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Financial Stocks
PM dons economist’s hat
ONGC declares Rs 6,884-cr dividend
Reliance begins crude output from KG Basin
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Stricter norms for WiFi network on cards
Global meltdown to ‘affect’ IT industry
Export target will be met, says Pillai
LSE chairman resigns
Videocon, BPCL JV buys Brazilian firm
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Financial Stocks
London/New York, September 19 US Securities Exchange Commission (SEC), acting in concert with the FSA, has also decided to halt short-selling in 799 financial stocks with immediate effect, the SEC said in a statement today. "The Commission is committed to using every weapon in its arsenal to combat market manipulation that threatens investors and capital markets. The emergency order temporarily banning short selling of financial stocks will restore equilibrium to markets," SEC chairman Christopher Cox said. This action, which would not be necessary in a well-functioning market, is temporary in nature and is part of the comprehensive set of steps being taken by the Federal Reserve, the Treasury, and the Congress, Cox added. Besides, FSA also stated that it was ready to extend this approach to other sectors if it is found necessary and these provisions would remain in force until January 16 2009, although they would be reviewed after 30 days. "While we still regard short-selling as a legitimate investment technique in normal market conditions, the current extreme circumstances have given rise to disorderly markets. As a result, we have taken this decisive action, after careful consideration, to protect the fundamental integrity and quality of markets and to guard against further instability in the financial sector," FSA chief executive Hector Sants said. "What we are working on now is an approach to deal with systemic risks and stresses in our capital markets. And we talked about a comprehensive approach that would require a legislation to deal with the illiquid assets on financial institutions' balance sheets," the New York Times quoted treasury secretary Henry M. Paulson Jr as saying. Thursday's rally came after four days of turmoil during which Lehman Brothers declared bankruptcy, Merrill Lynch sold itself and government agreed for a $85 billion bailout for insurance giant American Insurance Group. The new plan being considered would override the current crisis through a case-by-case approach. Short-selling is a technique that investors use to profit from falling stock prices. |
Mumbai: The rupee finally overcame its weakness today by gaining 59 paise at 45.82/83 against the greenback to close below 46-mark, reflecting the impact of infusion of billions of dollars by central banks yesterday. However, some dollar buying by oil refiners to meet their import requirements amidst a jump in crude prices in Asia trade pushed the domestic currency to intra-day low of 46.40. Forex dealers said a smart rise in Asian bourses also helped the rupee to gain against the US dollar. Many a central bank yesterday pumped in billions of dollar into the liquidity system following turmoil in global financial markets which saw the investment bank Lehman Brothers going down and Merrill Lynch being sold at throw away price. |
PM dons economist’s hat
New Delhi, September 19 Taking a stock of the international economic situation, Prime Minister Manmohan Singh donned his economist hat and asked cabinet ministers to stay alert on the unfolding situation and its impact on the Indian economy. It is learnt that the Prime Minister was briefed by finance minister P Chidambaram about the financial crisis in the US while stating the Indian economy was not affected by the developments. The Prime Minister asked the ministers to stay alert on the global financial situation, rural development minister Raghuvansh Prasad Singh said after the CCEA meeting, which was convened for taking stock of international situation. On the sidelines of a press conference, Prime Minister's Economic Advisory Council (PMEAC) chairman Suresh Tendulkar said “Indian economy is largely domestic demand-driven and would not be impacted much by the US financial crisis unless there is mess-up in the domestic markets”. “Indian economy is largely domestic demand-driven, though not completely insulated from the US financial crisis. Domestic factors seem to be much more prominent than the international factors,” he said. Buoyed by the prospects of a good harvest, Tendulkar said the prices of essential commodities were coming under control. “The coming harvest seems to be reasonably comfortable, and consequently inflation situation may be coming under control,” he said. PMEAC chairman expressed confidence over the economic growth prospects for the current fiscal. The EAC, in a recent report, projected an economic growth rate of 7.7 per cent for the current fiscal, down from 9 per cent recorded during the previous year. He cautioned that given the sort of integration taking place in the Indian economy with the global economy, “we cannot be impervious to it”. In 2008-09, Tendulkar said, the GDP growth would be more or less in line with expectation. “It is the next two fiscals that we need to worry about. The panel will look at the GDP forecast in January 2009,” he said. The economy clocked a 7.9 per cent growth rate in the first quarter of this fiscal. |
ONGC declares Rs 6,884-cr dividend
New Delhi, September 19 “In absolute terms, the total dividend of Rs 6,844 crore is the highest posted by any Indian corporate body, private or public,” said ONGC chairman R.S. Sharma. Of this, the government’s share will be Rs 5,000 crore. ONGC shares went up 7 per cent during the day’s trading on the Bombay Stock Exchange. Meanwhile, the company said today it would invest Rs 19,338 crore during the current fiscal, 10 per cent up from Rs 17,651 crore in the previous year, in oil and gas exploration. The chairman said first priority of the company was to intensify exploratory efforts and improve the reserve replacement ratio. He added that improving recovery factor, arresting decline in mature fields and expeditious development of discovered fields were the other priorities. ONGC Videsh Ltd (OVL), the company's overseas arm, is targeting 39.47 million tonnes of oil and oil equivalent gas from overseas properties in XI Plan, compared to 23.25 million tonnes during X Plan, while its refinery subsidiary, Mangalore Refinery, is on track for expanding its capacity to 15 million tonnes by 2010, the company officials said. |
Reliance begins crude output from KG Basin
New Delhi, September 19 The company's predominantly gas-rich D6 block in Krishna Godavari basin on September 17 flowed first oil, said a source in the consortium of Reliance Industries and Niko Resources of Canada which operates the block. Reliance, the operator of the block with 90 per cent stake, is likely to make an announcement in the next few days and it is expected that company chairman and managing director Mukesh Ambani will announce the accomplishment. "You may hear of it as early as Monday (September 22)," the source said. Block KG-DWN-98/3 or D6 will be the first area in deep-sea to produce crude oil since India opened up its oil hunt programme for private and foreign players in 1999 with the advent of New Exploration Licensing Policy (NELP). The Mukesh Ambani-led group operates India's largest refinery at Jamnagar in Gujarat and will start production from another only for exports unit in next couple of months. It will, however, not refine the D6 crude at its refineries and instead sell it to state refiners. Reliance, the source said, has initially opened one of the two oil producing wells in the MA oilfield in the D6 block. Once both the wells are in full operation, the output will rise to 10,000 to 15,000 barrel per day within weeks. Two more wells are planned to be drilled on the field which would raise the output to 34,000 barrels per day (1.7 million tonnes a year). — PTI |
Stricter norms for WiFi network on cards
New Delhi, September 19 While the telecom regulator TRAI has been studying various proposals to ensure that WiFi connections remain secured and are not hacked into by the terrorists to send emails, in a way mocking at the security agencies, the notification for the laws could come over the next month. According to telecom ministry officials, the DoT has already set up a committee to formulate stricter guidelines to strengthen the WiFi subscriber verification system. According to the reports, TRAI had begun studying open WiFi networks after the Ahmedabad blasts, but the Delhi blasts and the email just minutes before has prompted immediate action. Measures for proper authentication and maintenance of such networks would be issued soon. Incidentally, following the 21 blasts in Ahmedabad on July 26 which killed 55 and injured 100, TRAI had asked the government to direct all Internet Service Providers (ISPs) to instruct their customers to have 'proper authentication measures' so that this facility was not misused. The new norms may put the onus of informing the consumers of the importance of securing the WiFi's on telcos and ISPs. Besides, the ISPs will also be asked to ensure that customers access the Internet over a WiFi connection only through a password. WiFi networking companies may also be asked to limit WiFi signal right down to a defined radius by installing access points around the signal. Security agencies have asked the government to ask all ISPs to make password protection mandatory for every customer using a WiFi network. This has also been endorsed by the home ministry. |
Global meltdown to ‘affect’ IT industry
Bangalore, September 19 Quoting a recent Nasscom report, K.R. Girish, convener of CII committee on economic affairs and public policy, said IT giants such as Infosys, Wipro, Tata Consultancy Services (TCS) and Satyam were expected to soon announce “huge layoffs” of their employees. Quoting the report, Girish said US companies like Lehman Brothers, Merrill Lynch and Morgan Stanley, which had been affected by the crisis, accounted for about 40 per cent of the revenue earned by the IT companies of India. “The exact picture would emerge when the IT companies announce their next quarter results in December. I am sure their revenue will drop substantially in the next quarter”, Girish said. Karnataka IT and BT principal secretary Ashok Kumar Manoli, who was also present at the meeting held at the CII office here, refused to make any categorical statement on the impact of global financial crisis on the IT industry in India. The nature of the impact would be clear when the next quarter results were announced, he said. Releasing the CII-KPMG report on the necessity of re-examining the expiry of income tax holiday till 2010 given to Indian IT companies, Manoli said the report was being issued at an appropriate time as it coincided with the global financial crisis. He said the state government was offering various benefits to IT companies for setting up their units in smaller cities such as Mysore, Mangalore, Hubli and the likes (known in official parlance as tier-II and tier-III cities). Manoli announced that a rural IT policy was being framed by Karnataka government for spread of IT in the rural areas. S. Viswanathan, chairman, CII, Karnataka, said the financial turmoil in the West would have a massive effect on the IT industry in India. Girish said small and medium IT companies desperately required the extension of the income tax holiday beyond the deadline of March, 2010. |
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‘Malicious rumours hit ICICI shares’
New Delhi, September 19 "We are seeing malicious rumours completely without any basis at all and done in a consistent manner ... so clearly there is something much beyond just banking in this," ICICI Bank chief K.V. Kamath told to a private TV channel. "We are clearly seeing concerted short-selling activities... We do not know who is responsible for this," he added. ICICI Bank's share price has plummeted by nearly 15 per cent or more than Rs 100 per share in the past 10 days. Yesterday, ICICI Bank's market value dipped below that of public sector major SBI. Its market capitalisation has dipped to near Rs 64,000 crore, against close to Rs 1,00,000 crore for the public sector banking major SBI. The bank had said in a statement earlier in the week that rumours were being spread that some of the top management of the bank were selling their shares. "These rumours are baseless and irresponsible, and no shares have been sold by members of top management of the bank during the current year," it added. However, the impact of the collapse of Lehman Brothers will be felt on the ICICI Bank as its UK subsidiary had an exposure of about Rs 375 crore in bonds of the US-based investment banker. — PTI |
Export target will be met, says Pillai
Mumbai, September 19 "We are well on target to achieve a 25 per cent growth in exports," Union commerce secretary, G.K. Pillai told PTI on the sidelines of a packaging summit here. However, the sharp fluctuation of rupee was not good for the industry, Pillai said, adding that some sectors like gems & jewellery and handicrafts would be marginally hampered in the current scenario. "Sharp fluctuation is not good for the industry, but we can't help it given the problem in the global financial market. Our industry is mature enough to live with it. There would be some marginal impact on sectors like gems & jewellery," Pillai said.
— PTI |
LSE chairman resigns
Ludhiana, September 19 The chairman, who alleged that he was manhandled and expressed his unhappiness over inaction on the incident, cited "non-cordial atmosphere" at the bourse as the reason of his resignation. The chairman sent his papers to the LSE's board of directors and also the SEBI. Mentioning "non-cordial atmosphere", Sharma wrote in his letter that the problems occurred when six of the directors went to NSE/SEBI suggesting NSE tie-up with the LSE. Thereafter, a meeting was held on July 5, post which he was manhandled and he even brought the same to the notice of the board of directors, said Sharma. He rued that no action was taken on the incident. Recently, there was an upheaval at the stock exchange wherein a few members made a move to oust the chairman. He stated that he was "pained when no plausible solution could be reached against requisitioned notice in the board when the SEBI team of five senior officers from Mumbai and New Delhi" visited the bourse. Upset over recent developments at the stock exchange, the chairman said he had been feeling suffocated due to "lack of transparency" and general atmosphere at the exchange. |
Videocon, BPCL JV buys Brazilian firm
Mumbai, September 19 A 50:50 joint venture of Bharat PetroResources Ltd (a BPCL subsidiary) and Videocon Industries has completed the acquisition of the entire stake of EnCana Brasil Petroleo Limitada (EBPL) from Canadian gas producers — EnCana Corp and Alberta Ltd, Videocon today said in a filing to the Bombay Stock Exchange. The acquisition has been made for a consideration of $165 million, while the consortium would also pay $118 million as reimbursement the Canadian firms' expenses.
— PTI |
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