Rupee higher against dollar
Mumbai: The rupee gained against the dollar on Wednesday. The Indian currency opened lower at 46.60/62 but ended at 46.47, higher than Tuesday's close at 46.53/54.

Forwards: In the forward-premia market, the six-month ended at 1.19 per cent (1.11 per cent) and the 12-month ended at 1.29 per cent (1.18 per cent).

Bonds: Bond prices rose by around 70 paise reacting to the pause in the hike in interest rates by the US Fed. The traded volume on the order matching system was high at Rs4,405 crore. Dealers said that sentiment was positive also because the Rs9,000 crore auction held on Tuesday was well-bid for.

G-secs: The 7.59 per cent-10 year-2016 paper opened at Rs96.25 (8.15 per cent YTM) and closed at Rs96.50 (8.12 per cent YTM), up from Tuesday's Rs95.99 (8.19 per cent YTM). The 9.39 per cent-5 year-2011 paper opened at Rs106.31 (7.81 per cent YTM) and ended at Rs106.60 (7.74 per cent YTM), against Tuesday's close at Rs106.2 (7.84 per cent YTM).

Call rates: Call rates were between 6 and 6.10 per cent.

Reverse repo: In the first one-day reverse repo auction under LAF, Reserve Bank of India received and accepted 25 bids for Rs29,840 crore and in the second one-day reverse repo auction, 28 bids for Rs11,240 crore. There were no repo bids.

CBLO: The CBLO market saw 235 trades aggregating Rs14,937.65 crore in the 5.88-6.05 per cent range.
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Vijaya bank plans to raise capital
Mumbai: Vijaya Bank plans to raise Rs500 crore of Upper Tier-II capital by October or November this year said Prakash P. Mallya, chairman and managing director of the bank. He said the capital would be used to meet the capital adequacy norms as per Basel-II. The bank's capital adequacy ratio as on June 30 was 11.55 per cent. The bank has already raised Rs250 crore as Upper Tier-II capital. Vijaya Bank expects credit growth of 28 per cent and deposit growth of 18 per cent, he said. The bank expects the low-cost deposits to grow over 40 per cent from 35 per cent.
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Canara Bank to float FPO
Canara Bank is planning to come out with a follow-on public issue by the end of this calendar year. The bank's decision would depend on market conditions, said M.B.N. Rao, chairman and managing director, Canara Bank.

The Government holding in the bank is 73 per cent. Its CAR post-the public issue would be 12-12.5 per cent. Canara Bank plans to raise a total of Rs3,000 crore this fiscal through equity, perpetual debt, Upper Tier II bonds in rupee and foreign currency.
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Bank's borrowing costs rise
Mumbai: ICICI Bank is offering 10.10 per cent on Rs225 crore of triple-A rated perpetual bonds which is much higher than some of the issues by other banks recently.

As against this Kolkata-based UCO Bank, rated double-A, raised perpetual debt in May 2006 at 9.35 per cent while Indian Overseas Bank (IOB) rated double-A+ raised Rs200 crore of perpetual debt in May 2006, with the coupon at 9.15 per cent.

Perpetual bonds are quasi equity and irredeemable as they do not have any expiry date. Investors wanting to exit from perpetual bonds have to do it by selling them in the secondary market. It is the same as encashing investments in normal bonds before maturity. These bonds are considered as core (Tier-1) capital.
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