Rupee strengthens
Mumbai: The rupee gained against the dollar on Wednesday on FII inflows into domestic markets.

The rupee opened at 46.28 and touched an intra-day high of 46.16 to end at 46.18.

On Tuesday, the rupee had closed at 46.27/28.
In forwards, the six-month premium ended at 1.37 per cent (1.43 per cent) and the 12-month premium at 1.36 per cent (1.39 per cent).

Bonds: Bond prices rise by 15 paise tracking US yields. Dealers said bond prices opened around 20 paise higher over Tuesday's close as the US 10- year paper eased from 4.81 per cent to 4.77 per cent. However, profit booking trimmed some of the gains.

G-secs: The 7.59 per cent - 10 year-2016 paper opened at Rs99 (7.74 per cent YTM), up from Tuesday's close at Rs98.77 (7.77 per cent YTM) and closed at Rs98.97 (7.74 per cent YTM). The 8.07 per cent - 11 year-2017 paper opened at Rs102 (7.78 per cent YTM) and ended at Rs101.89 (7.80 per cent), higher than Tuesday's Rs101.72 (7.82 per cent YTM).

Call rates: Call rates remained unchanged at 6.00 - 6.10 per cent.

Reverse repo: In the first one-day reverse repo auction under LAF, RBI received and accepted 16 bids amounting to Rs18,090 crore while in the second one-day reverse repo auction, 31 bids for Rs18,080 crore were picked up. There were no repo bids.

CBLO: The CBLO market saw 254 trades aggregating to Rs14,218.40 crore in the 5.00-6.10 per cent range.
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SBI to finance M&M tractors
Mumbai: The State Bank of India has tied up with Mahindra & Mahindra to provide finance to the company's tractor dealers. Under the agreement, SBI will offer loans to the dealers at concessional terms. The loan scheme is subject to State Bank of India's credit norms.

M&M said the tie-up providing finance to its dealers is another vital link to the value chain from `factory to farm' and will add fillip to the relationship with SBI. Mahindra Finance is also providing finance to tractor buyers in the rural market.
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KVB plans Rs125-cr rights issue
Mumbai: Karur Vysya Bank is planning a rights issue of 1.79 crore equity shares to raise Rs125 crore, according to a draft letter of offer sent to the SEBI. The bank proposes to issue 1,79,99,784 equity shares of Rs10 each for cash at a premium of Rs 60 per share aggregating Rs125.99 crore on a rights basis in the ratio of one equity share for every two equity shares held (1:2).

The lead manager to the issue is SBI Capital Markets and the registrar is SKDC Consultants Ltd.
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Banks plan strategic alliance
Mumbai: Three public sector banks — Corporation Bank, Indian Bank and Oriental Bank of Commerce — are forming an unprecedented strategic alliance.

The alliance will allow the banks to collectively build loan assets as well as fee-based businesses. They will leverage the combined strengths of their balance sheets, though the pact does not envisage any equity participation.

The combined asset base of the three banks stands at Rs 1,47,079 crore, higher than that of Punjab National Bank, the country's largest nationalised bank.

State Bank of India, the country's largest government-owned bank, has over Rs400,000 crore in assets. The largest bank in the private sector, ICICI Bank, has an asset base of close to Rs200,000 crore.

The plan includes sharing branches, automated teller machines (ATMs) and even employees.

The boards of Corporation Bank and Indian Bank have cleared the proposal while the Oriental Bank board will take up the issue on Friday.

Next, the banks will sign a memorandum of understanding on the strategic alliance covering business, infrastructure and people.

Finance Minister P Chidambaram has been advocating consolidation in the banking sector through mergers. However, he has made it clear that the concerned banks would have to take the decision, and the government would not force any merger.
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Canara Bank to issue Rs500-cr bonds on Sept 15
Mumbai: Public sector bank Canara Bank will come out with a Rs500 crore bonds issue on September 15 to augment its capital base.

The Upper Tier II bonds will have a tenor of 15 years and carry an interest rate of 9 per cent per annum, the Bangalore-based bank informed bourses.

In the form of Promissory Notes, the bonds will have a call option at the end of 10 years. The bond-holders will get 50 basis points more in interest at 11.5 per cent from 11th year onwards if they do not exercise the call option.

The face value of each bond in Rs10 lakh and the tentative date of opening and closing of bonds issue is September 15, it said.
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