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India pitches for trade with Malaysia
Investors’ interests will be protected: Anil
State FMs’ meeting with PM likely
Memani takes over as PHDCCI chief
S&N in Rs 940-cr equity deal with UBL
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CII for creating strategic reserve of cotton
Lexia luxury bus rolls out
Life policy exempt from tax
FIIs propel markets further
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India pitches for trade with Malaysia
New Delhi, December 19 The issue will be discussed with Malaysian Prime Minister Adbdullah Ahmad Badwai, who arrived here today on a five-day state visit to India accompanied by a large delegation of businessmen. India is expected to urge him to use his influence to increase bilateral trade and with other Asean countries. Bilateral trade between the two countries is estimated to cross the $ 4-billion mark this year from $ 3.2 billion registered last year. Since Malaysia is the largest trade partner of Indian among Asean countries, and home to over two million persons of Indian origin, the government hopes to improve economic, social and political relations with the country. Indian companies are looking at Malaysia as a gateway to enter Asean countries and China. “ Malaysian companies play an active role in infrastructure development in India including in the construction of highways and ports. Similarly, Indian companies ... have been engaged in the Malaysian industrial sector since the 1970s,” the Indian Foreign Ministry said ahead of his arrival. The current trade balance is firmly in Malaysia’s favour. The government is also expected to urge Malaysia to use its influence and help create an Asian free trade market with Asean countries by 2015, a trade official said. Malaysia will assume the chairmanship of Association of South East Asia Nations (Asean) next year. The traders said Badwai is expected to push New Delhi to lower palm oil duties. India is one of the largest importers of Malaysian palm oil. It imports 50 per cent of its annual edible oil requirement of nearly 9 million tonnes, the bulk of which is palm oil from Malaysia and Indonesia. Meanwhile, Indian government will showcase its new economic policies to attract investment in the infrastructure sector.
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Investors’ interests will be protected: Anil
Mathura, December 19 “I want to say only this that whatever will happen will be for the good...their (investors and employees) interests will be protected,” he told reporters here after offering prayers to Lord Giriraj. “I have come here to seek the blessings of Lord Giriraj for the well-being and good future of my family and all the people associated with Reliance. I feel at peace after coming here,” Anil said. He is here on an invitation of Dinanath Chaurvedi who was close to Dhirubhai Ambani, the founder of Reliance group. Earlier, Anil reached Mathura by road from Delhi and went to the Giriraj Mukharvind Temple located 25 km from here. He performed puja and offered milk to the deity, after which he undertook the 21-km ‘parikrama’ of Lord Giriraj. — PTI
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State FMs’ meeting with PM likely
New Delhi, December 19 Apart from occasional one-to-one meetings which the chief ministers and state finance ministers had with the Prime Minister and the Union Finance Minister, no formal meeting has been held either with the Prime Minister or the Finance Minister specifically to discuss a package to bail the states out of the debt crisis. Sources told The Tribune that the government is considering the recommendations made by the 12th Finance Commission. A meeting of the state finance ministers with the Prime Minister and the Union Finance Minister may be convened to discuss the debt situation and the recommendations on the devolution of revenue as suggested by the Finance Commission. The total outstanding debt of all states together stands at over Rs 2,50,000 crore and the Centre may consider waiving a portion of these debts in an attempt to provide relief to the beleaguered finances of the state governments. Even though a complete waiver of the outstanding debts as demanded by the states is unlikely to be met, a reduction in the interest rate is an option that is learnt to be under consideration. There are also huge inter-state variations in debt-burden among states. As per 2001-02, while Delhi had a debt burden of 11.9 per cent of the state GDP, Orissa was the highest with a 58.7 per cent debt burden. Bihar also had a relatively very high debt burden of 46.8 per cent. The 12th Finance Commission, headed by former RBI Governor C. Rangarajan submitted its report to the President on Friday. The commission, is understood to have made a series of recommendations on the devolution of funds from the divisible pool of resources, and has also addressed the tricky issue of service taxes. The commission is also understood to have increased the share of states to 30.5 per cent from the present level of 29.5 per cent. The devolution formula of the commission, sources said, contains several variables, including an incentive-linked scheme grant system. It has also recommended a higher proportion of grants. Presently, states get a 28 per cent of the total collections of centrally administered taxes such as income tax, corporation tax, customs duty and central excise duty. In addition, they get 1.5 per cent of the additional excise duty imposed by the Centre on items such as sugar, textiles and tobacco etc. There has been a progressive increase in the amount of money released to states by the Centre on account of share in Central taxes although there has been a fall in Grants-in-Aid. The share in central taxes of all the states combined has increased to Rs 65784.41 crore in 2003-04 from Rs 56141.17 crore in 2002-03 and Rs 52844.17 crore in 2001-02.
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Memani takes over as PHDCCI chief
Chandigarh, December 19 Ms Sushma Berlia, president, Apeejay Stya Group, has been elected vice-president at the first meeting of the re-constituted managing committee of the chamber. Mr Memani specialises in business and corporate advisory and foreign taxation financial consultancy. For two consecutive years, Mr Memani was on the External Audit Committee (EAC) of the International Monetary Fund and was appointed Chairman of EAC for 1999-2000. He is the only Indian appointed in this committee by the IMF. Ms Sushma Berlia, an economic graduate from Delhi, is one of the leading woman entrepreneurs in the country.
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S&N in Rs 940-cr equity deal with UBL
Mumbai, December 19 Briefing newspersons here, UB Group Chairman Vijay Mallya said that the Board of Directors of UBL today approved a transaction under which S&N will receive 17.5 percent of UBL’s equity by way of preferential allotment for a consideration of Rs 217 crore at the rate of Rs 575 per share. For the balance 20 per cent equity, S&N will make a public offer at Rs 575 per share. Dr Mallya said, “Through a deal like this (public offer), even the public stands to gain.” That apart, Dr Mallya said S&N would invest a further Rs 247 crore in UBL by way of a Redeemable Preference Share (non-convertible) with a coupon rate of 3 per cent. The business of Millenium Alcobev Ltd (MABL), in which S&N has already invested Rs 177 crore, will be combined with UBL as a result of which UBL’s market share will be 50 per cent, Dr Mallya said. In this context, UB Group President & CFO Ravi Nedungadi clarified that “there is no merger involved as we are only combining the business of two entities for operational expediency.” Replying to a question, Mr Nedungadi said “in the event of public not subscribing fully to the open offer, the company may issue a warrant which could be converted into equity later.” Under the terms of the shareholders agreement signed between Dr Mallya and his group and S&N, who will hold equal shares in UBL not exceeding 37.5 per cent each, Dr Mallya will continue as Chairman of UBL and will have the right to nominate the Chief Executive Officer for UBL, while S&N will have the right to nominate the Chief Financial Officer (CFO) of UBL. Commenting on the agreement, S&N Chief Executive Tony Froggatt said “the combination of S&N and UBL will further strengthen the strong leadership position that UBL holds in a fast-growing market of enormous long-term potential.” —
UNI
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CII for creating strategic reserve of cotton
Ludhiana, December 19 This reserve can be created through the Cotton Corporation of India (CCI), said yesterday that given the present lower prices, the chances of any risk or loss on this account seems to be remote. Further, the cotton has a fairly long shelf life if properly stored. Mr Oswal says that based on today’s prices, total investment for creating strategic reserve would be less than Rs 1,500 crore. “Our own assessment is that there would be a better balance in the demand supply situation next year and price would be around 50 cents per pound,” said Mr Oswal. He said 2003-2004 witnessed high prices because of shortfall in the crop.
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Lexia luxury bus rolls out
New Delhi/Chandigarh, December 19 “We have plans to sell our luxury tourist buses in the Saarc and Asean nations after increasing the sales volume in the domestic market. “Nothing has been finalised as yet on the export front. But we will approach these countries, where market for such products is big,” Lexia Motors CEO Kulwant S. Wilkhu said. Lexia Motors, a part of Rs 50-crore Sutlej Motors, is also ready to share its technological knowhow with any player across the globe, Mr Wilkhu said, adding, “A company from Peru is in touch with us for developing a double-decker.” Recently the company sent the proto-type of its luxury bus to a Kenyan firm, BanBros Ltd. —
UNI, TNS
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by Lalit Batra FIIs propel markets further Last week, indices raced to a new high on the back of FII buying. Despite a loss of 74 points last Friday, the Sensex closed the week with a solid gain of 113 points for the week at 6346. The Nifty gained 43 points to close at 2012. Though the market got a boost from an expected 25 basis points hike in US interest rates by the Federal Reserve last Tuesday, the incessant increase in the rate that Fed has done this year may not be very good news for the world markets as FII money flow back to the USA if any further hike is effected. FII inflows continued unabated and, on an annual basis, inflows crossed the $8 billion mark in 2004. The correction which took place last Friday may continue in the coming days as an expected showdown in FII inflows may provide the trigger for correction. A 15 per cent increase in the global oil prices may also dampen the sentiment. FII inflows are expected to slow down in the coming days as fund managers would shortly go on Christmas vacation. The undertone in the market remains bullish on the expectation of a strong third quarter earning. As has been advocated earlier, investors need to remain cautious at the current levels and need to follow a stock-specific approach than a secular one. Biocon Biocon is an integrated biotechnology company. With over 25 years of expertise in fermentation technology, it has built a strong presence in lucrative high growth segments like statins, immuno-suppressants and anti-diabetes. We believe Biocon is best placed to capitalise on the huge statins opportunity. Statins derived through the fermentation route (Lovastatin, Simvastatin and Pravastatin) represent a global market of $ 10 billion (at innovator prices). We expect the total API market (post patent expiry) to be over $ 400 million, which would be the key growth driver for Biocon in the medium term. The company’s efforts to launch Human Insulin in India and in unregulated markets as well as a supply tie-up with Biocon Myers Squibb are also likely to scale up over the next couple of years. Though the stock is trading at rich valuations (24 times the expected earnings), we believe that the premium valuations are justified in view of Biocon’s superior and sustainable growth rates, healthy return ratios and excellent visibility of earnings. Investors can buy with a two-year perspective.
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Scottish & Newcastle Plc.(S&N) has sewed up a deal with United Breweries Ltd (UBL) to pick up 37.5 per cent equity for a consideration of Rs 940 crore through the public offer route.
