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March 14, 2001, Chandigarh, India   
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Steps to corporatise stock exchanges The government today moved ahead to provide protection to investors, specially the small investors by announcing a three-point strategy to corporatise stock exchanges, give more teeth to the 1992 Sebi Act and extend rolling settlement to 200 category “A” stocks by July. BSNL may
extend cellular service Income tax
on bank interest hits savings GM to hold
fresh talks on Daewoo |
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SSI
units, traders in for a hard time Asia
reels from Nasdaq slump Shut
loss-making PSUs: PHDCCI IBM to
open centre in Gurgaon Nasscom,
ITAA sign pact BSE
assures smooth functioning Petition
against UTI dismissed
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Steps to corporatise stock exchanges New Delhi, March 13 Yaswhant Sinha in a statement in the Rajya Sabha brought out the strategy and said these steps apart from several measures
initiated by Sebi to improve institutional mechanisms and trading practices in the face of bear-hammering that started in the Indian stock markets, two days after the presentation of the Union Budget. Responding to the Calling Attention motion moved by Leader of the Opposition Manmohan Singh on extreme volatility in the stock markets, the Finance Minister assured the House that those guilty for the crash of the stock market will be brought to book without “fear or favour and no one will be spared.” “I would like to reiterate that the government and Sebi will continue to make every effort to ensure that capital markets operate in an orderly, transparent, safe and fair manner for all investors,” he said. Apart from extension of rolling settlement to 200 category “A” stocks in modified carry forward scheme, automated lending and borrowing mechanism and borrowing and lending securities schemes would also be introduced by July this year. He said ownership, management and trading membership would be
segretaged from each other by corporatisation of stock exchanges adding that administrative steps will be taken and legislative changes brought about if needed. He said while fluctuations were normal in stock markets and should not be a matter of undue concern, “we should be vigilant with regard to any systemic risk or movements driven by manipulation. “I have been assured by Sebi that there is no systemic risk to the market and there is no danger of a payment crisis,” he asserted. As far as bank advances against shares and guarantees to stock brokers by the banking system was concerned, the RBI has intimated that it was less than 2 per cent of the total advances as on December,2000. In this regard, according to information available with the RBI, there has been no violation of its prudential norms, he said. Tracing the downward trend in the stock markets, soon after the presentation of the Budget, Mr Sinha also listed the measures already taken by Sebi, including banning of former President of BSE Anand Rathi and his broking concerns from undertaking fresh booking business till further orders. Anand Rathi has also been restrained from acting as Director member of the governing board, he said adding that in the interest of investors, orderly development of the securities market and proper management of
BSE, six members of governing board have been restrained. Mr Sinha has also listed the several measures initiated by Sebi since March 5 when it reviewed the bear hammering. This included investigations against 20 brokerage entities. The Finance Minister maintained that the volatility in the Indian stock market has not been unusual compared to international markets. The BSE sensex had decreased by 22 per cent in the past one year. In line with international technology stocks indices, the Indian technology stocks have declined by about 63 per cent. While Nasdaq declined by about 59 per cent, the markets in Japan, Korea, Taiwan and Germany had gone down in the past one year by about 50 per cent, 40 per cent, 55 and 71 per cent, respectively. |
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BSNL may extend cellular service New Delhi, March 13 In reply to a question during the Question Hour he said a notice inviting tender had been issued to procure 15 lakh lines in the first phase and 25 lakh lines in the second phase. The tariff for the proposed cellular service in each of the licensed service area would be decided as per the prescribed procedure at the time of introduction of the service in that area, he said. BSNL had decided to introduce cellular mobile telephone service initially as a pilot project covering 27 cities spread over Andhra Pradesh, Bihar, Tamil Nadu, West Bengal and Jharkhand. While the service had already commenced in Patna and Hajipur under the pilot project, it was under implementation in the remaining cities, he said adding that the pre-paid tariff proposed by BSNL was under consideration of the Telephone Regulatory Authority of India . Replying to supplementaries, Mr Paswan said the government had fixed a target of raising the tele-density in the country to 15 for a population of 100 by 2010 from 3.34 now, for which 17.5 crore new lines would be required. By 2005 the tele-density will be increased to seven per 100 and an additional 7.5 crore new telephone lines would be required for it. |
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Income tax on bank interest hits savings Ludhiana, March 13 Mr S.K. Malhotra, Chief Manager, Allahabad Bank, said, ‘‘The Finance Minister’s proposal to impose tax on the interest income, if implemented, will badly hit the saving deposits of the bank and the workload of the banks will be increased manifold as they will have to keep records for the IT department.’’ Incidentally, there is income tax on the interest income above Rs 10,000 per annum. It means that people having bank deposits worth more than Rs 100,000 have to pay income tax to the government. The bankers say that most of the people were already splitting the bank deposits or opening more than one accounts in different branches. The income tax on Rs 2,500 interest income will further boost that trend. Mr Malhotra feels that this decision will badly affect the small depositors especially the retired people who are dependent solely on their interest income. The cut in interest rates on small savings and provident fund has further compounded their problem. The customers will be forced to shift their deposits outside the banking system. He disclosed that though the banks have not received the circular so far but the people have started withdrawing their savings from the banks. The banks are trying to convince their customers to wait till the passage of the Budget in the Parliament. The government may decide to review the proposed decision. Another senior official of the Punjab and Sind Bank said, ‘‘The money market is already tight due to recession in the industry. The hosiery manufacturers have failed to sell their material because of the shrinking of the winter season this year. They will need hard cash from the banks in the coming days at higher interest rates. But they may prefer to tap deposits privately from the market at lower interest rates. In this case both parties will benefit: the lenders will save income tax and the borrowers will pay lower interest rates.’’ No doubt, the depositors will be exposed to higher risk in the market. But many depositors may be allured by the private borrowers. Mr Raman Singh, a school teacher, said, ‘‘The so-called dream Budget is nothing but a slow- poison for the middle and lower classes. The government may not have increased the taxes but income tax on interest income is indirectly a tax itself.’’ However, there are some bankers who feel that the people do not have any significant alternatives to deposit their savings. Mr M.P. Gupta, Chief Manager, State Bank of India, said, ‘‘The government has already decreased the interest rate on small savings and provident fund. It is only a matter of days that the banks will also cut their rates. The depositors will have to save their money in banks or with the non-banking firms. Most of whom are nothing but a fraud. So there will be no substantial impact on bank savings.’’ |
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GM to hold fresh talks on Daewoo Seoul, March 13 “We expect some progress in the negotiations because GM officials are coming here this week,” Lee Song-Kun from the board of directors of Korea Development Bank said. GM has not made clear its intention towards the acquisition of Daewoo Motor, but with anxiety growing in South Korea over the automaker, President Kim Dae-Jung met GM Chairman Jake Smith in Chicago last week. South Korean Commerce and Industry Minister Shin Kook-Hwan has given the US auto giant until the end of April to commit to buying Daewoo Motor, saying it would otherwise look at other options for the automaker. But Lee dismissed concerns that any further delay in the purchase of Daewoo Motor would be detrimental to the financially-strapped firm. He stressed Daewoo Motor would not need further financial assistance from creditor banks in the latter half of the year. He said Daewoo Motor executives and creditor banks would meet consultants from Arthur Andersen to discuss a report which recommended the shutdown of Daewoo’s main plant in the western city of Inchon. The firm, once South Korea’s second largest automaker, slid into a financial crisis after the parent Daewoo Group collapsed in August 1999 under $ 80 billion of debt. AFP Hyundai Elect to raise $1.96 bn Sedul, March 13 Hyundai shares plummeted 12 per cent to 3,000 won despite the firm naming a new chief financial officer to tackle its recent financial troubles. Analysts said foreign investors led a sell-off that sent Hyundai to the top of the bourse’s volume list with turnover of more than 63 million shares. The impact of a weekend statement by the local banks assuring investors of their support for the Hyundai group companies was shortlived as investors appeared unconvinced. Reuters Riyadh, March 13 “OPEC will decide on a reduction in its production in a way that will keep the price of crude at its targeted level of $ 25 a barrel and guarantee a balance between supply and demand,” the Saudi Minister said at the end of a three-way meeting in Riyadh with his Venezuelan and Mexican counterparts. He said in a statement that the next OPEC cut would “take into account current stock levels and those expected over the coming months.” The minister added that “the three countries (Saudia Arabia, Venezuela and Mexico) underlined (at the end of the meeting) the need for a cut in output by producer countries” within and outside OPEC.
AFP
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SSI units, traders in for a hard time New Delhi, March 13 Though the Finance Minister has promised protection to the domestic industry from cheap imports through higher countervailing duty on some items, manufacturers feel nothing much will come out of it. “It is a government policy of introducing countervailing duty but this remains only on paper. The dumping many a time cannot be proved due to lack of evidence. Moreover, the implementation is in the hands of customs authorities, where many laxities occur,” says Y.P. Suri, Hon. General Secretary, Federation of Association of Small Industries of India (FASII). As per the guidelines, to prove dumping one has to give an application by proof that the exports are below normal price, besides evidence of material injury to the domestic industry. “All this cannot be proved many a time due to lack of evidence,” Suri notes. Many of the industries like toys, locks, umbrellas and woollens have suffered huge losses due to large scale influx of Chinese goods and those from Nepal, while electronics, crockery, auto accessories and TV parts are under the threat of being wiped out, says Sanjeev Kumar, a retailer in Karol Bagh. “Our borders with Nepal are porous and it is from there that these foreign-made goods enter our markets. There is large scale dumping from other SAARC countries also as no customs duty is imposed on their items, further killing our industry,” says Dr S.S. Aggarwal of Laghu Udyog Bharati. Same is the case with phones, toys, fabrics, umbrellas, footwear, locks, electronic goods, sanitary fittings and even drugs, says Kumar. “All these are available for less than half the price of local goods and with customer’s preference for foreign-made, who is going to buy the local products,” Kumar says. “A large variety of Chinese cycles is being dumped here but the manufacturers have not been able to prove its dumping. The customers too go in for low prices, easily compromising on durability,” notes Kulwinder Singh, a wholesale cycles dealer. “In the electrical appliances list, according to the rules around seven items have to adhere to ISI specifications while 33 others should cater to the Quality Control Order, but the market is flooded with sub standard goods... Where are the checks,” asks Suri. “Though the Finance Minister has given some protection to the automobile sector by imposing a very high duty on import of second hand cars, no such thing has been done for the small sector,” says Aggarwal. “Second hand imported television sets, computers and a whole lot of white goods, which are available in developed world for pennies would be fully importable from April. How is the government going to protect the domestic sector from this onslaught,” asks Aggarwal. “Even the US has special laws to protect its SSIs and there is nothing wrong if we too enact something on the same lines,” says Aggarwal.
PTI |
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Tokyo, March 13 Tokyo’s Nikkei-225 closed the morning down 256.81 points, or 2.1 per cent, at 11,914.56, plumbing depths not seen since before Japan’s asset-inflated “bubble economy” of late 1980s. “The meltdown is just starting,” warned an equity strategist at Vickers Ballas in Singapore, after New York’s tech-laden Nasdaq composite tumbled below 2,000 for the first time since December 1998. The Nasdaq slumped to 1,923.37 following a profit warning from Swedish telecommunications equipment maker Ericsson, hurting a tech sector already reeling from similar alarms last week from Intel and Yahoo. With European bourses suffering on the Ericsson news, Asia woke up to a flood of red ink on regional trading boards. The Nikkei was off an intra-day low of 11,710.33 — its worst trading level since it reached 11,704.80 during the session of January 9, 1985. Japanese companies have been dumping their cross-share holdings in an attempt to improve their accounts before the fiscal year ends on March 31, redoubling pressure on the bourse from economic drift and political uncertainty. “Given the current Japanese political climate, there are no incentives for the stock market to go up,” said Tsubasa Securities head of equities Masakazu Kimura amid confusion over the fate of Prime Minister Yoshiro Mori. “The Bank of Japan’s interest rate cuts, the government’s proposals to prop up the stock market and other measures aimed at supporting the stock market have done little to help the market so far.” Investors were looking to a strong stand from meetings next week of the US Federal Reserve and the Bank of Japan to reassure global markets, commentators said. Singapore shares dived through the 1,800 support barrier on opening, with the Straits Times Index losing 55.36 points, or 3 per cent, to 1,794.48 in the first 40 minutes of trading. LG Investment Securities analyst Park Joon-Beom reported “panic-driven selling” in Seoul, with the South Korean composite index down 18.40 points, or 3.38 per cent, at 526.65 in early trade.
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Shut loss-making
PSUs: PHDCCI Chandigarh, March 13 The PHDCCI has said since the tax revenue has reached its plateau, the state should reduce its non-plan administrative expenditure so that it could improve the financial health and at the same time allocate higher funds for expansion of infrastructure and social welfare. Mr. P K Jain, Chairman, Haryana Committee ,
PHDCCI, while reacting to the Budget proposals said the higher level of public debt at Rs. 2,800 was a matter of concern as its repayment is not possible because of state PSUs incurring heavy losses. The state Finance Minister should have taken a bold step of closure of the loss making PSUs , since this adversely affects the ability of the state government to finance development expenditure. The borrowings of the state have reached over Rs. 14,000 crore and there is a need to reduce it, which consequently will reduce the interest payment. The eleventh Finance Commission had suggested interest payments vis-a-vis revenue receipts, including central devolution and grants at 18 per cent . But the ratio in Haryana is much higher and has been increasing over the years. |
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Bangalore, March 13 A new centre will be opened in Gurgaon, near Delhi, this year, he told newsmen here. IBM which has introduced in the market place education software for e-marketplaces was undertaking proof-of-concept, architecture and delivery for organisations in India and abroad, he said. IBM India’s Software Group would focus on developing and enabling business partners to address the market. It would work closely with independent software vendors and help them to leverage the company’s expertise across hardware, software and services, he added. Mr Thomas said in domestic services, the focus for the year and beyond would be strategic outsourcing, network integration services, IT consulting and learning services. He said IBM would introduce a unique postgraduate course in information technology at the Indian institute of Information Technology, Hyderabad in May. It would also expand its global financing operation in India with options to help customers in bringing down the total cost of ownership/acquisition of their IT assets, he added. The company would soon launch “KidSmart”, a unique community initiative programme in India to introduce the basics of information technology to children in the age group of three to seven years. Replying to a question, Mr Thomas said there was no slowdown in IBM business due to recession in US economy.
UNI |
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Nasscom,
ITAA sign pact New Delhi, March 13 The MoU will promote joint marketing of IT software and services to countries in Europe, Africa, Latin America and Asia besides giving a boost to trade and business relations between India and the USA, Mr Harris N Miller, ITAA President, said. On the impact of the slowdown of the US economy on the Indian software sector, Nasscom President Dewang Mehta said the country’s software exports thrive on outsourcing and in turn increase orders for Indian software exporting companies. |
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BSE assures smooth functioning Mumbai, March 13 Talking to UNI, Mr Joshi said that the non-elected 10 board members including him, will take overall control of the BSE with immediate effect and added that governing body will function as usual. Mr Joshi, who spoke publically for the first time after the controversial 175 points fall in the BSE sensitive index, which led to sacking of all elected BSE members, while assuring the smooth functioning of the country’s Premier Brouse, ruled out of any crisis in view of sacking of elected governing board members. The BSE governing board had total 18 members including seven elected and 10 non-elected members and Executive Director.
UNI |
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Petition against UTI dismissed Chandigarh, March 13 Pronouncing the orders in the court on a petition filed against the Unit Trust of India by a minor girl Kumari Palvi of Moga and others, the Judges observed: “The respondent has actually acted in the interest of the petitioners. It has saved them from possible losses. The Trust has exercised its judgement. The Judges added that in the fact and circumstances of the case they were satisfied that the Trust had acted in accordance with the established business principles and the decision was in the best interest of the investors. |
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Training programme Dabur directors Apple Computers Air Sahara ONGC Director ATM at Refinery |
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