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Lehman collapses
Indian firms lose over Rs 2,000 cr
Punjab to disinvest stake in
PACL, Puncom
Airtel eyes acquisitions in emerging markets
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‘Inflation may dip to 10 pc by Dec’
Sensex sinks below 14,000
Investors in IPOs lost over Rs 5,000 crore in 2008
Re tumbles, oil slips
Vice-President favours private-public mode
Vice-President M. Hamid Ansari with DONER minister Mani Shankar Aiyer during the inaugural session of the Fourth North East Business Summit in Guwahati on Monday. — PTI
NE promises project-wise security to investors
Morgan eyes $5 b from pvt banking biz
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Lehman collapses
New York, September 15
As a deepening crisis took new, bigger victims, US Federal Reserve said for the first time it would accept stocks in exchange for cash loans and 10 of the world’s top banks agreed to establish a $70 billion emergency fund, with any one of them able to tap up to a third of that. On a black Sunday for Wall Street, frantic attempts to find a rescuer for Lehman failed and troubled insurer American International Group asked the Fed for a lifeline, according to news reports. The events signal a seismic shift in Wall Street’s power structure with big name investment banks biting the dust and major banks like Bank of America and JPMorgan Chase becoming the survivors. “It’s a return to pure capitalism, the survival of the fittest - the government can’t and won’t bail everybody out. Investors will now retreat to the trustworthy banks,” said Justin Urquhart Stewart, investment director at 7 Investment Management in London. Bank of America agreed to buy Merrill Lynch in an all-stock deal worth $50 billion, seeking a bargain as the world’s largest retail brokerage sought refuge from fears it could be the next victim. Asian and European stock markets tumbled as the worries about Lehman counterparty risk and further financial market turmoil sent investors scurrying for safe havens such as gold. The FTSEurofirst 300 index of leading European shares fell 5 per cent, led by falling bank stocks such as UBS, down 10 per cent. Shares in US banks trading in Frankfurt tumbled, with Lehman plunging 80 per cent and Morgan Stanley, Citigroup and others all in retreat. Merrill’s shares offered a rare bright spot and its Frankfurt-based shares jumped 36 per cent. Lehman said it filed for bankruptcy protection and was attempting to sell assets, becoming Wall Street’s highest-profile bankruptcy since junk bond specialist Drexel Burnham Lambert succumbed in 1990. Lehman’s European arm appointed administrators, who said they would wind down the business in as orderly a manner as possible. Lehman’s petition followed three days of talks between bank CEOs and regulators. S&P500 share futures fell more than 3 per cent, signalling US stocks will open sharply lower, and dollar tumbled. The euro jumped to up 1.7 per cent from Friday, while US Treasury yields dropped to five-month lows on concern about the stability of the US financial system and as investors increased bets the Fed will cut interest rates.— Reuters
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Indian firms lose over Rs 2,000 cr
Mumbai, September 15 Lehman itself recorded a loss of more than Rs 50 crore today on its investments in India, which is nearly 10 per cent of its current holding worth an estimated over Rs 500 crore. The loss would have been much higher if Lehman had not started offloading its equity holding in Indian companies late last month. In a major selling spree that started on August 21, Lehman has sold shares worth close to Rs 400 crore in nearly 10 companies, including NIIT Ltd, Cranes Software, Amtek Auto, Amtek India, Fedders Llyod, Northgate, Mastek, Triveni Engg and Prajay Engg. Prior to this sell-off, Lehman’s Indian equity portfolio is estimated to have been worth more than Rs 1,000 crore, which has now nearly halved to about Rs 500 crore. — PTI |
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Punjab to disinvest stake in
PACL, Puncom
Chandigarh, September 15 It has also been decided to restructure or merge at least three financial corporations - Punjab Financial Corporation (PFC), Punjab State Industrial Development Corporation (PSIDC) and Punjab Information Commission and Technology Corporation. The Industries Department will have to examine if these corporations need a restructuring or have to be merged as a single entity. The Department has also been asked to study the utility of three other corporations — Punjab State Handloom and Textiles Development Corporation, Punjab State Leather Development Corporation and Punjab State Hosiery and Knitwear Development Corporation — so that a decision on their dissolution can be taken. A decision to this effect was taken last week by the core committee on disinvestments, headed by the chief secretary, Ramesh Inder Singh. It was decided that the Industries Department should formalise the exercise of disinvestments for PACL and Puncom and come back with the same to the Cabinet Committee on Disinvestment. It was decided that this was the right time to disinvest as both public sector undertakings were doing well for the past one year that would help the state government get a better deal by selling its stake. It may be noted that though Puncom had been in the red for the past five years, the company saw a complete financial turnaround in the first quarter of this year by recording a turnover of Rs 115 crore. PACL, too, has been making profit for the past two years. Officials said since PACL was a listed company, its disinvestment would take time as it would have to be approved by the shareholders. The Industries Department will now appoint an advisor who will get the disinvestment process going.
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Airtel eyes acquisitions in emerging markets
Mew Delhi, September 15 Bharti Enterprises managing director Akhil Gupta said here: “Our interest (to acquire) companies abroad remains as strong as it was. We are ready to go for acquisition mostly in emerging markets. We will look at all options”. He added that the company was in a position to acquire a company and replicate the unique model based on low-cost and low-tariff. Meanwhile, Gupta said Bharti Infratel, the infrastructure arm of Bharti Airtel, was mulling listing of the company in the next 2-3 years to monetise the assets. It will be managed and run independently and shall offer passive infrastructure services to all telecom operators and wireless service providers on a non-discriminatory basis. It will own approximately 20,000 sites at inception. Bharti Infratel has partnered Vodafone Essar and Idea Cellular to form Indus Towers, an independent tower company to provide passive infrastructure services in India. Indus Towers, with approximately 70,000 sites, will be formed by merging the passive infrastructure assets of the three companies across 16 telecom circles in Andhra Pradesh, Delhi, Gujarat, Haryana, Karnataka, Kerala, Kolkata, Maharashtra, Mumbai, Punjab, Rajasthan, Tamil Nadu (including Chennai), UP (East), UP (West) and West Bengal. Bharti Infratel will operate the passive infrastructure in the remaining 7 circles of Assam, Bihar, Himachal Pradesh, Jammu & Kashmir, Madhya Pradesh, North East and Orissa. |
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‘Inflation may dip to 10 pc by Dec’
New Delhi, September 15 After a dismal performance in the previous two months, the industrial growth recovered to 7.1 per cent in July on account of resurgence in capital and consumer durable goods sectors. “My estimate is that probably by December, inflation rate may go down to 10 per cent,” Rangarajan said on the sidelines of a Ficci seminar on financial inclusion. The former RBI governor said inflation last year was moderate towards the end of December, so base effect will heighten inflation in the current year. |
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Sensex sinks below 14,000
Mumbai, September 15 The bear hammering came amidst overnight reports that finance major Merrill Lynch had sold itself to Bank of America. The news got even worse after it was reported that the troubled Lehman Brothers would not find any buyer and would have to declare bankruptcy. Even as European bankers rushed to pump in money to prevent a financial meltdown, markets in the continent took a hit. The benchmark London index fell more than 3 per cent. Asian markets too took a beating with Taiwan’s benchmark index fell 4 per cent, while Indonesia was down 4.7 per cent. The Sensex opened with a huge negative gap and fell to 13,150 later in the day as on the back of short covering. Most blue chips touched new 52-week lows with
RIL, Tata Steel, Reliance Communications, Sterlite Industries and Hindalco falling sharply. Bigger losses were reported from the small and mid-cap indices. The BSE Small Cap index was down 4.9 per cent to 6,380 while the CNX Mid Cap was down 4.3 per cent to 5,312. |
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Investors in IPOs lost over Rs 5,000 crore in 2008
New Delhi, September 15 “Out of 34 IPOs issued this calendar year, 26 of them closed below their issue price last week. These IPOs have raised Rs 16,920 crore but the current value stands at Rs 11,562 crore. So they are suffering a loss of 31.67 per cent,” said Jagannadham Thunuguntla, equity head, NEXGEN Capitals Limited. He said five companies, which include JSW Energy, RNS Infrastructure, Ybrant Technologies, Elysium Pharma and Kamayani Patients Care, with the proposed issue of more than Rs 4,000 crore, withdrew their IPOs prior to SEBI approval. In 2008, 20 companies did not tap the primary market despite approval from SEBI due to uncertainty in the markets. Shares of eight out of 10 companies, which got listed on stock markets during second quarter of the current fiscal (July-September) following the IPO, are trading below the issue price. According to NSE data, the shares of only Vishal Information Technologies and Austral Coke and Projects are at 100 per cent and 30 per cent premium respectively, while the equity of remaining companies are being traded at discount. The shares of companies (listed during second quarter), which are trading below the issue prices, include Resurgere Mines and Minerals, Nu Tek India, Birla Cotsyn India, KSK Energy, Lotus Eye Care, First Winner Industries, Archidply Industries and Sejal Architectural Glass. Vishal Information Technologies closed at Rs 306 last week, an over 100 per cent premium to its issue price of Rs 150. The company is an IT-enabled services and solutions firm and its IPO received subscription by 1.2 times. Similarly, Austral Coke and Projects Limited (IPO subscribed by 1.65 times on the whole), was listed on September 4 with a 5 per cent premium to its issue price of Rs 196. Analysts believe that these two IPOs were listed under priced as the markets were in the bear grip since the beginning of the calendar year 2008. So after their listing, price appreciation was witnessed in these stocks. But stock speculation cannot be completely denied. — PTI |
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Re tumbles, oil slips
Mumbai, September 15 At the forex market, the local currency resumed stronger at 45.53/55 a dollar from its last close of 45.75/76 a dollar and later touched 45.46 level. The rupee, however, again tumbled to 45.85/86 a dollar. It had last touched this level on October 10, 2006. Meanwhile, oil prices plunged below $93 a barrel today, reaching the lowest levels since February, on the prospect of weaker demand for energy amid a worsening global financial crisis in the wake of Lehman Brothers’ bankruptcy, analysts said. — Agencies |
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Vice-President favours private-public mode
Guwahati, September 15 At the Fourth North East Business Summit here, Ansari said: “It is a conference with a different. Nowhere else in the country do we have such a geographical agglomeration trying to attract business and investments with commonality in purpose, and driven by their common strength.” He said the summit, jointly organised by the ministry of development of north eastern region and Indian Chamber of Commerce, was an effort as much to overcome the physical and commercial isolation of this region, as it was to set aside its ‘geo-political isolation and put it on the path of accelerated and inclusive growth.” The Vice-President called upon investors attending the summit to invest to tap the vast natural and mineral resources of the area. Addressing High Commissioners and Ambassadors of Brunai, Malaysia, Indonesia, Laos, Myanmar, Singapore, Thailand, Arab League, Bhutan and Czech Republic, he said: “The interest shown by the members of the diplomatic community is heartening. The government of India is committed to converting diplomatic initiatives into commercial opportunities for the overall development of the region.” |
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NE promises project-wise security to investors
Guwahati, September 15 The minister for development of north eastern region (DONER), Mani Shankar Aiyar, led the effort to reassure investors’ concern for security saying: “There has been dramatic improvement in security scenario in the Northeast compared to what it was 15 years ago. At least four states - Sikkim, Meghalaya, Arunachal Pradesh and Mizoram - are free of any troubles. Assam is by and large peaceful barring two hill districts.” He assured the investors that “project-specific” security would be provided to set up industries in certain troubled spots and security concern shouldn’t be allowed to come in the way of exploiting huge pool of natural and mineral resources in the region that is India’s gateway to the prospering economies of Southeast Asia. Assam industries and commerce minister Pradyut Bardoloi said development was now the pre-condition for peace in Assam “where law and order situation is now really a myth that needs to be broken”. Aiyar said the plan investment to the Northeast was intended to be raised to the level of Rs 14 lakh crore by the end of the 13th Plan period to bring the region at par with the rest of the country. He pointed out that the private sector investment in the region accounted for only 0.5 per cent as on date and the North Eastern Region Vision-2020 document called for private sector capital investment in the region to the tune of Rs 3 lakh by the end of the 13th Plan. The N-E states chief ministers today demanded waiving of the provision for restricted area permit (RAP) and protected area permit (PAP) for foreigners wiling to travel to the region. The Chief Ministers viewed the RAP and PAP as major deterrent to promote tourism in the region. In response, Aiyar informed that the lifting of PAP and RAP was under active consideration.
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Morgan eyes $5 b from pvt banking biz
Mumbai, September 15 The company has targeted to build up an asset-base of around $5 billion in the medium-term and $10 billion over the next few years, Morgan Stanley India Capital Services executive director Himanshu Jain said here. “The growing income levels in this market offer huge opportunities for wealth managers. We expect to attain an asset-base of $5 billion in the medium-term and $10 billion over the next few years,” Jain said. The company would offer its wealth management services from Mumbai, Kolkata, New Delhi and Bangalore in the initial phase but will expand the reach later to more centres - Chennai, Chandigarh, Jaipur, Ahmedabad Pune and Hyderabad, the company’s managing director, Asia (Singapore), Leslie S.Menkes said. Morgan Stanley’s private wealth management services would mainly target high and ultra high networth Individuals having an investable surplus of a minimum $5 million, he said. “The services offerings will include investment banking, private equity, real estate, institutional research services and structured finance,” Menkes said. — PTI
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Mumbai, September 15
Guwahati, September 15
