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To: Alex who wrote (25481)	1/6/1999 6:38:00 PM
From: goldsnow	Read Replies (1) \| Respond to of 116791

India Gold-Demand seen undented by duty rise 06:28 a.m. Jan 06, 1999 Eastern By Hari Ramachandran NEW DELHI, Jan 6 (Reuters) - India's decision to increase customs duty on gold imports is unlikely to hit consumption but may hamper progress towards liberalising trade in the yellow metal, trade and industry officials said on Wednesday. ''Gold is price-inelastic as far as consumption and consumers are concerned,'' said Manoj Kapoor of Jindal Dyechem Industries, a leading Delhi bullion trader. ''On Tuesday, despite the domestic prices going up, there was no let-up in demand.'' The Indian government decided on Monday to raise the gold import customs duty to 400 rupees ($9.41) per 10 grammes from 250 rupees. The government said the rise would bring it additional revenue of up to 2.5 billion rupees. Kapoor said genuine importers would be hit by the move as it had now become lucrative for the unscrupulous to smuggle gold. Traders said growth in demand from rural areas on expectations of a good summer crop and the beginning of the wedding season from mid-January would spur buying. ''Consumption of gold is not going to take a hit because of the Indian mentality towards gold...the rural population will still buy gold because it is their only source of saving,'' said a dealer at a foreign bank which imports gold. He said the very purpose of liberalising gold imports was to stop the flow of the metal through unofficial channels, and in that sense, the government's decision was a step backwards. For decades, India had strict controls on gold imports, a policy widely believed to have only encouraged large-scale smuggling. After the country launched an economic reform programme in 1991, it gradually eased controls on gold imports. India also authorised the import of gold by designated agencies, including banks, in October 1997. Experts and officials had said that lowering of tariffs on gold was a step towards current account convertibility. The World Gold Council said the process of liberalising India's gold sector and of moving towards convertibility had been put in jeopardy. D.V. Harish, director of Davanam Exports Pvt Ltd, agreed. ''... imposing this duty now is a very wrong step,'' he told Reuters. The government said that 575 tonnes of gold were imported through official channels in the first 11 months of last year, an increase of around 28 percent over the same period of 1997. Girish Kumar, president of the Chokshi Mahajan (Bullion Merchants Association of Ahmedabad), said the Indian market would maintain its annual consumption growth of 20-22 percent. He said India had consumed around 1,000 tonnes of gold in 1997/98 (April-March), of which about 720 tonnes was imports and the rest was scrap and recycled gold. He expected consumption in 1998/99 to be around 1,200 tonnes. ''Indians had bought gold when the prices ruled at $350 per ounce and are purchasing now when the prices are lower. Consumption can increase but cannot decrease,'' said Sanjeev Garg, a leading Delhi bullion trader. ($1-42.5 rupees) (With contributions from Ahmedabad, Bangalore and Bombay bureaus) Copyright 1999 Reuters Limited

To: Alex who wrote (25481)	1/6/1999 11:03:00 PM
From: goldsnow	Read Replies (1) \| Respond to of 116791

Thursday January 7, 12:41 AM Biggs sees 20-30 pct 1999 US stock mkt correction NEW YORK, Jan 6 - The U.S. stock market is poised for a large correction in 1999, and a U.S. recession seems likely in the years ahead, although the timing is difficult to predict, Morgan Stanley Dean Witter chief market strategist Barton Biggs said Wednesday. "I'm sure at some point in 1999 we're going to have another important leg down (in the stock market). I think from where we are now, it could easily be 20 to 30 percent," Biggs told Reuters Television. Asked about the chances for U.S. recession, Biggs said he did not know whether the downturn would come this year or even next year, "but absolutely there will be a recession." The strategist advised relative investors to underweight Brazil and approach the rest of Latin America cautiously. Financial and economic problems in the region comprise a potential stumbling block for the U.S. economy, he said. "We would be inclined to be cautious on Brazil. The Brazilian stock market is already down a lot, but I don't think an absolute investor has to own Brazil, and I think a relative investor should be underweight Brazil," the strategist said. "I think Latin America becomes a significant problem for the U.S. because of the amount of business and exports and trade we have with Mexico and Brazil in particular," he continued. But Biggs said Japan "has already been to hell and back" through recession, deflation and a domestic bear market, and investments in the country seemed a good value. "Japan is probably the best value in the world ... Japan is selling at a third of the value on price-to-book and price-to-sales as the U.S., for example. So Japan is definitely value, but there is no compelling reason to buy Japan yet," Biggs said. A further rise in the yen, which recently hit a 27-month high against the dollar, poses a threat to Japan, however, he said. "I think if we see the yen really appreciate a lot further and JGB (Japanese government bond) yields go a lot higher, you have to say that's bad for the Japanese economy, it's bad for the Japanese stock market and it's probably bad for the world," Biggs said. "I think the rest of Asia looks very good. I think that Hong Kong and Singapore, for example, look very attractive," he added. Biggs said he was "very optimistic" about Europe over the next two to three years because of the newly unified euro currency. "I believe the euro is going to work. I believe it's going to add roughly half of one percent to Euroland's growth" to about 2.5 percent, he said.