Share prices may fall further, subject to bounces: Friday Closing Report

While a bounce-back is on the cards, expect a further decline unless Nifty holds above 5,800

Yesterday we had said that the market is now in a downward trend and that immediate support for Nifty was at 5,750 and further down, at 5,700. The market broke its first support in early afternoon and then quickly fell to the second support of 5,700. The low for the day was 5,706. While Nifty bounced back to 5,750 in the late stages, the downward trend looks like a strong one. If the bears are able to maintain the downward trend, we may see the market fall to the level of 5,600. The bulls would regain the initiative only above 5,800. Today's decline meant a fifth negative closing in a row.

The market opened flat as investors remained nervous ahead of the RBI's monetary policy announcement, due on Tuesday. The Sensex opened at 19,293, almost unchanged from its previous close of 19,292 while the Nifty resumed trade two points lower at 5,783. Global as well as Indian analysts opine that the central bank will hike key rates by 25 basis points in a bid to cap rising prices.

The market touched the day's high in initial trade with the Sensex touching 19,357, a gain of 65 points and the Nifty rising 19 points to 5,804 at its intra-day high. Trade was range-bound with small spells of buying, pushing the indices in the green, but profit-taking ensured that they stayed in the negative terrain. A lower opening of the European bourses also added to the indecisiveness in noon trade.

The sell-off increased sharply, pushing the indices further southwards in the post-noon session with the key benchmarks falling to the day's low at around 2.45pm. The US futures trading weak added to the late session woes in the domestic market. At the intra-day low, the Sensex tumbled 277 points at 19,015 and the Nifty retraced 79 points to 5,706. The market bounced back from the lows of the day in the last half an hour, but closed in the negative for the fifth straight day. The Sensex settled at 19,136, down 156 points and the Nifty was 36 points lower at 5,750. The advance-decline ratio on the National Stock Exchange was 378:1015.

The broader indices suffered greater damage than the Sensex today. The BSE Mid-cap index tanked 1.03% and the BSE Small-cap index tumbled 1.57%.

Among the sectoral caps, the BSE Fast Moving Consumer Goods (up 0.88%), BSE Healthcare (up 0.61%) and BSE Oil & Gas (up 0.02%) were the gainers. The losers were led by BSE Capital Goods (down 2.72%), BSE Realty (down 2.66%) and BSE Bankex (down 1.76%).

Hindustan Unilever (up 2.24%), Maruti Suzuki (up 1.27%), Reliance Industries (up 0.83%), Hero Honda (up 0.80%) and Wipro (up 0.79%) were the top gainers on the Sensex. Larsen & Toubro (down 3.87%), Jindal Steel (down 3.57%), ONGC (down 2.79%), Jaiprakash Associates (down 2.57%) and DLF (down 2.37%) were the major losers on the index.

Side-stepping security concerns, India on Thursday finalised most of the terms on which it plans to buy natural gas from Turkmenistan through a pipeline passing through Afghanistan and Pakistan.

Terms of the Gas Sale and Purchase Agreement (GSPA) were finalised at a meeting of the oil ministers of the four to Turkmenistan-Afghanistan-Pakistan-India gas pipeline here yesterday but crucial aspects of price of gas and transit fee were left to be decided by July.

Markets in Asia ended mostly lower on the last trading day of the week on worries of another rate hike by the Chinese central bank and on reports that South Korea's industrial production expanded at a slower pace in March. South Korea's factory output climbed 8.7% in March from a year earlier after gaining a revised 9.2% in February.

Besides, the HSBC's China Purchasing Managers' Index (PMI) stood at 51.8 in April, unchanged from March even as the government hiked interest rates, pointing to a steady growth in the country's manufacturing sector.

The Hang Seng was down 0.36%, the KLSE Composite shed 0.02%, the Straits Times fell 0.16%, the Seoul Composite declined 0.72% and the Taiwan Weighted was down by 0.36%. On the other hand, the Shanghai Composite gained 0.87% and the Jakarta Composite advanced 0.28%. The Japanese market was closed for a local holiday.

Back home, foreign institutional investors were net sellers of equities worth Rs832.59 crore on Thursday. On the other side, domestic institutional investors were net buyers of shares worth Rs532.60 crore.


Distress call: Use multiple channels to free seafarers held hostage by pirates

The Indian Navy is doing a great job to provide protection for Indian vessels sailing in hostile waters. But there is much that other agencies, like intelligence agencies and shipping authorities must do deal with the scourge of piracy that is brutalising Indian seamen

A few days ago, seafarers in their thousands came out and demonstrated, demanding action to save the lives of their friends. This sort of a mass uprising has never happened before. The after-effects of shutting down India's ports, will be terrible, so right-thinking people will not want to bring matters to a head. But what else can seafarers do? Like pilots from Air India, they have been lied to, they have been treated worse than criminals and matters are reaching a point where people do not want to go to sea anymore.

My declaration: I was trained to be a seafarer, went through two years of training on the Training Ship Rajendra in 1973-75, and whilst there, ran the cyclostyled onboard magazine called "Porthole”. This was a fairly simple monthly publication, supposed to be more of a placid product, in a day and age where, as merchant navy cadets, we certainly did not make waves except when out on the boats, and most certainly did not try to expose the rampant corruption onboard our training ship which was accepted as a fact of life then.

One of the persons I met and admired a lot in those formative years was the father of a batch mate who used to write for The Times of India, but was also known to write under the nom-de-plume "Vox Populi." The batch mate and I were and are still good friends, and we were also together in charge of the recreation room, which meant we had a small budget for cadet's welfare activities. Traditionally, this budget was used totally by the then captain superintendent, one Capt Inderjeet Singh "Plaan", for his personal entertainment requirements, which included throwing parties onboard for his friends, as well as buying boxes of sweets which he despatched to film stars—we know because we delivered them.

Even then, I wrote what I felt was correct, and never really learned my lessons in more ways than one. A particularly strong article on the state of affairs pertaining to the rancid and putrid food onboard and the mis-utilisation of the rec-room budget saw the end of my tenure at Porthole; but I got my own back by motivating an evening newspaper in Mumbai to publish something similar. Of course, that article was suitably toned down, and I learnt not to get upset at blue pencils used by editors.

That got me into even more trouble, and along with yet another batch mate who was involved in getting this published "ashore", was suspended, and we had the honour of seeing how our batch mates organised a successful hunger strike, which among other things resulted in us getting re-instated. It was subsequently known as the First Mutiny in the history of the Training Ships. It was also the last. No management wanted the bad publicity a hunger strike can bring to an organization, especially if the strikers are correct on fact and have mass support.

While a career in the Merchant Navy in those days did not give much opportunity to write other than log books and accident reports, it certainly gave some of us an opportunity to read a lot. This was the socialism era in India where books were very controlled and very expensive. I remember going ashore at places like Vancouver BC, Liverpool, Sydney, Perth, Seattle and San Francisco/Oakland, searching public libraries, junkyards and churches, meeting wonderful people there who would simply give us cartons full of old books and magazines which they would not just present us with, but also provide pick-up trucks by which to take them back on board ships.

The typical way of saying ‘thank you’ was to invite them on board for an Indian meal; and this was in the ’70s, when many of them had not seen or heard of basic Indian food like dal, roti/chawal, subzi and meat curries, and more. Cooked and served by top-class Goan Catholic cooks and who would throw in Raj-era desserts like bread-butter pudding and fruit custard, again exotic stuff for these gentle souls. Interacting with people like this in their day-to-day lives, on return invites, gave many of us our first exposure to the absence of basic corruption in day-to-day life, again, another revelation for us. That's truly how simple we were in those days.

What was acceptable baksheesh or grease/speed money for us, was unacceptable for them. Of course, we did not understand the basic concept of large-scale corruption then, the fact that we could challenge our government and those who ruled or governed us, with the charge that it was not their right to steal from their own people, was considered not just heresy, but anti-national. There was no media which could ever say this. You went to jail, probably even today you could end up doing so, if you said that a customs officer or immigration officer at the Indian ports we visited was corrupt. Here again, I know that when I caught a customs officer by the name of Mr Kanungo, stealing from my ship in Paradeep, in the summer of 1978, the only reason I managed to escape not getting thrown from lock-up into jail was because my uncle used to play bridge with the collector with faraway Bhubaneshwar in those days.
On the other hand, I had enough friends and batch mates who were routinely at the receiving end of blatant corruption, whenever our ships visited India. They were physically assaulted, treated like thieves, and their personal possessions were pilfered. This was uniformed piracy in India—we saw it as cadets, and we lived with it. In contrast, the petty thieves who tried to board our ships to steal minor items, had some honour. When a particular incident involving the theft of personal possessions, including some of my service documents, took place in Vizag in 1976, I was invited to a bar by the fence who dealt in pilfered items from ships to reclaim what was mine, for he realised it could damage and delay my career if my documents went adrift. He then also bought me a beer. This was just like the bandits outside a particular bar in Rostock (East Germany), in 1979, flashing huge bayonets, when they learned we were from India—Raj Kapoor and Eechuk Daana saved our skins—though they subsequently offered to become our trading partners for some more organised crimes.
Shippies were and are even today, by and large—especially the ones still sailing—simple souls, who have learned how to co-exist with whatever the environment throws at them. And that, as we all know, is bad weather with good, which, of late, involves a lot more of the bad, especially in the Indian Ocean, especially where it relates to piracy, criminalisation of seafarers going about their legitimate duties and the added reality of terrible fatigue. Let us call them “distressed”, which is also a maritime term, used very often for similar situations.

Over the last few years, I have had more than a few opportunities to interact with distressed seafarers or their even-more distressed families. Of late, that includes those who have suffered at the hands of pirates, and other forms of illegal detention. Here are a few cases which I know about personally. In all, except two, full names and identities have to be totally protected.

# The master of a fairly large container ship was boarded by the coast guard of a north American country in international waters. Once stopped, his crew was lined up at gunpoint, while their cabins were searched and ransacked. The behaviour of the uniformed personnel from the coast guard ship was more than brutal. They broke open some of the containers, took what they wanted, and then told the master that if he lodged a formal complaint, then they would get him in the next port.

# A large general cargo ship carrying arms and ammunition legitimately, under proper manifests, from a European port to an African port, was stopped off the coast of another European country. The ship was then forced to enter a port, after which the master was put in jail, and the crew detained on board. After a few months, the owners came and resolved the issues, got a new master to sail the ship out, while this master had to fend for himself. He was then released after a few months, came back home, and was unable get a job.

# The master of a large ship was jailed along with his junior officer on charges of colliding with a fishing boat in the Far East. Held without proper trial, he spent seven years in jail, and was finally released after immense media pressure. When he came back, his wife had left him, and he had to start life all over again.

# More recently, the seafarers released from two ships that were under captivity (for almost a year in one case) have been making public appearances, within the seafaring community. One has spoken out in the mainstream media, but the rest refuse to be quoted or photographed, beyond neutral statements, since they are worried that not only will the pirates or their associates track them down, but that the Indian authorities will also harass them.

# The owners of a tug heading from India for the Red Sea, asked for "help" from the authorities to "persuade" the Indian seafarers onboard to sail. The seafarers on board, who technically have the option to refuse to sail in piracy-infested waters, were told in no uncertain terms that their certification, which is due for renewal every five years, would be looked into. They sailed.

# One specific youngster, who had spent months on board, related tales of assault and torture which made anything else sound like a vacation. The worst was being made to strip, being hogtied, and then having your private parts exposed and burnt.

# Another senior person ashore told me how in the case of one ship, the insurance company had agreed to pay the ransom, but the confusion purposely created between various other entities (despondent owner, beneficial owner, actual owner, registered owner, vessel charterer, cargo interest/receiver, "consultants", negotiator and others) kept spoiling the whole sequence.

All this, and more, but this is a finance magazine. So this is what the numbers are about. The ship and the cargo on board have a particular value. The captured souls on board are colateral, of lower
value, but also need to keep the ship and cargo in good shape for whenever it is released. The captured souls are also on board, as live protection against attack, which is increasingly not a major consideration, especially if the ship is anchored within territorial waters of the pirate country.
All this and more, but no solutions. My seafarer friends are organising demonstrations, petitions are being presented, statements are being made and, meanwhile, more ships are being captured, more seafarers are being brutalised, and Indian seafarers especially are being selected for special mis-treatment. The real action, as always, takes place elsewhere.
What can the Indian government do? Here are a couple of things to start with.


Here are the latest reports. Do not miss the photographs.

Somaliland delegation receives Indian Ambassador to UAE

Somaliland delegation in the UAE meets Indian Ambassador to the UAE + PICS 
This link gives an idea of what happens. The territory known as "Somaliland", or "O'Gadenia", or simply "NFD", sent a delegation to the UAE, which met with the Indian Ambassador to the UAE. The meeting took place in what appears to be, of all things, an open hotel lobby. That pretty much spells it out as far as official diplomatic channels are concerned. How does India negotiate or run diplomatic moves in such cases? We have very adept and well-meaning diplomats, the best of the best from the IFS and others, but who and what do they go and negotiate with?
These are the operative rules under which Indian seafarers work on foreign ships, over and above the Merchant Shipping Act (MSA), called the "Recruitment & Placement of Seafarers Rules, 2005" (RPS).

The less said about the Ministry of Shipping and its subordinate office, the Directorate General of Shipping, in such cases, the better. The RPS appears to be designed to eliminate accountability from the hands of the agencies and shipowners they represent, and in parts is contrary to the better-drafted and sensible MSA. Of course, there are exceptions within agencies, and some of the better companies do a fantastic job, simply because they have a reputation and name to protect. But there are ample fly-by-night types also, and there is nothing to keep them in check under the RPS.

Truth is in numbers, in black and white, and the RPS dealing with such situations spells it out. For example, RPS places the value of a seafarer on board, in case of distress, at just about Rs10,000 per person. RPS happily ignores the simple fact that ownership of foreign ships operating under flags of convenience or open registers (nearly 95% of foreign ships that have Indians) is hidden behind tax-haven secrecy, and, therefore, is not traceable even in the best of circumstances. In case of an accident, these companies just vanish, or place nil-liability fronts in position. Most of the RPS companies working in this business are in some way or the other beholden to the Directorate General of Shipping (DGS), with plenty of family members working there, just like the recently popular Directorate General of Civil Aviation (DGCA). The training and examination system is a brilliant mess, again, like at the DGCA. Accusations of corruption abound, and are hushed up, repeatedly.
To expect the DGS to be able to do something for Indian seafarers under the RPS is impossible—their hands are tied with their own rules, regardless of how well-meaning some of these people at the DGS are, and some people there are my contemporaries, fine human beings otherwise. (Like Dr Manmohan Singh, and we know the hole the 2G mess has landed us in, despite all the rules.)
The Indian Navy is also doing a great job, especially in support of Indian flag ships, in a variety of ways. Many of these cannot be discussed here. However, every ship sailing in and around the Indian Ocean area cannot have an Indian Navy ship as escort all the time; it is just not feasible. Hats off to them too.

The intelligence agencies are expected to work their back channels, often through religious entities as well as traders in the area. There is a big problem here—both these channels are currently considered to be too close to the pirates in that part of the world. The finance ministry could try and work through the banking channels, especially since the international banks involved in the money flow here are now well known. The problem here is that these very banks are considered to be too close to the powers that be, especially in the current scam tainted days.

The Indian insurance industry could try to work with its counterparts abroad, especially in the marine and re-insurance businesses. But here again, GIC is not known for being pro-active, and in any case, this whole thing simply means more business for them.

The home ministry could try to use the emigration/immigration departments to try and curtail seafarers going out to work on illegal non-RPS vessels, but that is like shooting in the dark. Both the Ministry of Overseas Indians as well as the Ministry of Labour, it appears—from their pronouncements—that they do not have a clue.


This is, at the end of the day, the most important and effective channel. And this is also, by the very nature of the beast, also the most opaque and difficult channel. In many cases, the dividing line between pirates and some shipowners—by way of their antecedents—are so grey, that it is difficult to tell one from another. Likewise, in many cases, the owners have simply abdicated all responsibility, leaving the seafarers on board to their own devices. Big or small has nothing to do with this, some of the bigger shipowners were pirates when they started out, and are hardly any better now. A good, recognised shipowner, operating from a flag of his home country, for example, will, on the other hand, have his options ready in advance, and sort matters out rapidly. And that is a separate subject, which impacts more the future.

For now, we can only hope that diplomatic initiatives as well as back-channel methods work in getting those already stuck there, out. That's about as short and clear as it gets.



p k

5 years ago

dear mr malik

another great and very informative article.
i wonder why and to whom i am payng tax, when the dylight robbery is happening.

in india everybody aND EVERYTHING IS FOR SALE. very furstrating.

what moral do th seafareres wd have and what leagcy are we leaving for the next generation i always wonder.
we are the most hypocrite people in the world.

anuroop chauhan

5 years ago

Very well written. I am a seafarer too from 80-81 batch. We just lost a batchmate to Somalian Piracy.



In Reply to anuroop chauhan 5 years ago

Anuroop please get in touch with me or give me a contact bearing and distance. Thanks. aAA


In Reply to anuroop chauhan 5 years ago

Dear Anuroop, thank you for writing in and very sorry to hear about the batchmate you lost. Please join the move to address the larger issue.

rgds/Veeresh Malik

Parvinder Bhatia

5 years ago

Very nice article with true facts and depth.



In Reply to Parvinder Bhatia 5 years ago

Thank you, Bhatia ji, for your comment.

As far as seafarers being sent to the mouth of piracy is concerned, there is complicit corruption which is one thing - and then there is outright being accomplice in murder and kidnap which is what DGS - RPS companies and others are party to.

That needs to be stressed. Make the DGS an accomplice in an FIR on kidnap in such cases where RPS companies have sent people to ships which are not provided with proper BMP3 protection as well as the enhancements like electrical barbed wire, armed guards, proper citadels, proper insurance - enough of this petitions and begging outside DGS. File an FIR in the town where the seafarer comes from, and implicate the officials.

RBI governor meets FM ahead of credit policy

It is widely believed that the central bank, in its annual credit policy, might increase short term lending (repo) and borrowing (reverse repo) rates by around 25 basis points

New Delhi: Amid concerns over high inflation and the possibility of a hike in key policy rates, Reserve Bank of India (RBI) governor D Subbarao today called on finance minister Pranab Mukherjee to discuss the state of economy ahead of the apex bank’s monetary policy next week.

"As a standard practice I had come to review the macro economic situation with the finance minister and senior officers ahead of the policy review,” Mr Subbarao told reporters after meeting Mr Mukherjee.

The RBI is scheduled to announce its annual credit policy on 3rd May in Mumbai during which it is widely believed that the central bank might increase short term lending (repo) and borrowing (reverse repo) rates by around 25 basis points.

The apex bank has increased these rates eight times since March 2010 to tame price rise.

The central bank faces a challenging task of managing the inflationary pressure at a time when the industrial growth has started showing signs of lagging.

On whether he anticipated high inflation to impact economic growth, Mr Subbarao said, “We will answer these questions on 3rd May.”

The headline inflation for March at 9% breached the RBI’s projection of 8%. This is much higher than the comfort zone of 5%-6%.

The government expects India’s gross domestic product (GDP) to expand by 9% in the current fiscal.

Factory output, as measured by the Index of Industrial Production (IIP) slowed to 3.6% in February 2011, compared to 15.1% expansion in the year-ago period.


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