The Union Ministry of Finance will dilute 6.78% of General Insurance Corporation of India to raise ₹47 billion. Non-retail investors can buy stakes in the reinsurance company for the first time since its 2017 offer-for-sale listing on Wednesday. Retail investors and GIC employees can place bids on Thursday. The Department of Investment and Public Asset Management Secretary stated on social media site X that the government will divest 3.39% equity and 3.39% as a green shoe option. The OFS floor price is projected to be ₹395 per share, a 6% decrease from the market price.
Top 3 Leads Today
- World Bank ups India FY25 GDP growth view to 7%, keeps outlook positive.
- Need credit products for various stages of infra projects, says econ secy.
- Households will likely build back financial assets going ahead, says RBI Patra.
Indian Markets
- Money Markets Minute: The call rate remained unchanged at 5.75%, closing well below the RBI's standing deposit facility rate of 6.25%, due to low demand for funds amid a widening liquidity surplus. The weighted average call rate eased to 6.47% from 6.49% on Monday.
- Government Bond Brief: Government bond yields ended down as traders covered short bets near the close of trade. Caution prevailed ahead of upcoming U.S. economic data, especially employment data due Friday. The 10-year benchmark 7.10% 2034 bond closed at 6.87% against 6.88% on Monday. Turnover rose to ₹317 billion from ₹260.95 billion on Monday.
- Corporate Bond Beat: Corporate bond yields in the secondary market remained steady as investors held back on large bets due to a lack of fresh domestic cues. Instead, they focused on the primary market. Combined deals on the exchanges totalled ₹124.82 billion, up from ₹59.98 billion on Monday.
- Forex Flash: The rupee ended at a three-week low against the dollar, pressured by persistent dollar purchases by banks on behalf of oil companies. However, the RBI's dollar sales prevented a steeper decline. The rupee moved within a narrow 4-paise range, closing at 83.9675 per dollar, down from 83.9175 on Monday.
- Stocks Spotlight: In a rangebound session, the benchmark indices ended almost flat. The Sensex dipped 0.01% to 82,555.44, snapping an 11-session winning streak, while the Nifty edged up by 1.10 points to 25,279.80, extending its gains for a 14th straight session. Despite a positive start, the market traded mainly in the red, with a late-hour recovery limiting losses.
International Markets
- US Stocks: All three main indexes fell on Tuesday, with the S&P 500 down more than 2% and the Nasdaq Composite down more than 3%, as investors' optimism about AI dwindled amid a wider market sell-off that accelerated following weak economic data. The benchmark S&P 500 index, Nasdaq, and Dow experienced their largest daily decline since early August. Chip companies were heavily affected, with AI heavyweight Nvidia dropping nearly 10% and Wall Street's chip index, the PHLX chip index, falling 8%.
- Treasuries: Yields fell on Tuesday due to weak manufacturing data, which raised fears about the US economy. According to the Institute for Supply Management survey released on Tuesday the manufacturing PMI increased to 47.2 last month from 46.8 in July. A PMI rating below 50 implies a contraction in the manufacturing sector, which accounts for 10.3% of the GDP. The benchmark 10-year note yield fell 6.5 bps to 3.846%, while the 30-year bond yield fell 5.9 bps to 4.1373%.
- Currency: The dollar was near a two-week high against the euro as traders braced for critical monthly payroll data on Friday. The impetus was reportedly after disappointing US manufacturing data, which fuelled fears of a hard landing for the economy. The dollar index was up 0.13% to 101.79. The euro fell 0.28%, trading at $1.104.
Trading Trends
Traded volume(in Cr) in corporate bonds by sector and maturity:
| Sectors | 0-1y | 1-3y | 3-5y | 5-10y | >10y |
|---|---|---|---|---|---|
| NBFC | 761 | 1369 | 828 | 1071 | 110 |
| Financial Institution | 550 | 300 | 74 | 751 | 20 |
| Public Sector Bank | - | - | - | 222 | 170 |
| Private Sector Bank | 45 | 500 | 1 | 494 | - |
| Other Utilities | - | - | - | - | 758 |
Secondary trade details for recently issued primary corporate bonds:
Security Name |
Issue Date |
Trades Since Issue(Cr) |
Avg Yield(%) |
LTY (%) |
|---|---|---|---|---|
| 8.27 CANARA BANK PERP 29AUG29 C | 2024-08-29 | 1352 | 8.27 | 8.30 |
| 7.22 HPCL 28AUG29 | 2024-08-28 | 1074 | 7.22 | 7.22 |
| 7.75 LICHSGFIN 23AUG29 | 2024-08-23 | 1045 | 7.74 | 7.74 |
| 7.81 TATA CHEMICALS LIMITED 20AUG2027 | 2024-08-20 | 950 | 7.81 | 7.81 |
| 9.50 CHOLAINVFIN PERP 22AUG34 C | 2024-08-22 | 926 | 9.62 | 9.57 |
| 8.55 CENTURYTEX 30AUG29 | 2024-08-30 | 350 | 8.57 | 8.58 |
| 7.61 LICHSGFIN 29AUG34 | 2024-08-29 | 275 | 7.61 | 7.61 |
| 8.35 CENTURYTEX 30AUG27 | 2024-08-30 | 250 | 8.35 | 8.35 |
| 8.70 ADANI ENERGY SOLUTIONS LTD 28AUG2034 | 2024-08-27 | 240 | 8.50 | 8.50 |
| 7.30 BOB 27AUG34 | 2024-08-27 | 200 | 7.30 | 7.30 |
| 7.42 SBI 29AUG34 C 29AUG39 M | 2024-08-29 | 170 | 7.41 | 7.42 |
| 9.50 AFL 23AUG34 | 2024-08-27 | 85 | 9.31 | 9.49 |
| 10.25 SCNL 21AUG26 | 2024-08-22 | 71 | 11.64 | 11.48 |
| 10.40 SICREVACAP 23AUG26 | 2024-08-23 | 56 | 13.59 | 15.40 |
| 7.74 LICHSGFIN 11FEB28 | 2024-08-29 | 50 | 7.76 | 7.76 |
| 7.25 IRFC 29AUG34 | 2024-08-29 | 50 | 7.25 | 7.26 |
Source: Harmoney data analytics
Events This Week
September 4, Wednesday:
- US International trade in goods & services for July.
- US M3 for July.
- US Domestic auto industry sales for August.
- India HSBC Composite PMI for August.
- India HSBC Services PMI for August.
- India M3 Money supply for Aug 19 week.
September 5, Thursday:
- US Unemployment insurance weekly claims report for Aug 31 week.
- US Services data PMI for August.
September 6, Friday:
- US Employment report for August.
- US Weekly export Sales.
- India Bank loan growth Aug 19 week.
- India FX Reserves Aug 26 week.
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