Call to stay above new Repo rate, G-secs
to wait for auction result

MUMBIA, Nov 3: The interbank call rate is expected to rule slightly firm at 5.50-5.60 per cent level in the week amid higher demand for funds in the beginning of the reporting fortnight and the twin auction for Rs 7,000 crore scheduled for November 6, dealers said.

Government bonds are likely to remain range-bound initially in the week as players would rather prefer to wait for the auction result to get some direction.

During the week ended November one, the liquidity-boosting credit and monetary policy, announced on Tuesday, lowered the benchmark bank rate, Cash Reserve Ratio (CRR) and the Repo rate by 25 basis points each, which caused yields on Government securities to touch their historic lows.

The call rate also eased to settle around the new Repo rate of 5.50 per cent after the Reserve Bank of India (RBI) cut the Repo rate from 5.75 per cent to 5.50 per cent from Wednesday following the monetary policy announcement.

The call rate, which stayed around 5.70-80 per cent on Monday, drifted lower after the monetary policy announcement and subsequent lowering of the Repo rate.

The overnight interest rate closed at 5.40-50 per cent on the reporting Friday. RBI continued to get good response to its daily Repo auction, even after slashing the Repo rate. The Central Bank absorbed daily average bids of about Rs 10,000 crore during the week.

The secondary market for Government securities opened the week on a dull note in the run up to the policy announcement as players had differing opinions about the prospect of a bank rate cut in view of a mixed economic outlook, dealers said.

However, bond prices shot up sharply after the policy announcement. Apart from the 25 basis point cut in bank rate, repo and CRR, the sentiment was further boosted after RBI Governor’s comment ... "bank rate is an indicator....But revision in Repo rate would be done on daily basis depending on the overnight conditions of the market."

Gilt prices across-the-board gained about one Rupee during the week sending the yield curve to their historic lows, dealers said.

The 7.40 per cent, 2012, and the 7.55 per cent, 2010 securities gained 99 and 87 paise during the week at Rs 103.32 and Rs 105.33 respectively as compared to their previous week’s close.

The 11.50 per cent, 2011 bond and the 11.03 per cent, 2012 bonds also rose by 95 and 96 paise at Rs 130.44 and Rs 128.10.

Meanwhile, RBI today announced the sale (re-issue) of 10.03 per cent Government stock 2019 for a notified amount of Rs 4,000 crore and the 10.16 per cent Government stock 2026 for a notified amount of Rs 3,000 on November six.

Given the abundant liquidity conditions, both the auctions are expected to sail through successfully, dealers said. (UNI)

Firm trend ahead in stock market

MUMBAI, Nov 3: Backed by an uptrend in the US markets, dealers expect a firm trend in the week ahead beginning with the special mahurat trading session on November 4.

They feel that the market has now bottomed out and expect the continuation of the uptrend which began last week after the better-than-expected quarterly financial result reported by the petrochem major Reliance Industries followed by the discovery of gas in Andhra Pradesh by the company, dealers said.

Commenting on the outlook of the stock market for the next week, UTI Securities Exchange Ltd head research Jaideep Goswami said the market is expected to continue the positive trend next week.

Infosys, Hindustan Lever and Reliance would be the driving force in the market, he said.

The positive results posted by Reliance reversed the downtrend triggered earlier by HLL and may push up the market next week, he added.

Ask Raymond James strategist Jignesh Shah was also upbeat on the market and said the firm trend in the US markets had strengthened sentiment in the local bourses which were expected to make a firm start on Monday.

"The market may face resistance at the 2,970 level but it would be in the higher range afterwards," he said.

The Bombay and National Stock Exchanges would conduct a special muhurat trading session on November 4 between 1700 hrs and 1815 hrs on the eve of the traditional Hindu new year Vikram Samvat 2059.

The 30-stock Bombay Stock Exchange (BSE) sensex ended above the 2,900 mark at 2,950.58 points on Friday, registering a gain of 75.05 points (2.61 per cent) from the previous close of 2,875.53 points in a week.

The SP CNX nifty index at the National Stock Exchange (NSE) ended higher by 19.25 points (2.07 per cent) at 951.45 points over the previous close of 932.20 points.

The Dow Jones and Nasdaq Indices in the US ended on a positive note on Friday. The dow finished higher by 121 points at 8,518 while the Nasdaq composite index too posted a gain of 31 points at 1361 points.

The benchmark BSE sensex slipped by over 4 per cent to close at 2950 during the Samvat 2058 due to sharp fall in HLL, Dr Reddy’s, Colgate, Hindalco, Reliance and Cipla, dealers said.

Old-economy stocks were the biggest losers on worries that the worst drought in more than a decade could hurt their financial performance while on the other hand technology stocks rallied due to heavy institutional buying during the Samvat 2058, dealers said. Technical analysts were more cautious about the trend in the november as according to them the market has seen an uptrend only three times in the month of November in the last nine years since 1992.

Meanwhile, after a weak start the market entered into the positive territory last week and maintained a firm trend in next four trading sessions. With the exception of Friday, Reliance single- handedly drove the market in the last week.

The Reilance scrip shot up by Rs 34 to Rs 257 last week. The company announced a 25 per cent rise in its net profit.

Besides, Reliance, heavyweights such as Satyam Computer, Infosys Technologies Ltd, IPCL, Cipla, PSUs namely BPCL, HPCL, Bharat Forge, Hindalco, Cement Stocks ACC, LT firmed up during the last week.

Banking stocks ICICI Bank, State Bank turned weak followed by media giant Zee, pharma giant Glaxosmithkline, FMCG leader ITC, Hindustan Lever too ended marginally lower on speculative selling pressure during the last week as compared to the previous week.

Total market capitalisation at the bse shot up by 2.31 per cent to 5,65,993 crore as compared to Rs 5,53,324 crore.

The BSE clocked a total turnover of Rs 6,687 crore as compared to Rs 6,074 crore in the previous week. (UNI)

Orissa Govt announces DA for employees

BHUBANESWAR, Nov 3: Orissa Government today announced a four per cent hike in DA for its employees with retrospective effect, but decided to deposit a part of the amount to their provident fund.

The additional DA amount would be paid retrospectively from January one, 2002, the sources said.

However, they said, the additional DA amount, from January one, 2002 to March 31, 2003, payable to the employees would be credited to their GPF account. The employees would be paid the additional DA amount in cash from April one, next.

At present the employees were being paid DA at the rate of 45 per cent. (PTI)

86 works costing Rs 1337.37 lakh in Tiruvenveli DT

TIRUVELVELI, Nov 3: In all 86 works at a total cost of Rs 1333.37 lakh are being carried out in Tirunelveli district through the PWD Building Construction and Maintenance Division, according to Sunil Paliwal, District Collector.

He told reporters here today that rain water savings schemes would be implemented in 64 buildings of Government offices.

Other schemes include construction of a repeater station at Manjolai. (PTI)

Kelkar Committee recommendations draw mixed reaction

MUMBAI, Nov 3: All India Employees Tax Payers’ Association has criticised the recommendations of the Kelkar Committee on direct taxes, which advocates scrapping all exemptions including the standard deductions for the salaried employees.

The recommendations are against the interests of salaried class, the most honest tax payers in the country, Mr R C Agarwal Convener, All India Employees Tax Payers’ Association (AIETPA) told UNI today.

The proposal to scrape exemption for small savings under Sec. 88 and withdrawal of standard deduction would result into higher income tax liabilities leading to a meager amount of ‘take home pay’ to the employee, he said.

Describing the recommendation of withdrawal of standard deduction as a grave injustice to the employees, Mr Agarwal alleged there are ample evidence that these ‘anti-people’ proposal were mooted under the pressure from foreign institution and multinational companies. They wanted that a huge amount available in small scale savings and bank deposits to get diverted to spending in order to boost sales of their consumer items in the country, he added.

He observed that employees were already not eligible for any deduction towards their personal expenses and also not eligible for depreciation for assets including vehicle.

The Committee has also recommended withdrawal of incentives for small savings and it would make small saving scheme further unattractive particularly when middle class are suffering from low interest regime due to declining interest rates in the economy.

Welcoming the recommendations of the committee, an executive from HDFC said these are aimed at taking ‘money power’ from the saving habit of the people to spending.

Ultimately Indian economy needs incentive to spend rather than saving. We have been witnessing rise in domestic saving even in crisis situation and also in the low interest rate regime.

These saving are needed to be canalized into spending in order to generate demand in the economy which would lead to industrial growth. (UNI)

Wipro signs up business deals with Saudi Arabia

DUBAI, Nov 3: Wipro, one of India’s largest IT companies, has signed up business deals worth more than three million dollars with Saudi Arabia’s petrochemical and healthcare companies.

With the business contracts, Wipro has entered the Saudi market with a "commitment to build a strong base in the kingdom," Wipro Chairman Azim Premji said yesterday.

Mr Premji said he held groundbreaking talks with the Ministry of Planning and Saudi telecom company to identify new areas of co-operation.

"The response was highly encouraging," Arab news of Riyadh, quoting him, reported.

Although the value of the contracts was described as modest by Wipro’s standard, Mr Premji said he hoped to pick up 15 million dollars worth of contracts in the next 11 months.

"We are committed to building a strong base in Saudi Arabia. We would like to cooperate in developing it skills among the Saudis to make them self-sufficient in this sector," Mr Premji told a press conference, which was also attended by Prince Turki Ibn Abdullah, president, Dar Al Riyadh group, and Indian Ambassador Talmiz Ahmad.

Mr Premji held talks with Minister of Planning Khaled Al-Gosaibi, STC president Khaled Al-Molhem and the Chief Executives of IT companies and other major organisations in the kingdom.

Thanking Dar Al Riyadh, Wipro’s marketing arm in the Kingdom, for its initiatives, he said his company has landed prestigious contracts, including an end-to-end ERP (Enterprise Resource Planning) implementation project from Saudi polyolefins company, as well as a full-fledged ERP implementation project for Riyadh pharma and Al Haya Medical Co.

"We won these projects against global competition," he added.

Mr Premji said, "we are looking at the possibility of setting up our own office in the kingdom."

Ambassador Ahmad said India had set up some 30 joint ventures in the petrochemical, industrial, services and other sectors.

He said the IT sector has projected India’s image abroad very well. "Since the kingdom is according priority to it, there is good scope for expanding relations in this area," he added. (UNI)

Indian IT companies asked to set base in Bahrain

DUBAI, Nov 3: Bahrain has asked the Indian IT companies to set up base in the new industrial township coming up in hidd near Manama and help the country accelerate its knowledge-based industries.

"We shall continue to benefit from India’s proven IT expertise, in developing more knowledge-based industries in the next phase of expansion of the Hidd Industrial area," Commerce and Industry Minister Ali Saleh Al Saleh said yesterday.

"We invite Indian industries to establish their presence for regional operation in the new location, which should be ready by 2004," Manama’s Gulf daily news quoted the minister.

The minister was speaking after the opening of the two-day Indiacatex 2002, a catalogue exhibition of Indian products and services.

"The exhibition, held regularly for the past two years, has evoked overwhelming response and appreciation from local and expatriate business people, said Indian Ambassador Bhaskar Kumar Mitra.

"The bilateral trade last year was 160 million dollars, registering a substantial growth over the previous year," he said. (UNI)

KVIC to generate one lakh job opportunities

THIRUVANANTHAPURAM, Nov 3: The Khadi and Village Industries Commission will chalk out an action plan in tie-up with the Kerala Government to generate one lakh new jobs in rural areas during the tenth plan period.

KVIC Chairman Mahesh Sharma told newspersons here today that a special plan would be worked out for Kerala to generate more job opportunities in the rural sector.

He said Chief Minister A K Antony had assured him to take special measures in the next budget to promote Khadi and Village Industries. A workshop of all concerned, including the representatives of banks and other financial institutions, would be held here next month to chalk out various components of the employment-generation scheme. A working group would be constituted to monitor the implementation of the scheme in the state.

An investment of Rs 30,000 to Rs 50,000 would come for every job opportunity created in the state, Dr Sharma said, adding that the KVIC would spend Rs 5,000 crore during the tenth plan period for setting up new units and technology upgradation.

Admitting that Khadi products were facing stiff competition from foreign goods, he said "our response is to increase the quality of products. We don’t merely depend on rebates and discounts. We are ready to take the challenge as we have a good range of eco-friendly products."

Though the focus of the kvic was on domestic market, khadi products Rorth rs 100 crore were exported last year, he added. (UNI)

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