Rupee versus the dollar, position still weak
Mumbai: Despite assuaging anxieties of short term interest rate rises through a large private placement of bonds by the government, forex dealers predict that the rupee will open weak against the dollar on Tuesday. The rupee closed on Monday at a new low 45.55/56 per dollar, after hitting an intraday low of 45.58.

However, the forecast is that this weakness was unlikely to persist for long as exporters were seen bringing in dollar supplies with forward premiums becoming attractive particularly for the months of October and January.

According to the dealers, the rupee could stabilise in a 45.60-45.80 per dollar range as corporate demand was also seen waning and this stability was likely to encourage more exporter dollar inflows.

The one-month premium ended Monday at 7.83 per cent compared with Friday's 5.84 per cent. The six-month premium closed at 5.21 per cent against 4.59 per cent.
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Andersen Consulting to lose name on arbitrator’s orders
New York: The ongoing battle between the two siblings – accounting firm Arthur Andersen and its consulting twin, Andersen Consulting – has come to an end. An international arbitrator, appointed to resolve the differences between the two firms, recently ordered that the two firms be split up.

While the Colombian arbitrator, Mr. Guillermo Gamba, sought to place the blame for the breakup on the parent company of the two firms, he charted a middle ground between the two warring parties, by giving a decision that appeared to allow for the breakup with as little pain as possible on both sides.

The decision will force Andersen Consulting to give up the Andersen name and require it to pay about $1 billion to the partners at Arthur Andersen. That money, which consists of regularly scheduled payments between the firms, has been held in escrow since the arbitration began in December 1997.

The arbitrator also ruled that Andersen Consulting must give back any technology jointly held by the firms, but Andersen Consulting avoided a potentially devastating $14 billion payment that could have been awarded under the contract between the two firms.

Andersen Consulting came into being under an arrangement created in 1989, that split up the firm’s auditing and consulting practices into separate units. Thereafter, when Arthur Andersen, the auditing arm, began its own consulting practice against Andersen Consulting, the consulting arm, the latter decided to break away from the arrangement.

The decision, which cannot be appealed, applies only to the two Andersens and carries no broader implications for the accounting or consulting industries. But in some ways, tumultuous changes in the auditing and consulting industries already have forced the Andersen sister companies to rethink how they do business and, in years to come, could force still more change there and at their rivals.
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IDBI to stop funding capacity addition in steel
Mumbai: Expressing concern over the short cycles in the steel sector, India’s leading development finance institution, Industrial Development Bank of India (IDBI), is unlikely to fund any more capacity additions in the steel sector for at least four to five years.

IDBI, which already has an exposure of 14.3 per cent in this sector, has decided to put a freeze on further financing of this sector, given the over-capacity, especially in the Indian scenario.

The domestic steel market is already displaying symptoms of over- capacity situation. Domestic sales have gone up by only 6.5 per cent from April to July. The 12 per cent rise in output has mainly been fuelled by exports.

This decision also follows a recent statement from the US commerce department, stating that it proposed to block lending by multilateral agencies including the World Bank for fresh capacity additions in the steel sector.
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