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Charges fly
‘Left’ and right Different view on
disinvestment possible,
says Jalan
RBI promises
liquidity Reduce roaming
rate, orders TRAI Orange picks
India for outsourcing LG Electronics Abbey National GAIL, Petronas
vie for Reliance tender
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Sensex slumps, market rides roller-coaster
New Delhi, May 17 “The genesis is the statements made by the Left leaders on reforms. I do not rule out payment crisis if such a huge fall continues unabated. However, I believe the market has enough system in place to avert such crisis if it happens. Like the Trade Settlement Guarantee Fund should be able to take care of it,” Ms Apoorva Shah, senior research analyst, Prabhudas Liladhar Securities, told PTI. “It is simple broadbased panic. Over the last two trading days (Friday and today), the market has lost about Rs 3 lakh crore. And it is unlikely, at least as is evident now, that the market will recover any time this week”, Kavi Kumar, senior research analyst, Indiabulls, said here. This could be well compared to the Great Depression of 1929, he said. “Today’s stock market crash is a reminder of that; the concept of a ‘Bear Cartel’ operating to pull the market down is hypothetical. “The problem is bigger than this. The statements made by the Congress’ coalition partners, like the Left, has all potential to destroy the market,” Mr Kavi Kumar said. He said senior Left leaders like A B Bardhan’s comment, ‘no disinvestment of profit-making PSUs’, Sitaram Yechuri’s view that only two per cent of the population invest in stock markets, and more importantly the silence of the Congress who is the original reformer party on this critical issue is adding to the nervousness. The market also feared that reforms and development agenda would take a backseat under the new government, Mri Kumar said. The crash was due to two reasons—election results were a surprise and the concerns over political stability, Mr Arup Raha, head, equities, JP Morgan, said. Mr Dina Mehta, former vice president, BSE, suggested that short sales should be banned for two to three days to contain volatility in the market. “There is no bear cartel as is being talked of. There is a panic in the market because of perceived ideological shift in the progressive policies of the government,” one analyst said.
— PTI
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You abetted it, brokers tell mediapersons
Mumbai, May 17 Mediapersons and television crew were threatened outside the BSE by about 200 persons and asked to move their OB vans and equipment away. The agitators who raised slogans against the Left parties for making statements, which had sent the capital markets in a tailspin, were angry with the mediapersons “for presenting a wrong picture during elections and exit polls.” They said distorted media reports had led to panic on the bourses. The agitators threatened to damage the OB vans if they were not moved away. Somebody from the mob spat on the female reporter of a TV channel covering the demonstration.
— PTI
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Don’t worry, assures India Inc New Delhi, May 17 “This (plunge in the stock markets) is partly due to slide in other Asian markets and partly due to a panic reaction arising out of uncertainty. I think it is important to create a sense of calm. Corporate India believes that the overall policies will bring about growth”, Director General-designate of the CII N Srinivasan told TNS. Mr Srinivasan said the CII had been getting calls from CEOs since the news of the market crash spread out. “Our members are confident about the shape of the economy. We are confident that the new government will pursue policies of economic growth”, he said. He said “similar noises” of difference of views were emanating even during the formation of the erstwhile NDA government. President of Assocham Mahendra K. Sanghi said there were no reasons for such a panic reaction when the fundamentals of the economy were strong and future economic growth indicators were bright. “It is unfortunate that some individuals from the coalition partners have reacted on some important economic issue. Therefore, the need of the hour is to exercise restrain and await the formation of the government”, Mr Sanghi said. PHDCCI President, Mr Ravi Wig said the economy was fundamentally very strong and stock market was likely to bounce back once there was a clearer indication that the pace of reforms would continue. The government would do well to end the prevailing uncertainty by announcing a pragmatic common minimum programme at the earliest and ensuring that the programme had investor-friendly provisions, Mr Wig said. Discussing the “ Economic Agenda for the new government” FICCI leaders have also supported the need for the change in economic priorities and to foucs on employment-led growth. However, chambers want the new government to continue the reforms to cut down fiscal deficit, to attract foreign direct investment and strengthen the primary market.
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Charges fly ‘Left’ and right
New Delhi, May 17 It rejected the Left charge that BJP’s manipulation of the market led to the crash. “Left leaders are making outlandish statements aimed at hijacking the mandate. This is indirect political pressure with an element of economic adventurism to disturb sentiments of the market,” senior BJP leader Arun Jaitley told newspersons here. He hoped those drafting the agenda for the new government would keep this in mind and not allow themselves to be subjected to pressure from those, particularly the Left parties, who want to enjoy power without sharing responsibility. On the charge by the Congress that BJP was manipulating the market he said, “I would have reacted if anyone responsible had made the allegation.” “Those who understand the management of the economy would not have made such charges,” Mr Jaitley said.
— PTI
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Different view on disinvestment possible,
New Delhi, May 17 “It is possible to take a different view both in terms of the human-face and content. You (new government) must have the capacity to do what it wants to do,” Mr Jalan said at a FICCI conference here. Although there was a difference in view between NDA and Congress and its allies, he said “they are not vital.” Mr Jalan said he was not opposed to populist measures like free power to agriculture promised by the newly-elected government in a state but added that such a measure should not be at the cost of tax payers money. In this context, he stressed on “fiscal empowerment” and the need to reduce fiscal deficit both at the Centre and in states to ensure higher growth. “I don’t think there is any difference in view that we want high growth, lower poverty, low inflation, financial stability and a strong market... Unless you correct the fiscal problem, you can not achieve what you want,” he said. Mr Jalan also stressed on improvement in the public delivery system, legal reforms, corporate governance and the need to bring down corruption. Prescribing a long-term fiscal policy, Mr Jalan said tax rates should come down, procedures be simplified and tax net be widened.
— PTI
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RBI promises liquidity
Mumbai, May 17 The central bank said it was closely monitoring the developments in stock markets and other financial markets, including foreign exchange. A task force has been constituted under RBI executive director, financial market committee, Mr S. Gopinath, for ensuring availability of liquidity, the apex bank said in a release here. “RBI has been in touch with major settlement banks and both stock exchanges (BSE and NSE) to ensure that payment obligations are met smoothly,” it said. On the foreign exchange market, RBI said: “It will continue to sell dollars through agent banks to augment supply in market or intervene directly to meet any demand-supply imbalances and all the transactions by RBI would be at the prevailing market rates. Foreign institutional investors (FIIs) will no doubt continue to take their decision in regard to reducing or increasing their stake in Indian equity markets,” it said. While RBI welcomes these flows, it would also like to ensure that those FIIs, who wish to reduce the investment, can do so as easily as possible at the prevailing market rates. As in the past, authorised dealers acting on behalf of the FIIs are free to approach RBI to procure forex at prevailing market rates depending on market conditions, it said. RBI would either sell forex directly or advise concerned bank to buy it in market, it added. Meanwhile, the Reserve Bank of India (RBI) has cautioned the banks to take suitable precautionary measures at the time of entertaining their prospective clients for opening current accounts because the apex bank found that a certain account holders are engaged in diversifying the funds from the banking system by opening similar current accounts in multiple branches of banks.
— Agencies
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Reduce roaming rate, orders TRAI
New Delhi, May 17 “The roaming tariff implemented by some operators for various distance slabs exceeds the prescribed limit and were also inconsistent with the provisions of Telecom Tariff Order and IUC regulations,” TRAI said in a statement. Airtel, cellular service of Bharti Group, and Hutch had increased the roaming tariff by Rs 1.50 a minute with effect from May 1 under which mobile to mobile calls up to 200 km are costing Rs 3.49 per minute and for distance over 200 km the new tariffs are Rs 4.49 per minute. Similarly, a post-paid roaming customer calling a landline would pay Rs 4.49 per minute for distance up to 200 km and Rs 5.49 for distance slab of 200-500 km while Rs 6.49 a minute for distance beyond 200 km. In view of the above, the TRAI has informed all mobile service operators that the roaming tariffs that are above the prescribed ceilings shall have to be reduced. TRAI asked the operators to immediately restructure their roaming tariffs and furnish their compliance report along with the revised roaming tariffs to the TRAI latest by May 20.
VSNL
VSNL said today it would start laying of cables for its Tata Indicom India-Singapore Cable System, a terabyte-capacity undersea cable, by next week. VSNL would lay the 3,175-km long point-to-point undersea fibre optic cable (FOC) from Chennai to Singapore, VSNL Director (Operations) N Srinath said and added that it would transform the international bandwidth scenario in the country. “We are building a submarine cable between Chennai and Singapore to increase the supply of international bandwidth to India. This will have a direct impact for the customers who are dependent on international bandwidth for their business. “The availability of bandwidth in the country will make the supply position much better and one more cable will give the customer better diversity, therefore better service,” Mr Srinath said. He pointed out that the cable system had been planned to cater to the exponential increase in demand for international bandwidth in the country and was in line with VSNL’s objective of providing end-to-end connectivity to its enterprise and broadband customers.
— Agencies
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Broadband verdict next month
New Delhi, May 17 Telecom Secretary Nripendra Mishra said the department would get opinion from all players and come to conclusions within a month. The country is expected to achieve 20-million broadband and 40-million Internet subscribers by 2010 if the government steps in with reduced duties and takes major e-governance initiatives, according to the recommendations on broadband presented by TRAI to the government. In its report released last month, the telecom regulator said broadband is “an always on connection that is able to support various interactive services and has the capability of a minimum download speed of 256 Kbps (kilobits per second). The regulator had pointed out that the broadband penetration can be increased to 1.7 per cent from the present 0.02 per cent by enabling the use of existing copper wire infrastructure of incumbent fixed-line operators such as Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL).
— PTI
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Orange picks India for outsourcing
Dubai, May 17 The GSM network operator, Orange is considering calling on Indian call centres to boost capacity in its UK Customer Care Department. “We are in discussions with two potential partners to develop a small proportion of their call handling,” Orange Customer Services Director Graeme Nixon was quoted by The Peninsula newspaper as saying. “We have agreed in principle that they will support us using their call centres in the UK and India and we will start trials with them in the coming months,” he said. Last week, staff was informed that Orange management are in discussions with three companies about outsourcing work when the call centre was overloaded. The company has, however, stressed though that it is not planning to make any of its UK staff redundant. “I can firmly say that the steps we are currently taking will not lead to any site closures or redundancies in Orange’s own call centres. “In fact, we are currently recruiting staff in the North-East,” he added.
LG Electronics
South Korean conglomerate LG Electronics is planning to make India a sourcing base for Hong Kong, South Africa and New Zealand. “We plan to source from India for other countries including Hong Kong, South Africa and New Zealand. As of now, we are exploring possibilities for grabbing a greater share of the global market and this plan is part of it,” LG Electronics India Managing Director Kwang-Ro Kim told UNI here.
Abbey National
UK-based banking and financial services giant Abbey National is planning to move 600 jobs to India to cut costs and streamline operations. Abbey is reviewing its call centres and other operational sites with IT services supplier EDS, with which it has a 260 million pounds joint venture. Abbey, which exit from India by offloading its 35 per cent stake in IDBI Home finance in 2003, is considering moving its billing and call centre operations to India. The group has already transferred 400 jobs in customer service to Bangalore. “Abbey is undertaking a review of all its operational sites as part of an ongoing programme to streamline the business,” Abbey and EDS said in a joint statement.
— Agencies
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GAIL, Petronas vie for Reliance tender
New Delhi, May 17 Reliance Industries has also bid for supply of natural gas from its giant Dhirubhai fields in Bay of Bengal. However, Petronet LNG, the country’s first LNG firm, and Royal Dutch/Shell have ignored the tender, sources said. GAIL has offered to supply liquefied natural gas (LNG) sourced from Iran to the project while Petronas proposes to supply LNG from South-East Asia. British Gas can supply gas from its Panna/Mukta and Tapti fields in the Mumbai offshore. Sources said the $2.97 per million BTU (British Thermal Unit) price offered by Reliance Industries for gas from Dhirubhai fields to the National Thermal Power Corp’s power plants in Gujarat will be the benchmark for Dadri tender. Reliance has offered NTPC gas from the Krishna-Godavari basin at $2.70 per million BTU plus $ 0.48 per million BTU for piping the gas from Kakinada on the Andhra coast to Kawas and Gandhar in Gujarat, a distance of 1400-km.
— PTI
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New Delhi, May 17
