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Biggest intra-day crash jolts Sensex
SEBI move to moderate capital inflow: FM
New Delhi, October 17
P Chidambaram As the panic-struck market shed over 1,700 points today over SEBI’s proposal to tighten norms for Participatory Notes (PNs), union finance minister P Chidambaram stepped in to arrest the sharpest-ever slide by asserting that government has no intention to ban the offshore derivative instrument but only wanted to cap the proportion of capital inflows.

“We are not in favour of banning PNs. We have not banned PNs. We have simply placed a cap on proportion of money coming through PNs… The SEBI’s proposals are intended to moderate the capital inflows which have been copious in the last few sessions,” Chidambaram told newspersons minutes after there was sharp fall in share prices on the BSE and the NSE.

Circuit-breaker comes into play
Mumbai, October 17
Dalal Street today pulled down its shutters for an hour after an early morning crash as part of the regulator's effort to safeguard investors' interest from any sudden surge or fall in the market levels.

FIIs can rollover PNs up to 18 months: SEBI
SEBI chief M. Damodaran Mumbai, October 17
In a bid to calm investors, market regulator SEBI today said foreign institutional investors (FIIs) would be allowed rollover Participatory Notes in derivatives market, provided it does not exceed the 18-month limit.



EARLIER STORIES

 

Upgrade airports to receive A-380, Singapore tells India
Singapore, October 17
Singapore Prime Minister Lee Hsien Loong today flagged in “Giant Child”, the world’s largest aircraft, Airbus Industrie’s A-380 aircraft bearing the Singapore Airlines (SIA) colours on its tail, at the Changi International airport today.

DLF rapped for unfair practices
New Delhi, October 17
In a far-reaching judgement, the Monopolies and Restrictive Trade Practices Commission (MRTPC) has said the carpet area calculation should be made clear by the real estate developers while negotiating agreements with customers and insisted that BIS standards should be followed for calculating carpet area.

Gail to foray into fertiliser sector
New Delhi, October 17
In a move to compensate slow-down in profit growth because of government controls on gas prices, Gas Authority of India (GAIL) is entering the fertiliser sector in joint venture with the Rashtriya Chemicals and Fertiliser Limited (RCF) with an investment of Rs 2400 crore.

Hyundai laments lack of govt support
New Delhi, October 17
Korean car major Hyundai today said there was no support from the government and appreciating rupee was a problem for its exports but it was still determined to make India a global hub for small car.

Reliance Energy net up 34 pc
Mumbai, October 17
Reliance Energy Ltd today notched a 34.17 per cent rise in net profit at Rs 250.08 crore for the second quarter ended September 30, against Rs 186.39 crore for the same period last year.

Export Of Non-Basmati Rice
Exporters against blanket ban
Karnal, October 17
The All India Rice Exporters Association (AIREA) has criticised the Central Government’s decision to put a blanket ban on export of non-basmati rice from October 9 onwards. They said the ban would directly benefit rice growers in countries like Pakistan and Thailand.

Broadcasting Bill
FDI may be hiked to 74 pc
New Delhi, October 17
Facing severe criticism from the industry, the government today said it is in the process of redrafting the controversial Broadcasting Bill besides considering FDI in the cable segment to 74 per cent from the current 49 per cent.

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Biggest intra-day crash jolts Sensex
SEBI move to moderate capital inflow: FM
S. Satyanarayanan
Tribune News Service

New Delhi, October 17
As the panic-struck market shed over 1,700 points today over SEBI’s proposal to tighten norms for Participatory Notes (PNs), union finance minister P Chidambaram stepped in to arrest the sharpest-ever slide by asserting that government has no intention to ban the offshore derivative instrument but only wanted to cap the proportion of capital inflows.

“We are not in favour of banning PNs. We have not banned PNs. We have simply placed a cap on proportion of money coming through PNs… The SEBI’s proposals are intended to moderate the capital inflows which have been copious in the last few sessions,” Chidambaram told newspersons minutes after there was sharp fall in share prices on the BSE and the NSE.

The finance minister asserted that the decision of the SEBI yesterday is part of the series of steps that have been taken to moderate capital inflows.

“It (SEBI’s Proposal to cap PNs) is in the interest of the investors. It is a necessary step, a good step and is in the interest of the investors and the markets,” Chidambaram said.

Pointing that alarmist remarks from commentators are uncalled for, the minister said the alarming situation would quieten as the day progresses.

“Let me assure all investors what has been done is a step to moderate capital flows, which have become very copious. It is a culmination of long discussion between SEBI, the RBI and the government,” he said adding the SEBI proposals would become regulations with or without some modifications on October 25.

The Sensex closed down 336.04 points low at 18,715.82 after falling to 17,307.90 at the start of the trading day.

The foreign cash inflow has raised demand for rupee, pushing it to highs against the dollar not seen for a decade and potentially making it harder for exporters to stay competitive.

Some of the analysts also termed the SEBI move as an attempt to curb cash inflow to arrest rupee hardening and said this will have no impact on the investment flow in the country.

“Every government faces the tricky situation of excess capital inflow and they do not know whether it is real or speculative. This is not a problem that is being faced only by India, many other countries, including China are facing this… So the Indian market regulator’s step appears to be to dampen the capital inflow and I don’t think it would impact the investment flow in the country,” Dr John Llewellyn, managing director and senior economic policy adviser of Lehman Brothers International (Europe) told The Tribune here.

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Circuit-breaker comes into play

Mumbai, October 17
Dalal Street today pulled down its shutters for an hour after an early morning crash as part of the regulator's effort to safeguard investors' interest from any sudden surge or fall in the market levels.

As part of a regulatory directive issued by SEBI over six years ago on June 28, 2001, the bourses need to implement an "index-based market-wide circuit breaker system" every quarter that brings in a coordinated halt in trading across all equity markets in case of any sudden movement.

The circuit breaker system becomes effective at three stages of the index movement — which has been fixed as 10 per cent, 15 per cent and 20 per cent in either BSE's Sensex or NSE's Nifty, whichever is earlier.

In case of a 10 per cent movement on either side in either of the two benchmark indices, there would be a one-hour halt if this movement takes place before 1 pm. If the movement is at or after 1 pm, but before 2.30 pm, there would be a trading halt of half an hour, while in case of such a movement after 2.30 pm, there would be no halt triggered by a 10 per cent fall or gain.

In case of a 15 per cent movement, there would be a two-hour halt if such a movement happens before 1 pm, while if the 15 per cent trigger is reached on or after 1 pm, but before 2 pm, there would be a one-hour halt.

If the 15 per cent trigger is reached on or after 2 pm, the trading would halt for the remainder of the day.

In case of a 20 per cent movement of the index, the trading would be halted for the remainder of the day.

Importantly, the percentages are calculated not on the basis of the previous day closing levels of Sensex or Nifty, but on the basis of the closing value of the previous quarter. — PTI

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FIIs can rollover PNs up to 18 months: SEBI
Tribune News Service & PTI

Mumbai, October 17
In a bid to calm investors, market regulator SEBI today said foreign institutional investors (FIIs) would be allowed rollover Participatory Notes in derivatives market, provided it does not exceed the 18-month limit.

"It is made clear that there is no proposal to bar an overseas derivative instrument (ODI) contract expiring this month or in the following months, being renewed provided the renewal does not go beyond 18 months," SEBI said in a clarification to its draft discussion paper on ODI that includes Participatory Notes (PNs).

The SEBI clarification clears the air of uncertainty over the fate of renewal of PNs that are due to expire this month or will expire in the coming months.

Meanwhile, SEBI has sought to assuage investors by asking them not to be carried away by rumours. "Investors should see what period they are investing and remain within their set horizon not be swayed by rumours", SEBI chairman M Damodaran said here reacting to crash within minutes of the opening of the market. He added that SEBI's proposal to curb issuance of ODIs by FIIs was a well-designed package and "we have a period of four days to debate on the package."

Damodaran, however, felt that SEBI was looking forward to bring in more FII investments into the country.

"We are looking at encouraging FII registration. The process will be simplified soon," he added.

He also said the regulator does not take much time in clearing FII applications.

Currently, there are 34 FIIs/sub-accounts issuing ODIs. The notional value of PNs outstanding grew to Rs 3,53,484 crore by August, 2007, constituting 51.6 per cent of assets under custody (of all FIIs/sub-accounts).

The value of outstanding ODIs with underlying as derivatives stands at Rs 1,17,071 crore currently, approximately 30 per cent of total PNs outstanding. The notional value of outstanding PNs, excluding derivatives as underlying, is 34.5 per cent of assets under custody (AUC).

According to analysts, the move by SEBI would only hurt investors with dubious credentials and create a healthier market in the long run.

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Upgrade airports to receive A-380, Singapore tells India
Girja Shankar Kaura
Tribune News Service

Singapore, October 17
Singapore Prime Minister Lee Hsien Loong today flagged in “Giant Child”, the world’s largest aircraft, Airbus Industrie’s A-380 aircraft bearing the Singapore Airlines (SIA) colours on its tail, at the Changi International airport today.

At a grand ceremony at the Changi international Airport, the Prime Minister, along with of SIA CEO Chew Chong Seng, presented the new innovation to the world media.

The A-380 is almost the size of a football field in length and the tail rises to the height of a seven-storey building. So far 16 airliners across the world, including India’s Kingfisher Airlines, have ordered 189 such aircraft that can carry 800 persons in economy class at one time.

Although the aircraft can fit in 525 passengers in three-class (first, business and economy) configuration, the SIA has gone a step ahead to fit just 471 seats in its first of the 19 aircraft. It will have 12 suites, which have been termed as “beyond first class” 60 business class and 399 seats in the economy class.

Addressing the media before the touchdown of the A-380 aircraft, senior executive vice-president of SIA Lt. Gen (retd) Bey Soo Khiang said that the aircraft offered more space and luxury even in the economy class along with a wider 27 cm screen for the in-flight entertainment. Each of the 12 suites would offer along with a seat, a separate bed, which can be folded against the wall when not in use.

The aircraft uses just about 2.9 litres of fuel per passenger per 100 km, which is about the same as a small car, while creating half the noise than a Boeing or any other aircraft.

Although SIA’s “Giant Child” would first take off on October 25 on a special charity flight between Singapore and Sydney, it would still be some years before India would be able to accommodate this craft. While it enters into scheduled service three days after the charity flight, SIA officials here said that India still needed to develop the infrastructure before it could start accommodating it. This could happen by 2010, when Delhi would have a new expanded airport and other metro cities like Bangalore and Hyderabad would have new greenfield airports in place.

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DLF rapped for unfair practices
Tribune News Service

New Delhi, October 17
In a far-reaching judgement, the Monopolies and Restrictive Trade Practices Commission (MRTPC) has said the carpet area calculation should be made clear by the real estate developers while negotiating agreements with customers and insisted that BIS standards should be followed for calculating carpet area.

Coming down heavily on real estate major DLF for “suppressing norms” while fixing the actual covered area, the MRTPC said the company had indulged in unfair trade practice and came under the scrutiny of Section 36-A of the MRTP Act by not disclosing to the complainant, K P Jain, the basis of carpet area calculations thus prejudicing the interest of consumers.

The MRTPC held that suppression of norms by DLF in calculating carpet area has a flavour of misrepresentation. It said the complainant was under the impression that the carpet area would be equal to floor area without including the thickness of the bounding walls.

DLF contended that carpet area would be floor area of the shop plus the thickness of its bounding walls. The respondent kept this view to itself without disclosing the same to the petitioner at the time of agreement and the petitioner relied upon the norms recommended by Bureau of Indian Standards (BIS).

DLF rejected the idea of applying BIS’s norms as they are not statutory in nation, the Commission said pointing that “in such a situation when norms are not defined statutorily, it was all the more necessary for the respondent (DLF) to define carpet area in terms of the norms understood by it and not to keep the same with itself to surprise the complainant.”

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Gail to foray into fertiliser sector
Tribune News Service

New Delhi, October 17
In a move to compensate slow-down in profit growth because of government controls on gas prices, Gas Authority of India (GAIL) is entering the fertiliser sector in joint venture with the Rashtriya Chemicals and Fertiliser Limited (RCF) with an investment of Rs 2400 crore.

GAIL would be setting up surface coal gasification project in Talcher in joint venture with the state-owned firm.

GAIL chairman U.D. Choubey said the two companies would sign a MoU soon.

Under the MoU, GAIL will carry out techno-economic study of a commercial coal gasification plant. RCF will carry out the techno-economic study of a commercial plant for utilising synthesis gas from the proposed coal gasification plant. GAIL and RCF will jointly evaluate the coal gasification potential for the fertiliser industry.

GAIL was forced to move in this direction as the government had fixed the gas price and the PSU wanted to diversify from the petroleum sector, analyst Raghav Upadhya with Infraline Energy Research said.

Further, the urgency for GAIL to enter the fertiliser sector is that its monopoly in the gas distribution would be threatened by the Reliance’s plans to build pipelines to transport gas from the KG Basin in 2008.

Meanwhile, Gail India reported a phenomenal jump in net profit for the quarter ended September 2007. During the quarter, the company experienced a 27.68 per cent rise in profits to Rs 572.54 crore from Rs 448.40 crore in the quarter ended September 2006.

Net sales for the quarter rose 22.17 per cent to Rs 4528.9 crore compared with Rs 3706.99 crore in the corresponding quarter, a year ago.

Total income rose 4.06 per cent to Rs 4709.50 crore for the quarter from Rs 4525.67 crore for the same period last year.

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Hyundai laments lack of govt support

New Delhi, October 17
Korean car major Hyundai today said there was no support from the government and appreciating rupee was a problem for its exports but it was still determined to make India a global hub for small car.

“There is no support from the government...appreciation of the rupee against dollar is a matter of concern...yet the advantages of doing business in India outweigh the disadvantages,” Hyundai Motor India Ltd MD and CEO HS Lheem said.

He said labour costs in Korea were exorbitantly high so from that point, India offered advantages, adding he had taken up the issue of fiscal support from the government on two fronts - exports and for localisation, which, however, has “not been forthcoming”.

“The government has announced plans to make India a global hub for small car exports. Hyundai has also strategy to make the country a hub for exports of small and compact cars, but we are very disappointed with the support that we get from the government.”

He said issues were raised at various levels, including with the Prime Minister and the company would continue to engage with the government to find solutions.

The company is investing Rs 5,000 crore and along with the vendors’ participation, the total investment should be about Rs 11,000 crore for the second phase of expansion to build a 300,000-unit plant and an engine and transmission unit in Chennai. Seeking more export-oriented incentives, he said the current government policy does not even allow it to utilise money raised from overseas for investing in India. — PTI

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Reliance Energy net up 34 pc

Mumbai, October 17
Reliance Energy Ltd today notched a 34.17 per cent rise in net profit at Rs 250.08 crore for the second quarter ended September 30, against Rs 186.39 crore for the same period last year.

Total income rose 13.65 per cent to Rs 1,799.92 crore for the quarter from Rs 1,583.70 crore in the year-ago period, the company said.

Yes Bank

Fuelled by robust growth in interest, non-interest income and advances, Yes Bank today registered an over two-fold jump in its net profit at Rs 45.28 crore in the second quarter this year against Rs 21.49 crore in the same period last fiscal.

Total income of the bank increased 128.5 per cent at Rs 379.38 crore in the quarter as against Rs 166.01 crore in the year-ago period.

The bank's operating profit stood at Rs 67.40 crore this quarter, up 93 per cent against the year-ago figure of Rs 34.93 crore.

Allahabad Bank

Allahabad Bank today posted a 14.16 per cent increase in net profit at Rs 239.78 crore for the second quarter ended September 30 compared to Rs 210.03 crore for the same period last year.

Total income of the bank rose 33.90 per cent to Rs 1,664.29 crore for the September quarter from Rs 1,242.93 crore in the corresponding quarter a year ago.

REC dividend

Chairman and managing director of Rural Electrification Corporation (REC) Anil Kumar Lakhina has presented a dividend cheque for Rs 177.00 crore to union power minister Sushil Kumar Shinde, for the year 2006-07. — PTI, TNS

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Export Of Non-Basmati Rice
Exporters against blanket ban
Tribune News Service

Karnal, October 17
The All India Rice Exporters Association (AIREA) has criticised the Central Government’s decision to put a blanket ban on export of non-basmati rice from October 9 onwards. They said the ban would directly benefit rice growers in countries like Pakistan and Thailand.

Vijay Setia, president, AIREA, said here today that the faith earned by Indian rice exporters through their dedicated efforts over the years would go waste and the country’s export policy would come under a scanner.

He said because of this ban the exporters would not purchase rice from the market, which would result in prices of the food grain falling, and this would have an adverse affect on farmers and will lead to unemployment through direct and indirect ways.

“We request the government of India to allow export of rice shipments lying at the ports with immediate effect. If the government wants to increase its buffer stock, compulsory levy can be imposed on non-basmati rice” Setia said.

He said there were number of paddy varieties, selling at Rs 1200-2100 per quintal in grain markets. And these are selling at prices way above the minimum support price of Rs 675 per quintal. These varieties are not been procured by the government and if their prices fall because of the ban the paddy farmers, especially of north India, would be ruined.

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Broadcasting Bill
FDI may be hiked to 74 pc

New Delhi, October 17
Facing severe criticism from the industry, the government today said it is in the process of redrafting the controversial Broadcasting Bill besides considering FDI in the cable segment to 74 per cent from the current 49 per cent.

“We are redrafting the Broadcasting legislation after consultations with stakeholders... we will put forward minimal regulations and most of the controversial issues have been put aside,” ministry of information and broadcasting secretary Asha Swarup told reporters on the sidelines of India Digital Summit.

The draft Broadcasting Bill has been severely criticised by the industry, which is not in favour of government’s intervention in the sector.

Further on the issue of increasing FDI in the cable sector, Swarup said, “Increasing FDI to 74 per cent is a sensible recommendation... we are looking into its modalities.” However, she declined to give any time frame for increasing FDI. — PTI

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BRIEFLY

Patni Computers
Mumbai, October 17
IT solutions provider Patni Computer Systems today said it has bagged a Rs 792-crore contract from UK-based Carphone Warehouse for providing wide range of technology services. Under the deal, Patni will become a technology partner with Carphone Warehouse, UK's largest mobile phone retailer, providing consulting, systems integration, application development, and maintenance, the company informed the BSE. — PTI

TCS plan
Chennai,October17
Tata Consultancy Services (TCS) is to double its headcount at Chennai in a couple of years, its COO N Chandrasekaran said here today. He told reporters that at present, Chennai was having an employee strength of 24,000, which would go upto 50,000 in the next two years. — PTI

GoAir flights
New Delhi, October 17
GoAir proposes to launch late night operations from this month-end. The airline will operate four red eye flights within its current network: Mumbai to Delhi, Hyderabad to Mumbai, Mumbai to Ahmedabad and Ahmedabad to Mumbai. — UNI

Hero Honda
New Delhi, October 17
The country's largest two-wheeler maker Hero Honda today launched its 150cc bike 'Hunk' at a starting price of Rs 55,000 (at ex-showroom Delhi). The company has launched two variants of the mobike kick-start and self-start. While kick-star would be available at Rs 55,000, the company would charge a premium of Rs 2,000 for the self-start model which is priced at Rs 57,000. — PTI

Unilever
Chandigarh, October 17
Hindustan Unilever Limited (HUL) today enters its 75th year of existence in India. Then known as Lever Brothers India Limited, the company was incorporated on October 17, 1933. The start of platinum jubilee year is being celebrated by 15,000 employees at its head office in Mumbai and in over 40 locations throughout the country, including locations in Punjab, Haryana and Himachal Pradesh. — TNS

Airtel tariff
Chandigarh, October 17
Airtel today announced a bonanza for its pre-paid customers in Punjab by reducing the rates of all local calls. Customers making local calls to other Airtel mobiles will save 33 per cent as they will now pay Re 1 per minute instead of Rs 1.50 per minute charged earlier. Calls made to other mobiles and landlines with be charged at Re 1 per minute from Rs 2. earlier. — TNS

Air Deccan
Kolkata, October 17
Air Deccan has announced a new cancellation and re-scheduling policy for offering better flight facilities to its passengers. According to the new policy, the passengers will now be entitled to cancel their ticket and suitably reschedule their flight till two hours before the actual departure of the respective flights and for that they will have to pay changing fee of Rs 500. — TNS

NTPC pact
New Delhi, October 17
The Department of Atomic Energy today signed MoU with NTPC to transfer ammonia flue gas conditioning technology (AFGC) to the state owned unit. The technology transfer would help NTPC in future projects for reduction of suspended particle matters. — TNS

Rupee weakens
Mumbai, October 17
The rupee recovered part of early losses and today ended at 39.5450/5500 versus the US currency, cheaper by about 20 paise from previous close of 39.35/36 in anticipation of a large pull out by foreign funds. — PTI

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