domain-b.com : RBI: 12 and 29 year papers to raise Rs.8,000 crore

Of this, Rs5,000 crore will be raised through the sale of 8.07 per cent 2017 12-year paper, while Rs3,000 crore will be raised through sale of 7.5 per cent 2034 29-year paper, said a RBI press release.

Both the auctions will be conducted through multiple price method.
Up to five per cent of the notified amount of the sale of the stocks will be allotted to eligible individuals and institutions as per the scheme for non-competitive bidding facility in the auction of G-Sec for both auctions.

Results will be announced on the same day and payment by successful bidders will be during banking hours on August 12. The stocks will qualify for the ready forward facility.

Market and financial sector chiefs stress need for a deeper debt market
Hyderabad: Chiefs of banks, stock exchanges, depositories, and credit rating agencies have stressed the need to deepen the debt market, especially the corporate debt segment, in order to effectively address the problems of the financial institutions and markets over the next 15 years.

Addressing a symposium at the Indian School of Business (ISB) on Friday, the Crisil Managing Director and CEO, R. Ravimohan, favoured pushing the subordinated debt instruments with more innovative options. These instruments, with longer tenures of up to 15 years and flexible repayment options, were needed to augment funds required for the major infrastructure projects in the country.

Ravimohan was of the view that the repayment capabilities of the infrastructure projects would significantly improve with the availability of long-tenured subordinated debt. Further, such instruments would enable the entrepreneurs to pay back the debt at the earliest.

The NSE Managing Director and CEO, Mr Ravi Narain, said that the current household financial savings at less than two per cent of the total financial market funds were highly inadequate for healthy growth of financial institutions and markets in the country.

Stating that the financial markets were currently growing in isolated boxes, the NSE chief stressed the immediate need for free and smoother flow of assets from different baskets. Towards this, he favoured an integrated regulatory framework comprising regulators of both securities and money markets.

According to the Citigroup-India CEO, Sanjay Nayar, the country's debt market is currently underdeveloped and requires longer tenure bonds. He also favoured the setting up of a project guarantee institution towards infrastructure financing in the country. He said that huge opportunities exist for such debt instruments in the market thanks to its growing household savings levels.

The UTI Bank Chairman and Managing Director, Dr P. Jayendra Nayak, advised the Indian financial services system to improve its technology to aggressively reach out the potential customers across the country instead of focusing only on the urban population.

Not comfortable with the multiple regulatory systems governing the Indian financial services market, he said that such a system would lead to the unhealthy practice of regulatory arbitrage.

Rupee sheds seven paise - securities range-bound
Mumbai: The rupee closed lower at 43.51/52 against the dollar on Thursday, against its Wednesday closing at 43.44.

Forwards market: Premiums were range-bound, with the 12-month premium closing at 0.92 per cent (1 per cent) and 6-month closing at 0.92 per cent (1.03 per cent).

G-Secs: The bond market traded in a range, gaining about 5 paise towards the end of trade, following Bank of England's cut in repo rate.

The 7.55 per cent 5-year 2010 paper closed at Rs103.95 (6.57 per cent YTM), almost unchanged from Wednesday's level of Rs103.90/95 (6.58 per cent YTM). The 7.27 per cent 8-year 2013 paper closed at Rs102.57 (6.85 per cent YTM), down from earlier level of Rs102.47/50 (6.87 per cent YTM). The 7.38 per cent 10-year 2015 benchmark paper was dealt at Rs102.90/95 (6.97 per cent YTM) against the earlier level of Rs102.45 (7.03 per cent YTM).

Reverse repo auction: The RBI received and accepted 56 bids amounting to Rs45,880 crore.

CBLO market: 281 trades were put through in the range of 4.85-5 per cent, for Rs10,944.70 crore.

Rupee firms up - securities decline
Mumbai: The rupee moved up by eight paise on Wednesday closing at 43.44, against Tuesday's level of 43.53/54.

Forwards market: The 12-month premium was at 1 per cent (0.93 per cent) and the 6-month premium was at 1.03 (0.9 per cent).

G-Secs: In the bond market the 7.27 8-year 2013 paper ended at Rs102.47/50 (6.87 per cent YTM), lower than Tuesday's close of Rs102.54 (6.85 per cent YTM). The 7.55 per cent 2010 closed at Rs 103.90/95 (6.58 per cent YTM). The 10-year benchmark was dealt at Rs102.45 (7.03 per cent YTM) against Tuesday's level of Rs102.90 (6.97 per cent).

Call Rates: The inter bank rates closed between 6-6.25 per cent (3-3.05 per cent).

Reverse repo auction: The RBI received and accepted 55 bids amounting to Rs50,610 crore.

CBLO market: 247 trades were put through in the range of 4-4.30 per cent, for Rs8,117.80 crore.

RBI: T-bills auctions fully subscribed
Mumbai: The auctions of the 91-day and 364-day Treasury Bills were fully subscribed, according to a press release from Reserve Bank of India. The notified amount for both T-bills was Rs2,000 crore.

For the 91-day T-bills, RBI received 58 competitive bids, amounting to Rs6,907.50 crore. Of these, RBI accepted 23 bids.

The cut off price was Rs98.69. The cut off yield was 5.32 per cent against 5.49 per cent last time. The partial allotment percentage was 25.56 per cent from 16 bids.

For the 364 day T-bills, RBI received 75 competitive bids, amounting to Rs5,156 crore. Of these RBI accepted 23 bids. The cut off price was Rs94.67. The cut off yield was 5.65 per cent against 5.89 per cent last time.

The partial allotment percentage was 34.34 per cent of 10 bids. The weighted average price was Rs94.69.

Chidambaram: Markets being closely monitored
New Delhi: Finance minister Chidambaram, on Tuesday assured the Rajya Sabha that the price movements in the bourses were being closely monitored. His comments come on the back of a steep rally in the capital markets.

He also said 731 foreign institutional investors (FIIs) have registered with the Securities and Exchange Board of India till June as against 685 as on March 31. The total number of FIIs registered with SEBI as on March 31, 2004 stood at 540, he said.

Chidambaram said the positive FII inflows in the recent past could be attributed to continued economic reforms, strong economic fundamentals, improved prudential and regulatory standards and attractive valuation of companies.

To curb malpractices in trading and to ensure integrity of markets, he said a regular system of weekly surveillance meetings with major stock exchanges - Bombay Stock Exchange and the National Stock Exchange - and the depositories had been put in place.

This has been done to provide a confidential platform for exchange of views on areas of emerging concerns, specific abnormalities and to consider pre-emptive actions and discuss general surveillance issues, Chidambaram said.

FIIs pick up Bank BeEs as limit in key bank stocks is reached
Mumbai: There has been a sudden inflow of funds in the Bank BeEs, a passively managed exchange traded mutual fund scheme tracking the NSE's CNX Banking index, as FIIs have reached the maximum limit in major banks.

Bank BeEs are traded like any other securities on the NSE. It closed the day at Rs437 against the previous day's close of Rs435.75 with 2,028 units changing hands.

In July alone, more than Rs1,100 crore has come into this scheme. The corpus of this scheme increased to Rs1,470.87 crore at the end of July from Rs369.36 crore at the end of June .

Due to the large inflows in this scheme, the total corpus of Benchmark Mutual Fund has increased to Rs1,724.43 crore in July (Rs619.67 crore), a rise of 178 per cent.

The sudden interest of FIIs in Bank BEes has happened as the FIIs reached the maximum 20 per cent limit in key bank stocks such as State Bank of India, Punjab National Bank, Oriental Bank of Commerce and Bank of Baroda and fresh purchase in these stocks cannot be undertaken.

The caution limit has been reached in key stocks, ICICI Bank and Union Bank of India, which are part of the CNX Banking index, which requires FIIs to take RBI permission in order to buy their shares. All these stocks constitute more than 70 per cent of weightage in CNX Banking Index. However, the remaining six stocks in this list have not reached the maximum FII limit.

Rupee drifts lower, bond prices rise
Mumbai: The rupee fell against the dollar on Tuesday ending trade at 43.53/54.

Forwards market: The 12-month premium was at 0.93 per cent and the 6-month premium was at 0.9 per cent.

G-Secs: In the bond market the 7.27 8-year 2013 paper closed at Rs102.54 (6.85 per cent YTM) against the earlier level of Rs102.45 (6.87 per cent). The 10.25 16-year 2021 paper was dealt at Rs125.40 (7.48 per cent YTM) against the previous close of Rs126.08. The 7.38 10-year 2025-benchmark paper was dealt at Rs102.90 (6.97 per cent).

Call rates: The inter bank rates opened at 5 per cent and closed between 3-3.05 per cent.

In the one-day reverse repo auction, the RBI received and accepted 55 bids amounting to Rs44,605 crore.

CBLO market: 249 trades, put through in the range of 2.26-4.10 per cent for Rs8,056.15 crore, were realised.

MFs pump Rs.3,500 crore into debt in July
Bangalore: With the Sensex having touched 7,700, mutual funds have been bullish on debt, having turned net buyers with over Rs3,500 crore being pumped in, according to Securities and Exchange Board of India (Sebi) data in July. On the other hand, till July 28, funds were net buyers of equities to the tune of only Rs50.13 crore.

This is the fourth time in a row in the current fiscal when funds have pumped in more into debt as compared to equities.

April 2005 was the best month when funds were net buyers in debt to the tune of Rs5,034.78 crore, followed by May when it was Rs4,705.43 crore and now July.

Fund managers say that most of the buying in July has happened with debt fund schemes (notably short-term, liquid and floating) investing in CDs (certificate of deposits floated by banks) to the tune of Rs1,500 crore to Rs2,000 crore.

Incidentally, during the last two days of July, banks like ICICI Bank and UTI Bank redeemed over Rs1,000 crore of CDs.

India Inc's investments in quoted securities rise in value
Mumbai: The value of India Inc's investment in the stock market has swelled by Rs17,200 crore over the last 16 months.

The book value of corporate sector's investment in quoted securities was Rs18,808 crore on March 31, 2005. This included a fresh investment of Rs6,000 crore made during the year.

The market value of this investment was Rs31,500 crore in March end this year. Riding high on the bull run in the stock markets, this kitty further appreciated by Rs4,500 crore taking their market value to Rs36,000 crore by July end. However, most of these investments are in group companies.

This study is based on the market value of quoted investment of 705 companies on March 31, 2005. The data have been sourced from Capitaline Plus, the corporate data package maintained by the capital markets.

Tata Steel is the biggest beneficiary of the stock market "boom" with its quoted investments of Rs313 crore appreciating by over Rs 1,900 crore. Tata Steel has investments in group companies such as Tata Motors, Tata Power, Tata Investment and others.

Bajaj Auto is the second biggest gainer of stock markets boom with its market value of its quoted investment rising by over Rs1,470 crore. Bajaj Auto has total investment of Rs4,292 crore, which is currently valued at Rs5,763 crore. The company has invested Rs394 crore in ICICI Bank which is now valued at Rs1,236 crore.

Reliance Industries is the third largest gainers in the list with its investment in group companies appreciating by Rs1,290 crore. Tata Investment raked in Rs1,156 crore through its quoted investments of Rs295 crore.

The company has investment in 21 sectors, with major being banks, cement, chemicals and fertilizers, energy, engineering, automobile, IT, oil and others.

Tata group flagship Tata Motors gained Rs1,011 crore on its investment of Rs431 crore, Grasim Industries, flagship of the AV Birla group, raked in Rs854 crore through its investments of Rs2,243 crore. Tata Chemicals gained Rs731 crore and Hindalco Rs675 crore.