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Expressions

Friday, May 22, 1998

	Crooked planters The credit rating agencies' reports on plantation companies confirms the worst fears investors have about most of these schemes. According to the rating agencies, almost all the plantation companies are below investment grade, and have managed to stay afloat only by continuously increasing their deposits. There has been gross mismanagement of funds, and there is ample reason to believe that the promise of investing in plantations was merely a ruse for massive diversion of funds.		Macro justice The US' Justice Department's anti-trust suit against software giant Microsoft is a timely reminder of the importance of fostering competition in order to ensure progress. To Microsoft's plea that the company is being penalised for being efficient, the Justice Dept's riposte has been that it is interested in ensuring that a hundred new Microsofts have the opportunity to come up, rather than be stifled by Bill Gates' strong-arm marketing tactics.
	Insularity talk is a paradox Fundamentals as talked by economists are the figures reported on account of a series of changes that take place on certain parameters in the economy over a period of time. The situation today is that international finance is so risky that they have the power to the change an economic scenario within a month.		Local derivatives plan may come a cropper The SEBI committee on derivatives, popularly known as LC Gupta Committee, had recommended the introduction of equity derivatives in India. The committee feels that derivatives trading will be a significant developmental step with regard to the Indian capital market, which presently "lacks hedging facility against market risk."

EID Parry: Sweet returns
Life for sugar manufacturers should get better once the Mahajan Committee report on reforms in the sugar industry are implemented. On one hand the free sale quota will increase over a period of time and second there could be an export possibility in surplus years of the kind we have seen in the past two seasons.

The Index
Although Hindustan Motor's Rs 54 crore rights issue may help in tying up its financial requirements, it is hardly going to do any good for the stock. Mainly because the stock is already suffering from an equity overhang with a huge equity base of Rs 107.57 crore due to which discounting has been quite low. The stock is also reeling under the effect of the diminishing prospects of its main product -- the ubiquitous Ambassador.