Jewellery stocks fall on more RBI curbs on gold import
The latest RBI moves mandate banks and nominted agencies to retain 20 percent (or one fifth) of every lot of gold imports in the customs bonded warehouses. They will be able to import further gold only if they export 75 percent of that stored gold.
July 23, 2013 / 11:05 IST
Moneycontrol Bureau
Jewellery stocks like Tribhovandas Bhimji Zaveri, Tara Jewels, PC Jeweller and Gitanjali Gems slipped 2-5 percent on Tuesday following Reserve Bank of India's latest measures to curb gold imports to reign in the high current account deficit. Titan Industries fell more than 6 percent initially, but recovered most of its losses, after the company said that it doesn't export jewellery and buys gold only from domestic bullions.At 9:50hrs, TBZ was down 1.5 percent at Rs 196, PC Jeweller was down 1.8 percent at Rs 73 and Tara Jewels slipped near 2 percent to Rs 118. Gitajnali Gems was again at its 5 percent lower circuit limit of Rs 98. Titan was down 0.5 percent at Rs 258.40. Late on Monday, the country's central bank put further curbs on gold import mandating that banks and nominted agencies should retain 20 percent (or one fifth) of every lot of gold imports in the customs bonded warehouses. They will be able to import further gold only if they export 75 percent of that stored gold.Further RBI said that gold should be made available for domestic use only to entities engaged in jewellery business or bullion dealers supplying gold to jewellers.Earlier in June, the RBI had banned banks importing gold on consignment basis for domestic consumption, which have now been withdrawn with the new guidelines in place. PC Jeweller told CNBC-TV18 that the RBI moves curbing gold imports were rational and well defined and would be positive for the company.Analysts say the latest move by RBI will further increase interest and financing costs of jewellers. Pankaj Kumar Parekh, vice-chairman of the Gems and Jewellery Export Promotion Council told Reuters that exporters should benefit from the measures as supplies will now be guaranteed from any imports. However, domestic supply will get reduced, he added. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
