Quake rocks Indonesia, India feels the jitters

Last Updated: Wed, Apr 11, 2012 20:53 hrs

Panic spread across the Indian Ocean after tsunami warnings were issued following two massive earthquakes off Indonesia earlier on Wednesday. 

Fearing a repeat of the disaster that struck the region six years ago, thousands fled the city of Aceh — 270 miles from the epicentre of the first quake. Tsunami warnings were issued in 28 countries, including Indonesia, Australia, Singapore, Thailand, India and Maldives. In India, tremors were felt in Kolkata, Chennai, Bangalore and Patna, among other places.

But nearly four hours after the powerful earthquake first struck, India withdrew the tsunami warning issued earlier. A second round of tremors was felt across metro cities on the east coast at 4.25 pm, but there was no tsunami threat from those aftershocks. A tsunami warning for the Nicobar Islands that was downgraded to an alert was also withdrawn.

With Indonesia being a leading coal exporter for Indian power companies, power stocks were the first to feel the jitters in the stock market. All companies that have exposure to Indonesia saw their stocks getting hit. India Cements, which has a large coal sourcing contract in Indonesia, tanked nearly eight per cent. Power companies like Lanco Infratech, GVK Power and JSW Energy, too, have mine agreements in Indonesia; these stocks were down about 2.5 per cent.

Stocks of Adani Power, a large coal importer, Tata Power and Reliance Power also came under pressure due to their Indonesian exposure. RPower owns three large mines, while Tata Power owns 30 per cent equity stake in major Indonesian thermal coal producers, PT Kaltim Prima Coal and PT Arutmin Indonesia, as well as related trading companies owned by PT Bumi Resources Tbk.

Most of the companies said their operations were safe. “Our mines are in south Sumatra while the earthquake happened in the north, that too 400 km from land. So, the impact will be negligible,” said a GMR spokesperson, echoing the collective sentiment. However analysts predict some disruption in freight traffic in the short term, which has made power investors jittery.

Bajaj Auto, which has operations in Jakarta, said the earthquake had not been felt where its plant was located. "All our employees and assets are safe. The closest dealership to the epicentre in Aceh is at Medan, which is also safe. We are doing a full check with other dealerships in the Sumatra region but expect them to be safe," a company spokesperson said.

Meanwhile, in Chennai and Kolkata, people came out of their homes and work places after they felt the tremors. Offices closed early as a precautionary measure. Even the metro services were stopped in Kolkata, while they continued in Bangalore.

“Following the tremors, as a precautionary measure, we temporarily evacuated our facilities. All our associates and facilities are safe. Our core business continuity teams have been alerted,” said a Cognizant spokesperson.

TCS said it had evacuated some of its buildings in Chennai. Wipro said it had also temporarily evacuated but later resumed work.

A few companies, like Ashok Leyland, which has manufacturing facilities in North Madras near the coast, continued to work.

In Andhra Pradesh, cargo handling operations were suspended for a couple of hours at Visakhapatnam, Kakinada and Gangavaram ports due to the tsunami alert. These areas witnessed mild tremors on Wednesday afternoon. At Vizag port, operations stopped only at the outer harbour where three vessels were engaged in cargo-handling.

Shipping companies seemed unfazed by the earthquake and tsunami threats. Vinay Kshirsagar, CFO, Shreyas Shipping and Logistics Ltd, said, "Whenever a ship calls on a port, the local port authority conveys a weather report to the ship. Therefore, the crew know exactly what is going on. Also, in the likelihood of a calamity like a tsunami, alert messages are sounded."

An official from the Shipping Company of India said, "Ships are in regular touch with the ports and are briefed about the weather. If there is a natural calamity like a tsunami, ships stay in high seas."

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