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The Indian markets witnessed a good up-move in the closing-session despite mixed global cues. At the closing bell, the BSE Sensex closed higher by 109 points, the NSE Nifty finished higher by 42 points. The S&P BSE Midcap & the S&P BSE Small Cap finished up by 0.4% and 0.2% respectively. Gains were largely seen in banking and capital goods stocks.
Asian markets finished higher today with shares in Japan leading the region. The Nikkei 225 is up 0.90% while Hong Kong's Hang Seng is up 0.68% and China's Shanghai Composite is up 0.50%. European markets are mixed. The CAC 40 is higher by 0.39%, while the DAX is leading the FTSE 100 lower. They are down 0.16% and 0.03% respectively.
The rupee was trading at 66.98 against the US$ in the afternoon session. Oil prices were trading at US$ 46.19 at the time of writing.
Oil & gas stocks traded mixed with Castrol India and Indraprastha gas leading the gains. As per an article in a leading financial daily, Indian Oil Corporation (IOC) has raised crude oil import from Iran 4-fold to 5 million tonnes (MT) in FY17 from 1.2 MT in FY16. The company has also cleared most of the past payments as sanctions against the Persian Gulf nation were eased.
Reportedly, US sanctions were lifted this year in January. Consequently, India steadily raised crude oil imports from Iran, making Iran as India's fourth biggest crude oil supplier. India imported 12.7 MT of crude oil in 2015-16 as against 11 MT in the previous two fiscals.
Further, the company had paid US$ 510 million out of the total outstanding of US$ 621 million due to Iran in past oil dues. Overall, the total outstanding due stands at US$ 55 million now, after accounting for the exchange variations, the company stated.
Notably, India imports about 80% of its oil requirements. India imported 53.2 MT of crude oil during the first quarter of current fiscal. Moreover, 65% of which came from the Middle East region, the reports noted.
Crude prices have fallen to decade lows. While the cost of production for economies like Saudi Arabia is much lower, these economies survive and thrive only on oil. As per the IMF (International Monetary Fund), most countries in the Middle East, including Saudi Arabia, will run out of cash within five years if oil stays below US$50 per barrel.
IOC finished the day up by 0.5% on the BSE.
Moving on to the news from banking sector. According to an article in The Economic Time, Housing Development Finance Corporation (HDFC) plans to raise up to Rs 5 billion through issuance of rupee denominated bonds to overseas investors.
Also known as masala bonds, the company would issue secured redeemable non-convertible debentures on a private placement basis for a tenor of one-and-a-half years to raise the amount. The bonds would carry coupon rate of 7.7% per annum. Further, the issue will open on 31 August, and close on 1 September 2016. The bonds will be listed on the London Stock Exchange, the reports noted.
The object of the issue is to augment the long-term resources of the corporation. The proceeds of the issue would be utilized for financing the housing finance business requirements of the corporation, the company stated.
Earlier, Axis Bank, Credit Suisse and another Japanese bank were also the investment bankers to the first masala bond sales. Radhika Pandit, Managing Editor of ValuePro has spoken about how firms are looking to tap cheap funds from overseas market through masala bonds (Subscription Required) in one of the edition of The 5 Minute WrapUp.
In another development, IDFC Bank Ltd has raised capital of Rs 15 billion through Basel III compliant Additional Tier-1 (AT1) bonds to enhance capital adequacy. This is the first AT1 bond issuance by the Bank during FY 2016-17. Moreover, the issue was competitively priced at a coupon of 11.09% payable annually.
Reportedly, the amount mobilized would be counted as a part of Tier I capital. Further, the bonds are rated A+ with Negative outlook by ICRA and India Rating.
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