Market Round-Up
Call MoneyThe Overnight call money continued to rule high on for the forth consecutive day. It opened at a high of 40 to 50 per cent as compared to yesterday's close of 35 to 40 per cent.It opened in the region of 40 to 50 per cent, came down in the morning session to 35 per cent but moved up later in the day to close around 60 to 65 per cent.Most of the deals were struck in the region of 35 to 50 per cent. Some stray deals were also done at 85 per cent."Money was not available in the market and the supply was very less compared to the demand, quite higher than yesterday. Most of the new and old private sector banks were seen borrowing heavily from the call market," said a dealer from Securities Trading Corporation of India. According to dealers, this trend is likely to continue for another week. FORECAST: Call is likely to open in the region of 50 to 60 per cent on Friday. Spot Dollar The spot rupee gained against the dollar on Thursday as exporters started to bring in their
remittances. Opening the day at 38.95/39.05, the rupee gained further ground during the day's trading as importers' demand for dollar receded. "There is less nervousness in the market", a chief dealer in a private sector bank said. The rupee saw day's high of 38.65/70 while most of the deals were conducted at 38.70/80 levels before closing at 38.74/78. Dealers said that if exporters continue to bring in their holdings, the rupee will continue its recovery. The Reserve Bank of India did not intervene in the spot market but dealers said that the apex bank did conduct swaps to bring down the forward premia. FORECAST: The rupee will continue its upward climb on Friday. Forward Premia The forward rupee continued to rule weak as the domestic overnight call rates were remaining high. On a day when the overnight call rates closed at 70 per cent, dealers said that the six month forwards crossed the crucial 25 per cent (annualised) to trade at 26 per cent before the Reserve Bank stepped into conduct someswaps for July maturity. The immediate result was a sharp fall in the forward premia to 20 per cent. "The RBI must have intervened upto $ 50 million in swaps", a dealer in a private sector bank said. Dealers said that the RBI intervention has seen a decline in the far-term forwards while the forward premia for February and near term continue to remain high. February premia closed at 40 per cent while one year forwards closed in the range of 17-19 per cent. FORECAST:The forward rupee, especially the far forwards might strengthen as pressure from exporters' side is expected. Gilts Prices of government securities across the board continued to fall as banks continued to sell their securities portfolio on Thursday. Call rates continued to remain on the higher side and closed at 70 per cent levels after opening at 40 per cent. The high call rates also affected the forward rupee which weakened against the dollar forcing the Reserve Bank to intervene. The 364 day treasury bill maturing on
January 30 was traded at a yield of 19 per cent up from 17 per cent on Tuesday. The 13.50 per cent gilt maturing in April 1998 was traded at 98.55 (18.96 per cent), down from 99.25. Among other securities that were traded at lower prices was thee 13.70 per cent gilt maturing in 1999 which saw deals stuck at 98.05 -- down from 100.10. "Security prices will continue to fall", a dealer said. FORECAST: prices will fall further on Friday.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
|
