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Rupee closes firmer - bonds range-bound
Mumbai: The rupee ended firmer against the dollar on Thursday finally closing at 43.70/71, up from Wednesday's 43.73/74.

Forwards market: The 6-month premium was at 0.75 per cent (0.67) and the 12-month premium was at 0.75 per cent (0.73).

G-Secs: The 7.37 per cent-9 year-2014 paper closed at Rs102.02 (7.05 per cent YTM), one paise lower than Wednesday's closing. The 10.25-16 year-2021 paper closed at Rs125.42 (7.47 per cent YTM), lower than Wednesday's Rs125.45 (7.47 per cent YTM). The 7.38-10 year-2015 benchmark paper was dealt at Rs102.10 (7.08 per cent YTM), the same level as on Wednesday.

Call rate: The inter bank rates closed at 4.90-5 per cent (4.90-5).

Reverse repo: In the one-day auction, the RBI received and accepted 39 bids amounting to Rs29,060 crore.

CBLO market: 188 trades for Rs7,159.70 crore, in the rate range of 4.70-5.10 per cent, were realised.
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HDFC's US$500mn bond issue over subscribed - largest ever from India
Mumbai: Housing finance major, HDFC, broke new ground with the issuance of a US$500mn convertible bond (CB), which was subscribed two times. The five-year zero coupon bond, lead managed by ABN AMRO, Barclays Capital, Citigroup and JPMorgan, has a yield to maturity of 4.62% and a conversion premium of 55.6% (or 50% based on a 10 day weighted average).

The US$500mn issue is significant for it is the largest convertible bond ever from India, beating a Tata Motors issue from April 2004. Also it is the largest Asian convertible bond to date in 2005, beating a US$475mn issue by LG Philips. The CB is also the first issuance from India's financial sector following regulatory changes by the Reserve Bank of India this month.

HDFC Chairman, Deepak Parekh noted the bond's significance, saying: "The issuance of these bonds is a landmark event for HDFC and opens up another avenue for Indian financial institutions, including HDFC to raise capital in the international markets. These bonds will contribute to the capital requirements of HDFC and enable it to consolidate its position as the leader in the housing finance market. The offering is part of our continued efforts to diversify our investor base and we are delighted with the response to the offering."

Thus far in 2005 there have been 19 convertible bonds out of India, but only four were larger than US$100mn in size. This deal, at a record US$500mn, represents 26% of total Indian issuance year to date, and 8.7% of Asia ex-Japan convertible issuance.
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Public issue from Central Bank in current fiscal
Mumbai: Mumbai-based Central Bank of India is planning to hit the capital market within the current fiscal. The bank has also said that it plans to bring down its NPAs to below 10% and will also target a balance sheet size of Rs1 lakh crore during the year.

The bank's newly appointed chairperson and managing director, H A Daruwalla said the bank would raise money through an IPO as there would be need for fresh infusion of capital due to Basel-II norms.

The capital adequacy ratio of the bank is 12.15%, as of March 31, 2005, which may erode to the extent of 2-3% with Basel-II norms coming in. This is one of the considerations that compelled the bank to take the IPO route for its capital requirements.

Apart from infusing new capital, the bank's second most important agenda is on the NPA front. Though gross NPA declined to 9.01% as of March 31, 2005 from 12.55% of the previous year, this is an area still remains a matter of great concern, said Ms Daruwalla. "We wish to further lower the NPA level by the end of the current financial year," she pointed out.

The bank has targeted a 20% and 30% increase in deposits and advances respectively by the end of FY05-06 and aims to grow business to Rs1 lakh crore from Rs 90,000 crore in the current fiscal.

The bank also plans to bring 300 branches under core banking solution, which would be undertaken by Tata Consultancy Services.
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DSP Merrill Lynch's Super SIP scheme comes with life insurance
Mumbai: DSP Merrill Lynch Mutual Fund has launched a new product called the DSP Merrill Lynch Super SIP, which offers investors a life insurance cover along with market-linked returns.

Under this facility, investments made through a monthly systematic investment plan (SIP) will allow investors to save regularly with a financial goal in mind, while providing life insurance to cover the likely deficit in savings because of the premature death of the investor.

Under the facility, investors will have two broad options, viz a variable cover, which is available for tenures of 6, 11 and 16 years and a fixed cover, which is available for a tenure of 21 years.

The scheme will provide life insurance up to Rs20 lakhs with no medical check-up, subject to providing a declaration of good health. It also allows a wide choice of schemes under the DSP Merrill Lynch mutual fund equity stable, to invest in.

The schemes where investments can be made are DSP Merrill Lynch TIGER fund, DSP Merrill Lynch Opportunities fund, DSP Merrill Lynch Top 100 Equity fund and DSP Merrill Lynch Equity Fund.

Investors will also have the option of switching among them anytime and any number of times without charge. The introductory offer starts on September 9, 2005 until October 25, 2005.
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CCEA clears capital infusion for Punjab & Sind Bank
New Delhi: The Cabinet Committee on Economic Affairs on Thursday has cleared the infusion of Rs500 crore in the Punjab and Sind Bank (PSB).

It has also permitted the bank to come out of narrow banking and lifted the embargo under the prompt corrective action.

The Government has said that the measure would help PSB reduce its gross and net NPAs to eight per cent and two per cent respectively by March 31, 2008.
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RBI: Govt. stock sale oversubscribed
Mumbai: The auction of Rs6,000-crore 11.90 per cent Government Stock 2007 was oversubscribed on Thursday.

For the 11.90 per cent paper, the notified amount was Rs6,000 crore. The Reserve Bank of India received 154 competitive bids amounting to Rs9,214 crore. The cut-off price was Rs109.59 (5.04 per cent YTM). The RBI accepted 101 bids amounting to Rs5,995.41 crore.

The partial allotment percentage amounted to 24.86 per cent from seven bids.

The amount of underwriting accepted from primary dealers was Rs6,000 crore. The weighted average price was Rs109.63. The RBI also received four non-competitive bids amounting to Rs4.59 crore.
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