Sucheta Dalal :Business as usual (15 September 2002)
Sucheta Dalal

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Business as usual (15 September 2002)  

It is like a rewind to 1999-2000. The Joint Parliamentary Committee (JPC) has reportedly no plans to submit its report until the year 2003 and continues to squabble over whether or not to summon former Finance Minister Yashwant Sinha for questioning.

In fact, this JPC seems almost reluctant to prepare a final report. With no punishment in sight, the ICE (Information technology, communications and entertainment) stocks are back in the limelight without even a growth story to back their prices.

Newspapers are also back to tracking the K-10 scrips while speculation is rampant. For instance, little known Hexaware Technologies (formerly part of Aptech Ltd.) ran up a volume of 1.21 crore shares on the NSE (last Thursday) up from its average level of anywhere between 3000 to 20,000 trades.

DSQ software, whose Managing Director has several arrest warrants issued against him, posts a whopping net loss of Rs 72 crore and has sold its most lucrative contracts, but its stock price moves steadily upwards. Himachal Futuristic (HFCL), still in trouble over the diversion of funds to Ketan Parekh quietly places $ 50 million GDRs.

As for Ketan Parekh, he has apparently cleansed himself with a strict eight day Jain fast that involves living only on water. His media friends also tell us that Bank of India is all set to forget its complaint and settle with him but for the Reserve Bank playing spoilsport.

How does the Finance Ministry react? But watching benignly while the Department of Company Affairs (DCA) continues to block more powers for Sebi and giving the capital market regulator an excuse for failing to stop market manipulation.

The benchmark index

The Bombay Stock Exchange (BSE) finally got an opportunity to score a subtle hit against the National Stock Exchange (NSE). On Thursday, it published an interesting advertisement titled: The benchmark index. It traced the average daily turnover on the BSE, the price volatility and the 30-scrip Sensex (BSE Sensitive Index), showing that all three moved in tandem.

In other words, the Sensex was not merely the more popularly tracked index, but it was truly the benchmark index. The advertisement was perfectly timed. In the last few trading sessions, the National Stock Exchange (NSE) has faced the embarrassment of finding its 50-share Nifty being jerked about by a single scrip: Wipro. When Wipro was ramped up Nifty went into positive territory even though the rest of the market was sharply down (last Wednesday) and when Wipro crashed, the Nifty was down most of the day while other stocks had stabilised (last Thursday).

The NSE would do well to heed investors’ complaints and do something about the excessive weightage given to the illiquid Wipro scrip in the Nifty. Otherwise, the BSE could add the Nifty to its chart and give us a better comparison between indices– after all, that’s what competition is about.

Confusing signals

Now that the Unit Trust of India (UTI) bailout has been announced, the game of obfuscation has switched to IFCI. The loss making institution needs a cool Rs 8000 crore in order to meet its financial commitments and redemptions. But the law ministry has told the government that it is under no real obligation to bail out IFCI. At the same time a Reserve Bank evaluation has reportedly said that only 10 per cent of IFCI’s loans can be classified as standard assets.

Yet, IFCI’s chairman has said that it is looking for a strategic partner. Does this mean that the taxpayers will pay for the bad loans of IFCI, while the good part will continue to create fresh NPAs, but this time with the help of a strategic partner?

Utterly delightful

Amul has thankfully decided to give us some relief from its heavy-duty national integration theme by bringing back its original mascot – the Amul girl, featured in an utterly delightful television advertisement. Wish one could say the same about another company with an equally popular mascot ‘Asian Paints’ Gattu.

Media reports suggest that Asia Paints, which has sidelined Gattu in recent years, plans to give him the boot. It is a decision that is bound to sadden old-timers who participated in the massive public competition to christen the naughty mascot created by R.K.Laxman. But if Asian Paints is indeed getting rid of Gattu, then what is Ashwin Dani doing striking a classic Gattu pose on the cover of Business India?

-- Sucheta Dalal