Bond market can finance infrastructure development; Sebi chief
Mumbai: The growth of the bond market can provide an excellent opportunity to finance infrastructure development, said the SEBI chief, M. Damodaran, at the CII-Capital Markets Summit on Infrastructure Financing in Mumbai. He said while there is a roadmap in place, what is missing is its execution. He said policy issues on corporate debt financing should be ironed out soon.

According to the SEBI chief, cesses could be on the high side if the bond market route is not used for infrastructure financing. In the process one should ensure that there is no artificial segmentation of the market, he added. The SEBI chief also said that there was a need to devise new instruments and products without government guarantees.
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Rupee rises due to dollar inflow
Mumbai: The rupee rose slightly against the dollar due to inflows of the US currency into the market. The rupee opened at 45.91/93 and touched an intra-day high of 45.8750. It finally closed the day at 45.89/90 against Tuesday's 45.92/93.

Forwards: The six-month closed at 1.27 per cent (1.3 per cent) and the 12-month ended at 1.32 per cent (1.31 per cent).

Bonds: Bond prices dropped by about 11 paise on strong selling. Traded volumes on the order matching system were Rs4,350 crore.
G-secs: The 7.59 per cent - 10-year 2016 benchmark paper opened at Rs100.08 (7.57 per cent YTM) and closed at Rs100.04 (7.58 per cent YTM), down from Tuesday's close at Rs100.15 (7.57 per cent YTM). The 8.07 per cent-11 year-2017 paper opened at Rs103.10 (7.62 per cent YTM) and closed at Rs103.04 (7.63 per cent YTM) against Tuesday's Rs103.15 (7.62 per cent YTM).
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Yes Bank plans micro finance subsidiary
Mumbai: Yes Bank is planning to set up a subsidiary for micro finance and had applied to the RBI for permission two months ago.
Yes Bank proposes to set up the subsidiary as a non-deposit taking and specific activity non-banking financial company.

The minimum capital requirement for an NBFC is Rs5 crore. Yes Bank has tie-ups with about 15 MFIs and its total exposure to them is about Rs100-125 crore. The advantages of setting up a separate subsidiary is that the bank can ensure norms for lending and Know Your Customer.
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UTI Bank plans to set up investment banking arm in London
Bangalore: UTI Bank is planning to open an investment banking arm in London to capitalise on the large off shore business for Indian corporates. The bank has sought clearance from the RBI for this venture and would start operations immediately on receipt of the clearance. UTI Bank also proposed to open a branch in Dubai and another Representative office in the same region. The bank was awaiting permission from the UAE central bank.

Besides, it had also made an application to the Hong Kong Monetary Authority for opening a branch in the region. The bank, hopes to grow its assets by at least 40 per cent this financial year. Its growth is supported by large capital raising that the bank took up in the last few months, both in the domestic and in the international markets. UTI Bank has just raised Rs214 crore through perpetual bonds priced at 11.05 per cent in the event of call options not be exercised at the end of 10 years in the domestic market. It had also raised hybrid capital from the international markets.

Despite the high pricing of these forms of capital the bank would end with a net interest margin (NIM) of three per cent. Currently UTI Bank's NIM is 2.75 per cent.

UTI Bank has launched a new subsidiary, UBL Sales Ltd. This subsidiary would market asset products such as retail loans and credit cards of the bank and begin operations in 42 locations across the country. The subsidiary would hire 3500 sales staff and would initially target the banks own customer base for selling these products.
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IFC may invest more in Indian banks
Mumbai: The investment arm of World Bank the International Finance Corporation (IFC) is upbeat on Indian banks and is looking at making investments in Indian banks. This is despite the fact that the bank has had a bad experience in India in the past.
IFC took a hit on its 10 per cent equity investments in Global Trust Bank which failed last year. Its investment in Centurion Bank, where it held 8.5 per cent, had to be written down 90 per cent when the par value of the share was reduced from Rs10 to Re1.

IFC, which invests in both equity and debt of private companies, has a balance sheet size of $17bn with a strategy centred around investing 75 per cent as loans and 25 per cent as equity.
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