Friday, October 12, 2001, Chandigarh, India






THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS
B U S I N E S S

War to cost Pak $ 1b, says World Bank
Washington, October 11
The World Bank said Pakistan’s economy is likely to lose $ 1 billion due to events that have followed the September 11 attacks on the USA and the figure could rise if military action in Afghanistan is prolonged.

India can sell cheap anthrax drug
Mumbai, October 11
If the anthrax scare were to spread from the USA across the globe, cash-strapped governments would find dozens of suppliers in India willing to sell the costly medicine needed to treat the disease at cut-rate prices.

Spice to invest 100 cr in Punjab
Chandigarh, October 11
Spice Telecom will increase its subscriber capacity by another one lakh. The company has installed a new switch at Jalandhar which will be commissioned within 10 days. Spice is investing Rs 100 crore towards this, said Mr Vinod Sawhney, MD, in a press conference here today.

CORPORATE NEWS

Ranbaxy net profit spurts 68 pc
New Delhi, October 11
Ranbaxy Laboratories today reported a jump of 68 per cent in net profit at Rs 89.1 crore for the quarter ended September 30 from Rs 53.1 crore in the corresponding period last year.



EARLIER STORIES
 
  • HDFC buys 12.33 lakh equity shares
  • TVS-Suzuki net drops

Used cars steer US economist to Nobel
Berkeley (California), October 11
The three American economists who swept the Nobel Prize for Economics for research into the ways that markets can be rolled by an imperfect flow of information greeted the prestigious award with a mixture of surprise and practiced wariness on Wednesday.

 Joseph Stiglitz
Joseph Stiglitz

 George Akerlof
George Akerlof

 Michael Spence
Michael Spence

CMIE lowers GDP growth to 6 pc
Mumbai, October 11
The Centre for Monitoring Indian Economy has scaled down the gross domestic product projection to 6 per cent from 6.3 per cent for the fiscal 2001-02 along with downward revisions in agriculture, services and export growth.

Open offer for CMC on Oct 13
New Delhi, October 11
The Tatas are likely to announce open offer for floating shares of CMC Ltd on October 13, as part of conditions for transfer of 51 per cent government equity and get management control in the computer maintenance company.

ROUND-UP

Oil rises as OPEC may cut output
London, October 11
Oil prices rose on Thursday on growing signs that the OPEC cartel may be preparing for its fourth production cut this year.

  • Highest IOC bottling plant
  • J & K Bank net jumps 40 pc
  • Yahoo profit tumbles
  • GM-Automart pact on used cars
  • Swissair flights to continue


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War to cost Pak $ 1b, says World Bank

Washington, October 11
The World Bank said Pakistan’s economy is likely to lose $ 1 billion due to events that have followed the September 11 attacks on the USA and the figure could rise if military action in Afghanistan is prolonged.

World Bank President James Wolfensohn, in a statement that outlined the estimate, said yesterday his institution stands ready to help the country, which shares a border with Afghanistan, keep its economic reform programme on track.

“Events following the September 11 attacks on New York and Washington, D.C., have dealt Pakistan a sharp economic blow, estimated to cost the country at least $ 1 billion,” the statement said. “This figure could rise if the situation in Afghanistan is not resolved in the short term.’’

Refugees have been pouring over the border into Pakistan from Afghanistan, the site of US military strikes.

The bank issued the statement following a meeting between Wolfensohn and Pakistan Finance Minister Shaukat Aziz on the country’s economic reform programme.

Aziz assured Wolfensohn of his country’s commitment to stick to the reform programme and of his intention to accelerate its implementation, the World Bank statement said.

The bank lent Pakistan $ 374 million in fiscal 2001, which ended September 30, and is expected to increase aid during the current fiscal year.

While in Washington, Aziz is also set to meet officials from the IMF. He is hoping to make progress on a new IMF loan designed to reduce poverty.

Pakistan is widely expected to be looked upon favourably by international lenders because of its cooperation with the United States in the wake of the September 11 attacks. Reuters
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India can sell cheap anthrax drug

Mumbai, October 11
If the anthrax scare were to spread from the USA across the globe, cash-strapped governments would find dozens of suppliers in India willing to sell the costly medicine needed to treat the disease at cut-rate prices.

Every Indian drugmaker worth the name turns out its copy of German giant Bayer's Cipro, the only U.S.-approved treatment for anthrax. Demand for the drug surged in the U.S. after a man died of the disease, raising fears of possible biological warfare.

Bayer said on Wednesday it would increase production by 25 per cent starting from November 1.

But consumers outside the West could also buy cheaper copy-cat versions from at least 78 Indian producers, like Ranbaxy Laboratories, who churn out large volumes of the drug at a fraction of international prices.

"In the event of an anthrax crisis, Indian companies could easily ramp up supplies to unregulated and less regulated markets like China, Russia, Brazil, the Middle East and Southeast Asia," said ABN Amro analyst Giridhar Iyengar.

Analysts say it is difficult to predict whether demand in the United States will outstrip Bayer's ability to supply the drug in the event of an anthrax emergency.

Two months' supply of 120 pills of Cipro 500 mg costs as much as $693 in the United States. Reuters
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Spice to invest 100 cr in Punjab
Tribune News Service

Chandigarh, October 11
Spice Telecom will increase its subscriber capacity by another one lakh. The company has installed a new switch at Jalandhar which will be commissioned within 10 days. Spice is investing Rs 100 crore towards this, said Mr Vinod Sawhney, MD, in a press conference here today.

Unveiling the future plans, he said a unique pre-paid solution and a new billing system will also be introduced . “The existing switch which is located at Mohali can cater to more than 2 lakh connections . New switch will augment the current capacity of the network and also ensure good quality service levels”, said he.

Speaking further about the plans, he said the company will expand coverage to 20 more towns in Punjab. “In addition, to improve the in-building coverage, 20 infill sites will be added . As a result of these initiatives, the network capacity will be increased by 30 per cent”, said Mr Sahwney.

Talking about the new billing system, he said the billing capacity with this system will increase by over 100 per cent. The company will also focus on R&D to develop new services such as unified massaging system.

Strategic alliances with other companies for roaming facilities will be done in future, said he. “At present around 80 per cent of our demand for roaming is covered in Delhi.” 

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CORPORATE NEWS

Ranbaxy net profit spurts 68 pc

New Delhi, October 11
Ranbaxy Laboratories today reported a jump of 68 per cent in net profit at Rs 89.1 crore for the quarter ended September 30 from Rs 53.1 crore in the corresponding period last year.

While the company reported profit of Rs 72.7 crore on sale of its 50 per cent stake in joint venture with Eli Lilly, it made provisions of Rs 30 crore on account of losses recorded in its investment in Vidyut Investments.

The company’s sales witnessed an increase of 16 per cent at Rs 538 crore for quarter ended September 30, 2001, from Rs 464.1 crore for the same period last year, a company statement said here.

Export turnover of the pharma major recorded a growth of 24 per cent at Rs 262.5 as against Rs 211.1 crore in the quarter ending last year, it said.

Commenting on the performance, company Chief Operating Officer and Managing Director said, “Ranbaxy’s continuing emphasis on financial performance parameters is showing positive results.”

The company’s performance in the international market also improved with consolidated global sales at $ 416 million, a growth of 16 per cent.

HDFC buys 12.33 lakh equity shares

Housing Development Finance Corporation has purchased Hindustan Oil Exploration Company’s 12.33 lakh shares (Rs 10 each) from British Borneo Oil & Gas of Netherland.

After the acquisition, HDFC would hold 62,87,222 equity shares (Rs 10 each), representing 10.70 per cent of the paid-up capital of HOEC, the company informed the Bombay Stock Exchange today.

TVS-Suzuki net drops

TVS-Suzuki today reported a 48.6 per cent drop in the net profit at Rs 10.39 crore during July-September 2001-02 over Rs 20.24 crore in the same period last fiscal.

Net sales declined by 7.4 per cent at Rs 428.25 crore against Rs 460.12 crore in the year-on-year period. Agencies
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Hughes net falls 52 pc 

New Delhi
Hughes Software Services (HSS) today posted a 52 per cent drop in net profit to Rs 6.3 crore for the second quarter ended September 30 compared to Rs 13.1 crore during the same period of the previous year.

The company’s half-yearly net profit, however, increased by 11.60 per cent to Rs 25 crore against Rs 22.4 crore in the corresponding period of the previous fiscal.

Total income for the quarter increased 20.3 per cent to Rs 57.4 crore compared to Rs 47.7 crore in the same period in 2000-01.

For the H1, total income was pegged at Rs 124 crore as against 86 crore in H1 of 2000-01, reflecting a 44 per cent rise.

Speaking to reporters after announcing the results, Mr Arun Kumar, President and Managing Director of HSS, said: “The deterioration in the global economic environment has resulted in downsizing and lower business forecasts from communication companies worldwide.”

He reiterated HSS’ guidance given last month where it had indicated the forecast for income growth to be in the range of 25-35 per cent. Profit after tax was expected to be in mid-20s for 2001-02. PTI

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Used cars steer US economist to Nobel

Berkeley (California), October 11
The three American economists who swept the Nobel Prize for Economics for research into the ways that markets can be rolled by an imperfect flow of information greeted the prestigious award with a mixture of surprise and practiced wariness on Wednesday.

The Royal Swedish Academy of Sciences rewarded economics professors George Akerlof, Michael Spence and Joseph Stiglitz for their work on how markets function when some people know more than others.

As if to demonstrate the point, Mr Spence, 58, a Professor at Stanford University’s Business School, was surprised when news of the award reached him at 4 a.m. While he was vacationing with his wife in Hawaii, even though colleagues called the research work of the trio a long-standing favourite for the $1 million award.

“It was a cross between joy and stunned disbelief,” Mr Spence told Reuters. “I wasn’t expecting it so it came right out of the blue. It is a huge honour.”

California-based economist George Akerlof won a share in the Nobel Prize for Economics for his pioneering work showing that used car salesmen keep what they know to themselves.

Now with a third of the $1 million prize, he doesn’t need to buy a used car even if he wanted to, which he says he never has.

“I tend not to buy used cars,” Mr Akerlof, 61, told a news conference hours after learning he had won the prestigious prize along with Mr Michael Spence, 58, a Professor at Stanford University and Mr Joseph Stiglitz, 58, a Professor at Columbia University.

Mr Akerlof, of the University of California at Berkeley, cited his 1966 study of the murky and sometimes cut-throat used car market showing how markets function when some people know more than others as a major reason for receiving the prize.

Mr George Perry, senior fellow at the Brookings Institution, said the great contribution of the researchers had been to challenge the idea that all economic behaviour is governed by rational expectations about the future.

Instead, they showed that imperfect information — a concept called asymmetric information — affects economic decisions. The research has led to practical applications for everyone from insurance actuaries to central bankers.

“It is a wonderful award, if there was betting on these things, I would have been betting on George for the last few years,” Perry said.

Mr Akerlof said he chose to focus on the used car market in his study because it was an area where buyers and sellers did not have access to the same information.

For example, buyers may be wary because they wonder why a car is on the market, while sellers want the best possible price. A dearth of information could also spur parties to leave the market, causing it to collapse, Mr Akerlof said.

“The nice thing about the used car market is everybody knows what it means to buy and sell a used car,” Mr Akerlof said, adding, “If I went to a supermarket and they sold me rotten tomatoes everyday, I wouldn’t go back there.”

Mr Akerlof also paid tribute to his wife Janet Yellen, who served as chairwoman of the Clinton Administration’s Council of Economic Advisors from 1997 to 1999, as well as the co-recipients, saying much of his research stemmed from listening to friends and colleagues.

He added some people might think it strange that a person could win a Nobel Prize for studying used cars and that even he was still trying to come to grips with the award.

“I was totally thrilled but I didn’t quite believe it,” Mr Akerlof said. “Maybe tomorrow I will believe it.” Reuters
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CMIE lowers GDP growth to 6 pc

Mumbai, October 11
The Centre for Monitoring Indian Economy has scaled down the gross domestic product projection to 6 per cent from 6.3 per cent for the fiscal 2001-02 along with downward revisions in agriculture, services and export growth.

“The downward revision in GDP follows the impact of poor Monsoon in South India on agricultural growth and the effect of September 11 terrorist attacks in US on services sector,” CMIE said in its monthly review here today.

“We expect a healthy economic growth in FY-02 but we fear that this growth is not sustainable in coming years,” it said.

Growth in agriculture has been scaled down from 7 per cent to 6.5 per cent while services are expected to grow at 6.6 per cent (earlier 7 per cent). Industrial sector’s forecast remains unchanged at 4.6 per cent.

Post September 11, prospects of exports growth have worsened, hence the forecast in this sector stands revised to meagre 1 per cent (earlier, 7 per cent).

“This will be a major fall from the 21 per cent growth recorded in 2000-01,” the CMIE said.

The current account deficit was expected to go up to $ 3.5 billion from $ 2.6 billion in last fiscal, it said adding that, net invisibles are projected to take a hit due to expected fall in software exports and tourism earnings. PTI

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Open offer for CMC on Oct 13

New Delhi, October 11
The Tatas are likely to announce open offer for floating shares of CMC Ltd on October 13, as part of conditions for transfer of 51 per cent government equity and get management control in the computer maintenance company.

“We expect to advertise for the open offer to acquire the floating shares of CMC on Saturday. DSP Meryll Lynch, which was our adviser for CMC bidding, will assist us in the open offer process,” Tata Consultancy Services (TCS) sources told PTI.

Tata, most likely, would have to make an open offer to public shareholders of CMC at Rs 281 per share, as compared to Rs 197 per share, at which the Tatas bought the majority stake. PTI

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ROUND-UP

Oil rises as OPEC may cut output

London, October 11
Oil prices rose on Thursday on growing signs that the OPEC cartel may be preparing for its fourth production cut this year.

Buyers were also encouraged by news that the world's biggest oil exporter, Saudi Arabia, has reduced its crude allocations for key European customers in November. Industry analysts said it was a sign that Riyadh will tighten compliance to curbs set by the Organisation of the Petroleum Exporting Countries. Reuters

Highest IOC bottling plant

Leh
Indian Oil Corporation has set a record for building the world’s highest altitude bulk oil depot and LPG bottling plant at 11,500 feet above sea level and deserves a place in the Guinness Book of World Records, said Petroleum Minister Ram Naik, after dedicating the two facilities to the nation last evening. After the destruction of its oil depot in Kargil, during the war with Pakistan in 1999, the IOC built the 4,200 kilolitre depot here at a cost of Rs 12.25 crore. PTI

J & K Bank net jumps 40 pc

New Delhi
Jammu and Kashmir Bank has posted a net profit of Rs 108.47 crore in the first half of this year (Apr-Sep), registering a 40 per cent increase over the corresponding figure (Rs 77.29 crore) of last year. The bank had an operating profit of Rs 186.06 crore, a jump of 49 per cent, it was announced today. UNI

Yahoo profit tumbles

Sunnyvale (California)
Internet giant Yahoo has warned it may cut jobs as it reorganises its operations after plunging into the red in the third quarter. The Internet portal lost $ 24.1 million in the three months to September, including net investment losses of $ 17.9 million, it said in a statement yesterday. AFP

GM-Automart pact on used cars

NEW DELHI: General Motors India today said it had signed an agreement with used car retail chain Automart India to jointly develop and promote their used car business in the domestic market. The programme, to be promoted through the GMI dealerships in the country will initially be introduced in Delhi, Mumbai, Chennai and Bangalore in December, a company statement said. PTI

Swissair flights to continue

New Delhi
Swissair, whose operations would be taken over by a new Swiss airline from October 28 after merger with Crossair, would continue to operate on 34 international stations, including Delhi and Mumbai, the carrier said today. PTI
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BIZ BRIEFS

Canbank MF
Chandigarh, October 11
Canbank Mutual Fund has declared the seventh income distribution of 4 per cent in its Cangilt PGS Scheme, under the income plan. The cumulative distribution made by the scheme aggregates to 19.25 per cent since the inception of the scheme. TNS

Aventis Pharma
Chandigarh, October 11
Aventis Pharma launched Arava (leflunomide), the country's first specifically designed anti-rheumatic drug to treat active rheumatoid arthritis. This was stated in a company press note issued here. TNS

Kurlon products
Chandigarh, October 11
Kurlon has launched Klassic Plus, a premium mattress and a PU foam single moulded pillow Kurlopillo-Chimera. Kurlon is a Rs 2,200 crore Manipal Group company. TNS

Kirloskar Copeland
Chandigarh, October 11
Kirloskar Copeland, compressor manufacturer, today announced that it had achieved a total sale of one lakh eco-friendly compressors in commercial refrigeration segment in India. TNS

PizzaExpress
Chandigarh, October 11
San Marzano, a brand of the UK- based PizzaExpress, opened its third outlet in Pune today. The new restaurant will offer their first genuine taste in Italian dining. TNS

Uco Bank meet
Chandigarh, October 11
To extend easy credit to business organisations, Uco Bank organised a customers' meeting at Patiala yesterday. Mr J.C. Malhotra, Assistant General Manager of the bank, informed the gathering about various loan schemes launched by the bank throughout the country. He said the bank had decided to pay an additional 1 per cent interest to the senior citizens. TNS

PNB function
Yamunanagar, October 11
Punjab National Bank (PNB) organised a function at Community Development Centre, Bilaspur, near here, to distribute Krishi credit cards to farmers. Mr Rajeev Sharma, Deputy Commissioner, said the bank had started the scheme for the farmers having land holdings of more than one acre. OC

Gramin Bank
New Delhi, October 11
The proposed one-day strike of Gramin Banks employees on October 15 has been deferred. The decision was taken after representatives of the All-India Gramin Bank Workers Organisation and All-India Gramin Bank Officers Organisation met the Minister of State for Finance, Mr Bala Saheb Vikhe Patil and discussed their list of demands. TNS

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