Govt to issue oil bonds for Rs14,150 cr
New Delhi: To compensate oil marketing companies for selling petroleum products below cost price, the Government plans to issue oil bonds worth Rs 14,150 crore out of a total of Rs28,300 crore to State-owned oil marketing companies by the month-end. The bonds are likely to carry a coupon rate of 7.5-8 per cent.

The Reserve Bank of India is giving finishing touches to the modalities of the bonds and early next week, another round of meetings is expected between Petroleum Secretary and the Finance Secretary.

Petroleum secretary MS Srinivasan said that he has already met RBI officials on the issue. The Presidential assent to issue these bonds is awaited, he added.

Parliament had earlier approved issue of oil bonds worth Rs14,150 crore as part of supplementary demand for grants.

Srinivasan also said that the Ministry was open to the idea of the Rs14,150-crore tranche being issued in two parts on a quarter-to-quarter basis. The Government had decided to issue oil bonds worth Rs28,300 crore to oil marketing companies to partly compensate them for the losses on retail sales of petrol and diesel.
Back to News Review index page  

Three banks get approval to start PD business
Mumbai: The Hongkong and Shanghai Banking Corporation, Bank of America, N.A. and J.P.Morgan Chase Bank, N.A., have been authorised to undertake Primary Dealer business with effect from August 28 said a press release by the Reserve Bank of India.
The authorisation given to HSBC Primary Dealership (India) Private Ltd, Bank of America Securities (India) Private Ltd and J.P.Morgan Securities India Private Ltd, as Primary Dealer, has been withdrawn, according to a release.
Back to News Review index page  

Rupee falls against dollar
Mumbai: The rupee fell against the dollar tracking the movement of other global currencies against the US currency. The rupee opened at 46.55/57, touched an intra-day low of 46.61 but recovered to close at 46.55/56.

Forwards: In the forward-premia market, the six-month premium ended at 1.31 per cent (1.31 per cent) and the 12-month premium ended at 1.29 per cent (1.30 per cent).

Bonds: Bond prices fell on Friday due to profit taking. The announcement of issue of oil bonds was another negative for the market. Dealers said as oil bonds are of shorter maturity, most banks will prefer to buy these instead of Government securities.

Though the market opened higher, a sell off during the day pulled prices down by about 40 paise.

G-Secs: The 7.59 per cent-10 year-2016 paper opened at Rs97.87 (7.91 per cent YTM) and closed at Rs97.5 (7.97 per cent YTM) against the previous close of 97.8 (7.92 per cent YTM). The 8.07 per cent-11-year 2017 paper opened at Rs100.9 (7.94 per cent YTM), touched a low of Rs100.35 (8.01 per cent YTM) and closed at Rs100.46 (8 per cent YTM), against the previous close of Rs100.78 (7.96 per cent YTM).

Call rates: Call rates were at 6-6.10 per cent, unchanged from the previous day's close. In the first three-day reverse repo auction under LAF, the Reserve Bank of India received and accepted 19 bids amounting to Rs18,665 crore and in the second one-day reverse repo auction 16 bids for Rs5,320 crore. There were no repo bids.

CBLO: The CBLO market saw 326 trades aggregating Rs17,440.85 crore in the rate range of 6.15-5.87 per cent.
Back to News Review index page  

NHB to borrow Rs8,600 cr
New Delhi: National Housing Bank (NHB) would borrow Rs8,600 crore during July-June 2006-07 to fund the demand for credit from homebuyers, according to the company's chairman and managing director, S. Sridhar.

He said the bank has adequate capital and does not need to go in for capital increase immediately. NHB has been borrowing funds at higher cost (market rates), with the window for raising low-cost resources through the capital gains tax bonds having been closed.

Sridhar said that the absence of low-cost resources through capital gains bonds has, to an extent, contributed higher net profits, as NHB had to lend at higher rates to maintain margins.
Back to News Review index page  

Forex reserves up $273 m
Mumbai: Foreign exchange reserves rose by $273 million due to an increase in foreign currency assets for the week ended August 18. According to the Reserve Bank of India's Weekly Statistical Supplement, the reserves rose by $273 million to touch $165.367 billion for the week ended August 18.

In the previous week, the reserves had fallen by $701 million to touch $165.094 billion. Foreign currency assets increased by $273 million to touch $158.042 billion during the week. Foreign currency assets, expressed in dollar terms, include the effect of appreciation or depreciation of non-US currencies such as euro, sterling and yen.

Gold reserves remained unchanged at $6.557 billion. The reserve position in the IMF remained unchanged at $767 million.
Back to News Review index page