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…don’t panic,
says Cong
Biocon inks
insulin deal with Bristol-Myers |
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Industrialists
react to steel price hike SBP clocks 33 pc
net growth Maruti, Tata
sales go up
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Sensex bungee jumps 330 points Mumbai, May 14 After CPI General Secretary A.B. Bardhan’s statement that the Communists would make a halt to disinvestment, a condition for supporting the Congress-led government, the stock markets went on a downward spiral crashing 372 points in the intra-day trade. Mr Bardhan had demanded that the proposals to disinvest the Indianoil Corporation and BPCL should be scrapped immediately. After falling sharply in early trades, the markets subsequently recovered to close at 329.60 points lower than the previous close at 5069.87 points. The Sensex has lost more than 1,100 points in the past two months due to political
uncertainty. Major public sector undertakings like the Oil and Natural Gas Corporation and BPCL bore the brunt of bear hammering. According to market sources, foreign institutional investors and mutual funds were among sellers. According to speculation in the market, the new government may also force petroleum companies to cap oil prices, thereby hurting their
profitability. Among the biggest losers were the ONGC which fell 12.47 per cent or Rs 103 to Rs 723. The SBI fell 14.77 per cent or Rs 89 to Rs 515. BHEL dropped 14.80 per cent or Rs 83 to Rs 479. HPCL fell 12.81 per cent or Rs 49 to Rs 331. MTNL declined 13.10 per cent or Rs 17 to Rs 115. Hindalco crashed 5.81 per cent or Rs 55 to Rs 890. HDFC crumbled nearly 8 per cent or Rs 47 to close at Rs 541, HDFC Bank fell 3 per cent to close at Rs 361.
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Economic brainstorming needed, aver experts... New Delhi, May 14 With the Left parties today calling for scrapping the entire disinvestment programme of the NDA government, stock markets responded sharply. Stocks of public sector undertakings taking the brunt of the hit as prices nosedived in the major bourses. Domestic and foreign investors offloaded aggressively from these scrips, the PSU Index, the representative benchmark for shares of government-owned companies, fell by over 14 per cent to 3223.32 points, the lowest ever since it was institutionalised. Scrips of HPCL and BPCL — the two companies whose disinvestment programme has been marked by political controversies, closed at Rs 331.35 and Rs 356.40. Shipping Corporation of India (SCI), another PSU, which has been on the list of the big-ticket disinvestment programme of the NDA government, also took a serious beating with its share losing nearly 18 per cent today. Analysts familiar with marco-economic policy making said the new government have to engage in serious brainstorming to devise ways and means for fulfilling its promise to the rural economy while not compromising on overall fiscal management. The NDA Government had set a target of mobilising Rs 16,000 crore through disinvestment of government equity in PSUs during 2004-05. And this was more than 20 per cent of the entire non-tax revenue for 2004-05, which was pegged at Rs 70,750 crore. The IPO issues of the six PSUs did receive overwhelming response, especially from retail investors recently. Experts, however, pointed out that economic recovery in the fiscal year 2003-04 is poised to ride on a substantial increase in agriculture output backed by plentiful rains. Buoyed
by a strong performance of the farm economy, GDP recorded a staggering 10.4 per cent growth in the last quarter of 2003-04. Many analysts have termed this an aberration — coming as it did in the backdrop of the worst drought in two decades. “The improved growth performance in India was occasioned by more favourable weather ... India’s agricultural sector is expected to slow somewhat after its impressive performance in 2003”, the UN ESCAP Report for this year said. Independent think-tanks have also somewhat voiced the same line of opinion and many feeling that scorching rate of growth of 2003-04 would be extremely difficult to sustain for any government. The National Council for Applied Economic Research (NCAER) has projected a contraction in rural demand in the next fiscal year and estimated that agriculture would grow at the rate of three per cent. “This contraction in agricultural growth as compared to 2003-04 would lead to a reduction in overall demand as well. This would have an impact on industry and services growth”, NCAER has said. Observers said that stabilising agricultural output and improving productivity can come about only through better infrastructure of roads and power — projects, which will have a lagged effect. A more serious concern is the high government borrowings crowding out private sector investment. This is primarily because of the deterioration in the fiscal situation, which has constrained government in infrastructure projects. The Fiscal Responsibility and Management Act 2003, which seeks to eliminate the revenue deficit by 2008, does provide some comfort. “But this fiscal targeting is restricted to the Central Government. Though some states have initiated measures for new legislation to help improve the fiscal management, the efforts fall far short given the enormity of the problem,” an analyst said. The growing debt burden of the Centre is another matter of concern, with the total liabilities of the Central Government increasing to 64.9 per cent of the GDP in 2003-04.
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The Congress today made an attempt to win over the confidence of the investors by stating that the party was not opposed to disinvestment per se. The BSE sensitive index crashed 330 point following the Left parties’ demand of scrapping the disinvestment policy. Asked if Congress-led government would reverse the disinvestment policy under pressure from left parties, Dr Manmohan Singh, who is tipped to be the next Finance Minister, said: “We are not pursuing privatisation as an ideology. We are not against disinvestment per se. We are open to all options.” Dr Manmohan Singh, credited for initiating reforms in 1991, told reporters “investors can rest assured that the new government will pursue policies to create favourable climate for growth.” The announcement comes in the wake of apprehension that the economic growth may come down to below 8.0 per cent due to slower reforms. Asserting that the Congress-led government would take a balanced approach towards growth, he said: “We will pursue a policy that will promote both social and economic growth.” The statement from the former Finance Minister is significant considering the “jobless growth” during NDA’s tenure. He said Congress and its allies were in the process of drawing up a Common Minimum Programme, which will be a balanced document taking care of the imperatives and ensure that the economy gets going. On the recent rise in petroleum prices, Singh said “the rise in oil prices have a repercussion on Balance of Payments, internal price structure and profitability of oil firms.”
— TNS
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Biocon inks insulin deal with Bristol-Myers
New Delhi, May 14 The two companies had already signed a letter of intent to enter into the supply pact in September last year. “We have converted the letter of intent into a supply agreement; it is a nine-year contract. Bristol-Myers has given us orders and a two-year time-line, after which they will start commercial off-take,” Biocon Chairman Kiran Majumdar Shaw told newspersons. Besides the supply deal to Bristol Myers Squibb, Biocon also plans to sell recombinant human insulin in ready-to-take form in the country, branded as Insugen, by the second quarter of the current fiscal. At present, it is awaiting regulatory approvals, she added. Biocon has posted a net profit after tax of Rs 138.6 crore for the fiscal ended March 31, 2004 as against Rs 43.5 crore for the corresponding period last year, an increase of 219 per cent. Announcing the results, the company said it had reported a total income of Rs 549.3 crore for the current fiscal as against Rs 283.3 crore for the previous fiscal. Operating profits posted were at Rs 179.5 crore as against Rs 74.1 crore for the previous year. Operating margins of Biocon were higher by 654 basic points at 33 per cent for the year. Its earning per share (EPS) were Rs 16 for the year. Meanwhile, the board of directors of Biocon recommended a 20 per cent dividend.
— UNI
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Industrialists react to steel price hike Ludhiana, May 14 In a statement issued here today, the Chamber has requested the government to be formed at the Centre shortly to reduce the import duty on steel immediately to save the industry from a crisis. Both chamber have said that on one hand the domestic steel producers in the country have been asking the government not to reduce import duty on steel, while on the other, it has been increasing the price of steel arbitrarily, thereby hitting the steel consumers hard. The Steel Alliance has been requesting the government to maintain the custom duty on steel at 15 per cent, to protect the steel industry in the country. This has hit domestic consumer badly as the prices of steel in the international market is fast declining. Apex chamber in its statement has said that steel was available at $ 365 per MT, which will cost less than Rs 19,000 in the country, including taxes. Similarly the prices of steel scrap have also come down heavily in the range of $250-260.There is ample availability of steel scrap in the country.
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SBP clocks 33 pc net growth Patiala, May 14 Addressing a press conference, bank Managing Director A.K. Dass said the bank had become a zero NPA institution which meant that the Return on Average Assets (RAA) as on March 31, 2004, was pegged at 1.82 per cent which is well above the global standards of less than 1 per cent. The bank crossed the mark of Rs 1,000 crore in operating profit by achieving a growth rate of 35.73 per cent. The bank’s net profit reached Rs 322.02 crore in 2002-03 to Rs 430.36 crore in 2003-04, a growth of 33.64 per cent.
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New Delhi, May 14 A total 56,272 units were sold in April, 2004, over 42,499 units in the same month last year, data compiled by the Society of Indian Automobile Manufacturers (SIAM) showed today. Commercial vehicle sales, one of the yardsticks to gauge economic growth, went up by an impressive 66.8 per cent at 19,784 units in the review month over 11,855 units in April, 2003. Two-wheeler sales in the domestic market, the second-biggest after China, grew by 16.4 per cent at 4.41 lakh units as motor cycles and step-throughs posted a rise of 14.5 per cent to 3.48 lakh units. Scooter and scooterette sales registered a hefty growth of 28.3 per cent at 71,306 units. Utility vehicle sales, which have been on a northward drive, grew by 45.2 per cent at 12,372 units while multi purpose vehicles rose 21.4 per cent at 4,828 units.
— PTI
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Oil at $41.45 Inflation falls LML Ltd Airtel’s offer Wipro NTPC project Eicher sales |
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In video: Communists urge for scrapping of disinvestment policy. (
