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| Thursday, September 14, 2000, Chandigarh, India   
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Old economy bites
back Rel Petro to pay
maiden dividend Spend more on tourism:
Centre Army has 2,000 cr for domestic
shopping Dabur stock split, ESOP
approved |
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Chase to buy
J. P. Morgan for $ 33.2 b
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Old economy bites
back AS queues formed outside the few remaining British petrol stations open for business on Tuesday and panic buying for food began, economists who have pioneered the view that the world has become a virtual marketplace in which energy no longer matters were left scratching their heads. Britain — after just two days of protest — had moved from a country in which the government talked about the benefits of a “new economy’’ to one in which emergency powers were being invoked to deal with a crisis caused by the oldest of old technologies — a shortage of fuel. It is not just in Britain that governments are concerned about the possibility of the old economy biting back. President Bill Clinton has warned the oil producers’ cartel, Opec, that it could plunge the global economy into recession unless it produces more oil, and the US government is considering whether to release oil from its strategic petroleum reserve to increase supplies and lower prices. Prof Andrew Oswald of Warwick University, England, is one of those who believe that the significance of the new economy has been overstated. He argues that the three previous sharp increases in the price of crude since 1973 have all led to recessions and that the fourth — the fourfold increase since the beginning of last year — will have the same impact. Prof Oswald rejects the idea that the computer chip and the mobile phone are the visible signs of a “weightless’’ world not vulnerable to energy shocks. “Oil is an important input. Most especially, its price influences the prices of other energy sources, and so, in turn, determines lots of other
influential prices in the economy. (And) Employment and output respond.’’ Economic historians now believe that the low level of oil prices in the three decades after the second world war helped to create the conditions for the long burst of economic growth from 1945 to 1973, and that the price collapse in the aftermath of the 1991 Gulf war has been equally important to the success of the US economy. Cheap energy has pushed down inflation, allowing the Federal Reserve, America’s central bank, to foster growth by keeping interest rates low. The key question now is what happens next? In theory, all three of the world’s major economic blocs are vulnerable. Japan, which is only just emerging from recession, is highly exposed to dearer oil prices, the combination of more expensive energy and the declining euro has already pushed inflation in the single-currency zone above 2 per cent and triggered an increase in interest rates from the European Central Bank, while the boost to corporate profits from cheap oil, which has been a crucial factor in
underpinning share prices on Wall Street, could quickly evaporate. According to figures due to be released by the IMF next week, 2000 will be the best year for the global economy in a decade. But already there have been signs of a slowdown prompted by the rise in the cost of a barrel of crude from under $10 in early 1999 to around $35 last night. — By arrangement with The Guardian |
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Rel Petro to pay maiden dividend JAMNAGAR, Sept 13 (UNI) — Reliance Petrochemical Ltd (RPL) will reward shareholders by paying its maiden dividend in the current year, RPL Chairman Dhirubhai Ambani said here today. Addressing shareholders at the annual general meeting (AGM), Mr Ambani said that RPL will be the first company in India, of this size and scale, to pay dividends in the very first year of operations. Quoting the statistics, the RPL Chairman said that in the current year, RPL and RIL will be the top two private companies in India, on almost all financial parameters. RPL and RIL will also rank among the top three manufacturer exporters from India in the current year. RPL already ranks among the top five private sector companies in India with market capitalisation of over Rs 27,500 crore. RPL shareholders have earned far higher returns than those from the overall stock markets, Mr Ambani claimed. The investors in the original Triple Option Convertible Debenture (TOCD) offer in 1993 and the option offer in 1998, have earned compounded returns of over 35 per cent per year. The return of the investors was even higher than the overall return of the 30-share Bombay Stock Exchange (BSE) sensex which had provided returns of only 9 per cent per year during this period, he said. Investors in the 1998 TOCD conversion option offer have earned a 300 per cent return in just two years, which is 250 per cent higher than the returns on the sensex. |
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Spend more on tourism:
Centre AGRA, Sept 13 — The government today asked the states to increase their allocation to the tourism sector and called upon the industry for greater participation to tap the huge potential of this sector. At a conference on “India: Tourism and Heritage Challenge” organised by CII, Tourism Secretary M.P. Bezbaruah said the collective allocation of Rs 300 crore by all the states and Rs 110 crore from the central allocation were not adequate for developing India’s potential as a major tourist destination. “We have asked for an increased allocation for this year from the Ministry of Finance, but a large part of this problem can be solved by increasing private participation in the industry he said. There are nearly 5,500 monuments and tourist locations all over India. Last year the union government had allocated Rs 150 crore towards development of tourism in the country. Uttar Pradesh Minister of State for Tourism Ashok Yadav said that the UP government is in the process of developing six Buddhist centres in the state. According to him, the UP Government is in the process of developing the Taj National Park for which international consultants are already making presentations. Meanwhile a survey conducted by CII and consultant AT Kearney indicated that inadequate promotion of tourism by the Indian government and infrastructure problems were hampering tourist inflow into the country. The exit survey conducted at Delhi’s international airport indicated that most of the 600 respondents had visited the country on suggestions by friends and relatives. “The travel agent or advertisements and brochures were really not the key influencer of the decision to visit India” said Mr Simon Bell of A.T. Kearney, a US-based consultancy firm. The results of the survey would give an opportunity to representatives of the government and the industry to chalk out future policy. Respondents said that the main problems were that of infrastructure. Poor airport facility, dirty toilets, ground transportation, railway services and roads were the major negative features cited by the respondents, said Mr Bell. Roughly the business tourists constitute 25 per cent of this. This sector employs 10 million people directly and an additional 10 million indirectly. An average stay period of tourists in India is around 20 days and they spend about $ 1200. The present allocation to the tourism sector is around 5 per cent of the GDP and is expected to rise to 8 per cent of the GDP. |
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Army has 2,000 cr for domestic
shopping CHANDIGARH, Sept 13 — While the industry looks up to business opportunities worth over Rs 2,000 crore annually from the Army, the Army is desperately searching for avenues to tackle problems of spares and modernisation while keeping the economy factor in mind. With this backdrop, the Army top brass and representatives of the industry will get together tomorrow for the two-day Army Industry Partnership - 2000 (AIP - 2000) to work out how best can one benefit from the other in the field of vehicles spares and overhauling, information technology and communication, and allied stores and clothing. As per information available at the CII, business opportunities that exist annually in these three sectors alone are worth Rs 2,000 crore. The vehicle segment, which offers the largest chunk, is estimated to be Rs 1,200 crore, with annual business from the IT sector and allied fields being estimated at Rs 600 crore and Rs 200 crore respectively. The CII estimates that the Western Command, which is collaborating with it to organise AIP - 2000, alone can provide 40 per cent of the total market which exists in these sectors. This amounts to about Rs 800 crore annually. Army sources say that with decentralisation of power to formation commanders for directly procuring specified items, the army-industry partnership can assume a new dimension. Under the policy, specified items which are required urgently for the conduct of operations can be procured directly by formation commanders instead of the Army acquiring them centrally. Of major concern to the industry are issues like bureaucratic delays, long gestation periods and requirement of relatively small quantities of items. Availability of defence hardware in the global market at competitive rates, competition within the Indian industry and frequent technology upgradation are among other factors the industry has to contend with. The industry would also like a greater deal of clarity and
transparency in the procurement process, besides realistic projections in requirements and delivery schedules. The industry has also suggested that the Army invest in research and development projects to be undertaken by the private sector. As far as items on the agenda of the AIP - 2000 are concerned, the industry already has access to the latest technology. Besides, easier import procedures, elimination of the licence raj and availability of bank loans on easy terms for defence projects are added advantages. Tremendous scope exists in the field of IT and communications. With the Army implementing the IT Roadmap 2001, which envisions massive computerisation of its communication networks, logistics management and operational planning, it is procuring off-the shelf, commercially available equipment. Developments like cellular technology, optical fibre, ATM technology and satellite communication offer a wide scope to the industry for providing turn-key projects to the Army. Electronic warfare and cyber security, inter-formation networking, communication infrastructure, communication security and development of specialist software are listed as areas of interest. In the vehicle segment, general duty vehicles are being procured from the private sector, where service and repair facilities can be set up by the manufacturers on mutually agreeable terms and suitable places. Difficulties in maintenance of vehicles of foreign origin calls for stress on indigenisation of spares, where the industry can play a vital role. The private sector is already engaged in the supply of general stores, clothing etc. One concern to the Army is the availability of high quality clothing and equipment for extreme weather and high altitude, most of which still has to be imported. As per available information, the Army’s total expenditure on indigenous procurements, including ordnance and combat equipment as well as other general duty items was Rs 8180 crore last year. While the major chunk, Rs 4935 crore went to the ordnance factories, public sector undertakings accounted for Rs 830 crore. Major industrial houses received orders worth Rs 1862 crore, while small scale industries had a share of Rs 1003 crore. It is the small scale sector and the medium scale industries which the army is looking up to for meeting its requirements. |
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Dabur stock split, ESOP approved NEW DELHI, Sept 13 (PTI) — Dabur India’s shareholders today passed a resolution to split each Dabur share of Rs 10 into 10 shares of one rupee each, besides approving the new Employee Stock Option Scheme (ESOP) for the senior management. Speaking at the meeting, Chairman of Dabur India Limited V.C. Burman expressed confidence that the company would continue to outperform the market, achieve double-digit growth in all its strategic business units (SBUs) and double its turnover to Rs 2,000 crore within the next four years. Mr Burman’s remarks assume significance since the company has pushed back this target by one year to 2003-04 and has exited several businesses over the last two years, besides hiving off the foods business as a 100 per cent subsidiary, to focus on its core competencies of healthcare and ayurveda. “The company discontinued the low-margin businesses like merchant exports, generic drugs and herbal intermediaries. In order to concentrate management time and resources on core businesses, the company exited from two joint ventures — General de Confetaria and Excelcis Foods,” Dabur said in its balance-sheet. |
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Chase to buy
J. P. Morgan for $ 33.2 b NEW YORK, Sept 13 (Reuters) — Chase Manhattan Corp, the No. 3 U.S. bank holding company, said on Wednesday it would buy commercial and investment bank
J. P. Morgan & Co. Incl. for $ 33. 2 billion in stock, creating a global powerhouse to compete in a consolidating industry. The combined bank, which will be called
J. P. Morgan Chase & Co., will have about $660 billion in assets and large, far-flung businesses advising companies on merger and acquisitions and new stock offerings, as well dominant commercial and consumer banking operations. J.
P. Morgan is one of the country’s oldest banks, and also the fifth biggest bank holding company. The deal follows a spate of industry mergers that have put pressure on the remaining independent U.S. banks and brokers to strike transaction or be left behind. Chase, which has made no secret of its desire to build its investment bank as the traditional banking business becomes more challenging, said it will pay 3.7 a share of its stock for each.
J. P. Morgan share, or about $ 207 per J. P. Morgan share. Based on Chase’s closing price of
$ 56-1/16 on Wednesday, the deal would be worth about $ 33.2 billion. Shares of
J. P. Morgan, a long-rumoured takeover target, had shot up ahead of the talks and closed on Wednesday at
$ 177-3/4 a share. The deal is expected to close in the first quarter next year. The banks said they expect about
$ 1.5 billion in pre-tax cost savings from the deal, and an estimated
$ 400 million pre-tax in incremental revenues. |
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Microsoft to roll out new Windows WASHINGTON, Sept 13 (AFP) — Even as it faces a court-ordered breakup, Microsoft is quietly rolling out a new version of its Windows operating system this week that integrates more software that could draw complaints from rivals. “Windows Millennium,” or Windows Me, makes a low-key debut tomorrow with demonstrations in shopping malls around the USA. Windows Me will be clearly marketed toward the home computer user as Microsoft tries to shift its business users to the more profitable windows 2000 operating system, analysts say. The replacement for Windows 98 makes only incremental changes in the basic operating software, keeping the same look and feel as the current system. But it does include a number of new tools that will be integrated in the basic software, such as photo and movie-editing features. “It’s not about bits and bytes; it’s about communicating with friends and family and having fun,” said Greg Sullivan, Microsoft Product Manager for Windows Me. “The new focus reflects a shift in the way consumers are using computers. The PC can be a game console, a home theatre, a jukebox. It’s a pretty drastically different experience.” Badal’s offer to Bill Gates CHANDIGARH, Sept 13 (TNS) — In response to the invitation of Microsoft Corporation for a luncheon meeting with Bill Gates, Mr Parkash Singh Badal has put forth a proposal for collaboration between Microsoft and the Punjab Government for speedy deployment of information technology in the state. In a communique to Mr Bill Gates, Mr Badal said the Punjab Government had already chalked out a detailed strategy and action plan in four sectors — infrastructure, HRD, industry and e-governance. Expressing his willingness to have collaboration with Microsoft in different areas of IT, Mr Badal said: “We can jointly work on the establishment of an e-governance centre for northern India to develop e-governance solutions on pilot basis for deployment across the northern states”. The Punjab government can provide necessary infrastructure for this purpose in Mahatma Gandhi Punjab State Institute of Public Administration, said Mr Badal. Aptech to float firm in China NEW DELHI, Sept 13 (PTI) London Stock Exchange-listed Aptech Ltd today said it would soon form a joint venture company in China to deliver software through Application Service Provider (ASP) model. “Aptech is currently negotiating with two IT companies in China to set up a joint venture company which would offer software applications through ASP mode,” Ganesh Natarajan, MD, of Aptech told PTI. Rediff to pick up stake in ICICI MUMBAI, Sept 13 (PTI) — Rediff.Com will pick up 10 per cent and 5 per cent equity stake in ICICI’s “traveljini.com” and “billjunction.com” respectively, in an all cash deal. “We do not want to disclose the deal value for
commercial and competitive reasons”, ICICI Ltd’s Managing Director and Chief Operating Officer K.V. Kamath told reporters after signing the agreement here today. Protege enters Indian market MUMBAI, Sept 13 (UNI) — Protege Systems, one of the largest independent e-integration companies in the USA, has announced entry in the Indian market. The company known the world over for its expertise in implementing complex e-integration projects will make India a hub for operations across the Asia Pacific region, James Kahn, President and CEO, Protege Systems told reporters here today. Architecture portal unveiled BANGALORE, Sept 13 (PTI) — BuildingSteps.com, a portal dedicated to architecture and design industry, has been launched by Convergence Infotech Limited. “The portal is a showcase, meeting point and resource centre for professionals in the building and design industry”, the company’s Head Subodh Shah, told reporters here last night. The portal, Shah said, serves the needs of all the constituents of the building industry — architects, interior designers, engineers, contractors, consultants, manufacturers, vendors, universities, students, builders, developers, banks and government departments. Cheaper alternative to PCs MUMBAI, Sept 13 (UNI) — Suntel Electronics (India) Ltd, has entered into a strategic and exclusive partnership with CPS Europe BV to launch cost-effective products alternative to PCS. These include low-cost smart card terminals, mid-range smart screen phones and high-end Internet applications like Pronto Mail. The devices, which are of affordable range will offer home banking and Internet applications for the Indian market and the sub-continent. CPs Europe BV, founded in 1993 is headquartered in Holland and is part of the Dutch Pijenburg group of companies. |
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Indians are just ‘cheap’ WASHINGTON: The USA wants to bring in Indian and other foreign high-tech professionals “not because of genuine shortage in the country but for cheap labour,” a computer expert has said. Prof Norman Matloff, at the University of California, in an article in The Washington Post yesterday, said according to the Immigration Support Network, a support group for H-1B-holders from India, the H-1B holders are de facto “indentured servants” because they lose their status if they do not stay with the same employer for five years. The Indian and other professionals are usually paid only $ 35,000 a year against at least $ 45,000 for equivalent American professionals. Referring to the fact that Congress has been increasing the H-1B non-immigrant quota, Professor Matloff said: “Politicians on Capitol Hill do not want to know any of this as they are anxious to curry favour with the industry. “These firms of the new economy,” said Matloff, “seem to be awfully fond of the old economy — of 200 years ago — when indentured servitude was in vogue.” The support group wants the techies to be given green cards straightaway as Germany is doing, but so far neither Congress nor the government has agreed to that, he said.
— PTI Irreverent site
up for auction LONDON: An irreverent US website set up to chart the demise of cash strapped Internet start-ups has received a $10m takeover offer. Fuckedcompany.com - which was founded, owned and run by an industry pundit known as “Pud’’ — has become the must-visit website for gossip about dot.com failures. Anyone working in the Internet industry is encouraged to post rumours anonymously about what is going on in the industry and each week vote on the five web firms they think most likely to go bust. Among the 27,950 subscribers to its daily email newsletter are journalists, venture capitalists, entrepreneurs, investment bankers and recruiters keen to keep abreast of the latest gossip. Fuckedcompany.com receives 2.6m page views a week, according to PC Data. Yesterday Pud, whose real name is Philip Kaplan, put the site up for auction — online, of course. “I was bored this morning so I put FC one Bay,” he said, explaining that he had always viewed the venture as a side issue to his other business interests and could not devote time to its development. Last night the highest bid stood at $3.3m, although according to some reports Pud had been contacted by someone prepared to pay as much as $10m for the site. Fuckedcompany.com has received glowing endorsements from industry experts. Ken Cassar, senior analyst at renowned Internet research firm Jupiter Communications, says he checks the site before making positive comments about any company. Michael Wolff, author of the seminal Silicon Valley novel Burn Rate, said recently: “I wish I’d though of it’’. The site has attracted unspecified advertising and sponsorship revenues. User features include an archive that allows you to search for “all the bad news your little heart desires’’. Its main rival is dotcomfailures.com, whose motto is “kick ‘em while they’re down’’.
— The Guardian |
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PACL CICO Tech IFFCO A.C. Saini Naukri.com SBI loan |
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