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Big leap for RIL
Scrip gains 2.27%, RNRL plunges 23%
Mumbai, May 7
The stock markets reacted to the Supreme Court verdict by propelling the Reliance Industries’ scrip more than three per cent in a falling market.

M-cap swells to Rs 3,38,085 cr

European debt woes hit global stocks
Investors watch share prices on a digital brodcast board outside the Bombay Stock Exchange on Friday. London, May 7
World stocks plunged today, with Asian bourses tumbling by as much as three per cent as rising concerns about worsening European debt turmoil sparked a massive sell-off by investors.

Investors watch share prices on a digital brodcast board outside the Bombay Stock Exchange on Friday. The BSE barometer, Sensex, closed at a two-month low of 16,769.11 points on Friday, down 218.42 points. — AFP


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Gas Row
‘SC ruling has no bearing on NTPC case’
New Delhi, May 7
Power Minister Sushilkumar Shinde today said the Supreme Court upholding the government's right to approve price and utilisation of gas was a "fair decision" and it had no bearing on the gas supply dispute between NTPC and Reliance Industries.

No wheat exports for now: Minister
Chandigarh, May 7
Inflationary concerns and a low price of wheat in the global market has stalled all plans of starting wheat exports from the country. In spite of a glut in the mandis and the overflowing wheat stocks, the government has decided not to allow wheat exports for the time being.

Soaring temperature hits wheat output in 6 districts
Ludhiana, May 7
Bathinda, Mansa, Faridkot, Ferozepur, Muktsar and Sangrur are the worst-hit districts of Punjab where wheat production has fallen due to sudden rise in temperature during the month of March.

3G auction to fetch over Rs 45,000 crore
New Delhi, May 7
The revenue potential for the government from the ongoing 3G auctions has crossed the Rs 45,000-crore mark and could actually end up giving it more than Rs 55,000 crore after the auction of the broadband wireless access (BWA) has been completed.

Gold zooms by Rs 495
New Delhi, May 7
Gold prices today spurted by Rs 495 to regain the Rs 18,000 per 10 gram level after five months on heavy buying driven by a rally in overseas markets. Standard gold surged by Rs 495 to Rs 18,110 per ten gram, a level last seen on November 26, 2009.






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Big leap for RIL
Scrip gains 2.27%, RNRL plunges 23%
Shiv Kumar
Tribune News Service

Mumbai, May 7
The stock markets reacted to the Supreme Court verdict by propelling the Reliance Industries’ scrip more than three per cent in a falling market. Reliance Industries closed 2.27 per cent up at Rs 1,033.85 on the BSE. During the trading hours, the stock gained 4.85 per cent to touch intra-day high of Rs 1,060.

On the other hand, Anil Ambani's Reliance Natural Resources Ltd was hammered thoroughly. Shares of RNRL settled at Rs 52.75 on the BSE, down 22.82 per cent over the previous close. During the day trade, the stock had lost a whopping 26.84 per cent to touch the year-low level of Rs 50. On the whole, market sentiments worsened for ADAG stocks as a whole with Reliance Power also closing lower.

Analysts expect RIL to gain sharply in the coming sessions despite poor overall sentiment. "RIL has been an under-performer compared to the Sensex due to the overhang of the Supreme Court case. With the judgment coming in its favour, RIL will show greater strength," says Amar Jesani, a stock broker here. RNRL, on the other hand, is expected to be a major loser. "RNRL is only a shell company that was depending on low-priced KG gas from RIL. Now it’s business model has fallen apart," says Jesani.

Investors in RNRL may, however, draw solace from assurances given by RIL that it would sell gas from the KG gas fields to RNRL at the rate of $4.20 per MBTU if allowed to do so by the government. RIL has, however, stated that the tenure of the gas supply to RNRL would, however, be cut from the 17 years sought by the latter.

As per the original agreement signed between Mukesh and Anil Ambani in 2005, RIL was to supply 28 million standard cubic meters of gas per day to RNRL for 17 years at $2.34 per MBTU.

Brokerages and analysts have now turned bullish on RIL. Reacting to the judgment, broking houses Goldman Sachs and Ambit have given ‘buy’ recommendations on the stock with target of Rs 1,200. However, Macquaire has advised investors to wait and watch while RIL and RNRL conduct renegotiations on gas supply and pricing as advised by the Supreme Court.

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M-cap swells to Rs 3,38,085 cr

Market valuation of Reliance Industries on Friday swelled by Rs 7,500 crore, even in an overall depressed market, while Anil Ambani Group (ADAG) companies saw a combined erosion of over Rs 9,000 crore.

The market capitalisation of Reliance Industries went up by Rs 7,500 crore to settle at Rs 3,38,085 crore, compared to Rs 3,30,580.3 crore yesterday.

However, the shares of the ADA Group tanked on the bourses, leading to a sharp decline in their combined marketcap to the tune of Rs 9,000 crore.

The top losers among the ADA group in terms of marketcap were Reliance Power, which lost Rs 3,307 crore, and RNRL, with its valuation dwindling by Rs 2,547 crore in a single day.

RNRL, whose shares plunged by nearly 23 per cent, saw its marketcap plunge to Rs 8,614.76 crore from Rs 11,162.44 crore on Thursday.— PTI

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European debt woes hit global stocks

London, May 7
World stocks plunged today, with Asian bourses tumbling by as much as three per cent as rising concerns about worsening European debt turmoil sparked a massive sell-off by investors.

The investor sentiment was further battered by the overnight fall on Wall Street, reportedly due to some trading glitches which saw the benchmark Dow Jones Industrial Average plummeting nearly 350 points.

Right from Tokyo to London, stock markets tumbled by one to three per cent on increasing prospects of Greek debt contagion enveloping many European nations. Japan's benchmark Nikkei 225 dropped over three per cent to 10,364.59 points while South Korea's Kospi declined more than two per cent to 1,647.50 points.

On weak global cues, Hong Kong's Hang Seng fell one per cent to 19,920.29 points and Australia's key S&P/ASX 200 Index shed two per cent to 4,480.70 points. India's Sensex dropped 1.29 per cent to end the day at 16,769.11 points.

In Europe, all the major markets, including the UK and France, were in the red in the afternoon session. France's benchmark Cac 40 plunged 2.17 per cent to 3,478.87 points while London Stock Exchange's FTSE 100 declined one per cent to 5,206.43 points.

Germany's Dax Index went down 1.31 per cent to 5,831.06 points. Even though Greece is likely to get a 110 billion euro bailout package from other European nations and the IMF, investors are worried about the debt contagion spreading across Europe.

Yesterday, global rating agency Moody's warned that Greek debt crisis could impact banking systems in many European countries, including the UK, Spain and Portugal.

Meanwhile, Wall Street witnessed one of the worst sessions yesterday, as the benchmark Dow Jones Industrial Average crashed over 1,000 points, due to some technical problems, before closing 347 points down at 10,520.32 points.

The broader S&P 500 index and tech-heavy Nasdaq Composite fell over three per cent to 1,128.15 points and 2,319.64 points, respectively. — PTI

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Gas Row
‘SC ruling has no bearing on NTPC case’

New Delhi, May 7
Power Minister Sushilkumar Shinde today said the Supreme Court upholding the government's right to approve price and utilisation of gas was a "fair decision" and it had no bearing on the gas supply dispute between NTPC and Reliance Industries.

"It has nothing to do with RIL-NTPC case," he said shortly after a three-judge bench of the apex court ruled that private family agreements cannot override the government's right under Production Sharing Contract (PSC) to approve price and fix users of gas.

The Supreme Court had ruled that Anil Ambani Group's RNRL cannot claim gas at concessional rate of $2.34 per million British thermal unit from RIL.

The rate RNRL is claiming is the same that RIL had bid in a 2004 NTPC tender to supply 12 million standard cubic meters per day of gas to the state utility.

The contract for supply could not be concluded over differences on terms and NTPC has dragged RIL to Bombay High Court seeking performance of the contract.

Shinde said today's judgement had nothing to do with NTPC's dispute with RIL. "It has nothing to do with my case of NTPC against RIL. No reference has been made on the dispute in the court judgement." He declined to comment on the supply dispute between RIL and RNRL, saying it was a matter being two brothers.

When asked about the Supreme Court upholding government's right under PSC, Shinde said: "It is a fair decision." Shinde said he was "part and parcel" of the ministerial panels that first approved $4.20 per mmBtu price of RIL's KG-D6 gas, fixed priority and users of the fuel and then decided to appeal against the Bombay High Court decision. — PTI

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No wheat exports for now: Minister
Ruchika M. Khanna
Tribune News Service

Chandigarh, May 7
Inflationary concerns and a low price of wheat in the global market has stalled all plans of starting wheat exports from the country. In spite of a glut in the mandis and the overflowing wheat stocks, the government has decided not to allow wheat exports for the time being.

Talking to TNS here, on the sidelines of a conference organised by CII today, Union Commerce Minister, Anand Sharma, said though the matter was also taken up in the meeting of Empowered Group of Ministers (EGoM) recently, no decision on starting wheat exports was taken. “The country is presently very comfortable with regards to its wheat and rice stocks, which are far above the mandatory buffer stocks. Even the stocks of pulses, edible oils and sugar are enough to meet the demand. But high prices of most of these items is preventing the government from taking a decision on exports,” he said.

It may be noted that as against the buffer stocks of 22 million tonnes, the country has in excess of 32 million tonnes of grains. In addition, the government is looking at procuring another 262 lakh metric tonnes (26.2 million tonnes) of wheat during the current rabi marketing season. Though the government has made enough interventions to bring down the prices of these items, it has apparently failed to have the desired impact. “We have to ensure food security for the country first, before we decide on wheat exports,” he said.

Sharma said in order to cool down the prices, the government has now asked all states to release 5 lakh metric tonnes (LMT) of wheat to all Above Poverty Line families. “This will be done by June 1, and should help in bringing down prices,” he added.

Another reason for the government not allowing wheat exports now is that the global prices of wheat are at an all time low. In the global market, wheat is presently trading at around Rs 850 per quintal, while in India, the government is procuring the grain at Rs 1,100 per quintal. Therefore, it cannot sell wheat at a price lower than what it has purchased from the farmers.

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Soaring temperature hits wheat output in 6 districts
KS Chawla

Ludhiana, May 7
Bathinda, Mansa, Faridkot, Ferozepur, Muktsar and Sangrur are the worst-hit districts of Punjab where wheat production has fallen due to sudden rise in temperature during the month of March.

Overall wheat production has fallen by 10 lakh tonnes in the state due to high temperature and lack of irrigation during the month of March. The farmers of the state have suffered a loss of more than Rs 1,000 crore as a result of fall in the production.

The state procuring agencies have procured 100 lakh tonnes of wheat so far and may not hit the target of procuring 115 lakh tonnes.

A survey conducted by the Punjab Agricultural University has revealed that average yield of wheat variety PBW 343 in Amritsar district was reported at 17.5 quintals per acre against 18.4 quintals of last year. Similarly, districts like Bathinda, Faridkot, Ferozepur, Jalandhar, Kapurthala, Ludhiana, Moga, Muktsar and Sangrur have witnessed a downfall in production of the grain.

However, Dr PS Minhas, Director Research, PAU, told The Tribune today that wheat production in the sub-mountainous districts of Ropar, Hoshiarpur, Gurdaspur, Fatehgarh Sahib and Patiala had shown increase over the production of last year.

These districts were hit by yellow rust and the PAU had launched a vigorous campaign against the same. Moreover, the heat in the soil had helped in increasing the production per acre. In Ropar the production increased from 10 quintals per acre to 16 quintals, while in Hoshiarpur it was 13.5 quintals last year and this year it was 18.9 quintals, Fatehgarh Sahib — 12 quintals to 18.0 quintals and Gurdaspur — 14.6 quintals to 18.6 quintals and SBS Nagar 13 quintals to 18.6 quintals per acre respectively.

The total production of wheat in the state was likely to touch 150 lakh tonnes against the expected 160 lakh tonnes.

The failure of providing irrigation for only 20 days before harvesting has resulted in loss of wheat production by 20 per cent in some areas.

The PAU experts are of the view that the country has a buffer stock of 25 million tonnes of last year, and this year would be 20 million tonnes more. Since the government has banned the export of wheat and the Food Security Act was also deferred hence there was no possibility of rise in wheat prices during the lean period. Because of these factors the farmers have not withheld the produce and brought the same to the markets. Withholding of wheat stocks take place only if there is a scope for rise in the prices during the lean months, they explain.

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3G auction to fetch over Rs 45,000 crore
Tribune News Service

New Delhi, May 7
The revenue potential for the government from the ongoing 3G auctions has crossed the Rs 45,000-crore mark and could actually end up giving it more than Rs 55,000 crore after the auction of the broadband wireless access (BWA) has been completed.

Looking to reduce the fiscal deficit from the earnings of the auction, the amount, which the government would get would also include the payment to be made by the public sector telecom operators BSNL and MTNL after the auctions conclude. The government has already allotted 3G spectrum to BSNL and MTNL.

After 137 rounds of auction completed today, the pan-India bid price was over Rs 12,000 crore, assuring the government a revenue of over Rs 46,000 crore. It was around Rs 11,300 crore after completion of 132 rounds yesterday, up 224 per cent compared with the original base price of Rs 3,500 crore.

As the bidding process for the 3G auction ended today, airwaves for Mumbai and Delhi continued to be the most sought after with the bidding crossing Rs 2,000 crore mark.The round price for Delhi after 137 rounds was recorded at Rs 2,080.62 crore, whereas Mumbai service area pricing stood at Rs 2,128.88 crore. Although late last week Telecom Minister A Raja had said the bidding for the 3G spectrum was likely to get over in a day or two, but the fight for the airwaves in Mumbai and Delhi, the two most saturated markets, just seems to be extending the bidding process. With the shortage of airwaves in these two cities, the winning bid for these cities would help the winning telecom operator to increase its presence in the voice sector, for which the competition is on. Incidentally, DoT has said on its website, “the activity requirement will be set to 100 percent in clock round 132” which got concluded today. This implies that the 3G auction can conclude in a day or two.

A Rs 40 crore increment was applied for Delhi and Mumbai for the next round of bidding. After 128 rounds on Wednesday the provisional winning price for a pan-India licence crossed the Rs 11,000 crore-mark. It stood at Rs 11,047.04 crore. Slots for three to four players are available in each of the 22 circles into which the country has been geographically divided for the 3G services, which will facilitate much faster connectivity than now and enable applications such as Internet TV, video-on-demand, audio-video calls and high-speed data exchange.

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Gold zooms by Rs 495

New Delhi, May 7
Gold prices today spurted by Rs 495 to regain the Rs 18,000 per 10 gram level after five months on heavy buying driven by a rally in overseas markets. Standard gold surged by Rs 495 to Rs 18,110 per ten gram, a level last seen on November 26, 2009.

Silver also jumped Rs 565 to Rs 28,165 per kg on increased offtake by industrial units and coin makers.

Marketmen said trading sentiment remained firm as gold climbed in overseas markets on stronger demand for the alternative investment as currencies weakened and equities dropped.

Gold in global markets, which normally set the price trend on the domestic front, recorded a handsome rally of $33.20 to $1,208.80 an ounce last evening.

Standard gold and ornaments surged by Rs 495 each to Rs 18,110 and Rs 17,960 per 10 gram, respectively. Sovereign followed suit and rose by Rs 100 to Rs 14,250 per piece of eight gram. — PTI

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