Infotech shares flare up at local bourse

NEW DELHI, Jan 1: Infotech shares flared up at the local bourse last week as Foreign Institutional Investors continued to make a beeline to these counters contrary to their traditional behaviour ahead of new year.

This enthused domestic operators to pick up substantial quantity of it shares at the Delhi Stock Exchange during the week ended December 30.

However, heavy weighted shares, including Hindustan Lever Limited and ITC, topped values, arresting rise in the DSE index (base 1983).

Though hijacking drama did not dampen investors’ mood in the beginning, the prolonged crisis led to somewhat subdued sentiment at the later session.

The DSE index (base 1983) inched up by 0.02 points at 977.74.

The magnitude of rise in infotech scrips could be gauged from the fact that one share zoomed up by Rs 2,000, another scrip by over Rs 400, two pivotals by more than Rs 300 and one equity by more than Rs 200.

FIIs have net invested 340.20 million dollars in the Indian equity market this month till December 29.

Analysts said foreign funds have made sizeable gains in developed markets and are expected to allocate a higher portion of portfolio funds in emerging markets next year. Top-level fund managers expect foreign inflow of one billion dollars to 1.5 billion dollars in 2000.

The fast moving consumer goods scrips slid, while cement, banking and pharma shares closed mixed.

Meanwhile, DSE remained closed on monday as office of the local bourse was being shifted to Asaf Ali road from the present location at the Indira Gandhi stadium and on Friday following guidelines by the Securities and Exchange Board of India to that effect.

Infosys technologies touched the new height of Rs 14,600, up by whopping Rs 2000 against the previous close of Rs 12,600. The company on Wednesday approved a stock split in the ratio of 2:1, which further attracted investors to that counter.

NIIT gained Rs 438.80 to close at Rs 3358.80.

Aptech Limited flared up by Rs 363.50 at Rs 1803.60, while SSI jumped by Rs 315 at Rs 2230.

Satyam Computer climbed by Rs 226 at Rs 2220.

Zee Telefilms rose by Rs 141 at Rs 1091.15. Investors rushed to that counter after reports that MTNL is negotiating with Zee for internet through Cable TV.

Digital Equipment closed at Rs 1142, higher by Rs 97.

Among other major gainers, Larsen and Toubro went up by Rs 74.20 at Rs 547, HCL infosys by Rs 58.50 at Rs 691.50, silverline by Rs 48.90 at Rs 809 and Moser Bear by Rs 41 at Rs 348.

Pentafour software was the major exception at the software counters as it dropped Rs 54 at Rs 1342 on profit booking.

Hindustan Lever shed Rs 40.10 at Rs 2215 and ITC declined by Rs 40 at Rs 659.

While Gujarat Ambuja moved down by Rs 39.45, ACC fell by Rs 36 at Rs 250. (UNI)

Year 1999 -a watershed year for mutual funds

MUMBAI, Jan 1: The year 1999 which marks a watershed in the ongoing saga of mutual funds in India, will be remembered as a year which finally saw the coming of age of the sector with investors putting in their money for all the right reasons.

Consider the statistics - during the period april to november this year mutual funds mobilised funds of nearly Rs 30,000 crore. Last year the amount mobilised during the same period was Rs 14,288 crore while for the whole of 1998-99 MFS managed to collect a little over Rs 21,000 crore.

Given that investors’ response to mutual funds was at best lukewarm since 1994 (when the over-hyped Morgan Stanley 15-year India fund, with assets of Rs 1400 crore, met with a bitter fate at the bourses and investors found themselves holding units with no prospects of offloading it profitably for the next 15 years) 1999 has been watershed year.

With the exception of Unit Trust of India, the country’s first mutual fund (which contrarily continued to attract funds) investors showed a disinclination to put money in MFS, especially those floated by private and foreign asset management companies.

The lesson of Morgan Stanley however could not be unlearnt - most of the retail funds (and institutional funds too) found their way into public sector mutual funds, a trend which was subverted only this year.

For the first time, mobilisation by private sector funds were higher (Rs 17,305 crore) than those of their public sector counterparts, including the Unit Trust of India (UTI) (Rs 10740 crore).

According to the Securities and Exchange Board of India (SEBI) till March 1999, the net assets of private sector mutual funds (14,128) were higher than public sector mutual funds (8715.65), excluding the UTI.

This year so far there has been a net inflow of funds of Rs 7819.34 crore in case of private sector mutual funds, while there was a net outflow of funds of Rs 604.39 crore in case of public sector MFS.

In fact, the year started out on a dull note for the mutual fund sector, with low Net Asset Values (NAVs) and the only offering being from LIC mutual fund, which came out with a bond fund at the beginning of the year.

GIC mutual fund deferred its demat scheme from January to later in the year, waiting for the markets to show some buoyancy.

Then came the union budget and with it that vital spark necessary to ignite the sector - in budget ’99, income distribution from MFS was made tax-free in the hands of the recipient while equity oriented MFS (exposure in excess of 50 per cent) were exempt from the ten per cent dividend tax.

This was a windfall for institutional investors, high net-worth individuals and corporates, who began to pump in money into the sector - boosting the MFS’ collection figures. (PTI)

World oil flowing smoothly so far: IEA

LONDON, Jan 1: The millennium bug has failee so far to damage til and gas flows in Asia, the Middle East and Russia, boding well for world energy supplies, the West’s energy watchdog, the International Energy Agency, said today.

The smooth transition to the new year means the agency sees no need so far for the release of emergency stockpiles of oil, IEA Deputy Executive Director William Ramsay told Reuters.

"So far, so good, but it’s not over yet," he said from IEA headquarters in Paris, where the agency is monitoring world petroleum, gas ane power supplies around the clock.

"As the sun goes across the time zones, there is not much happening. Our own channels have not turned up anything you guys haven’t seen."

Mr Ramsay added the IEA had not seen any signs of millennium bug hitches in potential troublespots russia or Iraq. "The sniffing around that we have done has shown nothing," he said.

Oil consuming nations worried about supply

The agency, grouping the world’s major industrialised nations, sale in December that it was confident preparations for computer date rollovers on January 1, 2000 would minimise risks to the global energy sector.

Concerns had risen among oil consuming nations about the possible impact of the millennium computer bug because of a sharp rise last year in world oil prices.

Supply curbs implemented by OPEC and other oil exporters have sliced spare inventories and driven prices to 25 dollars a barrel for North Sea Brent.

The IEA has said steps have been planned by member countries to deal with any residual Y2K problems and it was prepared for collective emergency measures in the event they were needed.

But Mr Ramsay said: "I don’t see any particular reason (to tap emergency stocks). There are no discernible shortfalls in oil." Mr Ramsay said a problem in Japan, where three equipment failures were reported at the Shiga nuclear power plant about 300 km Northwest of Tokyo, was not apparently Y2K-related and had been quickly dealt with.

"Things seem to be going fine...Japan was the showcase, the canary in the coal mine," he said.

Gulf OPEC powers look bug-free so far

Mr Ramsay said the big OPEC gulf petroleum powers appeared to have sailed through the Y2K test and had stood ready to release emergency stockpiles of oil in case of an emergency shortage.

"They seem to be fine, not only in the terms of being prepared technologically by also in their willingness to participate should there have been any problems." The IEA has warned of oil supply shortages this winter if inventories fall much further and US Energy Secretary Bill Richardson has complained prices have been dangerously high.

IEA Executive Director Robert Priedle earlier yesterday spoke to Mr Richardson about the global energy industry’s performance so far in coping with the millennium bug.

IEA member states are mandated to hold oil stocks of more than three billion barrels for release in the event of an emergency. The reserves were last released when Kuwaiti and Iraqi supplies were suspended after Baghdad’s invasion of Kuwait in the 1990-1991 Gulf crisis.

The IEA groups Austral, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Japan, Luxembourg, the Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States. (REUTERS)

Karnataka abolishes turnover tax on 113 commodities

BANGALORE, Jan 1: The Karnataka Government has abolished turnover tax on 113 commodities and reduced it to one per cent on 38 commodities.

The reduction was part of the modified rates adopting floor rates as recommended by the Finance Ministers committee in 1995.

At least ten commodities which were not not taxed now attract four to 12 per cent tax while six of them such as raw silk and wind mills carry a four per cent tax. Three commodities, including shoddy blankets will be taxed at eight per cent while electronic musical instruments carry a 12 per cent tax.

While on 18 commodities such as chemical fertilsiers and plastic woven sacks the tax has been increased from two per cent to four per cent, lottery and sports goods and eight other commodities now carry an eight per cent tax as against two per cent earlier.

The tax on 69 other commodities such as arecanut, coffee and paper the tax had been doubled to eight per cent from four per cent, while on four commodities such as dry fruits and ivory articles the tax would now be 12 per cent as against four before. Asphalt would be taxed a 20 per cent as against four per cent before, similarly tax on molasses and brake fluie had been doubled from ten to 20 per cent. For 37 other commodities including adhesives and fireworks the tax would be 12 per cent as against ten per cent before.

In the list of goods suggested for different floor rates, the goods taxed at lower rates presently and those enjoying exemptions and considered to be sensitive in nature such as inputs to industries, needs of weaker sections, handicapped and disabled were continued at present rates.

Wherever the tax rates were increased by more than two per cent, the turnover tax had been exempted, while it was reduced to one per cent wherein the rate of tax was increased by two per cent.

In the list of zero rated goods only pulses, wheat products and jaggery continued to enjoy the benefit, according to a statement issued by Commercial Taxes Commissioner V Madhu. (UNI)

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