By Ruma Dubey, Special to Arab News
Sunday 20 May 2001
Last Update 20 May 2001 2:48 am
BOMBAY, 20 May — First came the rate cuts from the Reserve Bank of India (RBI); the bank announced the much awaited slash in the cash reserve ratio (CRR) to boost liquidity in the banking system. The rates have been cut from 8 percent to 7.5 percent with effect from May 19, 2001. The cut is expected to release Rs.45.00 billion into the banking system. <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
The week’s other high point was the SEBI decision to ban forward trading.
On Monday the BSE Sensex closed at 3,568.93 and the NSE Nifty Index at 1,140.80. Selective buying was seen in pharmaceutical stocks. Banking stocks were also in the limelight. After market hours, SEBI announced the ban on carry-forward trading, effective July 2, 2001. SEBI also announced options trading in select stocks from July 2, 2001. All stocks will be moved to rolling settlement by Jan. 2, 2002.
Restrictions on daily share price movements for 414 stocks will be lifted from 2 July 2001. Telecom major MTNL was up. ITC faced immense selling following reports that the company was facing a decline in sales due to a recent hike in cigarette prices and the availability of cheap smuggled cigarettes from Bangladesh.
On Tuesday, the BSE closed at 3,576.96 and the NSE Nifty Index at 1,145.30. There was buying interest in Nestle, mainly by FII — Alliance Capital. There was buying in Satyam Computers, ahead of the listing of its ADR on the New York Stock Exchange.
Media stocks like Balaji Telefilms, Mukta Arts, Tips Industries, Padmalaya Telefilms, Pritish Nandy Communications and Creative Eye were up after the RBI allowed banks to finance up to 50 percent of the cost of a film if the cost of producing the film was less than Rs.100 million.
On Wednesday, the BSE closed at 3,591 and the NSE Nifty Index at 1,151.15. The highlight of the day were pharma stocks which seemed to be on a bull run, following rumors of major relaxation in the Drug Price Control Order (DPCO) next month.
Glaxo India was up on rumors that the company’s anti-cancer drug Ranitidine would be taken out of DPCO. And there were similar rumors in stocks of Ranbaxy Laboratories, Dr Reddy’s Laboratories and Cipla. Reliance Petroleum was up on news that the company had commenced road shows for an overseas listing. Satyam Computers got listed on the NYSE, at a 15 percent premium to the offer price at $11.16.
On Thursday, the BSE closed at 3,669.76 and the NSE Nifty Index was up to 1,178.75. Automobile stocks like Bajaj Auto, M&M and Telco were up as there were rumors of a further hike in duty on imported vehicles. Private sector refining major Reliance Petroleum (RPL) rose further on reports of the imminent listing of the company’s ADR on the New York Stock Exchange (NYSE). The RPL ADR is likely to be priced at an equivalent of Rs. 60 per equity share. HDFC touched an all-time high of Rs.678.90 after the Reserve Bank of India allowed the company to raise FII investment limit to 49 percent.
On Friday the BSE closed at 3,655.03. Of a total of 1,338 stocks in A, B1 and B2 groups that changed hands, 656 advanced, 556 declined while 126 remained unchanged. Turnover on BSE stood at Rs.1,3.97 billion.
Gold was at Rs. 4,425 per 10 gms and silver was at Rs. 7,415 per kg.
US dollar was at Rs.46.94, pound sterling at Rs.67.04, euro at Rs.41.15, DM at Rs. 21.13, Saudi riyal at Rs.12.51, Bahraini dinar at Rs.124.43, Kuwaiti dinar at Rs.152.39, Qatari riyal at Rs.12.88, UAE dirham at Rs.12.77 and Omani riyal at Rs.121.84.