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Market
stabilisation fund mooted
Mumbai: An internal Reserve Bank of India committee
has suggested setting up of a new market stabilisation
fund for excess liquidity management. The fund will issue
debt to complement the stock of government bonds that
the RBI has been running out in its continuous strive
to suck out excess liquidity from the banking system.
The
reports of the internal group on liquidity adjustment
facility (LAF) as well as that of working group on instruments
on sterilisation proposed a slew of new tools to manage
the liquidity overhang on the back of surging inflows
of foreign money into the economy. The RBI is inviting
comments on the proposals till 31 December. The recommendations
include extending the maturity of short-term repos and
reverse repos to one week to have a stronger impact on
the money market and introducing a standing deposit type
facility distinct from banks' cash reserve ratio (CRR)
besides repositioning of bank rate and reduction in interest
rate on CRR.
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Sesa
Goa witnesses sustained momentum
Mumbai: piggyback on the recent firmness in iron
ore prices, the stock of Sesa Goa has been witnessing
sustained momentum on the bourses, says a report. In fact,
the stock has appreciated significantly from a low of
Rs 59.05 on the Bombay Stock Exchange in March to its
current levels of Rs 485 on the bourses. Brokers attribute
the sharp rise in prices to the fact that it is by and
large an illiquid counter. "And given the fund interest
in the counter, sustained buying support on any given
day will push up prices,'' a broker said.
On
their part, analysts maintain that prospects of a further
strengthening in iron ore prices will continue to sustain
interest in the counter. "One plausible reason could
be that with prices firming up, there is expectation of
a hefty increase in prices when the contract comes up
for re-negotiation in financial year 2004,'' Mr Arun Kejriwal
of KRIS said. Sesa Goa, the flagship company of the Sesa
Group, is the country's largest private sector exporter
of iron ore.
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