As per SEBIs directive, the special trading window will be kept open only from 9.55 am to 10.30 am and transactions done through this separate window will constitute a 'block deal'.

Rupee recovers lost ground
Mumbai: With the easing of month-end demand, the rupee continued its recovery against the dollar closing at 43.86/87, higher than Thursday's level of 44.03.

Forwards market: The 12-month premium closed at 0.58 per cent (0.5 per cent), while the 6-month was unchanged at 0.45 per cent.

G-Secs: The 7.37 per cent 9-year 2014 paper closed at Rs102.42 (6.99 per cent), higher than the earlier close of Rs102.17 (7.02 per cent YTM). The 10.25 per cent 16-year-2021 paper closed at Rs126.06 (7.42 per cent YTM), up from the previous level of Rs125.65 (7.45 per cent YTM). The 7.38 per cent 10-year benchmark closed at Rs102.35 (7.05 per cent YTM) against Thursday's yield of 7.08 per cent YTM.

Call rates: The inter bank rates were at 4.05-5 per cent (4.9-5 per cent).

Reverse repo: In the three-day auction, the RBI received and accepted 45 bids amounting to Rs30,885 crore.

CBLO market: 251 trades for Rs10,608.25 crore, were realised.

Pension fund regulator proposes restrictions on fund investments
New Delhi: In its draft regulation on registration of intermediaries released on Friday, the interim Pension Fund Regulatory and Development Authority (PFRDA) has proposed restrictions on investments of pension accumulations handled by pension fund managers (PFMs). The PFRDA has said that PFMs would be allowed to invest only in a handful of instruments, all of them domestic.

These include equities of companies listed in India and regulated by SEBI, publicly traded securities issued by the central government, traded Indian corporate debt instruments that have been rated as investment grade by at least two rating agencies and loans of Indian micro-finance institutions guaranteed by the RBI.
The permitted equities would have to be part of an index approved by the PFRDA.

The draft regulations has been issued to conform to the wishes of the parliamentary standing committee on finance that had suggested that the broad contours of the regulations governing the implementation of the 'new pension system' should be first put in the public domain prior to the enactment of the PFRDA Bill.

1 September 2005

Finance ministry issues revised guidelines for companies issuing GDRs
New Delhi: As part of the revised guidelines on GDRs/ADRs/FCCBs announced by the Finance Ministry here today, it is now mandatory for unlisted companies that have raised funds from the overseas markets through the Global Domestic Receipts (GDRs) or Foreign Currency Convertible Bonds (FCCBs) route to list on the domestic stock exchanges within a stipulated time frame.

The listing would have to be done within three years of the issuance of GDRs/FCCBs or on making profit in any financial year starting from 2005-06, whichever is earlier.

The amendment to the existing guidelines on GDRs/ADRs/FCCBs aligns them with the Securities and Exchange Board of India's (SEBI) guidelines on domestic capital issues.

For unlisted companies that have not yet accessed the GDR/FCCB route for raising funds overseas, the Finance Ministry has said that such companies would require prior or simultaneous listing in the domestic market while seeking to issue FCCBs/GDRs.

With regard to listed companies, the amended guidelines now stipulate that an Indian company that is not eligible to raise funds from the domestic capital market, including those restrained by SEBI, would not be eligible to issue GDR/FCCBs.

The Finance Ministry has also said that the Reserve Bank of India (RBI) regulations regarding voting rights in the case of banking companies would continue to be applicable to all shareholders exercising voting rights.

Further, the guidelines also stipulate that the Overseas Corporate Bodies that are not eligible to invest in India through the portfolio route and entities prohibited to buy, sell or deal in securities by SEBI would also not be eligible to subscribe to the FCCBs/GDRs issued by Indian listed companies.

As regards pricing of GDRs/FCCBs, the revised guidelines stipulate that the issues should be made at a price not less than the higher of the following two averages - (i) The average of the weekly high and low of the closing prices of the related shares quoted on the stock exchange during the six months preceding the relevant date; (ii) The average of the weekly high and low of the closing prices of the related shares quoted on a stock exchange during the two weeks preceding the relevant date.

The `relevant date' would be the date 30 days prior to the date on which the meeting of the general body of shareholders is held, in terms of section 81 (IA) of the Companies Act, 1956, for considering the proposed issue.

SEBI clears corporatisation of the Hyderabad Stock Exchange
Hyderabad: The Securities and Exchange Board of India has approved the scheme for corporatisation and de-mutualisation of the Hyderabad Stock Exchange Ltd (HSEL).

The scheme, inter alia, provides for the re-registration of HSEL as a company limited by shares, segregation of ownership and management from the trading rights of the members, restriction on voting rights of shareholders who are also trading members, composition of the Governing Board etc.

SEBI, having considered the scheme and on being satisfied that it would be in the interest of the trade and also in the public interest okayed it, according to the HSEL

Rupee slides to 8-month low
Mumbai: The rupee fell against the dollar for the third day in a row touching a new low seen last in December 2004, closing at 44.13/14, against Tuesday's close of 44.02.

Forwards market: The 12-month premium closed at 0.5 per cent (0.63 per cent) and the 6-month premium closed at 0.45 per cent (0.66 per cent).

G-Secs: The 7.37 per cent 9-year 2014 paper ended trade at Rs102.0675 (7.04 per cent), lower than the earlier close of Rs102.08 (7.02 per cent YTM). The 10.25 per cent 16-year-2021 paper closed at Rs125.46 (7.4705 per cent YTM), lower from Tuesday's close of Rs125.50 (7.46 per cent YTM). The 7.38 paper 10-year 2015 benchmark paper was dealt at 7.09 per cent levels (7.08 per cent YTM).

Call rates: The inter bank rates opened at 5 per cent and closed at 4.9-5 per cent (5-5.05 per cent).

Reverse repo: In the one-day auction, the RBI received and accepted 40 bids amounting to Rs25,780 crore.

CBLO market: 245 trades for Rs10,979.75 crore in the rate range of 4.78-5 per cent, were realised.

RBI: T-bills auction 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 the 91-day T-bills was Rs4,000 crore, out of which Rs3,500 crore is MSS amount.

The RBI received 77 competitive bids amounting to Rs10,663.17 crore. The cut-off price was Rs98.72. Of these, RBI accepted 27 bids.

The partial allotment percentage was 32.16 from 18 bids. The weighted average price was Rs 98.73.

The central bank also received and accepted two non-competitive bids amounting to Rs2,863 crore.

The notified amount for the 364-day T-bills was Rs2,000 crore, out of which Rs1,000 crore is MSS amount. The RBI received 65 competitive bids amounting to Rs4,141 crore.

The cut-off price was Rs94.69. Of these, RBI accepted 20 bids.

30 August 2005

Sebi puts C&D schemes of bourses on the fast track
Mumbai: After completing the corporatisation and demutualisation (C&D) process of the country's premier bourse, the Bombay Stock Exchange (BSE) Ltd, market regulator SEBI has now put the C&D process of other stock exchanges (SEs) on the fast track, clearing the C&D schemes of other ten stock exchanges. The process is expected to gain further momentum next week with the C&D schemes of the other remaining bourses being cleared.

On Monday, Sebi issued orders clearing the C&D schemes of the Delhi Stock Exchange Association Ltd (DSE), Uttar Pradesh Stock Exchange (UPSE) Ltd, Hyderabad Stock Exchange Ltd (HSE), Madras Stock Exchange (MSE) Ltd, Madhya Pradesh Stock Exchange (MPSE), Pune Stock Exchange Ltd (PSE), Gauhati Stock Exchange Ltd (GSE), Calcutta Stock Exchange Association Ltd (CSE), Cochin Stock Exchange Ltd (CoSE) and Bangalore Stock Exchange Ltd (BgSE).

As part of the process, these exchanges will have to fulfill two main conditions; providing 25 per cent representation to the brokers/trading members on the governing board of the exchanges and devolving 51 per cent of the ownership with the public, and also those entities who are not the trading members of the exchange.

The regulator is expected to clear the C&D schemes of Ahmedabad, Bhubaneshwar, Coimbatore, Jaipur, Ludhiana, Magadh, Saurashtra-Kutch and Vadodara SEs next week. The clearance of the C&D scheme for the Mangalore Stock Exchange (MgSE) is expected to take a while as its case is pending in the Supreme Court, Sebi officials said.

The exchanges which were set up as companies limited by guarantee will have to convert/re-register themselves to companies limited by shares and demutualise.

Rupee down 20 paise- securities bearish
Mumbai: The rupee crashed to an eight-and-a-half month low against the greenback as rising prices of global crude sparked heavy dollar buying. The domestic currency ended the trade at 43.89, down by about 20 paise from its previous closing of 43.6850/6950.

Forwards market: The 12-month premia ended at 0.6 per cent (0.67 per cent) and the 6-month closed at 0.51 per cent (0.59 per cent).

G-Secs: The 7.37-9 year-2014 paper closed at Rs102.12 (7.04 per cent YTM), down from Friday's Rs102.16 (7.03 per cent YTM). The 10.25-16 year-2021 paper closed at Rs125.50 (7.47 per cent YTM), lower than Friday's Rs125.56 (7.46 per cent YTM). The 7.38-10 year 2015 benchmark paper was dealt at Rs102.10 (7.08 per cent YTM).

Call rates: The inter bank rates remained unchanged at 4.90-5.05 per cent.

Reverse repo: In the one-day auction, the RBI received and accepted 35 bids amounting to Rs22,255 crore.

CBLO market: 214 trades for Rs10,673.25 crore in the rate range of 4.75-5 per cent, were realised.

RBI suggests rationalizing of import tariffs at 10 per cent
Mumbai: According to RBI's annual report, released on Monday, the country's external environment including foreign exchange reserves allows for rationalisation of tariffs with respect to imports and has suggested a single uniform tariff rate of 10 per cent for all imports.

According to the apex bank, the move towards a uniform rate will help simplify customs procedures in line with the best global practices and improve competition as well as exports.

The central bank's report says that the India's merchandise exports have risen at a rate of over 20 per cent a year in dollar terms during 2002-05. However, the country's current account balance has moved from a surplus of 1.7 per cent of GDP in 2003-04 to a deficit of 0.9 per cent in 2004-05, mainly due to a substantial rise in imports.

As per the report, since the capital flows into the country were in excess of the current account deficit, the overall balance of payments remained comfortable. The country's foreign exchange reserves (excluding valuation effects) increased by US$26.2 billion during 2004-05 which, according to the central bank, can finance about 14 months of imports.

While the exports, at $79.3 billion grew by 24.1 per cent, imports at $107.1 billion grew by 37 per cent in 2004-05.

Oil imports at $29.8 billion have shot up by 45.1 per cent in 2004-05, mainly on account of the surge in international crude oil prices in volume terms. However, in terms of growth rate, oil imports slowed to 5.5 per cent in 2004-05 from 10.6 per cent in 2003-04. Non-oil imports excluding gold and silver witnessed a substantial increase at 61.1 per cent during April-May 2005, led by imports of mainly industrial units.

RBI's domestic income falls - earns more globally
Mumbai: The Reserve Bank of India (RBI) has earned more from its foreign and less from domestic investments during 2004-2005.

Increase in the level of foreign currency assets, hardening of short-term interest rates in the US and lower market to market depreciation on securities resulted in higher earnings from foreign sources. RBI's earnings from foreign sources increased to Rs16,979.47 crore (Rs9,103.50 crore).

Domestic income fell to Rs2,048.81 crore (Rs5,220.20 crore) on account of booking substantially higher depreciation in the value of the rupee securities as the yields hardened during the year, lower availment of Ways and Means Advances (WMA) by Central and State Governments, investment of Government of India surplus balances in rupee securities from the Bank's portfolio and earmarking of certain securities to cover the liabilities in provident fund, superannuation fund and encashment of ordinary leave fund.

The net interest income on rupee securities was negative on account of higher depreciation during the year.

RBI's gross income for the year 2004-05 was Rs19,028.28 crore, against Rs14,323.70 crore in 2003-04, an increase of Rs4,704.58 crore or 32.8 per cent. However, net income fell to Rs12,215.27 crore (Rs13,166.14 crore).

Gross income comprises Transfer to Contingency Reserve, which increased to Rs6,125.92 crore (Rs969.47 crore), Asset Development Reserve, which rose to Rs687.09 crore (Rs188.09 crore) and Surplus (profits) transferred to Government remains unchanged at Rs5,400 crore.

Total expenditure declined to Rs6,811.27 crore, (Rs7,762.14 crore), a fall of Rs950.87 crore or 12.3 per cent. Interest payment decreased to Rs1,386.28 crore (Rs1,808.48 crore).

Other liabilities include the internal reserves and provisions of RBI and net credit balance in the RBI General Account. These liabilities declined to Rs1,00,356.27 crore (Rs1,29,929.49 crore) mainly on account of decrease in levels of Currency and Gold Revaluation Account (CGRA). The balance in the CGRA fell to Rs26,906.21 crore (Rs62,283.04 crore), due to increase in level of foreign currency assets during 2004-05 and appreciation of rupee against US dollar and appreciation of dollar against other currencies.

Foreign currency assets rose to Rs5,75,863.66 crore (Rs5,24,865.01 crore), due to net purchases of US dollars from market and interest and discount received, net of revaluation losses.

Investment in Government securities increased to Rs68,476.48 crore (Rs40,179.74 crore). Other assets declined to Rs14,403.57 crore (Rs14,459.77 crore).

These comprise fixed assets, gold holdings in the banking department, amounts spent on projects pending completion and staff advances.

29 August 2005

Revised IPO norms: TCS to seek Sebi exemption on dilution of shareholding
Mumbai: The Tata Consultancy Services (TCS) is planning to seek an exemption from the Securities and Exchange Board of India (SEBI) from offering a 25 per cent shareholding to the public, as mandated by the revised initial public offer (IPO) norms.

Last year TCS had offloaded 15.16 per cent of its equity to the public through an IPO, and now to meet the revised Sebi norms, the company will have to divest an additional 9.84 per cent stake to the public within the next two years.

In 2001, the Sebi had permitted software, telecommunication and media companies to offer only 10 per cent of their total equity stake to the public. The Tata group company was listed on August 25 last year under Clause 19(b) of Sebi regulations.

The regulator's order last week, Friday, revised the book-building norms by removing the discretionary allotment for qualified institutional buyers (QIBs), and made it mandatory for firms to offload a minimum of 25 per cent to public shareholders.

Mutual funds and UTI held 1.31 per cent, banks and financial institutions held 1.18 per cent, foreign institutional investors held 6.11 per cent and others held 6.56 per cent of the total public stake of 15.16 per cent. Others include private corporate bodies, the Indian public, non-resident Indians and overseas corporate bodies.

The initial lock-in period on diluting the promoters' holding in TCS is over with the company's public float being one year old now. The promoters can dilute as much as 64.4 per cent now as there is a three-year lock-in period on 20 per cent promoters' stake.