Saturday, November 17, 2001, Chandigarh, India






National Capital Region--Delhi

THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS
B U S I N E S S

Doha outcome positive for India: Maran
New Delhi, November 16
The Union Commerce and Industry Minister, Mr Murasoli Maran, today expressed satisfaction over the outcome of the Doha Ministerial Conference of the World Trade Organisation saying that the final declaration takes care of India’s concerns in key areas of agriculture implementation, TRIP, trade and transfer of technology and WTO rules.

PSU banks’ capital market exposure falls to 22,730 cr
New Delhi, November 16
Scams, September 11 attacks and a overall depressed sentiment have resulted in fall in PSU banks exposure in capital market to about Rs 22,730 crore in the first half, as against Rs 22,930 crore in March 2001.

UTI selects 30 firms for sale of stake
Mumbai, November 16
Unit Trust of India has selected over 30 companies for block or a strategic sale of its stake even as India’s largest fund manager is reviewing its investments in capital market intermediaries including OTCEI.

Impose 20 pc import duty on cotton: Badal
Chandigarh, November 16
Concerned at the fall in prices of domestic cotton due to falling prices in the international market, the Punjab Chief Minister Mr Parkash Singh Badal has requested Mr Kanshi Ram Rana, Union Minister for Textiles, for the imposition of a 20 per cent import duty on cotton. He pointed that farmers are facing near disaster due to severe attack of American ballworm.

Bridgestone Corporation announced today that it has developed the world's largest tyre and will begin marketing it in spring 2002. The new radial tyre for dump trucks that carry loads of 380 to 400 tons, stands 4.02 metres (158.5 inches) high and measures 1.47 metres (57.9 inches ) across. Shown with the world's largest tyre is a tyre for Formula One competition. — Reuters

Nafed to market Leh berry juice
New Delhi, November 16
Compact International Ltd (CIL), has set up India’s first commercial plant at Leh in Jammu and Kashmir, for extraction of juice from the fruit of Seabuckthorn shrub, growing abundantly in the area, and claims to be the “complete answer to health related problems, an official of the company announced here on Thursday.



Children look at a model of farmers feeding his oxen outside the Maharastra state pavilion at the 21st India International Trade fair (IITF) in New Delhi on Friday. "Agro products and processed food" will be the theme of the fortnight long annual event. The protection of India's vast agricultural sector and greater market access are two of India's main concerns at the World Trade Organisation meeting in Doha. — AFP

EARLIER STORIES
 

Aviation security meeting
New Delhi, November 16
As Civil Aviation is passing through a critical phase worldwide, a round-table discussion on challenges to the security will be held at India International Centre (IIC) on November 24.

ANALYST’S DIARY

Tips slips on corporate governance
L
ast week, we had zoomed in on Mukta Arts to comprehend why its fortunes at the bourses have taken a nosedive. Media sector stocks, which were market darlings during the last quarter of FYOO, are now on the chopping block. One of the bigger media IPO’s was that of Tips Industries (TIL) and what happened to its share price in many ways mirrors the general trend in the media stocks segment.

ROUND-UP

Microsoft launches Xbox
Washington, November 16
Competition on the video game market has escalated with the launch of Microsoft’s Xbox, marking the entry of the software giant into a sector dominated by Japanese firms Sony and Nintendo.

  • Hudco to propose fiscal incentives
  • Wipro ties up with MosaicSoft

Top








 

Doha outcome positive for India: Maran
Tribune News Service

New Delhi, November 16
The Union Commerce and Industry Minister, Mr Murasoli Maran, today expressed satisfaction over the outcome of the Doha Ministerial Conference of the World Trade Organisation saying that the final declaration takes care of India’s concerns in key areas of agriculture implementation, TRIP, trade and transfer of technology and WTO rules.

India has also succeeded in warding off any commitments for negotiations in the important areas of investment, competition policy and transparency in government procurement.

Addressing newspersons here after his return from Doha, the minister, however, said India yielded some ground on environment to gain substantially in agriculture on which the European Union was very adamant.

“Perhaps for the first time we have something positive to show (from trade negotiations)”, he said, adding that “the fears that India would be isolated proved wrong and we found support and commonality of interests among many developing countries”.

On environment “the damage is limited and this is the price we have to pay for something in agriculture. It is a trade-off,” Mr Maran said claiming overall the Doha declaration was “positive” for India. “We have marginally agreed on environment, which to a large extent, is a political acknowledgment of its importance rather than rebalancing of rights and obligations,” he said.

Mr Maran said the development dimension of agriculture had received focussed attention with additional flexibility being given for providing domestic support and protection from imports on grounds of food security and rural development.

Special and differential treatment for the developing countries in all three areas of agriculture — market access, domestic support and export competition — would now be an integral part of the negotiations on agriculture to enable the developing countries to take care of their development concerns.

A commitment for phase-out of export subsidies by the developed countries has been secured in the declaration. This would facilitate the Indian farmers access to global markets by making Indian agriculture globally more competitive.

Elaborating on Singapore issues, Mr Maran said negotiations could start only if there was consensus and that too after getting reports of the study group in the next ministerial to be held two years later.

“I would say that nothing will happen immediately and the negotiations will take their time during which we have to be watchful,” he said adding that if there was one lesson from Doha, it was to push up economic reforms with renewed vigour.

Apart from enlarging the scope of agriculture negotiations to address developing countries’ concerns, Mr Maran said a major gain on services was on the issue of movement of natural personnel.

Now India has secured the right for a trade off on services. For example opening of a branch of a foreign bank could be made conditional to their allowing specified number of Indian personnel to work there.

On contentious core labour standards, he said: “We have kept the labour issue out of the trade negotiations and we saw to it that European Union did not have its way in the launch of a comprehensive round of trade negotiations.”

The first victory of Doha declaration was on implementation issues — the unimplemented portions of the previous Uruguay Round agreements.

“First our cries were ignored by the industrialised world, later they started denying them by saying that they would reopen the entire Uruguay round understandings,” he said adding that “we got the major players of international trade and the World to accept India’s point of view on implementation issue as correct.”
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PSU banks’ capital market exposure falls
to 22,730 cr

New Delhi, November 16
Scams, September 11 attacks and a overall depressed sentiment have resulted in fall in PSU banks exposure in capital market to about Rs 22,730 crore in the first half, as against Rs 22,930 crore in March 2001.

The PSU banks, including SBI, have increased their investments in shares slightly to Rs 4,089 crore during the first half of this fiscal as against Rs 3,984 crore but their investments in mutual funds and advances against shares have dipped, official sources said today.

SBI topped the list of 27 banks in terms of investment in shares to the tune of Rs 1,381 crore till September as against Rs 1,324 crore in March 2001, but it is yet to advance any loans against shares.

The SBI and its seven associates invested a total Rs 1,636 crore till September as against Rs 1,564 crore in March.

SBI was followed by Bank of Baroda, Bank of India, Punjab National Bank with over Rs 300 crore investment in shares.

Central Bank of India, Canara Bank and Indian Overseas Bank’s investments in shares were over Rs 100 crore.

In contrast to shares, SBI and its associates had more or less shied away from debentures. The total investment of the group was a meagre Rs 372.6 crore till September as against Rs 347.5 crore in the end of last fiscal.

The PSU banks had a total investment of Rs 10,473 crore in debentures till September as against Rs 10,446 crore in March 2001.

SBI had also reduced its exposure in mutual funds and other instruments to Rs 449.76 crore till September from Rs 785 crore in the last fiscal end.

The SBI Group’s exposure in mutual funds came down to Rs 1,410 crore at the end of last half from Rs 1,705 crore in March 2001.

In case of other PSU banks, some have increased their exposure in debentures and mutual funds significantly in the last half.

The total exposure of 27 PSU banks in debentures went up to Rs 10,845 crore during the first half from Rs 10,793 crore last fiscal.

Bank of Baroda’s exposure in debentures went up to Rs 3,528 crore in the last half from Rs 3,308 crore in the last fiscal. PTI
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UTI selects 30 firms for sale of stake

Mumbai, November 16
Unit Trust of India has selected over 30 companies for block or a strategic sale of its stake even as India’s largest fund manager is reviewing its investments in capital market intermediaries including OTCEI.

“We are negotiating to sell our holding where we can get significantly higher price than the prevailing market value” M. Damodaran, UTI Chairman told reporters here today.

The multinationals want to raise their holding in their Indian subsidiaries and UTI would use such opportunities to offload its stake, he said adding “some promoters have also approached to purchase our holdings.”

Referring to the intermediaries like OTCEI, he said the divestment would be based on OTCEI board’s decision on certain proposals being currently worked out to revive the entity.

On the feedback on the Y.H. Malegam Committee report, he said “small investors are not comfortable with the recommendation of distancing government’s association with the fund.”

The investors have preference for safety and liquidity coupled with adequate returns and see government association as a comfort in times of difficulty, he added.

The employees feel that there was no dearth of fund management talent within UTI and have questioned the benefit of inviting a strategic investor in sponsoring and managing the funds, Damodaran said.

They want separation of asset management work from the function of trustees, he added. PTI
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Impose 20 pc import duty on cotton: Badal
Tribune News Service

Chandigarh, November 16
Concerned at the fall in prices of domestic cotton due to falling prices in the international market, the Punjab Chief Minister Mr Parkash Singh Badal has requested Mr Kanshi Ram Rana, Union Minister for Textiles, for the imposition of a 20 per cent import duty on cotton. He pointed that farmers are facing near disaster due to severe attack of American ballworm. The farmers have spent large amounts on pesticides in order to save the crop but at current prices they are unlikely to recover even cost of pesticides, leave alone generating profits.

It is estimated that during the current year around 20 lakh bales have either been imported/contracted all over India. Of this, the imports/contracts by major spinning mills of Punjab, like Vardhman, Nahar and Winsome Group is around 3 lakh bales.

The domestic price of cotton in Punjab has fallen from Rs 1830 permound to Rs 1480 per mound and from Rs 1740 to Rs 1425 per mound in Haryana. The drop in prices of LINT in Rajasthan is from Rs 1710 to Rs 1410.
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Nafed to market Leh berry juice
Rohit Wadhwaney

New Delhi, November 16
Compact International Ltd (CIL), has set up India’s first commercial plant at Leh in Jammu and Kashmir, for extraction of juice from the fruit of Seabuckthorn shrub, growing abundantly in the area, and claims to be the “complete answer to health related problems, an official of the company announced here on Thursday.

Speaking at the launch of the product (Juice) Chairman of CIL, D.K. Mittal said environment and health related problems are the common concern of people all over the world.

The Small Farmers Agri-Business Consortium (SFAC), an organisation under the Ministry of Agriculture, has supported this venture in the interest of employment generation in Leh region and the National Agricultural Cooperative Marketing Federation of India (Nafed), has extended its marketing support to the venture.

Nafed has also planned to market the juice to government institutions like Indian Airlines and Indian Railways.

Seabuckthorn is a small, deciduous, thorny, nitrogen-fixing shrub that grows naturally in Ladakh, Himachal Pradesh and the dry temperate areas of Himalayas. The shrub is also found in Russia, China and Germany. Seabuckthorn, which grows under clean ecological conditions, has accumulated many “physiologically active components, due to which these substances are beneficial to normal metabolic activities, therefore are valuable for human health,” said Sudhir Kumar, Managing Director of SFAC.

Priyadarshan Thakur, Managing Director of Nafed said China has a business of about “Rs. 1700 crore” from Seabuckthorn products.

Mr Mittal also informed that CIL would be soon launching a variety of food products like jam, jelly, squash, pickles and biscuits made from Seabuckthorn fruit. The product was launched by the Indian Airlines, CMD Mr Sunil Arora.
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Aviation security meeting

New Delhi, November 16
As Civil Aviation is passing through a critical phase worldwide, a round-table discussion on challenges to the security will be held at India International Centre (IIC) on November 24.

The eminent panelists, drawn from the areas of aviation and security, will discuss, debate and suggest ways and means to improve the safety of aircraft and security of passengers. Dr S.S. Sidhu, former secretary-general of the International Civil Aviation Organisation (ICAO), says: “The discussion has become necessary in view of the recent terrorist attacks in USA where commercial aircraft was used as missiles to cause incalculable damage to life and property”. OC
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ANALYST’S DIARY

by Ashok Kumar

Tips slips on corporate governance

Last week, we had zoomed in on Mukta Arts to comprehend why its fortunes at the bourses have taken a nosedive. Media sector stocks, which were market darlings during the last quarter of FYOO, are now on the chopping block. One of the bigger media IPO’s was that of Tips Industries (TIL) and what happened to its share price in many ways mirrors the general trend in the media stocks segment.

TIL offered 3 million shares of Rs 10 each at a price of Rs 325 each share. The book built portion, the records suggest, was oversubscribed four times. TIL listed at a marginal premium on the BSE on November 20, 2000. The scrip started trading at Rs 342, 5 per cent above its offer price of Rs 325 before touching a high of Rs 426.

Post-listing, the stock had taken a major beating and touched a low of Rs 40 and currently quotes close to its rock bottom price at Rs 72.

Dashmesh International, a Mauritius-based company has become a 100 per cent subsidiary of TIL. Dashmesh is engaged in the business of purchase and licensing of music rights and selling cassettes and CDs. It is also engaged in purchase & licensing of theatrical rights of motion pictures.

Where Tips really slips is on the corporate governance front. Being a predominantly skill-based business, the company is overly dependent on the promoters’ skills and further queering the pitch is the serious charge of murder hanging over the head of one of the promoters.

Furthermore, its foray into film production has been an unhappy one thus far, adding to a potential investors worries. About the only positive thing going for it at the moment is that fortunes change overnight in the industry it is engaged in and its share-price is close to rock bottom. Or is it?

Whilst on entertainment, there was a fair share of it on offer, except of course for its shareholders, when Reliance Industries declared its latest results. If only the spokesman of the nation’s premier and of course, the highly ‘reliable’ private sector group had heard what good ole Abe Lincoln had to say about not being able to fool all people all the time, they might perhaps not have declared their latest results the way they did.

To cut a long story short, no analyst worth his salt would have missed out on the fact that the bottomline had actually dipped by over 20 per cent if one factored in the boost in other income and interest cost cut through premature repayment. Furthermore, if the forex benefits too were to be factored in, the operational picture assumes abysmal proportions.

My guess is that if the US GAAP were applied, the bottomline would have declined around 40 per cent YoY.

Little wonder then that this company ranks low in the new corporate governance sweepstakes and has never merited the kind of discounting that an Infy or an HLL has routinely received.
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ROUND-UP

Microsoft launches Xbox

Washington, November 16
Competition on the video game market has escalated with the launch of Microsoft’s Xbox, marking the entry of the software giant into a sector dominated by Japanese firms Sony and Nintendo.

The Xbox is in direct rivalry with Sony’s PlayStation 2, which has sold more than 20 million units since its release in October last year, and, to a lesser degree, nintendo’s GameCube, which debuts in North America on Sunday.

The Microsoft console, which will be marketed on February 22 in Japan and on March 14 in Europe, was on the shelves in more than 15,000 US stores. Many have already sold out to avid customers who reserved their Xbox before Thursday last.

“We had a very strong demand with people lining up as early as 1:30 am,” said Bill Cimino, spokesman for the electronics store chain Circuit City. AFP

Hudco to propose fiscal incentives

New Delhi
Housing & Urban Development Corporation (Hudco) would propose a slew of fiscal incentives including extension of time-limit for tax deduction on repayments of housing loans and setting up a ‘shelter development fund’ in the forthcoming Budget.

Hudco would propose to the Central Government to make deposits/bonds of housing finance companies eligible for investments by provident and pension funds and permitting FDI into the sector under a proper regulatory regime. PTI

Wipro ties up with MosaicSoft

Bangalore
Wipro Technologies, a global provider of IT services and MosaicSoft,Inc, an enterprise software company, have signed an agreement with Heidelberg for DocSmart, an enterprise document and information management solution, jointly developed by Wipro and MosaicSoft.

The OEM agreement gives Heidelberg, the world’s foremost supplier of print media solutions, worldwide distribution right for DocSmart and allows Heidelberg to integrate DocSmart as the Document Management solution of its ImageSmart Software suite. UNI

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BIZ BRIEFS

Tata Internet
New Delhi, November 16
Tata Internet Services Ltd (TISL) today said it would offer value-added services in 32 cities including disaster recovery, hosting and co-location. TISL will also offer IP-based virtual private network, dedicated internet access and ISDN connections to its corporate clients in these cities, a company release said. PTI

Octavia
New Delhi, November 16
Volkswagen group company Skoda Auto today launched a four-cylinder luxury car “Octavia” at a price of Rs 10.6 lakh targeting to sell about 6,000 units in the first 12 months. PTI

AirTel Magic
New Delhi, November 16
AirTel today announced the availability of all India roaming services on its ready cellular card Magic. The customers can now receive voice calls and SMS throughout the country without having to change their card or number. UNI

Singer
New Delhi, November 16
Singer, market leader in sewing machines, today launched a number of kitchen appliances as part of its diversification plans in other consumer durables. “We are introducing a range of cooking appliances including food processor, electric kettle, sandwich toaster, auto-cooker and micro-wave oven,” Singer MD director Rajiv Sud said in a statement. PTI

BHEL bags order
New Delhi, November 16
Bharat Heavy Electricals Ltd (BHEL) has bagged yet another turnkey order from Delhi Vidyut Board (DVB) for setting up two grid substations in the Bawana industrial area. UNI
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