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IT raids on brokers sends Sensex in tailspin
Govt invites private players to invest in hydel projects
IT industry calls off boycott
Bharti Teletech to invest $1 m in R&D, manufacturing
FDI in India below potential: IMF
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Tata Motors signs MoU with Fiat
Nokia SEZ near Chennai okayed
Crude output down by 16 per cent in August
Nod to pipeline
Gold zooms
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IT raids on brokers sends Sensex in tailspin
New Delhi/New York, September 22 Intelligence Bureau has despatched two additional directors to Mumbai to investigate whether any manipulation has led to the surge in the market. India’s key share market index went into a tailspin today, shedding 266 points to close at 8,221.64 points on fears of multi-agency probe into the thrilling stocks upsurge and the raids on stockbrokers by Income Tax sleuths. The IT department swung into action and raided some stockbrokers in Mumbai, Ahmedabad and a few other places in Gujarat after getting a tip-off that funds have been funnelled into the Indian capital market through the Mauritius route. While confirming CBDT’s involvement in the market probe, Revenue Secretary K.M. Chandrasekhar said: “We have told them to give whatever information is required.” SEBI chairman M. Damodaran, now in New York, cautioned investors to take informed decision and not get carried away by hype or day-to-day events. “Investors must look at whatever information is available and evaluate to facilitate productive investment. They should not be carried away by hype or carried away by day-to-day events,” he said in a message to investors. The Finance Ministry, however, asserted that there was no need to panic as the price movements were based on fundamentals. The government maintained that everything was all right but for some manipulation in penny stocks whose contribution in the overall market capitalisation was very small. Proactive steps were being taken, including ordering probes into the source of funding, but there was no need to panic and today’s market crash was only a technical correction, a government official said. Movement in the 30 blue-chip companies share index, Sensex, and the NSE top 50 scrip -based index Nifty was based on fundamentals, the official said. Small-cap and midcap stocks faced investors’ wrath following reports that the government and the financial market regulators have widened its investigation to examine FII inflows in the segment. The BSE Small-Cap Index crashed by 460.32 points or 7.62 per cent to 5,579.25 and BSE Mid-Cap Index fell by 236.76 points or 5.60 per cent to 3,991.03. However, Finance Ministry said there was no nation-wide raid by taxmen on stockbrokers. Only some brokers in Ahmedabad were raided.
— PTI
...leaves investors panicky
The news of government’s instruction to various investigating agencies to investigate the possibility of fraud in the stock market seems to have created a panic among the retail investors to sell their shares in the market, leading to fall in Sensex to 8,221.64. The shares of small companies, that had witnessed sharp rise in prices in the recent past came down heavily. A large number of retail investors have turned panicky and dumped their stocks in reaction to frenzied sell-off by Foreign Institutional Investors (FIIs) in a bid to trim exposure in the futures and options. Investors sold shares in blue-chip companies on concern that the market is set for profit booking after record gains, dealers said. The investors said they are concerned whether market would witness repeat of previous frauds in the market. The dealers in the stock market privately said that the much-awaited fall seems to be coming as there are perceptions that FIIs will start booking profits after being buyers for a long time. Today’s fall was the biggest since May 17, 2004, when the Sensex had crashed by 564.71 points. The news reports that the Finance Ministry, along with the Securities and Exchange Board of India, might launch an investigation into the market boom, encouraged the investors’ to sell their shares.
— TNS
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Govt invites private players to invest in hydel projects
New Delhi, September 22 Concerned over the failure of the public sector companies to tap the hydel potential and delay in number of projects, the sources said, Prime Minister Manmohan Singh has directed the Power Ministry to prepare a roadmap for opening of the sector for the private firms. The ministry has subsequently prepared a draft paper and invited all stakeholders to give feedback on it. It has pointed out though the country is endowed with a large economically exploitable hydro potential assessed at about 84,000 MW at 60 per cent load factor equivalent to a probable installed capacity of 1,48,700 MW yet only about 21 per cent of this comprising of just over 32,000 MW has been exploited so far. “The magnitude of investment and work involved is so huge that even with the presence of state-level utilities, Central public sector undertakings like the NHPC, SJVNL, Neepco, THDC, and the entry of NTPC into hydro power development may take decades to develop capacity of 30,000 MW. It is, therefore, imperative that the private sector should also participate in this programme,” said the draft paper. The government has lamented that the capacity addition in hydel since Independence has not grown in tandem with the additions in the thermal capacity. For instance, the hydro thermal ratio which stood at 46:54 in the ’70s has come down to 24:76. The government has proposed that to attract private players in the hydel sector and minimise the financial risk, MoU could be signed in the interest of timely development of the project. In order to address concerns of the financial institutions and requirements of transmission, in all cases of MoU, the letter of allotment should inter alia contain a condition of the developer entering into long term power purchasing agreements, of at least 25 years tenure, within a reasonable timeframe. It said tariff should follow the CERC norms, which would entitle the power purchasers, who pay for the power in the initial years, to enjoy lower tariff regimes after the project is fully depreciated.
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IT industry calls off boycott
Bangalore, September 22 The Chief Minister maintained his government had the needed political inclination and formed a six- member Committee, including members from the IT sector, to review the progress made on the infrastructure front on a weekly basis. He also announced that the government had asked for a central assistance of Rs 560 crore to carry out the necessary development works. Though there were recriminations in the meeting with the industry maintaining that the pace of development was very slow and the government maintaining that the IT industry was not chipping in with help in the creation of a new infrastructure, both parties effected a compromise for the present. Contentious issues like whether the IT industry will have to pitch in money for development works and whether a mechanism would be evolved to ensure a fixed level of recruitment of Kannadagas in the IT industry have been put on the backburner. Briefing newsmen after the meeting ,Chief Minister N Dharam Singh said he had told the IT industry that it was because of the political will of the government that the international airport was coming up in the city and that the metro project would also fructify. He claimed that Infosys founder Narayan Murthy was satisfied with the steps being taken by the government. He said the government had asked the Centre for special assistance to ensure all infrastructure problems were solved urgently and that he had invited UPA Chairman Sonia Gandhi to the
IT. in event. He said the participation of Mrs Gandhi was still to be confirmed.
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Bharti Teletech to invest $1 m in R&D, manufacturing
Humbran (Ludhiana), September 22 Mr Rakesh Bharti Mittal, Vice-Chairman and Managing Director, Bharti Teletech, said: “Post investment, the Hambran unit will have an annual production capacity of 3.5 million phones, in addition to the 3 million phones of the Goa facility.” He said the company expected to attain a capacity of 10 million phones at both manufacturing units by 2008. Mr Mittal also announced that the company has completed the fastest production so far of the millionth phone at its Ludhiana unit. The task was accomplished in a record time of five months. Talking about the market for fixed line phones, which had remained stagnant over the last two to three years, Mr Mittal said an upswing was expected with broadband services fast catching up. “Unlike the global trend, where growth in sales of mobile phone handsets and fixed line phones is simultaneous, Indian market witnessed stagnation in fixed line phone sales as the mobile phone market picked up. However, with broadband services catching up and telephone service providers actively promoting these, we are expecting a resurgence in this market.” He said the company expected a growth of at least 15 per cent in the fixed phone sales next year.
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FDI in India below potential: IMF
Washington, September 22 In Asia, FDI continued to rise in 2004, particularly in India, China, Indonesia, Malaysia and Vietnam, and the trend is expected to continue in the emerging market countries in 2005, it said in its latest report on global financial stability. The IMF said that India had received much attention for its success as an outsourcing destination and was attracting large financial inflows (in 2004, it accounted for one-fourth of the portfolio flows to emerging Asia). But FDI has been hindered in the country by a difficult investment climate as well as by caps on FDI in certain sectors. And the growing inadequacy of India’s infrastructure constitutes a major obstacle to private investment and export potential. While China remains the predominant location for FDI inflows, the report said, there were some tentative signs of a reallocation of FDI inflows within Asia.
Growth rate for Asia
Faster economic growth in China and India, excluding that of Japan, may offset the effect of higher oil prices on other Asian countries like South Korea and Thailand, according to the IMF. “While growth in China and India remained relatively robust, expansion in much of the rest of the region slowed, reflecting the impact of higher oil prices,’’ and weaker global demand for electronics, the IMF said in its semi-annual World Economic Outlook report released yesterday. The IMF said the region’s economies would expand 7.3 per cent this year, with China registering 9 per cent from 8.5 per cent and India 7.1 per cent from 6.7 per cent.
— Agencies
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Tata Motors signs MoU with Fiat
Mumbai, September 22 “A joint team would be set up by the two companies to determine the feasibility and specificity of the nature of cooperation. If found feasible, the two companies will enter into definitive agreements,” Tata Motors said. Tata Group Chairman Ratan Tata said both companies would benefit from the alliance in terms of possible joint product development, shared platforms and aggregates. Fiat CEO Sergio Marchionne said: “The possible strategic cooperative agreement with the Tata Group represents another step in our clearly defined strategy that calls for targeted alliances across the automobile value chain.’’ Bangkok: Tata Motors Ltd, is in talks with a leading Thai auto assembler, Thai Rung Union Car
Plc., to manufacture pickup trucks in Thailand, the Thai company said here.
— Agencies
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Nokia SEZ near Chennai okayed
New Delhi, September 22 The government is also taking steps to speed up notification of the SEZ rules by November to facilitate
SEZs, which have firmed up investment of Rs 50,000 crore, including a large chunk of
FDI. Commerce Ministry Additional Secretary G.K. Pillai said the final revision of the rules was being done after incorporating industry suggestions and these should be notified by November. The government had also approved in principle a 4,000 hectare SEZ in Dadri by Reliance Energy, as also a petrochemical one in Jamnagar by Reliance Industries and a biotechnology and pharma
SEZ, near Pune, by Serum Institute, entailing an investment of Rs 1,200 crore. Singapore real estate major Ascendas had joined hands with Mahindra to co-develop 40 acres in their SEZ in Chennai at an investment of $ 75
million. Biocon had also made a proposal for a biotech SEZ near Bangalore.
— PTI
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Crude output down by 16 per cent in August
New Delhi, September 22 According to information available from the Petroleum Ministry today, the crude production at 2.412 million tonnes was 16.1 per cent lower than 2.874 million tonnes output in August last year. The production from the Bombay High offshore region fell by 29.9 per cent to 1.086 million tonnes in August as compared to 1.55 million tonnes a year ago.
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Nod to pipeline
New Delhi, September 22 “The CCEA has cleared the proposal,” Petroleum Minister Mani Shankar Aiyar said after the CCEA meeting here. The pipeline would transport 1.72 million tonnes of petrol, diesel and kerosene produced at the Numaligarh refinery. Till now products from the refinery were moved by rail and faced frequent disruptions by natural calamities and floods, which affected production evacuation. OIL already has a 259-km line from Numaligarh to Guwahati (also in Assam) and a 401-km loop to Siliguri in West Bengal is proposed to be constructed over next 24 months at an estimated cost of Rs 468.92 crore, a company official said. After the commissioning of the pipeline, the Numaligarh refinery would be able to operate at 3 million tonnes per annum instead of present 2.2 million tonnes. About 2.32 million tonnes of surplus product will move to deficit areas of Bihar, UP and beyond, instead of current 1.60 million.
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Gold zooms
Mumbai, September 22 Pure gold of 99.9 purity grade opened at an all-time high of Rs 6,815, while standard mint gold resumed high at Rs 6,780 per 10 gm. Both prices increased smartly by Rs 95 each from their last close.
— UNI
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