Economic Setback After NDA - Printable Version

Economic Setback After NDA - Printable Version

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Economic Setback After NDA - Guest - 05-14-2004

Sensex slumps 330 pts on divestment threat
Reuters
Mumbai, May 14

Indian shares slumped over six per cent on Friday as investors worried privatisation and foreign investment could be hit by a shift to a leftist-backed Government following the surprise election victory of the Congress party.

The slump in the Bombay 30-share index -- Sensex was led by selling in state-backed firms and banks, such as ONGC and State Bank of India. The Sensex ended down as much as 329.60 points to 5069.87. The Indian rupee fell half a per cent against the dollar.

The fall in shares extended a selling trend over more than two weeks, in which the Bombay index has tumbled 14 per cent since it became clear the pro-reform National Democratic Alliance (NDA) might not fare as well as had been expected in the election.

Congress and its allies, including some on the far-left, stunned pundits with a commanding victory and were trying to form a new Government on Friday, prompting the latest sell-off.

"It has reached a situation where people have given up hope. They have lost heavily," said managing director of Dimensional Securities, Ajit Suarana.

"But, I think it is being overdone and people should use this as a buying opportunity. Just because privatisation may not go through, doesn't mean the country will come to a halt."

India is Asia's third-largest economy.

Confirming the fears of many investors, the country's largest communist party described India's privatisation ministry as "unnecessary".

Congress says it will continue with privatisation, but only "selectively", and will not sell profit-making state companies.

"Clearly, the privatisation story is over for now," said director of Kotak Mahindra Asset Management, C Jayaram. "And the big India story, which was popular among foreign investors, will lose some its appeal."

The share slump knocked half a per cent off the value of the Indian rupee, which had gained gained five per cent against the dollar in 2003 as record levels of overseas money flowed into India.

Among those shares hardest hit were companies in which the NDA government had announced plans to sell a strategic stake.

Refiners Hindustan Petroleum Corp and Bharat Petroleum Corp Ltd both dived 13 per cent, while Shipping Corp of India, the country's biggest shipping line, lost 17 per cent to hit a nine-month low of Rs 86.70.

Shares in ONGC, the country's top oil producer, in which the Government sold a record $2.3 billion worth of shares in March, dropped 11 per cent to Rs 731.40.

Foreign funds have sold a net $365 million worth of Indian shares in seven straight trading sessions through Wednesday.

Banks were also hit on expectations crucial sector reforms will be delayed or shelved. State Bank of India, the biggest commercial bank, slumped 14 per cent to Rs 516.9 and Punjab National Bank plunged 18 per cent to Rs 263.50.

Economic Setback After NDA - Guest - 05-14-2004

Scrap disinvestment policy: CPM, CPI
http://www.hindustantimes.com/news/6996_754754,00160055.htm

Economic Setback After NDA - Guest - 05-15-2004

Free electricity to farmers
<img src='http://www.thehindubusinessline.com/2004/05/15/images/2004051502610101.jpg' border='0' alt='user posted image' />

Next I hope they should write off all farmers loan.
Free fertilizers.
No tax on income.

Economic Setback After NDA - Guest - 05-15-2004

QUOTE(Mudy @ May 14 2004, 11:30 PM) Next I hope they should write off all farmers loan.
Free fertilizers.
No tax on income. 
Mudy: All these aren't new. Heard of the loan melas by Janaradhan Poojari (Cong I) from Karnataka? Was pretty famous in 80s (I think).

Economic Setback After NDA - Guest - 05-26-2004

Disinvestment panel members resign en masse

New Delhi, May 25: Even before the Left parties could rake up the controversy over disinvestment, members of the Disinvestment Commission, including its chairman R H Patil, tendered their resignations en masse to Arun Shourie, before he demitted office as Disinvestment Minister.

Patil, along with four other part-time members, sent in their resignations to Shourie after the election results were announced, official sources said.

The resignations of T L Shankar, N V Iyer, V V Desai and K R S Murthy, still reported to be pending with the government, were sent in to enable the new government a free hand to reconstitute the commission.

The commission has virtually become defunct with only the Member-Secretary remaining.

Disinvestment Commission was reconstituted in 2001 after remaining dormant for two years, initially for a two-year period, and was given a year's extension till October 2004. The commission, first set up in 1996-97, was a creation of the United Front government under the chairmanship of G V Ramakrishna.

Left-supported UPA government has demanded scrapping of the Disinvestment Ministry and Prime Minister Manmohan Singh decided to keep the portfolio vacant though no final decision has been taken on its future.

The new government has decided to abandon NDA style privatisation policies but Prime Minister Manmohan Singh last week committed his government to allowing case-by-case privatisation where needed

Economic Setback After NDA - Sunder - 05-26-2004

QUOTE(Mudy @ May 26 2004, 10:14 AM) Disinvestment panel members resign en masse 
The Disinvestment Ministry Site is under "reconstruction" <img src='style_emoticons/<#EMO_DIR#>/thumbup.gif' border='0' style='vertical-align:middle' alt='thumbup.gif' />
Wonder if this site will be disinvested, or if there will be a new portfolio-less cabinet minister for maintaining this site.

http://www.divest.nic.in/

Economic Setback After NDA - Guest - 05-26-2004

India is heading for gutter. Now we have PM, Chairwoman is outsourced and Politburo to run country.
Yuck.

Economic Setback After NDA - Guest - 05-27-2004

MTNL not to be privatised, says Communication Minister
The state-run telecoms firm Mahanagar Telephone Nigam will not be privatised, the Communication and IT Minister Dayanidhi Maran said on Wednesday, pushing the company's stock lower in a firm market.

The announcement is in line with the new coalition Government's plans to reverse the previous Govt's policy of privatising profit-making companies that underpinned a strong market rally in 2003.

New Delhi-based MTNL was one of about 15 state-run companies on the previous BJP-led coalition Government's privatisation agenda that had been on hold for the past year due to political and legal wrangles.

"It is off the privatisation list," the newly installed minister Dayanidhi Maran told reporters in response to a question whether his ministry would work towards selling off MTNL.

Soon after the announcement, MTNL fell as much as 3.6 per cent to Rs 120, but later recovered to quote at Rs 123.40, still down one per cent. The main index was up 0.84 per cent. MTNL, which is also listed on the New York Stock Exchange, provides fixed-line, mobile and Internet access in the two main cities of Delhi and Mumabai-- the largest telecoms markets in the country.

It competes with firms such as Bharti Tele-Ventures Ltd and Reliance Infocomm Ltd
....
India's fragmented telecoms sector already has some of the lowest phone tariffs in the world as more than a dozen companies often resort to price cuts to lure more users.

Economic Setback After NDA - Guest - 05-27-2004

After a couple of years, there wont be anything left to privatise as far as MTNL is concerned. <!--emo&

--><img src='style_emoticons/<#EMO_DIR#>/rolleyes.gif' border='0' style='vertical-align:middle' alt='rolleyes.gif' />

Economic Setback After NDA - Guest - 05-28-2004

Law Ministry OKs reducing retirement age from 60 to 58
Let see how Delhi Babus who voted for Cong will react. <!--emo& Big Grin

--><img src='style_emoticons/<#EMO_DIR#>/biggrin.gif' border='0' style='vertical-align:middle' alt='biggrin.gif' />

Economic Setback After NDA - Guest - 05-28-2004

Sensex down 223 as markets write off CMP 
Mumbai, May 28. (PTI): The Sensex crashed by 223 points today wiping out over Rs 51,000 crore of investors wealth on across-the-board sell-off by investors disillusioned by the Common Minimum Programme (CMP) of the United Progressive Alliance.

The BSE Benchmark 30-share Index opened sharply lower at 5026.92 and later plunged to the intra-day low of 4821.59 before ending at 4835.39, a steep fall of 223.16 points or 4.41 per cent. 

The broad-based BSE-100 Index tumbled by 122.63 points to 2568.40 from previous close of 2691.03.

Indices did not fare well at the NSE either.

The main NSE index, the S&P CNX NIFTY ended at 1508.75 a shade less than five percent below Thursday's close of 1586.40

For its part, the CNX NIFTY JUNIOR lost 4.75 percent at 2988.65, compared to its previous close of 3137.65.

Extremely disappointed over the CMP that put disinvestment, labour reforms and privatisation of power utilities on the backburner, Foreign Institutional Investors (FII) pressed heavy sales across the spectrum, brokers said.

Power as well as PSU and Banking sectors bore the brunt of the sell-off and registered huge losses.

There was nothing for the market as well as for foreign investments in the CMP which has done little to allay investors fears over the pace and extent of economic reforms.

Commenting on the privatisation issue, brokers said though the government is open to disinvestment of upto 49 per cent in PSUs including profitable ones, it has scrapped the disinvestment ministry indicating that majority stake and management control would remain with the government.

This will automatically discourage foreign investments in the country, these brokers feel.

Brokers see "lack of clarity" in CMP

Reacting negatively to lack of clarity in the CMP as to how the government will mobilise resources, operators and retailers too joined the bandwagon resorting to heavy selling in blue chip counters.

Attributing the sharp downturn in power stocks to the UPA government's decision to review the Electricity Act, 2003 and defer the mandatory date for unbundling and replacing of the state electricity boards, brokers said the Congress-led UPA has almost reversed the policy of previous government by scrapping disinvestment ministry.

Bank stocks fell sharply on speculations of hike in interest rate.

Business volume rises sharply

In fairly good volume, key counters like RIL, SBI, REL Grasim, HLL, HPCL, Tata Motor, Tata Power, ICICI Bank, BHEL, Tisco, Wipro, MTNL, MUL, Infosys Tech, Satyam Computer, ITC, Bharti Tele-Venture and Bajaj Auto suffered a sharp setback.

The volume of business rose sharply to Rs 2324.15 crore from Rs 1590.24 crore yesterday. SBI was the top traded share with the highest turnover of Rs 264.55 crore followed by RIL (Rs 228.89 crore), MUL (Rs 168.07 crore), Satyam Computers (Rs 161.25 crore) and Tisco (Rs 127.18 crore).

Economic Setback After NDA - Guest - 05-31-2004

Weak trend of futures indicates bearish market
TIMES NEWS NETWORK[ SUNDAY, MAY 30, 2004 11:46:54 PM ]

MUMBAI: The derivatives market investors seem to be in a worse mood than their counterparts in the cash market. After the common minimum programme of the new Congress-led coalition turned out to be a total non-starter with the market, discounts in the futures and options segment of the market increased further on Friday, the day the leading benchmark indices â Sensex and Nifty â lost around 4.5 per cent each.

Since the derivatives market is taken as a pointer towards the future cash market trend, derivatives dealers are expecting some more downside from the current level since June contracts for a number of index heavyweights are at substantial discount to their respective share prices.

And marketmen are just keeping their fingers crossed â nobody wants another repetition of the âManic Monday' of May 17 or some free fall anywhere near that

Economic Setback After NDA - Guest - 06-01-2004

Reforms to be key to India's rating
Pioneer News Service/ New Delhi

Putting the onus on the new government at the centre, international rating agency Standard & Poor's has said that India's rating can improve if the new government reduces fiscal deficit and continues reforms to maintain a high economic growth.

"A better fiscal performance, along with structural reform to maintain country's growth prospects and its strong external profile could lead to an improved foreign currency rating," S&P director Ping Chew said in a statement.

The government's ability to improve the fiscal situation and deepen structural reforms will be key factors for the foreign currency now at "BB" with stable outlook and local currency rating of "BB+" with a negative outlook, he said.

S&P, which pegged India's GDP growth at 6.0 per cent for this year compared to 8.0 per cent last year, also said the budget for 2004-05 will be a "litmus test" for Congress-led United Progressive Alliance (UPA) government.

Economic Setback After NDA - Guest - 06-02-2004

Have cars, will tax, says Govt
Here comes Commie agenda, back to same old days. Same old concept why people need telephone or why they need two cars.
When people can afford car, why not? Now govt will dictate how to live.

QUOTEHowever, the registration costs may get higher if you own two cars (not applicable to two-wheelers) and want to buy another. "The main idea is to have a disincentive for purchasing many vehicles. Affluent sections in Delhi own more than one vehicle and add to congestion. We want to tell people that a family can manage with two cars and there is no for each individual in a house to own a vehicle," an official said. An estimated 10-14 per cent of vehicle owners have two or more cars.

Sounds like they want to discourage automobile industry and small industry attach to automobile industry. This will add unemployment and loss of revenue.

Economic Setback After NDA - Guest - 06-03-2004

Sensex sheds 106 pts on Thursday despite FM visit
Reuters
Mumbai, June 3
Indian shares ended more than two per cent down on Thursday despite positive comments from Finance Minister P Chidambaram on his visit to the financial capital, as investors wanted more detail on the Government's plans.
Against the backdrop of weak global markets, the 30-issue Bombay Stock Exchange index -- Sensex closed 105.7 points or 2.15 per cent down at 4,817.99 points, while the broader National Stock Exchange index fell 2.6 per cent

Economic Setback After NDA - Guest - 06-23-2004

Rupee hits 11-month low vs $ 
UNI/ Mumbai
The rupee dipped to a 11-month low on Tuesday to close at Rs 46.24/26 against dollar compared to Rs 45.93/94 of last day's close.
According to a market dealer, the rupee lost 31 paise against dollar. It opened at Rs 45.95/96 and went to a low at rs 46.57/58 in the intra-day trading.

Economic Setback After NDA - Guest - 07-17-2004

UPA To Focus On Rural Roads, Atalâs NH Project Takes Backseat QUOTEThe second phase comprises four/six laning of north-south/east-west corridors linking Srinagar with Kanyakumari and Silchar with Porbandar. Work on over Rs 25,000 crore Golden Quadrilateral (first phase) has also not touched half-way mark <img src='style_emoticons/<#EMO_DIR#>/thumbsdownsmileyanim.gif' border='0' style='vertical-align:middle' alt='thumbsdownsmileyanim.gif' />

Economic Setback After NDA - Bhootnath - 08-12-2004

Uncertain at the Centre
Anuradha Dutt
A revealing study prepared by the German multinational Deutsche Bank has recommended against major investment in India by highlighting the uncertain future of the United Progressive Alliance Government, headed by bureaucrat turned politician, Dr Manmohan Singh.

The main reasons cited for such surmise are the UPA's uninspiring budget proposals and persisting policy differences between the Congress and its communist allies over the fuel price hike and easing of foreign direct investment rules. One might add that spiralling inflation and the one per cent reduction in the rate of interest of employees' provident fund are other contentious points. At the ground level, the excessive price of onions and vegetables could well bring tears to the UPA's eyes.

The study, titled "Indian Parliament looking to 2006", predicts a mid-term poll in 18 months. The event is likely to be precipitated by the state elections in early July 2006, when the Congress is pitted against the Left parties. Some observes might feel that the time estimate veers towards the optimistic since the communist trade unions, exercising considerable influence on their party policy makers, are inclined to parting ways with the Congress earlier. In any case, since the Left is essentially a watchdog of the UPA, extending outside support to the ruling coalition, its primary interest is to keep the BJP-led alliance out of office. In terms of the material benefits of power, it has nothing to lose. Only Lok Sabha Speaker Somnath Chatterjee, CPI(M)'s veteran parliamentarian, might be somewhat inconvenienced in the event that the communists decide to dump the Congress in a bid to keep intact its support base. For, continued association with a ruling regime that has made some unpopular economic developments to its discredit at the very outset will prove detrimental in the long run.

The UPA testifies perfectly to the dictum that there can be no permanent friends or enemies in politics. The electorate is confronted with the edifying spectacle of the CPI(M), along with other communist parties, propping up the Congress-led coalition at the centre, though the two parties fight tooth and nail in the red bastion West Bengal and Kerala. Many grassroots workers die in inter-party clashes. Strange indeed is life, for during the dark period of the Emergency (June 1976 - January 1977), the CPI(M) was pitted against the Congress under Indira Gandhi, supported by the CPI. It joined the Bharatiya Jana Sangh, the BJP's pre-1980 avatar, and the socialists in opposing the fascist onslaught on civil liberties. The Left party even extended support to the short-lived Janata Government, the Jana Sangh being one of its components.

The experiment was repeated after the November 1989 polls, when the Left and the Right supported the VP Singh-led coalition of regional parties and socialist factions. Again, the alliance collapsed under the weight of its irreconcilable differences, with the BJP withdrawing support over the implementation of the Mandal Commission report, in the wake of the VHP's October 30 attack on the Babri Masjid. Alliances such as these, which owe purely to the compulsions of real politik, are by their very nature doomed. The National Democratic Alliance, comprising the BJP, regional parties and socialist splinters was more workable, as its five-year stint demonstrated, because they seemed to have more in common.

The lesser partners, chiefly Chandrababu Naidu's Telugu Desam Party (TDP), the Akalis and socialists, willingly collaborated with the dominant BJP so long as they procured their pound of flesh. The BJP further reciprocated by marginalising its Hindutva agenda, that was instrumental in substantially enlarging its vote bank. While this may have kept the key NDA constituents together till the end of its tenure in office, it proved counterproductive for the BJP by eroding its support base. Thus, the Congress, with a tally of 145 Lok Sabha seats in the recent elections, still fared better than the BJP, whose haul was reduced to 137 from 182 seats in the 1998 mid-term polls. Its socialist allies too suffered reverses. But, it was the TDP, which was voted out in Andhra Pradesh that was most severely affected by the loss of credibility.

These, then, are the perils of opportunistic alliances, that pay little heed to voters' sentiments. For, the latter make their disenchantment known at the hustings in a decisive way.

Economic Setback After NDA - Bhootnath - 08-12-2004

No wonder some intellectuals bycycled for 100's km in search of BDO, well that was you voted for congress!

Economic Setback After NDA - Guest - 08-12-2004

Banks report erosion of NRI deposits