[Grapevine] For Sep 3, 1998

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________Summary_______________________
(Details below)

News:
 Pune in the grip of dengue
 Tata Drama Seen Harming Indian Aviation Investment
 Mukand promoters defer equity subscription 
 Chief Justice angry comments may create difficulties for state govt 
 

Market Summary:
 Markets rise; funds buy amid global rebounds


________News_______________________
(From various news agencies)
  
   
 Pune in the grip of dengue
   A dengue epidemic has broken out in the city, with and 14 localities
   reporting the highest incidence of the killer fever. Out of 110 blood
   samples tested for the fever since July this year, 55 have tested
   positive with the number of dengue cases registering a sharp rise from
   two to 10 per month over the past three years. In the last two months,
   the figure has shot up to 54, causing widespread concern.
  
            
 Tata Drama Seen Harming Indian Aviation Investment
   Investors could be deterred from 
   India's aviation sector following Tata's withdrawal of its plan to 
   start a domestic airline, industry representatives said on 
   Wednesday. 
   Tata Industries said on Tuesday it had scrapped its proposal for an 
   airline with foreign investor participation after losing patience 
   with delays in government approval. 
   The government said last week that it needed six more weeks to 
   examine new objections to the proposal from trade unions and 
   lawmakers-- a move criticised by some industrialists as being at 
   odds with its claim to be ushering in a liberalised economy. 
   Unions and some members of parliament have objected that the plan 
   would lead to excess capacity and challenge state-owned Indian 
   Airlines. But Tata said the ministry of civil aviation had already 
   had eight months to make up its mind. Finance Minister Yashwant 
   Sinha said on Tuesday that the conglomerate's move, announced with 
   thinly veiled acrimony, would not dent foreign investors' confidence 
   in India. 
   ``One proposal will not influence the confidence level,'' he told 
   reporters. 
   Industry experts were not convinced. 
   ``It will send wrong signals to investors in the aviation industry 
   and also in other fields,'' said S.S. Sidhu, president of the 
   Foundation for Aviation and Sustainable Tourism. 
   ``The pullout might shatter the confidence of foreign investors and 
   raise doubts on India's credibility,'' said Subhash Goyal, President 
   of the Indian Association of Tour Operators. 
   Sidhu said Tata's withdrawal could upset the civil aviation 
   ministry's plans to build new international airports and provide new 
   domestic airlinks. 
   ``The point is that there are at least 400 airports competing around 
   the world to attract investments and India is one of them,'' he 
   said. 
   Sidhu said the basic objective of providing air transport to 12 
   million domestic passengers a year had to be met: preventing the 
   entry of new airlines could lead to a lack of capacity. 
   Civil Aviation Minister Ananth Kumar told Reuters after the pullout 
   was announced that the clearance delay was due to the Tatas not 
   providing complete information on foreign partners. 
   He said he did not want to harm India's domestic airline sector by 
   allowing competitors in. 
   ``We have to be judicious...it is not survival of the fittest,'' he 
   said. 
   Kapil Kaul, chief manager of Sahara India Airlines, a leading 
   private airline, said the failure of Tata's plan suggested there 
   were entry barriers for serious competition-- other companies would 
   ``think twice'' before coming in. 
   ``I also don't know why the government is so wary of foreign equity 
   in private airlines. A panel formed by the government has only this 
   week suggested allotting shares in India's flag carrier (Air India) 
   to a foreign partner,'' he said. 
   Goyal said the withdrawal would be a blow to tourism in India as 
   there is a lack of aircraft capacity for connecting cities 
   frequently visited by tourists. 
   A leading industry body said Tata's entry into the capital-intensive 
   and high profile aviation sector would have had a multiplier effect 
   on other sectors of India's economy. 
   Associated Chambers of Commerce and Industry of India President L. 
   Lakshman said Tata's exit indicated ``a total sense of frustration 
   on the part of the private entrepreneur.'' 
   ``The signal being sent through the withdrawal is of protection to a 
   few. It will mean that the open skies policy in domestic aviation is 
   really not working,'' said a leading travel industry official, who 
   asked not to be identified. 
   State-run Indian Airlines said it would have faced up to competition 
   from Tata, fairly and squarely. ``But we have always maintained 
   excess capacity is bad and should not be allowed,'' a company 
   spokesman said. 


 Mukand promoters defer equity subscription 
   The promoters of Mukand Ltd have deferred subscription to
   22.59 lakh shares of the company at the rate of Rs. 97.39 per
   share aggregating about Rs. 22 crores. This follows the crash in
   the company's stock prices at the Bombay Stock Exchange.
   The stock closed at Rs. 33 on BSE on Tuesday. 
   

 Chief Justice angry comments may create difficulties for state govt 
   The chief justice's angry retort came when Advocate General C
   J Sawant tried to defend the government saying that there was
   nothing wrong with the machines and that they were working
   fine. "Nothing wrong? There's everything wrong with your
   department" Chief Justice M B Shah said. "These machines
   have been lying idle and not being used for public benefit, at
   whose cost the machines have been purchased?" he asked
   Sawant. 

   While the chief justice's comments are likely to make life more
   difficult for the state government embroiled in several other
   controversies, The Indian Express was the first to focus
   attention on the Rs 11-crore MRI machine deal that was not
   preceded by any consultations. A series of reports had quoted
   experts raising doubts about the quality of the machines and
   their evaluation. The matter was also raised in both the houses
   of assembly and comparisons were drawn with similar
   machines procured by hospitals like Jaslok and Breach Candy
   at lower rates. High-profile Congress member R R Patil had
   gone to the extent of levelling corruption charges against Aher
   and the then dean Dayanand Dongaonkar. 
   

      
________Financial News_______________
        
        

Markets rise; funds buy amid global rebounds
		
    Mumbai--Sep 3--Foreign funds, influenced by stability in regional
markets, bought selective index stocks, prompting traders to go long as
well, and gave a boost to Indian stocks, dealers said.

    The Bombay Stock Exchange's (BSE) Sensex provisionally closed at
2918.89, up 31.98 points from Wednesday's close. The NSE50 provisionally
closed at 848.45, up 5.95 points.
    Stocks were range-traded for most of today amid thin volumes as traders
refrained from large commitments either way on continuing concerns over the
crisis in Russia and east and southeast Asia.
    "Traders were confused about the near-term trend as selling by
foreigners is being balanced by buying from local funds at lower levels,"
one dealer said.
    In mid-trade, however, foreigners were said to have bought index stocks
including BSES, Bharat Heavy Electrical and Reliance.
    Local funds led by the Unit Trust of India also bought moderate lots
across the board, traders said.
    In late trade, some prominent traders were seen buying ITC, Hindustan
Lever, Bharat Heavy Electrical, Castrol and Zee Telefilms, which prompted
short covering by other traders.
    "The Sensex is currently perceived at very strong support levels," a
dealer said.
    "A major downward break below 2800 levels in the BSE Sensex is seen
only if the government were to fall or on steep falls in global markets,
which does not seem imminent in the near term," he said.
    In the short term, the BSE Sensex will likely move in a 2850-3000
range, most dealers said.
    Below is a summary of market moves today:
    * Trading was lackluster amid thin volumes with traders mostly
    refraining from commitments. However, a couple of prominent traders
    bought large lots in select index stocks in late trade.
    * Foreign funds were said to have bought BSES, Bharat Heavy Electrical,
    Reliance and Siemens India
    * Local funds were said to have bought across-the-board. Unit Trust of
    India bought large lots in software stock HCL Infosystems
    * Hindustan Petroleum, Hindalco and Cochin Refineries declined on
    selling by foreign funds
    * Foreign players also took profits in software stocks including Tata
    Infotech, Satyam Computer, Pentafour Software and Infosys Technologies.

PROVISIONAL CLOSES
Bombay Stock Exchange:        :    National Stock Exchange:
Sensex: 2918.89, up 31.98     :    NSE50 (Nifty): 848.55, up 6.05
BSE100: n/a                   :    Mid-Cap      : n/a
VITAL STATISTICS
BSE Sensitive Index closings    : NSE50 closings
High: 4630.54 (Sep 12, 1994)    : High: 1292.95 (Aug 6, 1997)
Jan 1, 1998 close: 3694.62      : Jan 1, 1998 close: 1081.20
1998 High: 4280.96 (Apr 21)     : 1998 High: 1212.75 (Apr 21)
1998 Low : 2838.99 (Aug 19)     : 1998 Low : 830.15 (Aug 24)

------------------------STORY AT 0605 GMT---------------------------------

India Stocks: Rise due to higher GDR prices; seen ending flat
    By Pankaj Aher, Bridge News
    Mumbai--Sep 3--Small buying support on the back of a rise in the prices
of Indian global depository receipts (GDRs) pushed stock prices higher in
early trading today, dealers said.
    Market players expect shares to rise further, but said fresh selling
from speculators and foreign funds is expected at higher levels. The Sensex
is expected to close flat from Wednesday, dealers added.

    Stocks also rose on the Bombay and National Stock Exchanges due to the
positive sentiment generated by recoveries in some global markets
Wednesday, dealers said.
    At 1105 local time (0535 GMT), the Bombay Stock Exchange's 30-company
Sensex was at 2913.58, up 26.67 or 0.92% from Wednesday's close.
    The National Stock Exchange's NSE50 was at 850.30, up 7.80 points or
0.92%.
    Stocks are higher in line with the rise in GDR prices which rose
Wednesday as global markets rebounded, dealers said.  


	

	
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               This is the Mumbai Grapevine 
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________Forex_______________

As of Sep 3, 2:30 PM IST: 
1 US$ = Rs. 42.46 (+0.02)



________Weather_______________
(From CNN)


Current weather conditions   6 p.m. (local), Sep. 3          
mostly cloudy      
Temp: 28 C, 84 F      
Rel. Humidity: 74%               
Wind: W at 8 kph(5 mph)        


 Four-day forecast             
Thu.        rain        HIGH    29 C  85 F        LOW    24 C  76 F              
Fri.        showers        HIGH    30 C  86 F        LOW    23 C  75 F              
Sat.        cloudy        HIGH    32 C  90 F        LOW    26 C  79 F              
Sun.        t-storms        HIGH    31 C  88 F        LOW    26 C  79 F      

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