Product Updates

RBI to conduct term repo auctions for Rs 75,000 cr on Friday The Reserve Bank of India (RBI) has decided to conduct term repo auctions worth Rs 75,000 crore on Friday. These will be a 7-day term repo auction for Rs 15,000 crore and a 14-day term repo auction for Rs 60,000 crore. Successful bidders will get the allotment at their respective bids, said RBI. According to the Street the term repo auctions will help to ease liquidity into the system and may ensure that the bond auction for Rs 16,000 crore on the same day is fully subscribed. Thanking you Regards, Rajesh Kumar Kathpalia ¤ SMC Global 17,Netaji Subhash Marg,Daryaganj, New Delhi-110002 Mobile No 9891645052 Email Id: rajesh.ipo@smcindiaonline.com -- You received this message because you are subscribed to the Google Groups "Product Updates for AMC" group. To unsubscribe from this group and stop receiving emails from it, send an email to Productupdatesforamc+unsubscribe@googlegroups...

This Akshaya Tritiya don't buy gold We Indians love gold. It is more than jewellery. It is an investment that helps beat inflation. It is a security that can be pledged in hard times. Getting a loan against gold is much easier than getting a loan against your house or life insurance policies. Our love for the yellow metal pushed up the country's Current Account Deficit so much so that the government had to increase the import duty. The Reserve Bank of India also introduced controls making it difficult to import gold. The price of standard 10 gm gold as on April 28, 2014 was Rs 30,300. Over a one-year period the gain in gold prices has been 10.66%. Over a three-month period the gain is a little over 1%, while over a one-month period it is almost 6% higher. ALSO READ: Gold demand for Akshaya Tritiya likely to be subdued But will the yellow metal continue to give as good returns going ahead? Given that Akshaya Tritiya, when it is considered auspicious to buy gold, is a...

The stock markets are slowly rising in anticipation of the outcome of the ongoing general elections. The Bharatiya Janata Party (BJP)-led National Democratic Alliance is widely expected to form the next government. However, markets have not made big a upmove yet and are probably waiting for the results to be declared. In an interview, Harshad Patwardhan, executive director and head of equities, JP Morgan Asset Management India Pvt. Ltd, shares his thoughts on the present situation in the markets and what he expects in terms of market movement with regards to the possible election verdict. Edited excerpts: Recent data that showed inflation was up and industrial production down, but markets are still moving up. Is there a disconnect between markets and fundamentals? I don't think so. The fact that we are in a situation of high inflation and low growth is well known. It's not a new phenomenon. Clearly, market is looking at what lies ahead. What lies ahead is that cyclical g...

Sebi readying ground for trading new type of bonds Capital market regulator Securities and Exchange Board of India (Sebi) is preparing ground work to launch trading in least four new categories of bonds. These new products include municipal bonds, Sukuk bonds, covered bonds and bonds issued by co-operative societies. According to sources, the regulator is currently in the process of studying the framework for these bonds in the contemporary foreign markets and is examining the structure to be implemented in the domestic market. Sebi has started consultation with various stakeholders and is aiming to launch trading in these bonds in the current financial year. For the first time, the regulator has tasted some success in debt-based exchange traded instruments. Earlier this year, the market watchdog had re-introduced trading in interest rate futures (IRF), for the third time, with an easier framework based on market feedback. IRFs, which is derivative product with govern...

Bonds to find support in current range: Jajoo Fixed income markets maintained the positive momentum of the previous week for most of last week before losing the advantage in the last few hours of Friday to give up all the gains and with benchmark 10 year government bonds yield closing 3 bps higher at 8.88%. Buoyed by strong institutional support and trader interest, bonds continued to rally with 10 year government bond yield hitting an intra week low of 8.81%. However, the release of the minutes of the last technical advisory committee of RBI on monetary policy on Friday afternoon turned around the positive sentiment. As per the minutes, most of the members felt that moderation in vegetable prices drove the recent softening of headline inflation and this was unlikely to be sustained. In their opinion there were clear upside risks  such as suppressed pricing in electricity, fuel items, impact of hailstorms on select food prices, increase in NREGA employment guarantee by 50 d...

RBI clamps down on offshore refinancing SINGAPORE (IFR) - India has taken steps to clamp down on the growing trend among banks to convert rupee exposure into overseas debt in a move likely to trigger a rise in onshore restructurings. In a notice issued on Tuesday evening, the Reserve Bank of India warned that Indian banks should not lend through their overseas branches or issue any kind of credit guarantee to help companies repay their rupee obligations with offshore debt. The notice comes as the RBI is forcing banks to deal with stressed loans by restricting the practice of "evergreening", a common term for refinancing, rather than restructuring non-performing loans. "The amount of non-performing loans in the Indian banking system is grossly understated due to 'greening' of loans," said Sanjay Guglani, CIO of Singapore-based Silverdale Capital. "The RBI notification is a step in right direction to curb the misuse of offshore borrowing by ...

A switch from liquid funds to 'short-term' plans may fetch more: Experts  Many financial advisors are asking their clients to redeem their investments in liquid and ultra-short term bond (USTB) funds, and invest the proceeds in short-term bond funds to pocket better risk-adjusted returns in the next year. "If you have one-year time horizon and if you can take moderate risk, it is time to shift to short-term bond funds," says Lakshmi Iyer, chief investment officer (debt) and head of products, Kotak Asset Management Company. These schemes will benefit from the prevailing high short-term rates, and they may also provide capital gains when the rates starts coming down sometime next year, say experts. Many investors typically use liquid and USTB funds to park their contingency funds. However, they have started investing most of their fixed income portfolio in these funds in the last couple of years due to poor returns and volatility in long-term debt funds. ...

MUMBAI: The Reserve Bank of India could consider selling government bonds for the first time in four years to minimise the impact of heavy inflow of US dollars that have been pouring in on expectations of a stable regime following the ongoing general elections and could come in with greater intensity after the government is formed. The RBI on Monday set a limit of 50,000 crore for sale of government securities in 2014-15 under the Market Stabilisation Scheme (MSS), which was introduced in 2004 to facilitate absorption of excess rupee liquidity in the system. "Right now, it is not needed to issue such (market stabilisation) bonds as the situation does not warrant so," said Anindya Das Gupta, managing director of Barclays Bank. "Expectation on OMOs (open market operations for liquidity infusion) and MSS bonds cannot go in tandem. However, for the rest of 2014-15, if required, the RBI can do it depending on the degree of FII inflows." MSS bonds are special govern...

Limit exposure in high-debt companies ahead of elections, say analysts NEW DELHI: Although benchmark indices are hitting fresh record highs on a daily basis in the run up to election results which are due on May 16th, analysts advise investors to remain cautions of companies which have high debt-to-equity ratio. Investors should focus on companies where the fundamentals are strong and earnings visibility is decent. But that doesn't mean that they should avoid that space completely but the idea should be to limit exposure in high-debt companies. "I advocate a small exposure to these, because with all these companies, the assets are in place, where the utilisation is very low because the economy is doing badly. If the economy starts to pick up and utilisation levels pick up, then the returns could be disproportionate in these," said Jyotivardhan Jaipuria, HOR, BofAML Capital (India). If you look at the enterprise value of these companies, it is very high, but if...

Overnight rates stay firm amid weekly bond auctions Overnight rates stayed firm amid the weekly auctions of government bonds, treasury bills and state development loans, which touched high of 8.9%, according to Clearing Corporation data with the weighted average rate at 8.45%, marginally lower than its previous close. According to market participants, despite the central bank wanting the overnight rates to be aligned with the repo rate, which is at 8%, the rate remained high as liquidity is yet to be infused by Reserve Bank of India (RBI) by open market operations. The street believes if the call rates continue to hover higher, soon RBI will announce liquidity easing steps. In the post-monetary policy conference call with analysts and researchers RBI governor Raghuram Rajan had said that, "As far as the short-term liquidity goes, let me repeat that our intent is as far as possible to try and ensure that the call money rate hugs the repo rate." According to the dea...