Product Updates

Run up to monetary policy: Hawkish stance to weaken rupee The Reserve Bank of India (RBI), which is widely expected to maintain status quo during the second bi-monthly policy review on 3 June, but the hawkish stance to the policy is expected to weaken the currency though bond markets may remain range bound The Reserve Bank of India (RBI), which is widely expected to maintain status quo during the second bi-monthly policy review on 3 June, but the hawkish stance to the policy is expected to weaken the currency though bond markets may remain range bound. According to market participants, if the central bank continues to adopt a hawkish stance then it will dim any possibility of a rate cut in the near future, which will affect inflows - a key factor that will decide the direction of the currency. India Inc is clamoring for a rate cut to lift economic activities after GDP growth hit decade low last fiscal. Today RBI governor Raghuram Rajan said in New Delhi that fighting inflat...

Mumbai: Reserve Bank of India (RBI) on Monday authorised three more non-banking finance companies (NBFCs) to open and operate so-called white label automated tellers machines (ATMs) in addition to the four companies allowed earlier. Bangalore based BTI Payments Pvt Ltd, Kolkata-based Srei Infrastructure Finance Ltd and Mumbai-based RiddhiSiddhi Bullions Ltd have been given authorisation to set up ATMs. White label ATMs are mandated to be set up by NBFCs and do not have any bank branding. These ATMs can be used by any domestic debit card holder to withdraw cash, make a balance inquiry, change the personal identification number or ask for mini statements. "The primary objective of permitting non-banks to operate WLAs was to enhance the spread of ATMs in semi-urban and rural areas, mainly tier III to VI areas, where bank owned ATM penetration was not growing," RBI said in a statement on Monday. Earlier, Tata Communications Payment Solutions Ltd, Prizm Payment Servic...

Kotak Mahindra Bank slips after RBI orders to pare promoter stake Kotak Mahindra Bank fell 0.28% to Rs 861 at 11:55 IST on BSE after the Reserve Bank of India ordered the bank to reduce its promoter holding to 40% by the end of September 2014. The announcement was made during trading hours today, 27 May 2014. Meanwhile, the BSE Sensex was down 172.23 points, or 0.70%, to 24,544.65. On BSE, so far 18,000 shares were traded in the counter, compared with an average volume of 71,733 shares in the past one quarter. Trading was volatile on the counter. The stock rose 1.04% at the day's high of Rs 872.40 so far during the day. The stock fell 1.49% at the day's low of Rs 850.60 so far during the day. The stock hit a record high of Rs 950 on 16 May 2014. The stock hit a 52-week low of Rs 588 on 28 August 2013. The stock had underperformed the market over the past one month till 26 May 2014, rising 6.84% compared with 8.94% rise in the Sensex. The scrip had, howev...

With an eye on smaller centres, Sebi ups cash investment limit in MF In a bid to boost investor participation into mutual funds from smaller centres, capital market regulator Securities and Exchange Board of India (Sebi) has allowed asset management companies (AMC) to accept cash investments of up to Rs 50,000. Earlier, cash transaction limit was set at Rs 20,000. Senior industry officials said that increasing cash transaction limit will mobilize funds from beyond 15 cities. "The move will certainly help channelise more savings from smaller towns," said Vikaas Sachdeva, CEO of Edelweiss Mutual Fund. The industry experts also said that deeper mutual fund penetration could even help in curbing the menace of dubious investment schemes, which have become rampant in non-metro centres. "The increased limit for cash transaction is more like offering an additional facility. May not have much of an impact on retail participation but certainly it is a move in the ri...

India is entering a new bull market on hopes of new Govt: Nilesh Shah, Axis Capital In an interview with ET Now, Nilesh Shah, MD & CEO, Axis Capital, shares his views on the market and the investment strategy in the current scenario. Excerpts: ET Now: Well, the BJP offices in Delhi and Mumbai have ordered 2000 kg of ladoos. Are you also ordering the same in Axis Bank? I mean are we in for the biggest party of the season? Nilesh Shah: Yes, if you see the market, currency, equities and fixed income, they have priced in the new government reviving growth in the economy. We have seen the rupee moving significantly since the exit poll. We have seen the equity markets running a little bit ahead of the exit polls and thereafter exit polls, even yields have softened. So yes, it is party time. ET Now: So how does one participate in the party, come at 9:15 and buy, sell before 3:30, make money, go home? Nilesh Shah: If you are lucky, then surely you should do that. I guess ...

Sebi planning to relax some norms to revive primary market Mumbai: The country's capital market regulator plans to relax requirements on just how much of their stake promoters will have to dilute in an initial public offering (IPO) in a move aimed at reviving the primary markets. The Securities and Exchange Board of India (Sebi) is considering a multiple slab system, under which the minimum amount of equity to be offloaded would be linked to the post-issue capital of the company, according to three persons, including a Sebi official, familiar with the matter. At present, all companies with a post-issue capital below Rs.4,000 crore are compulsorily required to offer at least 25% stake in the IPO, while companies with above Rs.4000 crore post-issue capital are required to offer at least 10%. "A number of IPO-ready firms, especially those with market capitalisation (post issue capital) less than Rs.4,000 crore, have stayed away from a listing over fears that they ...

P-notes investment drops to US $31 billion in April New Delhi: Investments into Indian shares through participatory notes (P-notes), a preferred route for high networth individuals (HNIs) and hedge funds from abroad, slipped to Rs.1.87 lakh crore (over $31 billion) in April. According to the latest data released by market regulator Securities and Exchange Board of India (Sebi), the total value of P-notes investment in Indian markets (equity, debt and derivatives) declined to Rs.1,87,486 crore at the end of April after hitting nearly a three-year high of Rs.2,07,639 crore in the preceding month. P-notes, mostly used by overseas HNIs, hedge funds and other foreign institutions, allow them to invest in Indian markets through registered Foreign Institutional Investors (FIIs), while saving on time and costs associated with direct registrations. Besides, the value of P-Notes issued with derivatives as underlying, stood at Rs.1.27 lakh crore at the end of 30 April. However, inv...

Is the equity market running ahead of economic fundamentals? Even before exit-poll numbers are announced, let alone the final election results, BSE Sensex shot up by 650 points to enter into unchartered territory. It was normal to hear market chatter while travelling by mumbai locals on a day the market touched a new high. Queries doing the rounds are - Has the party already begun? Can the Sensex cross 25,000 on the day of the results? Is it too late to enter the market now? If one thought that only gullible retail investors generally turn euphoric around such events, think again. Credit Suisse conducted a survey of 118 fund managers who are betting on India from across the globe on Indian market strategy. More than 70 per cent of the fund managers believe that the Narendra Modi led government would drive an earnings turnaround within a year. While the retail investors travelling by train in Mumbai have a perception that things will improve once a new government comes in, ...

Election results to drive bond market sentiment: Jajoo Bond markets maintained the positive momentum last week as well with benchmark 10 year government bond yields easing by another 6 bps to 8.75%. Spurred by hopes of a decisive mandate in general elections, surge in equity markets to a new lifetime high, igniting hopes of large overseas capital flows and stronger rupee, traders built up huge positions. Strong buying support from nationalised banks for two consecutive trading sessions also helped 10-year yield hit the intra-week low of 8.71% before closing slightly higher at 8.75% at end due to some profit booking. Volatility remains the order of the day yet as underlying concerns of high inflation and global headwinds bring in periodic phases of nervousness. Slight confusion in the ban on exit polls till election results are to be announced on May 16 and subsequent clarification that ban on exit poll is till May 12 only, the end of voting period led to 10 bps volatility in bond yi...

Srei Infra plans to raise Rs 600 cr in FY15 Srei Infrastructure Finance plans to raise Rs 600 crore in FY15 through retail bonds. The first issue will hit the market on Friday. In the first round, bonds will be raised for up to Rs 75 crore with an option to retain over-subscription up to Rs 75 crore. "We would plan to raise a minimum of Rs 600 crore this financial year (FY15) in four tranches, similar to what was done in the last financial year. The objective is to reach out the Srei brand into the retail segment, broaden the investor/lender base and de-risk concentration from bank funding," said Moses Harding, group chief executive officer (liability and treasury management) and chief economist of Srei Infrastructure Finance. According to the investors' presentation, 60 per cent of the overall issue size is reserved for retail investors and the remaining is for institutional and non-institutional investors. The tenure of the non-convertible debentures are thr...