Sensex dull moves in flat trade
MumbaiThe stockmarkets were dull in early afternoon deals though select Old Economy counters made gains. Most ICE stocks were down.
However, Zee Telefilms was up 1.63 per cent. The
company said late on Friday 2.5 million shares had
been sold to a foreign investor.
Ranbaxy gained 0.53 per cent and announced that it had
received government approval to begin selling a
once-a-day form of the antibiotic ciprofloxacin.
Satyam was down 2.97 per cent in morning deals. The
stock was the largest traded in terms of volume last
week.
NIIT and Infosys were down 3.01 and 3.07 per cent
respectively.
IDBI lost 0.6 per cent on news reports that the
institution had asked the Reserve Bank of India for an
extension of tenure of its Rs 1,440 crore borrowing
into a 50 year debt.
Automobile and cement sectors saw buying interest on
hopes of good monsoon rains, a key driver of rural
consumer demand in the country, would boost earnings
prospects.
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IDBI seeks extension of loan tenure
New DelhiThe Industrial Development Bank of India
(IDBI) has sought extension of tenure of the Rs 1,440
crore borrowing from Reserve Bank of India into a 50
year debt.
It has also asked the government of India to infuse
preference capital to shore up the institutions
tier-I capital.
In a recovery plan submitted to the finance ministry
last week, IDBI has also asked the centre and the
state governments to honour guarantees given by them
in case of defaults by the borrowers. The centre and
the states have guaranteed loans of the order of Rs
1,100 crore.
To raise low-cost funds, IDBI has also suggested to
the government that it be declared an infrastructure
finance undertaking exempting it from paying tax on
income from interest, dividends and long-term capital
gains under section 10 (23) G of the Income Tax Act.
IDBI also said that the government should restore an
earlier provision, which enabled the institution to
issue tax free bonds.
Asking for immediate recapitalisation, IDBI has told
the government that the recent downgrade of its
long-term paper is hampering its ability to raise
capital from the market though its capital adequacy
ratio at the end of the last fiscal was 15.8 per cent.
Crisil had downgraded IDBIs rating of long term
bonds by a notch from AAA to AA+.
With deteriorating asset quality, Crisil had pointed
out that IDBI was falling short of meeting higher
provisioning requirements on account of growing non
performing assets (NPA) which stood at Rs 10,800 crore
as on March 31, 2001 or 18.4 per cent of total
advances.
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IDBI to recall Flexibond '92
Mumbai--. Tthe Industrial Development Bank of India
(IDBI on the back of declining interest rates is
exercising its call option on its deep discount
Flexibond 1992 issue.
The issue price of the bond was Rs 2,700 and the
institution will have to pay back Rs 12,000 per bond
on exercising the call. The redemption amount will be
payable on March 31, 2002.
The bond was originally of 25-year tenure, with a
put-and-call option after every five years and as per
the offer document, the bond would give a return of Rs
1,00,000 on maturity as on March 31, 2017.
Analysts say the announcement by IDBI is as a logical
measure at a time when interest rates have reached the
lowest level ever and the term-lending institution
could substitute its high cost borrowings (where the
interest rate exceeds 16 per cent) by a fresh loan at
an interest rate lower by at least five percentage
points.
Meanwhile, IDBI recently reduced its lending rates,
whereby the minimum term lending rate was cut by 50
basis points to 12.5 per cent and the minimum
short-term lending rate was reduced by 50 basis points
to 12 per cent.
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BSE modifies derivatives collaterals list
Mumbai--Dropping volumes and withering values have
taken their toll on some market performing stocks
accepted as collaterals in the derivatives segment on
the Bombay Stock Exchange (BSE).
The shares and other securities to be no longer
considered as collateral from September 17 include:
Bank of India, Chambal Fertilizers, DSQ Software, EIH
Limited, Essel Packaging, Global Trust Bank, Great
Eastern, Gujarat Gas, Hindustan Zinc, Hughes Tele.com,
Indian Rayon, Mascon Global, Mastershare, Morgan
Stanley, National Aluminium Co, Oriental Bank of
Commerce, Shonkh Technologies, Smith Pharmaceuticals,
Television Eighteen and UTI Bank.
The revised list of 100 eligible securities has been
based on market capitalisation and trading volume as
per the recommendations of the J R Varma committee for
acceptance as collateral towards minimum liquid assets
and additional liquid assets.
The new list includes: ABB Ltd., Aksh Optifibre,
Apollo Tyre, Aurobindo Pharma, Balaji Tele, Ballarpur
Industries, Bata India, Bombay Dyeing, BPL Limited,
Cadbury (I), Century Textiles, Cummins India,
Gujarat.Narmada, Hero Honda, Jindal Steel, Mastek, Saw
Pipes, Syngenta Ind, Tata Elxsi and Videocon
International.
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Scotia Fin gets nod to pick 25 percent stake in Ardee Finvest
New DelhiScotia Finance, a subsidiary of Scotia Bank
of Canada, has been allowed to buy out 25 per cent
stake held by its JV partner Ardee Finvest by the
Foreign Investment Promotion Board.
This will take the foreign equity holding in Scotia
Finance to 100 per cent and the company has also been
allowed to change its activities from the purely fund
based to non-fund based.
The 25 per cent stake, represented by 71.20 lakh
equity shares held by Ardee Finvest, would be
purchased for $0.5 million.
Ardee Finvest owned by the Delhi based real estate
developer Ardee Group decided to exit the partnership
following an internal restructuring of business
operations by Scotia.
Under the plan, it was decided that Scotia Finance
would concentrate on non-fund based business while all
fund based activities would be transferred to Scotia
Bank India through a slump sale.
Scotia Finance was set up as a joint venture in 1999
to provide a range of financial services, including
leasing, merchant banking and investment banking.
Scotia Bank held 75 per cent stake amounting to $5
million in the venture through BNS Pacific. Post
restructuring, Scotia Finance proposes to provide
investment advisory services, financial consultancy,
credit reference, credit rating, forex broking, money
changing and distribution of insurance products.
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