businessfortnight

Treasury portfolio of banks will get a much-required breather in the fourth quarter as bond prices improve following announcement of the borrowing programme by the government. The government surprised the market by reducing its plans to borrow Rs 2.88 lakh crore during April-September, only 47.5 percent of total budgeted gross borrowing as against 60-65 percent share in the first half of previous years. Indian government bonds or securities rallied with the benchmark 10-year yield falling to its lowest in two months on Tuesday following a surprise cut in the borrowing programme for the fiscal year starting April. The 10-year bond yield dropped to as much as 7.35 percent from 7.62 percent on Monday, lowest since January 29. Bond prices and yields (interest rates) move in the opposite direction. “Yes, we have seen the 10-year bond yields come off by 25-30 bps (basis points or percentage points) to 7.35-7.37 percent, same as the December figure. So to that extent, if the yields stay to e

The government will borrow Rs 2.88 lakh crore or 47 per cent of total budgeted gross borrowing during April-September, the first half of 2018-19. The government and the Reserve Bank of India (RBI) have decided to make the gross borrowing less by Rs 50,000 crore by reducing around Rs 25,000 crore from buyback and the rest from small savings schemes. “The government intends to use larger inflows from small savings schemes to fund its fiscal deficit during the year. The government will borrow Rs 1 lakh crore from NSSF as against budgeted amount of Rs 75,000 crore,” the government said in a release on Monday. The fiscal deficit – a measure of how much the government borrows in a year to meet part of its spending needs – target for 2018-19, however, continues to remain at 3.3 per cent of the GDP, Economic Affairs Secretary Subhash Garg said. In the last five years, the government typically conducted 60-65 per cent of its market borrowing in the first half of the year. In 2017-18, the gover

New Delhi:  India largest two-wheeler maker Hero MotoCorp Ltd Thursday said it has raised its stake in its joint venture in Colombia from the existing 51% to 68%. Consequently, the stake held by partner Woven Holdings LLC has declined to 32%. The joint venture, HMCL Colombia SaS, was formed in 2014 and Hero MotoCorp owned a controlling stake through its wholly owned subsidiary, HMCL Netherlands BV, for sale, distribution and marketing of its products in Colombia. Hero MotoCorp opened its fifth overseas manufacturing capacity—its first in Columbia—to cater to demand from the neighbouring Latin American countries and to set up a base for exports outside India. “Pursuant to subsequent investment by HMCL B.V. into the share capital of the JV, the equity interests/shareholding of the joint venture partners in the JV have been re-aligned whereby the company’s equity interest/shareholding in the JV (through HMCL B.V.) has increased to 68%, on a fully diluted basis, from 51%,” the firm said i

As part of its regular yearly practice, the government met bond houses on Wednesday to discuss its borrowing calendar for 2018-19. The conditions couldn’t be more unfriendly though. Bond yields have surged around 100 basis points in the last six months, essentially conveying that investors don’t like them any more. It is well known that foreign investors have begun dumping Indian bonds for a month now and even local banks are wary after choking on losses from previous buying binges. Forsaken by the biggest buyers, the bond market has seen trading volume dry up and consequent rising yields have wreaked havoc on many a balance sheet. But who can blame investors for pricing in realities of inflation, a monetary policy poised for tightening and liquidity that is becoming scarcer? In previous episodes, the Reserve Bank of India (RBI) has typically come to the rescue citing liquidity compulsions. The central bank has been willing to shoulder the burden of supply, partly by buying bonds beca

New Delhi:  The central government’s ambitious vehicle scrapping policy will become compulsory for all commercial vehicles from 2020 onwards and their life will be capped at 20 years, a high-level meeting decided on Friday, two senior government officials familiar with the development said. The plan is to try and get the GST Council to consider a lower goods and services tax, or GST, on new commercial vehicles bought against a scrapped one, from the current rate of 28% to between 12% and 18%, one of the government officials added on condition of anonymity. Vehicle manufacturers will also offer a discount on purchases against scrapped vehicles. The road ministry has been directed to put up a proposal before the cabinet within the next three months, detailing the scheme, this person added. Once the cabinet approves the scheme, and till the deadline of 2020 when it kicks in, owners of vehicles older than 20 years can voluntarily scrap their vehicles and receive a discount on the purchase

MUMBAI: In a bid to attract the youth, Honda Motorcycle and Scooters India, the country’s second largest two wheeler maker launched its yet another premium motorcycle – 160 cc X-Blade at an aggressive price of Rs 78,500 ex-showroom New Delhi. The new motorcycle will be sold alongside the Unicorn, Hornet and CBRs. While the company has made a name for itself in the scooter space, Honda Motorcycle and Scooter has been gradually inching up its share in motorcycle segment with the market share crossing over 15% with strong double digit growth this fiscal. The new motorcycle comes with a first in segment full LED headlamp with position lamp and full LED tail lamp. The bike sports aggressive tank design, alloy wheels, dual outlet muffler & digital meter. To enhance the sporty character of the bike the vehicles comes with a wide 130 mm rear tyre, long 1347 mm wheelbase & mono-shock rear suspension for better high speed handling. There are other convenient features on the bike which i

Royal Enfield Tuesday announced its foray into Argentina, the second biggest motorcycle market in Latin America. The motorcycle maker launched its first flagship store in Buenos Aires, commencing its full operation, including after sales, spares and service. Royal Enfield has appointed Grupo Simpa as its official dealer-partner for Argentina, which will look after all market development and support activities such as marketing and aftersales, for the brand in the country. Argentina is the third country after Brazil and Colombia in the Latin American region to have an exclusive Royal Enfield store. Rudratej (Rudy) Singh, President (Royal Enfield) said, “Our approach in international markets has been to focus on key cities that strongly influence the motorcycling and lifestyle culture in the country…More recently our focus has been on fast emerging motorcycle markets, like South East Asia and Latin America.” The company has been expanding its footprint in the Latin American region and h