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Sensex down 106 points Derivatives
FinMin discusses exchange rate loss by exporters
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Indian American to oversee US bailout package
Lehman CEO grilled
‘US crisis unlikely to hit govt banks’
BoA to raise $10 b
Airtel launches DTH service
Baddi to have trade centre
Hansa group to set up industrial park at Dera Bassi
World Bank wants India in G-7
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SEBI, RBI mission fails to boost market
Mumbai, October 7 Taking positive cues from Reserve Bank's cutting CRR rate and SEBI relaxing the guidelines on issuance of participatory notes on Monday, the BSE barometer commenced the day higher by a handsome over 379 points and had regained the 12,000 level, which it lost yesterday on massive selling for the first time in two years. However funds continued their selling, pulling down the key index to 11,695.24, a loss of 106.46 points. With selling continuing unabated, the Sensex even dipped to the low of 11,501.85 points during the day. As the market experienced choppy trade throughout the day, the wide-based National Stock Exchange index Nifty moved between 3,732.65 and 3,537.00 points before ending at 3,606.60, a marginal gain of 4.25 points. SEBI yesterday revoked 40 per cent restriction on issuance of PNs for both cash and derivative segments. It also decided to undertake a comprehensive review of FII framework in the backdrop of global developments triggered by ongoing global turmoil. In sync with SEBI, RBI also cut CRR rate by 50 basis points to 8.50 per cent, which would inject nearly 20,000 crore into the liquidity. Brokers said the regulators' moves in tandem to cool the bourses failed to calm down nervous investors, who seemed keen on booking profits rather than making fresh commitments in the prevailing uncertain situation globally. Asian indices, however, ended mixed after an intra-day recovery, while European markets also showed mixed trend in their morning trading. Capital goods, IT, banking and realty sectors were the major losers, while the market received support from oil and gas, PSU and power segment stocks. The capital goods index suffered the most among all sectoral indices, by falling 376.41 points, or 3.96 per cent at 9,118.52. Segment major Larsen and Toubro, Bharat Bijlee, Punj Llyod, Reliance Industrial Infra and Siemens declined. IT sector also dropped 88.95 points, or 3.04 per cent, at 2840.30 with blue-chip Infosys falling by 13.70 at Rs 1,304.10 and Satyam Computers by Rs 15.25 at Rs 279.05. Banking index fell by 132.75 points, or 2.15 per cent, at 6039.25. ICICI Bank, HDFC Bank, Kotak Bank and State bank of India fell sharply. Realty index fell by 58.27 points at 2,941.72, FMCG index by 36.90 points at 2053.68, Healthcare index by 60.55 points at 3427.52, Metal Index by 102.62 points at 7534.03, Teck index by 28.95 points at 2352.76, Consumer durable index by 17.28 points at 2552.32 and Auto index by 14.44 points at 3511.96. — PTI
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Derivatives
Mumbai, October 7 "We have to move progressively to the exchange-traded platform from OTC to provide transparency, better execution and liquidity," SEBI executive director Manas S Ray told reporters here. SEBI would have a relook at the regulatory mechanism, he said. "We have to realign regulation (in keeping with present requirements),"
Ray said. The country needs to introduce direct market access, currency derivatives and interest-rate futures, he said. Referring to commodity prices, which had shot up worldwide earlier this year, Ray blamed (overseas) index funds for investing in futures, which led to a speculation in the spot market. "Index funds had invested heavily in commodity futures leading to speculation in futures in the US and major economies," he said. Financial markets are integrated but "we (Indian markets) are insulated to a large extent", he said. The top five US banks have base in India, but efforts have been taken to see that the crisis in the US does not spread here, he said.
— PTI
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FinMin discusses exchange rate loss by exporters
New Delhi, October 7 According to sources in the finance ministry, the losses of the banks due to rupee derivatives is to the tune of Rs 24,800 crore. In April 2007, the rupee, keeping in line with its global peers, began to appreciate significantly against the dollar. As the rupee appreciated, Indian exporters began to make losses on the exports. The banks like ICICI, HSBC, HDFC, Yes bank, Axis Bank, Kotak Mahindra Bank, and others created and sold exotic derivative products to hedge the falling rupee against dollar to the exporters. Harried and helpless exporters, mostly in the medium and small- scale sector, bought these exotic derivative products without fully realising the potential risk and were kept unaware that these products are only speculative in nature. These currency derivatives were also in violation of the RBI guidelines. Now, these banks are in trouble on two counts — one is the losses from the exporters due to lack of transparency in explaining the product and the inherent risk involved. Second, being violating the RBI rules of hedging the rupee in currencies other than the dollar, pound or the euro. The RBI rules allow hedging by exporters for protecting against currency risk in which exporter carries out his trade. These banks sold exotic derivative product by hedging in currencies like the Swiss franc, Japanese Yen etc, which were not in line with the rules of the RBI. Another mistake made by banks is that they positioned themselves in a fiduciary capacity with their advice on cost-reduction and risk management. The devil was in the details as the banks concealed from the exporters the risk inherent in these contracts. The exporters were thrust unlimited risk of currency fluctuation in return for limited gains. Now that there is a loss in exchange rate, banks are taking exporters to court for recovery. Most small and medium exporters who bought the products are in Ludhiana, Tirupur, Karur, Kanpur, Mumbai, Delhi, Chennai, Panipat, Sholapur etc. They may face closure as the exchange rate loss cannot be recovered even if the firm is liquidated and all its assets are sold. |
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Indian American to oversee US bailout package
A 35-year-old Indian American has been put in charge of the $700-billion bailout package Congress approved last week in a bid to fix the broken US financial system.
Treasury Secretary Henry M. Paulson, Jr. on Monday appointed Neel Kashkari as the interim assistant secretary of the Treasury for Financial Stability, a position in which he will oversee the Office of Financial Stability, including the Troubled Asset Relief Programme. News of Kashkari’s appointment came even as the Dow Jones Industrial Average plummeted 800 points. But the Dow and other major indexes cut losses in the final hour of trading. The Dow ended down just short of 370 points. Originally from Stow, Ohio, Kashkari graduated from the University of Illinois at Urbana-Champaign with a Bachelor's and Master's degree in engineering. He also received an MBA in finance from the Wharton School. His wife,
Minal, works in the field for Lockheed Martin. The Senate will need to confirm Kashkari's full appointment. Congressional sources say that with lawmakers set to leave Washington, some of them to campaign for their re-elections on November 4, there may not be enough time to confirm
Kashkari. Another fact, these sources point out, is that with the Bush Administration's term set to expire on January 20, 2009, Kashkari is unlikely to serve in his new position for more than a couple of
months. Kashkari is highly regarded by Paulson, who head hunted Kashkari in July 2006 as a senior adviser. Both Paulson and Kashkari share a common bond - Goldman Sachs. Prior to joining the Treasury Department, Kashkari was a vice-president at Goldman Sachs & Co. in San Francisco, where he led Goldman's IT security investment banking practice, advising public and private companies on mergers and acquisitions and financial transactions. Paulson is a former CEO of Goldman
Sachs. Kashkari first visited Washington in 1990, when he came with his father, who had won a presidential award for helping get water supplies into 10 African villages. Earlier, Kashkari worked in the aerospace industry where he developed technology for NASA space science missions such as the James Webb Space Telescope. |
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Lehman CEO grilled
New York, October 7 A US House of Representatives panel grilled Fuld, Lehman's chairman and chief executive, on Monday over whether comments he made during a conference call with Wall Street analysts in the investment bank's waning days were deceptive. Fuld testified there was no attempt to mislead anyone. Legal experts said that under securities laws, criminal cases can be brought if prosecutors have evidence that corporate executives knowingly misled investors in an attempt to defraud them into buying or selling securities.
— Reuters |
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‘US crisis unlikely to hit govt banks’
Shimla, October 7 Addressing a press conference here, he said unlike the private sector banks, which were controlled only by the regulator, the nationalised banks were also subjected to government control. They were adequately insulated and had little exposure to the happenings in the global financial markets. Referring to the follow-up issue of the bank, he said it would come out but towards the end of the current financial year. At present, the market sentiment was not encouraging for bringing out the issue. He said the steps taken by the SEBI like easing restrictions on participatory notes (PN) would improve the sentiment. He said the performance of UCO Bank had been improving on all fronts and its non-performing assets (NPAs) had been coming down with each passing years. The gross NPAs stood at 2.91 per cent and net at 1.8 per cent. The recoveries were more than slippages. He maintained that the debt-waiver scheme would not affect loan recoveries in future as the relief had been granted only to those who were not in a position to pay. He said the banks were doing well in Himachal Pradesh and they had achieved all targets , except loans under differential rate of interest (DIR). As against the target of 1 per cent, the achievement of DIR loans was only 0.65 per cent, which was much higher than most of the states. |
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Airtel launches DTH service
New Delhi, October 7 Aiming to be different from the existing Dish TV, TataSky, Reliance’s Big TV, Sun TV in the south and the Doordarshan’s DTH, Airtel claimed that it would be offering some innovative services, which would be a first in the country. This would include a universal remote for both the set-top box and the TV, besides some of the Internet services like, INet, IMatinee and ITravel through which the customers would be able to book their movie and travel tickets. The service will initially be available to customers through 21,000 retail points, including Airtel Relationship Centres in 62 cities, across the country from Dussehra. The company plans to extend their service to 252 cities over the next one year. Airtel would be offering three start-up packages in North India with the basic being at Rs 2,499 followed by one at Rs 3,499 and the top of the line with all channels at Rs 3,999. While there would be a six- month subscription free with the initial package, the last two would have nine months of subscription free. Airtel would be putting on air 175 channels with the lowest package being at Rs 99 per month with the highest being at Rs 424 per month. Airtel digital TV uses the latest MPEG4 standard with DVB S2 technology, which translates into exceptional picture clarity and consistent high-quality audio for the customer. This latest technology also enables delivery of more complex interactive content and is High Definition ready. Also, Airtel digital TV uses 20 per cent larger dish antenna that offers better performance during rain. |
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Baddi to have trade centre
Solan, October 7 Since the facility would provide a platform for an interface between the buyers and sellers, the step has been welcomed by the industry. Giving information about the much-awaited project, Dr Amandeep Garg, deputy commissioner-cum-CEO, Baddi-Barotiwala-Nalagarh Industrial Development Authority
(BBNDA), said, “This is perhaps the first time that under the Assistance to States for Infrastructure Development of Exports (ASIDE) Scheme funds have been provided for a trade centre in any of the northern states, barring Delhi.” He disclosed that the first instalment of Rs 5.4 crore has already been received by the
BBNDA, which is the executing agency. The centre would have a conference hall equipped with modern systems, including Wi-Fi-enabled Internet system, facility for video-conferencing, besides a conference and exhibition hall. Welcoming the move at Baddi,
C.S. Gupta, chairman, CII Himachal Pradesh State Council, said, “It is a positive move by the state government as it would gear up the industrialisation in the hill state by providing a platform for more than 600 units in the region to come together.” |
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Hansa group to set up industrial park at Dera Bassi
Chandigarh, October 7 The park has been designed by Dham Consultants, Chandigarh. Enough green space has been provided for public use. Public utilities like parkings, dispensary and bus stops etc. have been included in the park. The plots are in sizes of 166 sq yds, 250 sq yds and 500 sq yds. The park is spread across Bhagwanpur, Kuranwala, Rampur Sainian and Harimpur Hiduan villages. The group has presented a 500 sq yd plot to the Dera Bassi Industrial Association for the construction of a three-storeyed exhibition-cum-convention centre at the park.
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World Bank wants India in G-7
Washington, October 7 "Countries matter. The G-7 is not working. We need a better group for a different time," Zoellick said at the Peterson Institute for International Economics here. "For financial and economic cooperation, we should consider a new Steering Group, including Brazil, China, India, Mexico, Russia, Saudi Arabia, South Africa, in the G-7," he said. Such a group would bring together over 70 per cent of the worlds GDP... 62 per cent of its energy production, the major carbon emitters... and the primary players in global capital, commodity, and exchange rate markets" he added. However, he said the Group would not be a G-14. "We will not create a new world simply by remaking the old. It should be numberless, flexible, and over time, it could evolve," Zoellick added.
— PTI |
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Stake in Hindalco
Mumbai, October 7 |
NHPC defers IPO Gold zooms ICICI Bank, Dish TV in pact
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