STATESMAN NEWS SERVICE
Mumbai, 16 July
The Reserve Bank of India’s move yesterday to squeeze out liquidity from the system by increasing short-term borrowing rates for banks and to hold Rs 12,000 crore bond sale on Thursday through open market operations helped the partially convertible rupee bounce back by more than one per cent against the dollar in morning deals.
However, shares on Dalal Street tumbled as the central bank steps in to salvage the rupee. Bank shares came under selling pressure as the RBI through its action conveyed it would restrict the availability or flow of easy money to bankers. The RBI move helped the rupee to end 0.97 per cent or 58 paise up at 59.31 against the dollar today.
The rupee that closed yesterday at 59.89 against one dollar, opened this morning stronger at 59.20 a dollar as the central bank restricted access to easy money to prevent speculation and volatility in currency market. The central bank has sent a clear signal that the rupee’s sharp fall to 61.28 a dollar ~ the biggest in history ~ was on account of banks and brokerages taking speculative positions.
At the end of the day’s business, the rupee, dealers say, has not improved on expected lines. They prefer to wait and watch to arrive at any firm opinion about the measures jointly mooted by the RBI and the finance ministry. The Yes Bank stock plunged 8.5 per cent while state-run Canara Bank was down 6.9 per cent in the morning. SBI, ICICI Bank, Bank of Baroda, IDFC, Power Finance Corporation were hit by the central bank’s decision to mop up liquidity from system.
The S&P Bombay Stock Exchange Sensitive Index recovered from the day’s low of 19,649.58 points (down 384.90 points) to close at 19,851.23 shedding 0.91 per cent or 183.25 points. The CNX Nifty of the National Stock Exchange reeled under across the board selling pressure plunging 119.85 points to 5,910.95 in the morning but recovered to end at 5,955.25 losing 1.25 per cent or 75.55 points.
The top losers on the BSE included SBI at Rs 1,826.45 (-4.57per cent), ICICI Bank at Rs 1,003.20 (-5.61 per cent), HDFC at Rs 816.45 (-3.88 per cent) and L&T at Rs 971.40 (-3.42 per cent).
Before the central bank announced tough measure to thwart the rupee fall, the RBI Governor Mr D Subbarao had a discussion with the finance minister Mr P Chidambaram. Dalal Street and currency market analysts say the RBI has signaled that corporate and markets should not look ahead to any monetary easing in the coming credit and monetary policy review later this month.
Last week as the headline inflation stayed below five per cent for June, trading became bullish because markets hoped for a much relaxed RBI policy statement. Market analysts say it would take some days to assess how foreign funds react to the RBI measures. The shoring up of the rupee might reverse the flight of investments from the domestic equity markets, they hope. 375
PRESS TRUST OF INDIA
New Delhi, 16 July
Drug major Cipla today said it has completed the buyout process of South African pharma firm Cipla Medpro for an aggregate consideration of Rs 2,707 crore.
“The company has completed the acquisition of 100 per cent of the issued shares of Cipla Medpro South Africa Limited for an aggregate consideration of ZAR 4,507 mn (Rs 2,707 crore), Cipla Ltd said in a statement.
The listing of the shares of Medpro on the Johannesburg Stock Exchange (JSE) has been terminated from the commencement of business on 16 July 2013, it added.
Commenting on the development Cipla managing director and global chief executive officer, Mr Subhanu Saxena, said the investment is aligned with Cipla’s strategy to ascend the value-chain by managing a front end sales force in a market outside India.
“The acquisition aims to further strengthen Cipla’s commitment to South Africa and the broader African continent. The integrated business will compete more effectively in the changing local and global pharmaceutical environments and as such there will be an increasing focus on key African markets,” Mr Saxena added.
He said that for nearly two decades Cipla and Medpro enjoyed a longstanding symbiotic relationship and the acquisition will strengthen Medpro’s position in the South African pharmaceutical market by leveraging Cipla’s wide range of product portfolio and technological expertise.
“This will bring tangible benefits to consumers in South Africa, and increasingly the rest of Africa,” Mr Saxena added.
The Mumbai-based firm had received approval from the Takeover Regulation Panel of South Africa on 27 June 2013.
In May, Cipla Medpro shareholders had approved the Indian company’s takeover offer.
Cipla’s board had given a go-ahead to completely acquire the South African firm in March this year. Earlier, in November 2012, Cipla had offered to acquire 51 per cent stake in Cipla Medpro at a rate of 8.55 South African rands per share.
Cipla supplies majority of Cipla Medpro’s drugs through a long-standing agreement.