Market Round-Up
Call MoneyThe overnight call money opened in the region of 65-75 per cent on Friday, up from Thursday's closing level of 60-65 per cent. The rates moved up in the morning session to touch a high of 100 per cent. In the afternoon, it came down to close in the region of 65-75 per cent. Most deals were struck in the region of 60-90 per cent. According to dealers, some deals were also done at 100 per cent. Among others, HongkongBank borrowed at 100 per cent, dealers said. "Huge demand was seen in the market, but owing to shortage of supply, only a few transactions took place," said a dealer from the Securities Trading Corporation of India (STCI). The State Bank of India (SBI), a traditional lender in the call market, was absent. Mostly term-lending institutions and insurance companies were lending in the market. Dealers expect the tightness to continue. FORECAST: The call money is likely to open in the region of 70-80 per cent on Saturday. Spot Dollar The rupee opened the day
stronger at 38.79/80 to the greenback against its previous close of 38.83. Dealers said the demand for dollars was slack. "Several corporates and banks sold dollars...basically exporters are selling their greenback seeing the rupee appreciate," said a dealer with a brokerage. After opening at Rs 38.79.88 to the greenback, the rupee appreciated to Rs 38.62 levels riding on the back of higher dollar supplies. "Later in the day, the State Bank of India bought dollars. State Bank picked up dollars at around Rs 38.65," said a dealer with a European bank. The rupee grew weaker to 38.70 levels with State Bank's purchase of dollars and at close of trades, the greenback quoted at 38.68/73. Meanwhile, the Reserve Bank of India fixed its reference rate for the greenback at Rs 38.6200 against its previous peg at Rs 38.8800. FORECAST: Rupee seen trading in the 38.65-38.75 range on Tuesday. Forward Premium High call rates saw the forwards climbing today. The six-month annualised forward cover
closed at 19.40 per cent compared to its Thursday's close at 18.97 per cent. Dealers said that a few importers were seen cancelling their orders. Banks continued to sell spot and buy forward to cover their FCNR-B liabilities. "High call rates and covering on account of FCNR-B is putting pressure on the forwards", said a dealer. The Reserve Bank of India did buy/sell swaps for July premiums. "The Reserve Bank's intervened in a small way", said dealers. January premiums closed at 4/6 paisa, February at 128/138 paisa and March at 195/200 paisa. In the longer terms, July premiums finished at 370/380 paisa while August closed at 400/410 paisa". FORECAST: Six month cover seen at 20 per cent levels on Tuesday. Gilts Government securities continued to tumble on Wednesday with call rates touching the 100 per cent mark during the day. "There were a lot of desperate sellers in the market during the day," said a dealer with a private-sector bank. "With prices falling, the yields on T-bills
went up further to 24 per cent levels today," said a dealer with a public-sector bank. "A lot of public-sector banks were seen moving in to off-load government securities," said another dealer. The wholesale debt market segment of the National Stock Exchange witnessed trades worth Rs 494.95 crore on Friday. The 13.50-per cent 1998 government loan was traded for Rs 37 crore at a weighted yield of 22.32 against 18.81 per cent on Wednesday. The 364-day treasury bill maturing on February 27 was traded for Rs 22 crore at a weighted yield of 24 per cent. Repo deals worth Rs 205 crore were traded today. FORECAST: Yields expected to further climb on falling securities.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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