecting that at least 10 per cent of its 40,000 workforce would opt for VRS, which would entail an outgo of Rs 426 crore. In the case of the IOC, nearly 1,000 workers are expected to accept pre-mature retirement. According to the revised proposal, the one-time VRS would be applicable to those employess who have put in minimum 15 years of service and are not below the age of 40 years.
— PTI Panasonic’s car audio systems KOLKATA:
Isuta Electronics (India), the sole marketing agent of Panasonic audio products, launched a range of car audio systems here on Monday and plans to gradually capture Rs 500 crore market in India. Announcing the launch of different types of imported Panasonic branded cassette players, CD players, amplifiers, woofers, speakers and monitors, Isuta Electronics Executive Director C.A. Kaushik told newsmen that the systems, valued between Rs 5,000 and Rs 1 lakh each, had been specially designed for different brands of Indian cars, including Indica, Indigo and Safari.
— UNI Vijaya Bank plans 2nd IPO MUMBAI: Bangalore-based Vijaya Bank has finalised plans of a second public offering of its equity shares with a face value of Rs 100 crore by early September this year. It will issue about 10 crore equity share in the second tranche of its public offering at a price still to be determined by the board, bank’s Chairman and Managing Director M.S. Kapur disclosed at the analyst meeting held here on Monday.
— UNI |
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AirTel service Grain markets Hugo Boss shop IOC profit up Aviva Life EIL wins deal Tisco plan |
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