|B U S I N E S S||
Wednesday, January 6, 1999
Smuggling may increase
of SEBI chief sought
agri banks suffer loss
in gold import duty
NEW DELHI, Jan 5 Gold smuggling and transactions through the hawala route may get a fillip as a result of the increased import duty on the precious yellow metal, say market observers.
Director of Enchante Jewellery Limited, Mr Chand Mehra, told the TNS that an increased import duty means increased incentive for smugglers.
Moreover, there would be increased demand for dollars in the hawala market and the margin for the smugglers would increase, he added.
The government has announced an increase in customs duty on gold from Rs 250 per 10 grams to Rs 400 per 10 grams, effective from January 5, 1999.
This step was taken mainly to arrest the widening trade deficit as gold constitutes the second highest quantum of commodity of imports into the country after crude oil and petroleum products.
The government had earlier reduced the duty on gold and had considerably reduced transactions through the hawala and unofficial route.
Observers said the move to hike import duty now only reflects the desperation on the part of the government. Revenue in the short-term would increase as duty collections would be larger, but the long-term consequences to the economy would be terrible, said Mr Mehra.
The existence of a parallel market for gold implies a loss in sales tax because transactions are not accounted for in the books . There are other ways the government could have increased revenue and it appears that the gains from liberalisation would be negated, said an observer.
After liberalisation of gold import, smuggling of the yellow metal was almost removed as the difference between the official import and smuggled one had a small difference of 2 per cent.
The increase in import duty is also likely to affect the sale of gold by nominated banks and agencies in the domestic market as buyers would look for suppliers at cheaper rates.
The government has estimated to garner an additional revenue to the extent of Rs 250 crore on account of higher revenue. During the period January to November 1998, through official channels, 575 tonnes of gold was imported, showing an increase of around 28 per cent over the imports during the corresponding period last year.
The import of gold was projected to touch $ 7 billion by 1998-99 end, next only to oil imports at $ 7.5 billion. The increase in import of the yellow metal appears to have cause a some concern in the government as it would imply an outflow of foreign exchange in a period of sluggish foreign capital inflow to the country.
Observers, however said that a large part of the gold imported to the country are financed by NRIs. Marketmen said that NRI financed import of gold does not constitute an outflow of foreign exchange from the country as they are financed by dollars they have, what otherwise would have been invisible flows.
MUMBAI, Jan 5 (PTI) Gold prices zoomed up by Rs 120 per 10 gram on the bullion market here today due to sharp rise in import duty on gold.
Standard gold opened
higher and closed at Rs 4350, showing a sharp rally of Rs
120 over the last close of Rs 4230. 22-carat gold was
nominally quoted steeply higher at Rs 4025 from
yesterdays level of Rs 3915 and ten-tola gold bar
(.999 purity) jumped up by Rs 1,400 to end at Rs 51,000
from the last close of Rs 49,600.
NEW DELHI, Jan 5 (UNI) Senior BJP Lok Sabha member Jagat Vir Singh Drona has sought the removal of Mr D.R. Mehta as Chairman of the Securities and Exchange Board of India (SEBI).
Congratulating Prime Minister Atal Behari Vajpayee for his direction to the Finance Ministry to take action against unscrupulous promoters of companies, Capt Drona demanded that responsibility of SEBI officials be also fixed in the matter of companies which have vanished after raising money from small investors through public issue.
In a strongly-worded letter, he accused SEBI of deliberate lie to the government in reply to his question on the vanishing companies raised in the Lok Sabha in December.
Further, SEBI officials have been accused of active connivance with the unscrupulous promoters of companies which vanished after raising money through public issue.
NEW DELHI, Jan 5 (PTI)
The Punjab-based International Tractors Ltd (IT)
has launched two new models of its popular
Sonalika brand tractors having better fuel
efficiency and speed than earlier models. The new models
DI-55 and DI-66, designed to operate in different soils
with same efficiency, are more powerful than earlier
versions, a company release claims.
banks suffer loss
ROHTAK, Jan 5 Primary Agricultural Rural Development Banks (PARDBs) in Rohtak and Jhajjar districts suffered a loss of Rs 547.42 lakh, whereas the central cooperative banks earned a profit of Rs 101.10 lakh during the year ending March 31, 1998.
A survey conducted by NABARD revealed that none of the eight branches of the PARDB earned profit in the last financial year.
The total deposits with various bank branches in the undivided Rohtak district were over Rs 1219.38 crore as on March 31, 1998, but 86.59 per cent of this account was cornered by 70 branches of various commercial banks. The total lending by the banks was nearly Rs 505.40 crore. In 1997-98, these banks advanced only Rs 99.33 crore to the agricultural, industrial and other priority and non-priority sectors.
The data showed that the deposits of the central cooperative bank registered an increase of 23.9 per cent 1997-98 over the previous financial year. Percentage wise it was the highest amongst all banks.
Central Cooperative Bank has 13 branches in the district and the per branch deposits increased from Rs 245.7 lakh in 1996-97 to Rs 304.39 lakh in the last financial year. The NABARD, too, helped the premier cooperative bank in increasing its deposits by reducing the interest rate by 05 per cent.
The deposits with Kshetriya Gramin Banks in 1997-98 increased by 16.7 per cent as against 18.5 per cent in the commercial banks.
CHANDIGARH, Jan 5 Citibank NA, India and Maruti Udyog Limited (MUL) today launched the Maruti-Citibank-Visa Card in association with Visa. Designed to offer special benefits to the owners and prospective buyers of Maruti cars in India, this is Indias first co-branded card between a bank and an automobile company.
Maruti-Citibank-Visa Card was presented to the Chief
Guest, Mr RSSLN Bhaskarudu, Managing Director, Maruti
Udyog Limited by Mr Nanoo G. Pamnani, Global Consumer
Bank Head, Citibank NA, India at a special launch
function in New Delhi today.
MUMBAI, Jan 5 (PTI) Hyundai Motor India has decided to maintain the current price line of all the three variants of its Santro model despite slashing in prices of Zen series by Maruti Udyog and launch of Indica by Telco.
Addressing a news conference here last night, the company President A.P. Gandhi ruled out any reduction in prices and said it was other companies which were adjusting prices of their products with Santro.
Santro was technologically far advanced which met various requirements such as fuel consumption and pollution set for year 2000, he said.
As far as Telcos Indica is concerned, as of now it is non-existent and one has to wait to see how it performs, he said, adding after all, people will buy a good car, notwithstanding claims of competitors.
Hyundai Motor signed memoranda of understanding (MoU) with Kotak Mahindra Primus Ltd and HDFC Bank Ltd for launching two new private label auto-finance programmes.
These finance programmes would carry the Hyundai brand identity and will be offered to the Hyundai Santro customers during its second phase of customer order-taking that began nation-wide from yesterday.
The company Managing Director Y.S. Kim, who was present at the conference, signed the MoUs on behalf of Hyundai, while Dipak Gupta, Chief Executive Officer of Kotak Mahindra and Aditya Puri, MD of HDFC Bank, signed the respective MoUs.
Kim said the company was offering the customer a wider choice of finance options for buying the Santro.
He also announced the delivery figures for the Santro for 1998, according to which the company delivered 8447 cars by December 31, 1998.
NEW DELHI (UNI): Fiat S.P.A. of Italy has, for the time being, decided to freeze investments into its Ranjangaon plant near Pune, which was to produce the Siena and Palio under the world car project.
The decision to this effect was taken in view of the contracted demand in the automobile industry, Mr Marius DLima, spokesman of Ind Auto Limited, a joint venture between Fiat and Premier Automobiles Limited, told UNI here.
Fiat had earlier planned to set up the Ranjangaon unit to produce its range of world cars in India. But with the ongoing massive demand recession in the country, the company has decided not to put in more money into the unit for the time being and produce the Siena and the Palio from Premier Autos Kurla unit in Maharashtra, Mr DLima said.
The Kurla plant is presently being utilised to produce the Padmini and Uno. We have already set up separate assembly lines for the Siena and trial production of the car has also commenced in December-end.
The plant has a total capacity to produce 60,000 cars which will be divided between the three models.
At the Ranjangaon unit, the Italian car maker was planning to invest $ 370 million in the first phase and $ 130 million in the second stage in the facility which will produce one lakh cars per year. The facility is owned by Fiat India Automobiles Limited (FIAL), a wholly owned subsidiary of Fiat S.P.A.
NEW DELHI (PTI): To the delight of consumers, the onset of new year will see a fierce battle among car makers for supremacy as market leader Maruti fired its first salvo by cutting prices to face Indica from the House of Tatas.
Other players like Hyundai, Fiat, Mahindras, Daewoo are all expected to come up with marketing innovations to have a respectable piece of the car market, which witnessed a slowdown in growth during the year gone by.
Wrapped as a new year gift, Maruti Udyog Limited slashed drastically the prices of its popular models-800 CC and Omni and introduced a cheaper version of Zen, hours before the launch of Telcos much-awaited car Indica.
MUMBAI (PTI): The Tata groups latest indigenous innovation, the Indica car manufactured by Telco, has been added to the shopping list of the Canteen Stores Department (CSD) that has supplied the requirements of the Indian armed forces since 1948.
However, as per previous
practice with regard to consumer products, the orders for
Indica cars would be placed only after two
years to ensure that the vehicle has established itself
in the civilian market, Maj Gen Jagdish Chander, Chairman
of the CSDs Board of Administration and its General
Manager told reporters.
WASHINGTON, Jan 5 (Reuters) The United States today welcomed the launch of Europes new currency, shrugging off fears the euro could pose a challenge to the U.S. dollars status as the worlds most sought-after reserve currency.
We welcome the launch of the euro, on historic step that 11 nations in Europe have taken toward a more complete economic and monetary union, U.S. President Bill Clinton said in a statement, a successful economic union that contributes to a dynamic Europe is clearly in our long-term interests.
A strong and stable Europe, with open markets and robust growth, is good for America and for the world, he added.
Clintons endorsement of the euro, which today made a strong debut on the worlds foreign exchange markets, followed a series of more guarded comments by other top U.S. officials.
Treasury Secretary Robert Rubin earlier repeated his long-standing mantra that what is good for Europe will be good for the United States - adding that euros launch underscored the need for sound economic policies at home.
It will be a currency like all other currencies, he told reporters. As weve said many times, if its good for Europe then thats good for the United States. A strong Europe is good for the United States.
The 11 countries that adopted the single currency -Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain - almost match the United States economic might.
Their total annual output of about $ 6.5 trillion compares to almost $ 8 trillion in the United States. And according to European estimates, the euro zone will form the worlds greatest trading power, with 1997 exports 25 per cent larger than those of United States and twice those of Japan.
The euro zones weight in the world economy has prompted some to fear a shift of investor money out of the U.S. Dollar into the euro. That would make it harder for the United States to attract the capital it needs to finance its rising trade deficit, eventually pushing up interest rates and putting a damper on growth.
Some more or less equitable sharing of international roles between the two (currencies) is quite likely, U.S. Economist Fred Bergsten told Reuters in an interview.
The euro will move
up alongside the dollar in what will amount to a bipolar
international monetary regime, replacing the dollar
dominance of the past 60 or 70 years. I think its
matter of a few years, he added.
NEW DELHI, Jan 5 (PTI) Samsung India Electronics Limited (SIEL) today announced its maiden profit at Rs 5 crore for calendar 1998 over Rs 540 crore turnover, which was up 37 per cent over the previous year. It has no doubt been a tough year for the electronics industry on the whole but Samsung has beaten the slump to post its first ever profit. We expect this figure to reach Rs 16 crore in 1999 on a Rs 900 crore turnover, said the newly-appointed Managing Director K.S. Kim.
Buyback news spurts share prices
MUMBAI, Jan 5 (PTI) Equities got over initial resistance and several counters, particularly pharma shares, scored handsome gains in narrow movements on the stock market today following fresh purchases by foreign institutional investors (FIIs) and domestic institutions.
The news that the Cabinet had approved repromulgation of buyback of shares and promulgation of an ordinance amending the Patents Act provided the required tonic for the early stagnant tendency.
The BSE sensitive index moved in a limited range of 3103.62 and 3150.31 reflecting the activity on the National Stock Exchange which had the last day of the current account and closed at 3149.06 as against yesterdays close of 3122.04, netting a rise of 27.02 points. The BSE-100 index moved up by 10.64 points to 1402.06 from previous close up 1391.42.
Operators too had turned to pharmaceutical scrips after the news on Buyback and Patent Act.
Dealers said the current bull phase with new highs hit after a long time and expanding volumes indicated towards the gradual bottoming out of the market confirming strong signals of forthcoming rally.
Well supported by players, Telco, E Merck, Exide Ind, Wartsila, Carrier Aircon, Ballarpur and Rhone Poule hit the upper price band after exhausting the daily limit.
The BSE-200 and the Dollex were quoted moderately up at 324.80 and 127.06 compared with previous close of 321.99 and 126.11 respectively.
The volume of business was substantially up at Rs 1707.44 crore from yesterdays turnover of Rs 1504.04 crore.
Satyam Computer was the most active scrip with a turnover of Rs 255.97 crore followed by Pentafour Software (Rs 180.73 crore), ITC (Rs 178.51 crore), Zee Telefilms (Rs 138.38 crore) and Telco (Rs 135.12 crore).
MUMBAI, Jan 5 (PTI) The following were interbank forex and RBI rates (in rupees per unit):
U.S. $ Rs 42.52/53
The RBI reference rate was Rs 42.56.
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