Tag: BSE

BSE Tech gets RBI in-principle nod to set up, operate Trade Receivables Discounting System, BFSI News, ET BFSI

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Leading bourse BSE on Tuesday said its arm BSE Technologies Pvt Ltd (BSE Tech) has received in-principle approval from the central bank to set up and operate Trade Receivables Discounting System (TReDS). The TReDS business of BSE will commence only after the receipt of final approval and certificate of license from the RBI, as per a release.

TReDS is an electronic platform for facilitating the financing / discounting of trade receivables of micro, small and medium enterprises (MSMEs) through multiple financiers.

These receivables can be due from corporates and other buyers. The TReDS platform will bring all the participants together for facilitating uploading, accepting, discounting, trading and settlement of the invoices/bills of MSMEs, the release added.

“With the in-principle authorisation provided by RBI to set up TReDS, BSE Tech will now have the capability to provide an option to MSME to manage their working capital more efficiently through the TReDS platform,” said Ashishkumar Chauhan, MD and CEO of BSE.

BSE Technologies works for e-enabling the businesses in financial services sectors and is a provider of IT solutions with a focus on commodities, banking and financial services markets in India. PTI SRS BAL BAL



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Seeing early signs of rising private investments, says BSE Chief, BFSI News, ET BFSI

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Structural reforms along with Centre’s high capital expenditure has triggered private investments to flow into the economy, said the chief of the Bombay Stock Exchange (BSE).

In a conversation with IANS, BSE MD and CEO Ashishkumar Chauhan pointed out that macro-economic growth indicators have painted a healthy picture of the economy which coincides with the accelerated pace of India‘s vaccination rate.

“With the Indian government putting focus on structural reforms and capex, we are seeing early signs of increase in private investments.”

“That coupled with monetary stimulus provided by RBI aimed at boosting growth is only going to help India remain amongst the fastest growing economies in the world.”

According to Chauhan, India’s economy has recovered more strongly than it was halted by the pandemic.

“The economic toll from a deadly second wave of Covid-19 outbreak in India last quarter wasn’t as bad as feared, with the nation still very much on track to achieving the world’s fastest growth this year.”

“High-frequency data showed the impact of pandemic restrictions were less severe than last year, enabling demand to recover quickly in the consumption-driven economy.”

The optimism over India’s economic rebound pushed the benchmark S&P BSE Sensex above the 60,000-mark.

New investors along with healthy inflows of foreign funds and receding impact of Covid 2.0 have been cited as the key propellants of the equity market.

Besides, he expects the localised approach to contain the second Covid wave would continue to allow majority of business activities to continue and cushion the economic blow.

“The economic indicators clearly suggest that the Indian markets shall continue to perform well in in the coming days and achieve newer, greater milestones as we move forward.”

Furthermore, he said the pandemic has led in new market participants in the country.

“During the pandemic, we observed that the markets provided liquidity for investors in the worst of times. The government did not force the markets to close which allowed people who were in need of funds to sell their assets like stocks or mutual fund units, collect their money, use it for other purposes and that would not have been possible if we had closed down the markets.”

“Also, another reason is the rapid digitisation of processes that occurred during this time, it has made the investment process much easier for new comers and veterans alike.”

Recently, the BSE crossed the 8 crore Registered Investor Accounts (UCC).

The journey from 7 to 8 crore users took only 107 days making it the fastest addition in the history.



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Analysts, BFSI News, ET BFSI

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The RBI interest rate decision, macroeconomic data and global trends would dictate the equity market, which is showing some signs of correction after a stellar run, this week, analysts said. Besides, investors will also track the movement of the dollar index and US bond yields this week, they said.

“The market will have an eye on the global data to get further direction. On the domestic front, we don’t have many negative cues but it will be important to listen to the commentary of RBI governor in the upcoming policy scheduled on 8th October where what he says about inflation will be important,” said Santosh Meena, Head of Research, Swastika Investmart Ltd.

On October 8, TCS will announce its Q2 earnings, Meena said.

The movement of the dollar index, US bond yields will also play an important role in the direction of global markets while crude oil prices will have a major impact on Indian markets, he added.

“This week, the RBI is scheduled to announce its monetary policy. India’s service PMI is also due to be released this week,” Vinod Nair, Head of Research at Geojit Financial Services said.

During the last week, the 30-share BSE benchmark plunged 1,282.89 points, or 2.13 per cent. Market benchmarks faced losses for the fourth straight session on Friday.

Markets would also track movement of the rupee, Brent crude and FPI investments.

“The September correction in the US markets does highlight some developing risks – a surge in global inflation, oil and commodity prices, rising interest rates, Fed taper and the recent developments on the China front – which could create intermittent disruption in investor sentiment.

“Indian markets are currently richly valued and therefore not immune from some of these headwinds. However, given the strong earnings outlook trajectory, any meaningful correction in the equity markets can serve as an entry opportunity for long-term investors with a sufficiently long investment horizon,” said Unmesh Kulkarni – Managing Director Senior Advisor, Julius Baer India.



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BSE ready with technology for launching electronic gold receipts, BFSI News, ET BFSI

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New Delhi: Leading stock exchange BSE is ready with its technology to introduce electronic gold receipts (EGRs) on its platform, which will help in creating uniform price structure of the yellow metal across the country, its chief business officer Sameer Patil said on Sunday. The exchange will take the required internal approvals and apply to markets regulator Sebi for the launch of the new class of security on its platform, he added.

This comes after the Sebi board on Tuesday cleared a proposal for gold exchange, wherein the yellow metal will be traded in the form of EGRs and will help in having a transparent domestic spot price discovery mechanism.

Currently, India allows trading only in gold derivatives and Gold ETFs, unlike several other countries which have spot exchanges for physical trade in gold.

The instruments representing gold will be called Electronic Gold Receipts (EGRs) and it will be notified as securities.

EGRs will have trading, clearing and settlement features akin to other securities that are currently available in India.

“BSE, which is well known for its technological prowess, has been the main proponent of creating a transparent and efficient spot market for gold as it is very important commodity for Indian consumers,” Patil told PTI.

He, further, said the exchange was preparing the technology for very long in this market and was awaiting for the in-principle approval for the same to take it further.

The exchange had made several presentations to government and regulators on how the process will work. How the participants of various types including banks, vaults, wholesaler, retailer, importers, exporters etc will participate in this ecosystem.

According to Patil, like shares, these EGRs will be held in demat form and can be converted into physical gold when needed.

To enable trading in physical gold, EGRs (backed by physical gold) will be traded and settled on stock exchanges.

Patil said that the entire trading will be done in three tranches that include conversion from physical gold to EGRs, trading of EGRs and again conversion of EGR back to physical gold.

To begin with, BSE may plan to launch EGR of 1 kg and 100 gm denominations and the same can be converted to physical gold. To attract retail investors, EGR with smaller denominations of 50 gm, 10 gm and 5 gm will also be launched in a phased manner.

The source of supply of the physical gold to be converted into EGR will be the fresh deposit of gold, coming into the vaults, either through imports or through stock exchanges accredited domestic refineries.

A client can also convert physical gold to EGR by depositing physical gold at the designated delivery centre. Exchanges will empanel Vault Service Providers (VSPs) based on guidelines prescribed by Sebi.

Similarly, clients can redeem EGR’s back to physical gold, and the process is complete. An interface will be developed between the vault managers (of physical gold), depositories (that hold EGRs in demat) and stock exchanges and clearing corporations that clear the trade.

The move is expected to reduce the existing market inefficiencies that exist in bullion trade and may act as a bridge in integrating spot gold trade with derivatives markets and create a transparent platform for bullion trading.

In addition, a single point trading for both spot and derivatives would provide scale, liquidity and better pricing for all market participants by bringing down cost and cycle time significantly.

Moreover, trading in EGRs will contribute to the existing programs for gold monetization such as Gold Monetization Scheme (GMS), Gold Bonds and Gold Deposits.

In union budget 2021-22, Finance Minister Nirmala Sitharaman announced setting of a gold spot exchange and Sebi will be the designated regulator for the proposed gold exchanges.



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Aditya Birla Sun Life AMC IPO fully subscribed on Day-2, BFSI News, ET BFSI

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The initial public offer of Aditya Birla Sun Life AMC Limited was fully subscribed on the second day on Thursday. The Rs 2,768.25-crore initial share sale received bids for 2,99,46,460 shares against 2,77,99,200 shares on offer, translating into 1.08 times subscription, according to an update on the NSE.

The qualified institutional buyers (QIBs) category was subscribed 6 per cent, non-institutional investors 40 per cent and retail individual investors (RIIs) two times.

The initial public offer is of 3,88,80,000 equity shares.

The initial share-sale is entirely an offer for sale, wherein two promoters — Aditya Birla Capital and Sun Life (India) AMC Investments — will divest their stake in the asset management firm.

The price range for the offer is Rs 695-712 per share.

Aditya Birla Sun Life AMC on Tuesday said it has collected Rs 789 crore from anchor investors.

Aditya Birla Sun Life AMC Ltd, the investment manager of Aditya Birla Sun Life Mutual Fund, is a joint venture between Aditya Birla Group and Sun Life Financial Inc of Canada.

Asset management firms like Nippon Life India Asset Management, HDFC AMC, and UTI AMC are already listed on the stock exchanges.

Kotak Mahindra Capital Company, Bofa Securities India, Citigroup Global Markets India, Axis Capital, HDFC Bank, ICICI Securities, IIFL Securities, JM Financial, Motilal Oswal Investment Advisors Limited, SBI Capital Markets and YES Securities (India) are the managers of the offer. PTI SUM BAL BAL



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Indiabulls Housing Finance sells stake worth Rs 251 cr in OakNorth, BFSI News, ET BFSI

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Indiabulls Housing Finance has sold stake worth Rs 251 crore in OakNorth Holdings, and the proceeds from the sale will be added to its equity capital, according to a regulatory filing. “Indiabulls Housing Finance Ltd has sold a portion of its stake in OakNorth Holdings Ltd (the wholly owning parent company of OakNorth Bank plc) for approximately Rs 251 crore.

“The sale proceeds will be accretive to the regulatory net worth and the CRAR (capital-to-risk weighted asset ratio) of the company and will be added to the regulatory equity capital of the company,” Indiabulls Housing Finance said in a regulatory filing on Friday.

During the same month last year, the company had sold stakes in the UK-based OakNorth in two portions, and raised Rs 1,070 crore.

OakNorth Bank was launched in September 2015, in which Indiabulls Housing Finance had invested Rs 663 crore in November 2015 for a 40 per cent stake in the bank.

Shares of Indiabulls Housing Finance Ltd on Friday closed at Rs 225.70 apiece on BSE, down 1.76 per cent from the previous close. PTI KPM HRS hrs



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RBI streamlines process for redressal of complaints related to Sovereign Gold Bond, BFSI News, ET BFSI

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Mumbai: The Reserve Bank on Thursday said it has streamlined the process for redressal of investors complaints related to Sovereign Gold Bond to make it more effective. The sovereign gold bond scheme was launched in November 2015 to reduce the demand for physical gold and shift a part of the domestic savings — used for the purchase of gold — into financial savings.

To streamline the customer complaint handling process and make it more effective, the RBI said the nodal officer of the Receiving Office (RO) will be the first point of contact for attending to the queries/ complaints of their customers.

Receiving Offices refer to banks, Stock Holding Corporation of India Limited (SCHIL), designated Post Offices, and recognised stock exchanges (NSE and BSE).

In case the issue is unresolved, an escalation matrix at the ROs will be used to resolve customer grievance, the Reserve Bank said.

“The investor may approach Reserve Bank of India at sgb@rbi.org.in if no reply is received from the RO within a period of one month of lodging the complaint or the investor is not satisfied with the response of the RO,” the central bank said.

The price of the bond is fixed in Indian Rupees based on a simple average closing price of gold of 999 purity, published by the India Bullion and Jewellers Association Limited for the last 3 working days of the week preceding the subscription period.

Sovereign Gold Bond is denominated in multiples of gram (s) of gold with a basic unit of 1 gram. The tenor of the bond will be for eight years with an exit option after the 5th year to be exercised on the next interest payment dates.

The minimum permissible investment is 01 gram of gold. The maximum limit of subscription is 4 KG for individuals, 4 Kg for HUF and 20 Kg for trusts and similar entities per fiscal (April-March).



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Know how Banks and Financials performed throughout this week, BFSI News, ET BFSI

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Benchmark indices have been on a record-breaking rally lately and August witnessed the stock market reaching many new highs. The BSE benchmark soared over 9% last month. Buying action continues to follow a positive global trend. The index has formed a strong bullish candle on weekly charts.

Major market driving factors for this week are considered to be the Improving general pandemic conditions, GDP numbers indicating revival in economic activity, increased confidence in facing a potential third wave, the stress on universal vaccination and the indications from Jackson Hole address.

Monday Closing bell: All time high
Nifty made a strong bullish bar on Monday (30 August, 2021) closing at its all time high level. The rally was also supported by Banknifty. Nifty closed at 16,931 up by 225 points. Banknifty closed at 36,347 up by 720 points.

Tuesday Closing bell: All time high
Another All time high Nifty made another lifetime high on Tuesday. It had been showing strength since the last four trading sessions. The Sensex closed at 57,552.39, up 662.63 points, or 1.16%, while Nifty was at 17,132.20, up 201.15 points, or 1.19%. Metals, IT financials were top gainers.

Wednesday Closing bell : Markets end in Red
The Indian benchmark indices ended in the red after hitting record highs in the early trade on September 1. At close, the Sensex was down 0.37%, at 57,338.21, and the Nifty was down 0.33%, at 17,076.30.

However, Axis Bank and Induslnd Bank were among top BSE Sensex gainers. Bank Nifty gained 0.4% to settle at 36,574. Nifty sectoral indices mostly ended in green, except for Nifty Financial Services.

Thursday Closing bell: Markets end Flat
Benchmark indices ended higher with Nifty closing above 17200 led by IT and FMCG stocks. At close, the Sensex was up by 0.90% at 57852.54, and the Nifty was up 0.92% at 17234.20. Except for auto and PSU Bank, all other sectoral indices ended in the green with IT and Pharma indices up 1% each. HDFC Life was amonth the top Nifty gainers. BSE midcap and smallcap indices gained over 0.5% each.

Friday Closing Bell: Fresh record
The Sensex closed at 58,129.95, up by 0.48%, while the Nifty was at 17,323.60, up 0.52%. Boosted by Reliance Industries and a jump in Exide Industries following the sale of the battery maker’s insurance unit Exide Life Insurance to HDFC Life Insurance, while the focus was also on a key US jobs report later in the day.

Among sectoral indices on the NSE, Nifty Bank fell the most – down nearly by 1.5% to 23,531 levels. HDFC Bank, Induslnd Bank, HDFC Life were among the top losers.

Industry Key Takeaways

India’s GDP rose 20% in the June quarter

India’s economy expanded at its fastest ever in the June quarter, helped by the low base of the year-earlier record contraction and a strong rebound in manufacturing and construction, data released on Tuesday showed. The data also reflected thag Fiscal deficit narrowed to a nine-year low of 21.3% of annual budget estimate as of July end at Rs 3.21 lakh crore, helped by a rise in revenues and decline in non-interest revenue expenditure.

Kotak Mahindra Bank to sell 20 crore shares of Airtel Payments Bank to Bharti Enterprises:

Kotak Mahindra Bank on August 31 said it will sell 20 crore shares held in Airtel Payments Bank (APBL) for a cash consideration of Rs 294 crore or more to Bharti Enterprises Ltd. A share purchase agreement was executed by the bank for divestment of 20,00,00,000 equity shares (8.57 percent stake) held by Kotak Mahindra Bank Ltd in APBL.

ICICI Bank hits Rs 5 lakh crore market cap; what should investors do?

On September 1, Private sector lender ICICI Bank crossed Rs 5 lakh crore in market capitalisation for the first time only to become the second bank to attain the said feat. Among banks, HDFC Bank, the country’s largest lender by assets, remained at the top with Rs 8.7 lakh crore market capitalisation, while SBI is at the third spot with Rs 3.81 lakh crore market cap, Kotak Mahindra Bank at 4th and Axis Bank at 5th.

HDFC Life Insurance share price hits 52-week high

HDFC Life Insurance Company share price touched 52-week high of Rs 775.65and rising percent intraday on September 2 as company board is going to consider fundraising on September 3.

“A meeting of the board of directors of HDFC Life Insurance Company is proposed to be held on Friday, September 3, 2021 to consider issue of equity shares and / or other securities of the company by way of preferential allotment,” company said in its release.

HDFC Life to acquire 100% stake in Exide Life Insurance:

HDFC Life Insurance on Friday announced that its board has approved acquisition of 100% of the share capital of Exide Life Insurance Company Ltd for a total consideration of Rs 6,687 crore. Exide Life will be subsequently merged into HDFC Life.

HLIC also announced that out of the aggregate amount, Rs 725 crore will be settled in cash and the balance via issuance of over 8.70 crore equity shares at an issue price of Rs 685 per share to Exide Industries Ltd.



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Should you invest in the latest Sovereign Gold Bond issue?

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The latest Sovereign Gold Bond Scheme 2021-22 – Series VI will be open for subscription from August 30 to September 3, 2021. The issue price is ₹4,732 per bond (equivalent to one gram of gold). Those applying online and paying digitally get a discount of ₹50 on the issue price.

SGBs can be bought from banks, designated post offices, stockbrokers and the NSE and the BSE.

Why invest

The latest SGB issue price of ₹4,732 is lower by ₹45 to ₹157 per bond than in the preceding five issues in 2021-22. The price is a simple average of the price of gold (999 purity) for the last three business days preceding the subscription period.

Gold prices have fallen around 13 per cent rice (in rupee terms) since the August 2020 high.

Those with a long-term investment horizon can consider buying SGBs in this issue to add to their long-term gold allocation. As of now, no further SGB issues have been announced for this year.

Gold does well when other asset classes such as equity fare poorly and can form part of your portfolio (around 10 per cent) as a hedge against underperformance in other assets.

Given that returns from gold can be lumpy – long periods of poor return followed by short periods of high return – having a longer holding period helps. Over the last 30 years, gold has offered an average 5-year return (CAGR) of 9.4 per cent with the possibility of these returns being negative 13 per cent of the time.

Over the same period, the average 7-year gold return (CAGR) has been 9.7 per cent with the possibility of negative returns being only 1 per cent.

However, investors are advised to keep some powder dry for possible future tranches, which may come at lower prices.

Fears of the US Fed unwinding its ultra-loose monetary policy to rein in inflation have been weighing on gold.

The brass tacks

You can buy a minimum of 1 gram and up to a maximum of 4 kilograms during a financial year.

The limit includes bonds bought in the primary issues as well as those from the secondary market.

The investment tenure of these bonds is eight years. However, early redemption with the RBI is allowed from the fifth year. Both interest and redemption proceeds will be credited to the bank account provided by you at the time of buying the bond.

For this, you can approach the concerned bank or whoever you bought them from, 30 days before the coupon payment date (half-yearly). Request for premature redemption will be accepted only if you approach the concerned bank/post office at least 1 day before the coupon payment date. While you can also sell the SGBs in the secondary market any time before maturity, the lack of adequate trading volumes can be an impediment.

If interested in a more liquid option, consider gold ETFs that can be bought/sold anytime. However, gold ETFs involve an expense ratio while there is no purchase cost for SGBs. ETFs are also subject to capital gains tax, while capital gains on SGBs are tax exempt in certain cases.

Returns and taxation

Apart from the possibility of capital gains (appreciation in gold price between the time of purchase and redemption), SGBs offer investors interest of 2.5 per cent per annum (paid semi-annually) on their initial investment. The interest income is taxed at your relevant slab rate.

If you hold the bonds until maturity (eight years), then the capital gain, if any, is exempt from tax. Capital gains on SGBs sold prematurely in the secondary market are taxed at an individual’s income tax slab rate, if held for 36 months or less, and at 20 per cent with indexation benefit if held for more than 36 months.

This is a free article from the BusinessLine premium Portfolio segment. For more such content, please subscribe to The Hindu BusinessLine online.)

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Centre unveils series VI Sovereign Gold Bond Scheme; Rs 50 discount for investors who apply online, BFSI News, ET BFSI

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The Reserve Bank of India (RBI) has announced the Sovereign Gold Bond Scheme 2021-22 Series VI, which will be open for subscription for the period August 30-September 3, 2021.

The nominal value of the bond based on the simple average closing price for gold of 999 purity of the last three business days of the week preceding the subscription period works out to Rs 4,732 per gram of gold.

The Centre in consultation with the RBI has decided to offer a discount of ₹50/- per gram less than the nominal value to those investors applying online and the payment against the application is made through digital mode. For such investors, the issue price of Gold Bond will be Rs 4,682 per gram of gold.

Sovereign Gold Bonds are government securities denominated in grams of Gold and issued by the Reserve Bank of India on behalf of the government as a replacement for owning physical Gold. The bonds are sold through banks, Stock Holding Corporation of India Limited (SHCIL), designated post offices, and recognized stock exchanges like NSE and BSE.

A total of Rs 25,702 crore has been raised through the SGB Scheme since its inception till end-March, 2021. The Reserve Bank had issued 12 tranches of SGB for an aggregate amount of Rs 16,049 crore (32.35 tonnes) during 2020-21.



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