Andhranews

Mumbai, Aug. 16: The Reserve Bank of India is holding up the decision on whether institutions should be permitted to short sell in the cash market. At a high-level meeting held recently between the Reserve Bank and the Securities and Exchange Board of India, the RBI is understood to have said that it would like to introduce short selling for the institutions, but in a sequential manner.

Like first the FIIs or FI’s or vice versa. But Sebi, it is learnt, would like it to be introduced for everyone so that there is a level-playing field. It has given its views at this high-level meeting and is now expecting a reaction from the RBI which is presently said to be studying the matter. There is no meeting scheduled between the RBI and Sebi. Presently, the buyers or the bulls have a tremendous advantage. They can go long and buy shares and push up prices, but the bears or the sellers cannot go short. So the bulls have been creating havoc and this is one of the reasons why the Indian stock markets saw a much bigger erosion than the other emerging markets, when there was a global collapse of the markets in May.
“It’s a one-way traffic,” said an analyst. “There is no balance and that is why there is tremendous volatility in this segment,” he said.

Mr M.R. Mayya, former executive director of the Bombay Stock Exchange and former chairman of the Interconnected Stock Exchange of India Ltd, said that the foreign institutional investors are now asking for the facility of selling short in the cash market. In the F&O segment, short selling is permitted.

Mr Mayya said there should be a mechanism for lending and borrowing of shares and this is a prerequisite for permitting short selling. This has to be worked out first, he said. He said that if short selling is introduced, it will reduce the volatility in the market to a great extent. It will provide a level-playing field and a balance between the buyers and the sellers. The market is looking forward to the response of the RBI for this much-needed facility.

Hyderabad, Aug. 16: In the first ever challenge to the Patents (Amendment) Act 15 of 2005, which recognises product instead of process patents, Novartis AG, a Swiss pharmaceuticals firm, has filed a petition in the Madras High Court, seeking the declaration of Section 3(d) of the Act “unconstitutional and in breach of India’s obligation under the TRIPS Agreement (Agreement on Trade Related Aspects of Intellectual Property Rights)”. The Madras HC has admitted Novartis’ petition, the company said on Wed-nesday, which has also sought the the re-evaluation of the Glivec patent application in India.

In a second challenge, Novartis has sought a stay of the impugned order of January 25, 2006 ruling by the assistant controller of patents and designs, denying its patent application for the beta crystalline form of Glivec (imatinib mesylate) on the grounds that the ruling lacks legal or factual basis and justification.

“The filing of writ petitions with the Indian High Court of Judicature at Madras demonstrates Nov-artis’ strong commitment to defending international IP standards and its right to obtain patents for its innovative compounds under the TRIPS agreement,” the company said.

“Novartis commends the progress India has made in advancing intellectual property rights protection. The new patent regime has sent a signal to the international community that India provides an attractive opportunity for investments. However, India ne-eds to address some contentious issues before the patent law is fully aligned with TRIPS. This will en-sure that the environment is conducive to the country becoming a true knowledge economy. We are strongly committed to defending international IP rights for our most innovative medicines and ensuring that research to find new therapies for unmet medical needs continues,” said Ranjit Shahani, vice-chairman and MD of Novartis India.

Mumbai, Aug. 16: Mahindra and Mahindra (M&M) on Wednesday signed a memorandum of understanding with the Maharashtra government which provides for the company to invest Rs 500 crores to set up a new manufacturing unit at its Nashik facility. This unit will produce the multi-utility vehicle, Ingenio. The project envisages the investment for the new MPV product and for increasing the existing capacity of the company’s Nashik plant, which is expected to commence production by 2008.

“With this additional investment, the production capacity at the existing plant at Nashik will increase to 1,50,000 vehicles per annum from 80,000 vehicles and will generate employment for over 500 people,” said Dr Pawan Goenka, president, automotive sector, M&M. According to Dr Goenka, the added capacity will be divided almost equally between the Ingenio, the Scorpio and the Logan sedan, which the company will make from 2007 in a joint venture with France’s Renault.

“Our capacity is enough for our requirements right now and the new capacities will take care of the demand till 2009,” he added. The company will also be investing Rs 200-250 crores in Igatpuri for making new engines for the Scorpio and Ingenio. The capacity at this plant will rise from 450 units to 800 units per day. Moreover, it also plans to invest Rs 1,200 crores in its two SEZs in Pune and Thane and Rs 400 crores of investment in Tech Mahindra.

The company will also built a new auto plant by 2009 with the initial investment of Rs 1,000 crores and with the initial capacity of about 100,000 units per year which will rise up to 500,000 units eventually. For this greenfield facility, the company is in talks with the governments of Tamil Nadu, Andhra Pradesh, Karnataka, Maharashtra and Uttaranchal for a manufacturing unit. Mr Goenka also revealed that the company is working on bio-diesel and other alternative fuels as oil prices continue to climb.

Mumbai, Aug. 16: The upward climb of the Sensex, for the sixth consecutive trading session, to close 135.32 points up at 11,448.31 failed to enthuse analysts who were cautious in speculating whether this rapid rise of the Sensex could be sustained. The Sensex saw a high of 11507.92 intra-day, but in the last half-hour there was some profit booking. One view was that stock prices as the present levels were too high to sustain buying.

However, some India-centric funds are said to be interested in picking up stocks and the coming days would show whether there is renewed interest, and whether the risk appetite in emerging markets is returning.

The Nifty closed up 42.95 points at 3,356.05 in line with the buyoancy in the Asian markets that all ended in the green. The Nikkei was up 255.17 points, the Hang Seng 176.96, Kospi 20.50, Taiwan index 81.50 and the Straits Times 12.81.
The oil stocks continued to be on the boil because of softening crude prices and the hint from the Prime Minister in his Independence Day speech that there could be a fuel price hike as subsidies are not sustainable. Banking, auto and metal stocks were also up. BPCL was up 18.35, HPCL Rs 26.50, IOC Rs 31.45 and even Castrol was up Rs 10.

The Sensex was pulled up by heavyweights like ONGC up Rs 25.60, RIL Rs 15.95, HLL Rs 3.25, L&T Rs 76.10, Grasim Rs 15.05, HDFC Bank Rs 39.17 and ICICI Bank Rs 11.65. Among the banking stocks, SBI gained Rs 14.75, HDFC Bank Rs 39.17 and PNB Rs 13.40. Bajaj Auto was one of the big losers down Rs 44.05 while Suzlon lost Rs 32.95.

Mumbai, Aug. 16: Mr Kumar Mangalam Birla, chairman of the Aditya Birla group, on Wednesday resigned from the boards of Tata Steel and Maruti. He has been on the Tata Steel board since 1998 and on the board of Maruti since 2003. Mr Birla, who is already the chairman of the Aditya Birla group companies that include Idea, Grasim, Nuvo and Ultratech, felt that after his appointment on the board of the Reserve Bank of India in June, he was not able to give the time he should to these two companies. He said that he was very involved with the RBI.

Mr Birla is also on the board of the London Business School, IIM Bits Pilani and is the chairman of the advisory committee of the department of company affairs, a member of the Prime Minister’s advisory committee on trade and industry and the chairman of the board of trade set up by the commerce ministry. He is also a member of the government of Uttar Pradesh’s high-powered investment task force.

Mumbai, Aug. 16: The production of sugar-free confectionery is gaining increasing popularity in the developed markets of India. As confectionery is taking the direction of sugar-free and functional products globally, in India too, this is opening up a completely new segment.

Indian manufacturers are now seeing more sales and a bigger market share in sweetener-based low-calorie products like diet soft drinks, confectionery, ice-cream and frozen desserts and foods, rather than direct use of sweeteners.
“The new variant of Sugar Free in powder form brings in the conveniences of using sugar substitutes in other preparations like sweets, desserts etc.,” said Ms Jyoti Shairalee, general manager, marketing, Zydus Cadila Healthcare Limited.

Sugar Free, the market leader with over 60 per cent market share in the low-calorie sweetener market, has found out a way to increase the consumption of sweetener by introducing sugar-free natura powder, a new generation no-calorie sugar substitute, which is 600 times sweeter but without the calories of sugar.

“The market is premature and we are still creating an awareness among the consumers about the benefits of the product and how and where they can use it,” she said. According to Ms Shairalee, the company has tied up with reputed hotels, confectioners and mithaiwalas in the metros for the supply of its sugar-free powder and the demand is increasing for the same.

Hyderabad, Aug. 16: Many countries in Asia and the Pacific, including India, will not meet the Millennium Development Goal (MDG) targets for universal primary enrolment and a two-thirds reduction in child mortality unless governments rapidly intensify efforts to improve basic education and increase access to primary health care for the poor, the Asian Development Bank said on Wednesday.

“Without a concerted effort to reach the poor, Asia cannot, and will not, attain the health and education-related MDGs at all,” says Mr Ifzal Ali, ADB chief economist, in Key Indicators 2006, the bank’s flagship annual statistical publication. “To sustain Asia’s success in reducing poverty, governments must improve education opportunities for the poor, as this is a key driver of movements out of chronic poverty,” Mr Ali says. Health-related shocks can also be catastrophic from a household’s perspective, pushing entire families into poverty.

Countries such as India and Bangladesh have made significant progress in improving access to primary schooling, but concerns remain regarding the quality of basic education and inequalities in enrolment rates, the ADB says. In many countries, primary-school age children from poorer households are almost three times more likely to be out of school than those from richer households. Gender-related inequalities in enrolment remain prominent in countries such as Pakistan.

“Cambodia, India, Pakistan, and several Central Asian republics are all in danger of falling short of the target to reduce the under-five child mortality rate to two thirds of 1990 levels by 2015. Inequalities in health are prominent in many countries with child mortality rates for the poor being two or three times higher than those for the rich,” the report says.

Large primary school enrollment deficiencies remain in Pakistan, Azerbaijan, Mongolia, Nepal and Papua New Guinea, according to Key Indicators 2006, which this year includes a theme chapter titled “Measuring Policy Effectiveness in Health and Education”. The theme chapter examines options for evaluating public sector effectiveness in improving health and education services.

The theme chapter highlights the importance of measuring and analysing country-specific factors affecting MDG indicators, especially among the poor. Increased measurement, awareness, and dissemination of MDG indicators for the poor, contrasted with data for comparator countries, can itself be a catalyst for corrective policy action, according to the report