Mumbai, November 21
The benchmark Sensex on BSE today gained over 460 points to reverse hammering of the past seven days on emergence of buying triggered by Prime Minister Manmohan Singh's confident remarks that economy would sustain eight per cent growth despite global economic turbulence.

The 30-share barometer on the Bombay Stock Exchange bounced back to close at 8,915.21, a smart rise of 464.20 points, or 5.49 per cent, from its last close.

Nifty, the broader index on the National Stock Exchange, also recouped by 140.30 points, or 5.50 per cent, to 2,693.45.

The Sensex had plunged to its three-year low yesterday after being hammered in the past seven days. Sustained selling in these days has shaved off a whopping 2,085.15 points.

Domestic markets had fallen in sync with global bourses which plunged primarily due to losses and write-downs to the tune of $1 trillion by global financial companies after the collapse of the US mortgage market leading to failure of many a financial institution.

Besides Singh's optimistic remarks, anticipation of another round of rate cuts by the central bank encouraged investors to buy.

Marketmen said inflation declining for the second week in a row has further strengthened anticipation of rate cuts by the Reserve Bank.

Most of the other Asian indices also recovered their initial losses and closed higher by 2-5.8 per cent, while European markets also resumed higher, despite steep fall on Wall Street yesterday.

Brokers attributed recovery in share values also to short coverings by operators ahead of the expiry of derivatives contract on November 27 and also some positive measures taken by the government to fight the feared recession.

All counters, barring realty which ended in the red, attracted buying support. While the power index was the best performer, PSU, teck, consumer goods and oil and gas closed up by over five per cent.

Among the elite stocks, Rel Infra topped the list by notching up an impressive 14.07 per cent. Rel Com was the next best gainer at 13.64 per cent. Sterlite Ind at 9.10 per cent, NTPC at 8.80 per cent, HDFC at 8.49 per cent, SBI at 8.29 per cent, TCS at 7.89 per cent and RIL at 6.49 per cent were the other major gainers. — PTI 

Ludhiana, November 21
While the export of hosiery, particularly woollen, has been hit hard due to global meltdown, the local sales of the same have not picked up as yet. The hosiery industry continues to be in a state of doldrums and the captains of the industry say that it is becoming sick.

Enquiries made by The Tribune reveal that the export of woollen and cotton hosiery was going on well till May. The main markets for export of hosiery goods are the USA and Europe. The annual export of hosiery goods to these countries is estimated at Rs 1,000 crore and this is going to fall this year.

Ashok Jaidka, chairman, Wool and Woollens Export Promotion Council, told the Tribune that they were trying to explore new markets but due to the international recession, no much headway was expected. The exports to the USA were positive till May and things started deteriorating after August, he said.

Ashwani Dhawan, a leading exporter of woollen and cotton hosiery, said the exports were hit due to depreciation of the US dollar and now when dollar had started showing signs of improvement, there was global meltdown.

Dhawan said that there was shortage of labour, particularly for flat-knit machines.

Ajit Lakra, president, Ludhiana Knitters Association, said the export of hosiery had been hit but at the same time, there was no sale of hosiery goods in the domestic markets due to the delayed winter and secondly due to financial crunch. The industry had not received the payments from other states.

Lakra further said since there was a financial crunch, the hosiery manufacturers were not even able to return the bank loans and the banks had not reduced the rate of interest.

He also said that owing to higher fixation of minimum support price of cotton, the cotton textile industry was in trouble. More than 25 per cent spindles had been shut by the cotton mills.

Sanjiv Gupta, president, Apparel Exporters Association, Ludhiana also echoed similar views and said the overall export of hosiery goods would fall this year. The total export might touch the figure of Rs 700 crore this year.

The total production of hosiery in Ludhiana is estimated to be around Rs 5,000 crore, including export of Rs 800 crore. But this year, there will be fall on both counts, say the hosiery manufacturers. 

New Delhi, November 21
The economic crisis hitting the globe could have a major impact on the property prices in the country with the property developers and advisers expecting as much as a 30 per cent reduction from the present prevailing prices.

The eroding confidence amongst the buyers, liquidity crunch along with the capital-strapped developers could lead to a slump in property prices all over the country. Financial and property advisers have already sent out advisories to their clients to resist from investing in the property as the prices were expected to tumble in the coming months.

As part of the recession measures, real estate, automobile and steel companies have already cut their output and deferred projects as there is a drop in demand.

A major barometer of the prevailing situation is the country’s largest real estate developer, DLF's share price. It has fallen more than 80 per cent this year which is more than the average when compared to a 58 per cent drop in the BSE index.

Besides, DLF has also deferred projects and has had to revert to a wage cut and retrenchment as part of its measures to face the crunch. It lost four-fifths of its market value this year due to interest rates which have been the highest in seven years and a fall in demand.

Experts point out that the boom in the property market has been on the slowdown for a year, with land prices already falling about 15 per cent since they reached the peak in the mid of 2007.

However, they point out that the worse could be in store in 2009 as a result of the prevailing situation around the world and the lack of liquidity with the foreign investors who had initially played a major role in the steep rise of property prices since 2005.

It was then the government had eased rules on inward investment in the construction industry, sparking interest in home-building among foreign funds, leading to prices getting doubled in just a two-year period.

Riding on the high, big developers like DLF and Parsvnath Developers Ltd, even came out with huge initial public offerings to fund new townships. But sharp rise in prices, coupled with high interest rate on home loans has brought down the home sales. Experts do not rule out the possibility of even distress sales with the increase in cash crunch. Goldman Sachs Group Inc. this week forecast that some property prices in India could drop by 30 per cent.

They are, however, pinning hopes on reduction of borrowing rates by the banks.

There is also a feeling that a cut in interest rates may not actually lead to a raise in demand as the Indian investor would at present be wary of investing seeing the sentiments of the market.

Incidentally, the Confederation of Real Estate Developers' Associations of India, a lobby group, has also called for a fall in prices.

In a statement, the association has urged and advised its members across the country to make every effort in lowering prices to the levels possible.

The result has been that developers like DLF and Emaar MGF Land Pvt., the Indian unit of the Middle- East's largest real-estate developer, are looking at cutting prices to revive demand and HDFC, the country’s biggest home-loan provider is looking at increasing its disbursements by more than 20 per cent. But, would it help?

New Delhi, November 21
A special relief package for the exporters is expected to be presented to the apex committee chaired by Prime Minister by the next week-end, G.K. Pillai, commerce secretary, said today.

The package, he said, would factor in the difficulties being faced by the exporters and the fallout of the global financial crisis, the worst of which will come in March-April 2009.

The meeting was organised by the industry chamber Ficci between the exporters and commerce secretary. Representatives from textiles, chemicals, garments, leather & footwear, synthetic fibre, tyre, steel, roller flour mills, rice, handicrafts, automotive bicycles, and meat and livestock sectors listed out the problems being faced by their industries and urged the government to come out with immediate remedial measures.

Pillai also urged the exporters to bring to the notice of the finance and commerce ministries the bank braches that were hesitant or unwilling to lend, despite instructions from the RBI.

Pillai said a meeting of Chief Ministers has been convened in the first week of December to discuss issues relating to the export sector and expediting the payment of dues to the industry, including refund of VAT.

“The Committee of Secretaries has had detailed discussions with the various export sectors and we hope to finish the exercise by Monday. By the end of next week, the export relief package would be presented to the apex committee for its approval,” he added.

New Delhi, November 21
The Department of Telecom (DoT) has informed the Central Vigilance Commission that the spectrum allotment to new players was given on fixed licence fees and not auctioned as per the recommendations of telecom regulator TRAI.

Under fire from political parties that Rs 50,000 crore was squandered in distribution of spectrum, telecom ministry has said that it had gone by the book and had done nothing wrong.

Following allegations from the political parties and the emerging controversy over the allotment of 2G spectrum the CVC had sought a response from the ministry.

The DoT has said that TRAI had observed that any differential treatment to a new entrant vis-a-vis incumbent will go against principle of level-playing field. Therefore, TRAI felt that to decide the cutoff after which the spectrum should be auctioned will be difficult and might raise the issue of level-playing field, DoT said. Replying to another query with regard to the sale of stakes by two new operators — Swan and Unitech — allegedly at huge premium, DoT has reiterated its earlier stand that their promoters had not sold their share holding but made strategic partnership for investment in the company.

Meanwhile, the government has ruled out limiting the number of operators in a circle and said any such decision would need to be reverted back to TRAI.

The DoT has so far considered applications for telecom licences that were received till September 25, 2007, and is yet to take a decision on those that came between September 25 and October 1. There was speculation that the applications after September 26 would not be taken up at all leading to a cap on the number of operators in a circle.

Speculation got reinforced because of the scarcity of spectrum.

However, telecom minister A. Raja has clarified that no decision has been taken on this front. “I don't think the Telecom Commission has taken such a decision (either). If at all, it again has to be referred to TRAI. I never asked the Commission to deliberate on the issue," he said.

New Delhi, November 21
Credit rating agency ICRA today said debt programmes of private sector lender ICICI Bank carry highest credit quality ratings, supported by its standing as the country's second largest bank and sound capitalisation position.

In a rating watch statement, ICRA said it has re-affirmed the LAAA rating with a stable outlook on ICICI Bank's subordinated debt programme and long-term bonds programme, which indicate highest credit quality and lowest credit risk for the two instruments.

Besides, it has also re-affirmed its highest credit quality rating, MAAA, for the bank's term deposit programme and the A1+ rating, indicating highest safety in the short term, for the Rs 50,000 crore certificates of deposit programme of the bank. — PTI

New Delhi, November 21
FMCG major Dabur India today acquired majority stake in Mumbai-based Fem Care Pharma Ltd (FCPL), a leading player in the women's skin care products market, for Rs 203.7 crore in an all-cash deal.

The company said it had acquired 72.15 per cent stake in FCPL and would make an open offer for an additional 20 per cent shares as required under the takeover regulations.

The board of directors of Dabur India Ltd approved the acquisition at a board meeting held in Mumbai today. The transaction materialised at a price per share of Rs 800, which translates into an equity valuation of Rs 282.4 crore and an enterprise valuation of approximately Rs 300 crore of FCPL.

Commenting on the acquisition, Dabur India chairman Anand Burman said: "Acquisition of Fem Care Pharma is in line with our strategy to aggressively expand Dabur's scale of operations and strengthen its presence in the fast moving consumer goods (FMCG) space." He said the transaction would give Dabur an entry into the "high-growth skin care market" and extend the brand to newer and related skin care categories.

Fem Care Pharma chairman & managing director Sunil H Pophale said the deal would broaden the company's product portfolio and further capitalise on the emerging opportunities in domestic and international markets. — PTI 

New Delhi, November 21
Five lakh workers in the textile industry, which is reeling under the impact of a severe slowdown in the export market, may lose jobs in the next five months, commerce secretary G.K. Pillai said today.

"According to estimates of the textile ministry, there will be job losses of about five lakh in the next five months," Pillai told reporters on the sidelines of a Ficci function here.

He said the government was working on a package for the distressed export sector. The package, which may include cut in interest rates and increased credit for exporting firms, would go to the committee chaired by Prime Minister Manmohan Singh next week.

Pillai warned that growth rate of exports might come down to 10 per cent for the current fiscal "if the fall continues".

Before the slowdown set in, exporters had grown by over 30 per cent in the first half of 2008-09. — PTI 

The Executive Board of the International Monetary Fund will meet on Monday to consider Pakistan's $7.6-billion bailout package, finance secretary Dr Waqar Masood told this correspondent here.

Waqar said the IMF board was expected to order immediate disbursement of the first tranche of about $3.2 billion to bolster Pakistan's rapidly depleting foreign currency reserves.

The country's foreign currency reserves have fallen below $6.638 billion out of which only $3.459 billion belong to the central bank, excluding its forward liabilities estimated to be hovering around $1.5 billion. These cannot meet the requirement of one-month import bills.

The situation will improve with the release of first tranche that would be transferred into the account of the State Bank of Pakistan (SBP) on the day the Fund's Executive Board approves the loan.

The IMF's management has circulated the relevant documents of Pakistan's request for obtaining the loan. The board was also due to meet today (Friday) but Pakistan's loan request is not on the agenda.

Officials here said the toughest conditionality imposed by the IMF relates to achieving net zero borrowing for budgetary purposes for the federal government when the balance of payments (BoP) is in deficit mode. Due to the liquidity crunch in the banking and financial sectors, it will be difficult for the government to generate desired financing from other possible avenues.

Another difficult condition for the government will be achieving reasonable GDP growth rate and striking macroeconomic stabilisation by curtailing expenditures mainly on development side. "With massive cutting down in the development spending by around Rs 150 billion, economic activities will slow down," said an analyst. In case of missing the agreed conditions in the current fiscal year, the second or third tranches would be in danger.

BRIEFLY

Bank of New York Mellon to cut 1,800 jobs
New York: The Bank of New York Mellon Corp said it would cut its worldwide work force by 4 per cent, or about 1,800 jobs, blaming the weak global economy. It's the latest in a string of banks to announce lay-offs. "It has become clear that we need to take additional steps beyond our merger synergies to reduce expenses, given the current weakness in the global economy," chairman and chief executive Robert P Kelly said on Thursday. — AP

Peugeot to fire 2,700
Paris: French automaker PSA Peugeot Citroen said on Friday it planned to cut at least 2,700 jobs in response to the worsening economic crisis that has seen European car sales plummet. The plan is necessary because doing nothing "could throw into question, in the long run, the very survival of the group and its 200,000 jobs," the company said. — AP

Honda to cut production
New York: Honda Motor Co said it would cut its North American production by another 18,000 vehicles, citing the industry wide drop in demand for new vehicles. Honda spokesman Ed Miller on Thursday said the cuts were on top of others announced earlier this year and bring the automaker's total production cuts since August to 50,000 units.— AP

Religare, Aegon rejig MF biz
New Delhi: Aegon and Religare Enterprises' on Thursday announced restructuring of their business in India under which the Dutch financial services group will assume control of Religare-Aegon Mutual Fund, while the Indian partner takes charge of the Lotus Fund, which it recently acquired. Under the new business structure proposed to the regulators, Lotus Mutual Fund will be rechristened as Religare's assest management business, while Aegon will control Religare-Aegon Mutual fund.— PTI

Amartex CMD honoured
Chandigarh: Arun Grover, chairman-cum-managing director, Amartex Industries, has been awarded Indira Gandhi Priyadarshni Award. The award was presented to him by Orissa Governor M.C. Bhandare in New Delhi on Wednesday. — TNS