Millennium Fund put on ice due to low gold prices
CHENNAI, Aug 2 — UTI has put its ambitious Millennium Fund on the backburner for the moment in view of the falling gold prices in global markets, UTI Chairman P.S. Subramanyam said here today.

Maruti car sales highest in July
NEW DELHI, Aug 2 — Maruti Udyog Ltd has achieved the highest ever monthly car sales in July since its inception 15 years ago.

Kerala beats Punjab & Haryana in HRD
NEW DELHI, Aug 2 — Kerala has emerged top amongst all States in terms of providing the best quality of life as measured by the human development indicators including health care facilities and education.

Sensex to touch 6,000 mark: HSBC
NEW DELHI, Aug 2 — The BSE sensex is expected to touch the 6,000 mark by the end of current fiscal in the wake of revival of the Indian economy and restructuring undertaking by top companies, HSBC Securities has said.

J&K Bank net profit increases 40 pc
Jammu and Kashmir Bank Limited has recorded a 40 per cent rise in the net profit at Rs 28.50 crore for the quarter ended June 30, 1999 as against Rs 20.50 crore during the corresponding period year.

IRA to limit cost of health insurance
MUMBAI, Aug 2 — The Insurance Regulatory Authority is planning to establish a set of cost containment guidelines for the insurance industry.

Govt invites suggestions on E-Commerce Act
NEW DELHI, Aug 2 — The government today invited suggestions from trade and industry on the proposed Electronic Commerce Act being considered by the law ministry.

FIPB clears FDI worth Rs 175 crore
NEW DELHI, Aug 2 — The Foreign Investment Promotion Board today permitted Total SA of France to set up a joint venture technology supply unit for resins as part of the 39 proposals approved, amounting to a total foreign direct investment inflow of Rs 175 crore.

Millennium Fund put on ice due to low gold prices

CHENNAI, Aug 2 (PTI) — UTI has put its ambitious Millennium Fund on the backburner for the moment in view of the falling gold prices in global markets, UTI Chairman P.S. Subramanyam said here today.

“Gold prices are at a 20-year low following the Bank of England offloading 500 tonnes of the yellow metal. The entire gold fund business has changed since. So, we decided to put it aside,” Subramanyam told PTI in an interview.

There was no certainty that other central banks might not offload gold in the near future, though unit sales price at present was lower than output costs globally, the UTI Chairman said when asked about the future of the Millennium Fund.

Subramanyam said the reserve bank was looking into the whole gamut of gold fund business and guidelines for it might be in place over the next few months.

The apex bank was also looking at providing assaying facilities and shipping gold to offshore centres, he said and added that UTI would revert to the millennium fund proposal when the situation in gold business turns for the better.

Subramaniam had indicated in December that UTI would launch the fund by March this year following Finance Minister Yashwant Sinha’s announcement of the same in his maiden Budget speech.

The fund had planned to mop up about $ 500 million from overseas markets in the last financial year itself after Mr Sinha announced it in his budget speech in August 1998.

The fund, targeted mainly at Gulf residents, was to be taken up as soon as government approvals relating to exchange risks were received.

UTI officials had exuded optimism that the problems faced by its flagship US-64 due to redemption pressures late last year would not come in the way of the proposed gold fund.

The UTI chief had said that informal talks with investors about the proposed fund had indicated that the appetite for it would be good, especially in the light of the Resurgent India Bonds garnering over $ 4 billion.

He had also indicated that the company would target the developed markets if time permitted, saying North America could prove a good focus area.

At present gold prices have touched a record low of below $ 255 per ounce, while the estimated production costs are in the region of $ 260 per ounce, analysts here said adding that several gold mines were curtailing mining activity in the wake of dull markets.

Maruti car sales highest in July
Tribune News Service, PTI

NEW DELHI, Aug 2 — Maruti Udyog Ltd has achieved the highest ever monthly car sales in July since its inception 15 years ago by selling 35,528 units against the previous best of 33,466 units in March 1999.

The passenger car sales increased by 16 per cent to 35,528 units in July 1999 as compared to 30,603 units in the same month last year due to record sales achieved by Zen, 800 CC and Omni models, Chief General Manager (Marketing & Sales), Rohtash Mal told PTI.

Sales of Omni model was 7,548 units in July this year as against 5,100 units in the same month of 1998, registering a sharp growth of 48 per cent. The previous best sales figure of Omni was 7,520 units.

The Zen model sales was also a record during the review month as the company posted a 16.2 per cent growth in sales to 7,907 units from 6,800 units in the same month last year despite the most intense competition in the segment, Mal said.

Sales of the base model and most popular car of the company, Maruti-800, grew by 10 per cent to 18,400 in July this year from 16,700 units sold in July 1998, the highest ever recorded by the company.

Hyundai ‘Verna’

The Hyundai Motor Company is all set to unveil the brand new “Verna” internationally at the Frankfurt Motor show later this year.

The “Verna” is a result of a 24-month project code named “LC” undertaken by Hyundai. It will be available in various engine options including 1.3 litre SOHC, 1.5 litre SOHC and 1.5 litre DOHC.

This new car, which will replace the vastly popular “Hyundai Accent” around the world, is built on a brand new platform 10 cm longer and 3 cm wide than the existing model of the “Accent”, the spokesperson added.

Kerala beats Punjab & Haryana in HRD

NEW DELHI, Aug 2 (PTI) — Kerala has emerged top amongst all States in terms of providing the best quality of life as measured by the human development indicators including health care facilities and education.

This was revealed by India’s Human Development Report brought out for the first time by the National Council of Applied Economic Research (NCAER) representing a sample survey conducted in 1994 covering 33,000 rural households. The report was released here by the Deputy Chairman, Planning Commission, Mr K.C. Pant.

About 90 indicators of human development that reflected various dimensions of levels of living like income and assets, employment and wages, consumption expenditure, literacy, demographic rates and health care utilisation were discussed and compared to highlight disparities between the selected states and between the eight selected population groups.

According to the report, people living in the States of Kerala, Tamil Nadu, Andhra Pradesh, Maharashtra, Gujarat, Punjab and Haryana were doing relatively better compared to Bihar, Uttar Pradesh, Madhya Pradesh, Orissa, Rajasthan and West Bengal.

“Kerala exhibits the best human development characteristics”, the report noted.

The report said that about 8 per cent of household income was spent on health and primary education alone. A meagre 43 per cent households have domestic lighting, 25 per cent have access to tap water and only 33 per cent utilise the PDS.

Sensex to touch 6,000 mark: HSBC

NEW DELHI, Aug 2 (PTI) — The BSE sensex is expected to touch the 6,000 mark by the end of current fiscal in the wake of revival of the Indian economy and restructuring undertaking by top companies, HSBC Securities has said.

“Worst seems to be behind us, be it the Asian crisis, the domestic economy or the political situation. Based on these factors, we expect the BSE sensex to head towards the 6,000 mark by March 2000,” HSBC Securities, the broking arm of HSBC group said in “India-100” report covering top 100 companies.

Apart from this, it expects the markets to move up due to improved earnings (profits), expected to grow by around 21 per cent, re-rating of stocks due to restructuring undertaken by various companies and improved liquidity through massive inflow of funds by Foreign Institutional Investors.

HSBC feels that the current rally is different from the rallies in the past. “The fact that the market returns for July-December, for each of the last five years, have been negative, averaging at about 10 per cent. We, however, believe it is different this time around.”

This time, last year, it was doom and gloom across Asia. But this year, we prefer Asia to Latin America and within this region Taiwan, India, Thailand, Malaysia and Korea look good.

On the preference for Indian markets, it said “India has a beta — a key indicator on the volatility of markets — of 0.5, has 27 per cent of cyclicals and has low correlation with the US markets.

On the portfolio strategy, HSBC Securities said given the extremely bullish view on the market, almost all the top 100 stocks would offer positive absolute returns.

However, it said re-rating and earnings growth would be the key drivers of share prices with return on capital employed (ROCE) extremely important for share price performance.

From the earnings growth perspective, HSBC feels that cyclicals would perform better than the overall India-100 (the top 100 companies tracked by HSBC). The probability of attaining higher growth is more in domestic cyclicals, it added.

“International cyclicals like aluminium, steel, and petrochemicals would largely depend upon international price movements,” it said.

The broking firm is bullish on four-wheelers in automobiles has termed cement as the most attractive sector.

“Earnings upgrade is far higher in cement than in any other sector. This is because demand-supply imbalance is narrowing fast and with limited new capacity coming up, the chances of price increase are extremely high,” HSBC stated.

Apart from it, consolidation of the sector continues with takeovers and restructuring, there is high probability of re-rating.

Even though, HSBC is optimistic about economy related stocks, it is not keen on the banks and financial institutions sector as the spreads would be under pressure.

For the relatively lower but stable growth sectors like pharma and FMCG, HSBC feels that these sectors may underperform in the short to medium term, as we do not see a re-rating potential.

For the information technology sector, it feels as long as the explosive growth rates continue, the sector will continue to do well. As we approach year 2000, a slow down in order may be a hiccup, and this will help differentiate the boys from men.

J&K Bank net profit increases 40 pc

Jammu and Kashmir Bank Limited has recorded a 40 per cent rise in the net profit at Rs 28.50 crore for the quarter ended June 30, 1999 as against Rs 20.50 crore during the corresponding period year.

The deposits and reserves of the bank have increased to Rs 5979.94 crore from Rs 4699.81 crore and Rs 453 crore from Rs 358.62 crore respectively, during the same period. Also during the corresponding period, the bank’s credit portfolio increased 16 per cent to Rs 2602 crore from Rs 2,236.73 crore.

Roofit Industries Ltd has reported an increase of 47 per cent in net profit from Rs 11.15 crore in the previous year to Rs 16.44 crore for the year ended June 30, 1999. Turnover was at Rs 143.77 crore as against Rs 108.19 crore in the previous year, a growth of 33 per cent.

The Taj group of hotels has recorded a 7.7 per cent drop in net profit during the quarter ended June 30, 1999, to Rs 22.20 crore as against Rs 24.06 crore a year earlier.

Sales and other operating income for the quarter stood at Rs 120.07 crore, down 8.7 per cent from Rs 131.53 crore in the same period last year.

Other non-operating income was higher at Rs 12.24 crore while total income stood at Rs 132.31 crore, down from Rs 136.74 crore. Other income for the quarter includes dividend received from a subsidiary company.

Clutch Auto Ltd, manufacturer of automotive clutch, has posted an 8 per cent growth in net profit at Rs 75.31 lakh in the first quarter of the current fiscal as against Rs 69.77 lakh in the same period last year.

Net sales of Clutch Auto Ltd (CAL) also grew by 17 per cent to Rs 18 crore during April-June of the current fiscal as compared to 15.33 crore in the same period of 1998-99, a company release said. — UNI, TNS

IRA to limit cost of health insurance

MUMBAI, Aug 2 (PTI) — The Insurance Regulatory Authority (IRA) is planning to establish a set of cost containment guidelines for the insurance industry.

Explaining the concept, IRA officials said the guidelines would limit the rate of increase in the cost of repairs or health care from year to year by protecting the quality and accessibility of hospital care and repair-related services available to the policy-holders.

According to the IRA, this is intended to promote the public interest.

The guidelines would encourage service providers to make the most efficient use of the resources available to them in providing quality services, the officials told PTI here.

At present healthcare insurance is available to the Indian public through mediclaim insurance and personal accident insurance, but it is not sufficiently developed and the market reach is very poor.

Insurance authorities said that they wanted to ensure that with the entry of private operators — both domestic and foreign — into the insurance sector, the insuring populace does not find itself shortchanged by the companies.

Two years back, the then Finance Minister, P. Chidambaram while announcing the opening up of the insurance sector had said that the government intended to allow private operators in the health insurance segment first, but after that there were no further initiatives in this regard.

Cost containment is closely allied to rate making, and IRA will have the responsibility of determining whether the premium rates are reasonable or excessive.

According to the IRA definition, “a rate shall be termed excessive if it is likely to produce a profit that is unreasonably high for the insurance provided or if the expense provision included therein is unreasonably high in relation to the services rendered.”

With the entry of more players in the sector, IRA envisages undercutting of rates and inadequate rates are also not permissible as “a rate shall be inadequate if it threatens the solvency of the insurance company or has the effect of substantially lessening competition or the tendency to create monopoly in any market.”

Govt invites suggestions on E-Commerce Act

NEW DELHI, Aug 2 (PTI) — The government today invited suggestions from trade and industry on the proposed Electronic Commerce Act being considered by the law ministry. The draft Act has been put on the website of the National Informatics Centre yesterday to facilitate people to put their views on the matter, an official release said here. The Electronic Commerce Support Act is also being put on the Internet site along with the Electronic Commerce Act. It can be accessed from the site of commin.nic.in.

FIPB clears FDI worth Rs 175 crore

NEW DELHI, Aug 2 (UNI) — The Foreign Investment Promotion Board (FIPB) today permitted Total SA of France to set up a joint venture technology supply unit for resins as part of the 39 proposals approved, amounting to a total foreign direct investment inflow of Rs 175 crore.

TNB repair and Maintenance of Malaysia has also been allowed to set up a 11 MW power generation project near Trichy in Tamil Nadu by infusing Rs 100 crore, FIPB sources said here.

The Malaysian company would control 99.99 per cent stake in the venture — Tenaga BK Power.

Total, the sources said, would pick up 23.9 per cent stake in the resin venture by bringing in Rs 1.5 crore. The Indian partner, which is an SSI unit — Global Synthetics Limited — would control the majority stake of 76.1 per cent.

Another Total group company — Total Lubricants - has been allowed to hike capital base in its existing wholly-owned subsidiary in India. The company, whose existing equity base is Rs 16 crore, would be infusing an additional Rs 19 crore into the venture. The company, with a blending unit in Haryana, is engaged in the business of producing and marketing lubricating oils and greases.

Hewlett Packard has also been allowed to hive off its measurements division into a separate wholly-owned subsidiary. The new company would be formed with an investment of Rs 43 lakh and would be engaged in the business of producing testing measurement equipment, electronics components and measurement devices.

Trackmail India Private Limited has been allowed to provide e-mail services through a 100-per cent subsidiary. The company would be investing Rs 5 crore for the purpose.

The Commonwealth Development Corp, UK, promoted Ortel Communications would set up a joint venture with Orissa Electric Corporation for building hybrid fibre co-axial communications network. The British firm would control 49 per cent stake in the project.

In the tourism sector, Far Hotels has been allowed to join hands with Le Meridien for constructing a five-star hotel and convention centre. Kyungbokgong Hotel Private Limited of Korea has also been allowed to set up a wholly-owned Korean restaurant service in Chennai with an investment of Rs 35 lakh.

Nestle has also been permitted to set its instant tea produce in the domestic market. The company is presently exporting the entire produce from the unit.

Meanwhile, the Board deferred decisions on proposals by Honda-Siel cars and BMG Crescendo.

Forex
US $ Rs 43.32/33
Stg £ Rs 70.01/03
Euro Rs 46.18/21
Jap yen (100) Rs 37.92/94

Escorts Fin
NEW DELHI, Aug 2 (PTI) — ICRA has assigned an MA rating to the fixed deposit (FD) programme of Escorts Finance and reaffirmed the A1 rating of the finance company’s Rs 10 crore commercial paper programme to indicate highest safety. The ratings take into account Escorts Finance’s comfortable capital adequacy, the management’s increasing focus on improving asset quality and the group’s support.

Modi Sugar
NEW DELHI, Aug 2 (UNI) — Modi Sugar Mills today entered into the branded sugar market in the Capital with the launch of Modi Sugar. Manufactured with a double sulphitation process ensuring purity, Modi Sugar is processed under technical guidance from international sugar experts and this brand does not use bone ash as a purifying agent making it a 100 per cent vegetarian sugar.