Rupee falls more
Mumbai: The rupee continued to weaken against the US dollar due to the month-end demand and overall strength of the dollar. The currency opened at 44.60, six paise lower than Thursday's close and touched a low of 44.6925 on good dollar buying by state-run banks and oil companies. The rupee ended trade at 44.65, against the earlier close of 44.5475.

Bonds: Bonds opened firm on the statement made by the Finance Minister that the central bank would intervene to manage liquidity next week. Prices opened about 15 paise higher from the previous close. But towards the second half of trading, dealers squared their position with the RBI announcing the auction calendar. Inflation at 4.28 per cent, higher than the expected 3.96 per cent, was also a dampener.

G-secs: The 8.07 per cent 11-year-2017 paper opened at Rs105.25 (7.35 per cent YTM), touched a high of Rs105.28 and a low of Rs104.99. It closed at Rs105.05 (7.38 per cent YTM), marginally lower than Thursday's close of Rs105.08 (7.38 per cent YTM). The 9.39 per cent 5-year-2011 paper opened at Rs109.8 (7.12 per cent YTM), touched a high of 109.94 and a low of Rs109.58 before ending at Rs109.72 (7.13 per cent YTM), lower than Thursday's close of Rs109.55 (7.18 per cent YTM).

Call rates: Call rates were lower between 6.6 per cent and 6.8 per cent (6.90-7 per cent. Liquidity also improved.

Repo auction: In the three-day reverse repo, under the liquidity adjustment facility, RBI accepted one bid, amounting to Rs70 crore and 18 bids for Rs11,645 crore through the repo window. In the second auction, the central bank accepted four bids for Rs1,385 crore through the reverse-repo and seven bids for Rs1,605 crore in the repo.

CBLO: The CBLO market saw 334 trades, aggregating to Rs21,078.45 crore in the range of 6.25-6.5 per cent.
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Cabinet approves investment in SBI subsidiaries
New Delhi: Cabinet has approved the introduction of legislation in parliament to allow investors to buy more shares in the subsidiaries of State Bank of India, the country's largest bank.

On the news shares in SBI, which owns between 75 and 100 per cent of its seven "associate" banks, jumped 2.8 per cent to Rs974.70, while those of its three listed subsidiaries rose between 5 and 20 per cent — the most allowed for each respective share in a day.

Shares of State Bank of Mysore rose 20 per cent to Rs5,481.40, State Bank of Travancore rose 5 per cent to Rs3,654, and State Bank of Bikaner & Jaipur rose 5 per cent to Rs3,690.55.

Analysts also expect the amendment the act to allow shares to be held without physical certificates, as they are now.

SBI's unlisted associates are State Bank of Hyderabad, State Bank of Indore, State Bank of Patiala and State Bank of Saurashtra.
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Sebi advises banks to dematerialise pledged shares
Mumbai: The Securities and Exchange Board of India (Sebi) has advised all banks to dematerialise shares pledged with them as collateral to prevent fraud. Sebi's advice has come in the wake of detection of fraud by some listed companies, banking sources said.

Sebi has pointed out to the Indian Banks' Association (IBA) that some listed entities obtained duplicate shares, dematerialised them and sold them in the secondary market when the original shares in physical form were still lying with banks pledged as collateral.

The IBA, in a circular, has asked all its member banks to take necessary steps to comply with the Sebi request.

Market participants feel that this move is not enough to counter fraud, as dematerialised shares do not carry a unique identification number. The lack of a unique identity for shares held in the electronic form provided room for deceit, they said. Banking sources said the companies under scrutiny must be ones that were involved in defaults and whose loans had turned non-performing.
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ECGC starts scheme to provide credit risk cover
Mumbai: The Export Credit Guarantee Corporation of India (ECGC) and the Ministry of Commerce have set up a National Export Insurance Account (NEIA) Scheme to provide credit risk cover for medium and long-term high-value projects. This account will eventually have a corpus of Rs2,000 crore.

The cover is meant to benefit project exports with duration of more than five years and in the categories of civil constructions, power transmission, turnkey projects, supply of equipment, telecommunication ventures, services, and investments in overseas joint ventures.

All potential projects that are short-listed by the ECGC will be directed to the Committee of Directions. The members of this panel would include the Secretary of the Ministry Of Commerce, Secretary of the Ministry of External Affairs, the Secretary of the Department of Economic Affairs, the Deputy Governor or ED of the RBI, and the CMDs of ECGC and Exim Bank. The account would be maintained and operated by the NEIA Trust, which will be registered early next week when the scheme will be operational. Claims will be settled through ECGC.
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