After the share markets, it is the
bullion market
Ahmedabad : As the furore over the payment crisis in
the stock markets is slowly dying, a new payment crisis has gripped the Ahmedabad. This
time it is the default of a leading gold dealer, K Lal.
The dealer, who owes over Rs. 50 crore to various banks and gold merchants, has apparently
declared bankruptcy and is absconding.
While the Reserve Bank of India has declined to comment,
industry sources state that many state-owned banks, such as Bank of India, Punjab National
Bank and SBI -- have extended loans to Lal in the past.
Bank of Indias exposure is estimated to be the highest at Rs 20 crore. Also affected
is another gold merchant, Arvindbhai Choksi, who is reported to have made a payment just
prior to the default and never received delivery.
Through aggressive undercutting, Lal has dominated the Ahmedabad bullion markets for over
a year, and was selling gold biscuits at a price that was around Rs 600 lower than the
bank selling price.
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Mutual funds increase
communication with investors
Mumbai: With declining net asset values as a result of
falling markets, the investors in mutual funds are less than a happy lot. Nearly 37
open-ended schemes are quoting below Rs. 7 and nearly 100 schemes are quoting below par.
Investors in funds have suffered a substantial erosion in their wealth.
To assuage investor sentiments and reassure their
unitholders that their money is being well managed, mutual funds have aggressively
initiated distributor and investor meets. These meetings are all the more crucial if one
considers the fact that even if the markets were to improve, the NAVs are unlikely to
reach anywhere near the acquisition cost of the investors in the near future.
Among the funds who have already initiated such measures
are Alliance Capital, DSP Merrill Lynch, IDBI Principal and Prudential ICICI.
The funds are requesting investors not to panic and
instead focus on their investment objectives and their risk profile.
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Sebi initiates probe into
price rigging of Amara Raja Mumbai: The
countrys capitla markets regulator, Securities and Exchange Board of India (Sebi),
has launched a probe into suspected price manipulation in Amara Raja Batteries that has
seen the share price go from Rs. 60 to Rs. 300.
Sebi has asked the Bombay Stock Exchange (BSE) and
National Stock Exchange (NSE) to furnish the trading data of some of the brokers suspected
to be involved in the scrip. According to reports, the price of the share has been propped
up through circular trading.
Then the operators started offloading the stock by placing
purchase orders through their associates. At least 15 brokers came to grief by this
episode as the buyers vanished from the market without paying the money.
Investors, however, are blaming the stock exchange
authorities of taking a very lenient view of the price movement in the share. Apparently
the companys management had informed the Bombay Stock Exchange as early as March 1,
when trading volumes showed unusually high numbers.
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VST open offer may see offer
price increase
Mumbai: Pursuant to the counter-offer made by ITC, the
open offer made by the Damanis for acquiring 20 per cent additional stake in VST
Industries is likely to be revised.
According to a report in a leading economic daily, the
Damanis are planning to increase their initial offer of Rs. 112 per share by next Monday.
The Damani camp has until tomorrow to withdraw from the race, if they choose to do
so.ITCs counter open offer is at Rs 115 per share. The Damanis reportedly hold 14.97
per cent of the paid-up equity capital of VST.
Indications are that the Damani camp might move MRTPC to
stall ITCs offer, as if ITC were to get control over VST, it would have close to 80
per cent share of the cigarettes market in India.
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