Indian Bonds Advance as Growing Cash Supply Seen Boosting Demand

 India's 10-year government bonds gained, pushing the yield down from a two-week high, on speculation a growing cash supply will boost demand.
The overnight interbank borrowing rate has averaged 7.68 percent this month, compared with 8.12 percent in July. That’s less than the Reserve Bank of India’s key repurchase rate of 8 percent. Lenders’ overnight borrowings from the RBI to meet shortages have averaged 98 billion rupees ($1.6 billion) in August, from 128 billion rupees the previous month, official data show.
“Easing liquidity conditions are a source of comfort for the market,” said Debendra Kumar Dash, a fixed-income trader at DCB Bank Ltd. in Mumbai. “The market has confidence that the RBI will make sure that the overnight lending rate is close to the RBI’s repo rate.”
The yield on the 8.4 percent bonds due July 2024 fell one basis point, or 0.01 percentage point, to 8.55 percent, as of 10:34 a.m. in Mumbai according to the central bank’s trading system. The rate climbed four basis points yesterday to the highest level since Aug. 12.
Investors are waiting for another increase in the foreign-investment limit for sovereign notes, said Dash. Overseas funds can currently own a combined $25 billion of the debt and are already at 99.2 percent of that, according to National Securities Depository Ltd. data. The central bank raised the cap by $5 billion on July 23 and RBI Governor Raghuram Rajan said Aug. 6 that there was a possibility of increasing it further.
One-year interest-rate swaps, derivative contracts used to guard against swings in funding costs, were little changed at 8.46 percent.

Gold premiums widen as jewellers stock up in anticipation of festival demand

Gold premiums, or prices charged by suppliers in excess of the gold rate, have increased to $8-11 an ounce from $3-4 since early last week, as jewellers stock up on inventory ahead of the festival season amid signs of a gradual pickup in consumer demand, said Sudheesh Nambiath, senior analyst, GFMS Thomson Reuters, a precious metals analytical company. 

Jewellers said that the decline in prices by around $27 an ounce over the past week also helped. Indian gold prices take their cues from the metal's overseas rate as the country imports much of its consumption. 

However, gold rose by 1 per cent to $1,289.06 an ounce as investors assessed the geopolitical impact of tensions in the Middle East and Ukraine.

On commodity exchange MCX, gold was up three fifths of a percent at Rs 27,950 ex-VAT. A stronger rupee limited the domestic rate rise in noon trades. 

Havells India shares surge over 12 pc after stock split

 Shares of Havells India, maker of electrical equipment, soared over 12 per cent post stock-split to touch one-year high in a subdued market today.

The company stock surged 12.18 per cent to Rs 279.70 - 52-week high - on the BSE as against 249.31 (adjusted basis). The stock had closed at Rs 1,246.55 (pre-split) yesterday. 

Havells had announced a stock split in the ratio of 5:1, that is every share with face value Rs 5 will be split into 5 shares of Re 1 each.

The company had in a filing to the BSE on August 11 said it has fixed August 27, 2014 as record date for the purpose of sub-division of equity shares of Rs 5 per share of the company into 5 shares of Re 1 each. However, the split has taken effect today itself.

Stock split increases liquidity of a share as more retail investors buy the share due to its reduced price per share.

ONGC stake sale: Govt selects merchant bankers

Among the bankers include Citigroup and ICICI Securities and the ONGC stake sale is expected to be completed by the end of September.

The Department of Divestment has selected five merchant bankers for managing the 5% stake sale of ONGC through the offer for sale mechanism, according to a media report.
Among the bankers include Citigroup and ICICI Securities and the ONGC stake sale is expected to be completed by the end of September, the report added.
At present, the Government holds 68.94% stake in the company and is expected to raise around Rs. 18,250 crore through the stake sale.
On Monday, 14 merchant bankers made presentations before the Department of Disinvestment. Five legal firms also made presentations, the reports further said.
The CCEA is expected to take up the issue at its meeting on August 27. 

Shree Cement to buy JP Associates cement grinding unit for Rs 360 crore

Shree Cement is acquiring Jaiprakash Associates' 1.50 million tonne (mt) cement grinding unit at Panipat in Haryana, for a total consideration of Rs 360 crore. 

The acquisition is subject to satisfactory completion of due diligence and the cost of acquisition to adjustment for any short term liability and net working capital taken over as on the closing date, the company said in a statement sent across to the stock exchanges on Monday. 

Shree Cement managing director HM Bangur said that the two groups have merely entered into an agreement to buy out the Panipat unit and not take over the company. The deal would get finalized only after the due diligence gets completed within the next two weeks. 

If the deal is clinched, the acquisition will enhance Shree Cement's cement grinding capacity to 21.5 mt per annum and 23 mt by June 2015 from 20 mt now. 

Incidentally, the Jaypee group has been on a debt-reduction spree and is selling most of its cement assets to reduce its debt of Rs 60,000 crore. In September, the company offloaded its Gujarat cement plant to UltraTech Cement for Rs 3,800 crore. 

Asian Development Bank raises $50 million via offshore rupee-linked bonds

The Asian Development Bank has raised $50 million through offshore, rupee-linked, the lender said in a statement on Tuesday. 

The rupee-denominated bonds would be settled in US dollars and would mature in August 2016, the statement said. 


The bonds were sold as part of the Manila-based lender's $500 million offshore rupee-linked bond programme, which aims to deepen India's capital markets, it added. 

Azim Premji set to buy 10% in Manipal Education for Rs 900 crore

India's richest tech billionaire and Wipro  boss Azim Premji is set to invest Rs 900 crore ($150 million) for over 10% stake in Manipal Global Education Services, people directly familiar with the matter said. 

PremjiInvest, the proprietary investment fund of the Wipro chairman, is in the final lap of deal making, which could be announced soon. This will be the single largest investment by Premji, 69, with estimated net worth of $16 billion and broader interests in the education sector. 

Manipal Global, the for-profit education arm of the Bangalore headquartered Manipal Education and Medical Group (MEMG), operates a string of overseas campuses stretching from the Caribbean to Malaysia. India's largest education services company also operates test and assessment centers, skills development platforms and employment exchanges. 

Tech Mahindra rallies over 1%, hits 52-week high on growth outlook

Tech Mahindra Ltd rallied as much as 1.7 per cent in trade on Tuesday to hit its fresh 52-week high of Rs 2348 in trade, after the company said that it expects its digital unit to contribute more than $500 million to revenue by 2015, as the company moves towards its goal of achieving a $5 billion top line by that time. 

Tech Mahindra's digital unit includes also technologies related to network, security and sensors that comprise the Internet of Things, an idea of connecting almost everything online. 

The company, which has targeted growing revenue to $5 billion by 2015, expects 10% of that coming from the NMACS focused unit. Tech Mahindra reported revenue of just over $3 billion for fiscal year ending on March 31, 2014.

Gold ticks up but stuck near 2-month low on firm dollar

Gold regained some strength on Tuesday on bargain hunting but still held near its weakest level in two months as a firmer US dollar and rallies in equities undermined the metal's appeal as an alternative investment. 

Tensions between Russia and Ukraine as well as violence in the Middle East have failed to stir up demand from investors, although some jewellers purchased bullion after prices dropped below $1,300 an ounce. 

Cash gold added 0.22 per cent to $1,279.11 an ounce by 0328 GMT, still not far above a two-month low of $1,273.06 hit on August 21. 

Rupee up 4 paise against the US dollar

The rupee recovered by four paise to 60.52 against the US dollar in early trade today at the Interbank Foreign Exchange market on increased selling of the American currency by exporters. 

The local currency had lost 9 paise to close at 60.56 per dollar yesterday following late profit booking in local equities and fresh dollar demand from oil importers. 

selling of the US currency by exporters, dollar's weakness against other Asian currencies overseas also supported the rupee but a lower opening of the domestic equity market capped the gains.