While REIT would help developers unlock value from their leased out assets, it would also provide a much-needed entry and exit vehicle for the global institutional investors.
The Reserve Bank today increased foreign portfolio investors' (FPI) limits on investment in government bonds by an aggregate Rs 170 billion for the April- June period.
The IRF contract is based on 6.79 percent central government security maturing on December 26, 2029, and will be available for trading from January 10, BSE said in a circular.
Demand for high-yielding Indian government bonds is dwindling, going by the reduced interest seen at an auction on Monday for foreign investors for rupee-denominated sovereign paper.
TCS ploughed USD 3 billion into the market from January to March, its annual balance sheet showed last month, shifting funds that totalled 80 percent of its surplus cash position. Previously the company had largely invested in mutual funds.
There are several reasons for this. Banks have to wait for their high cost deposits to mature. Also for the big banks with 40 percent in savings and current accounts, the rate cut has impact only on 60 percent of the deposits.
The IRF contract based on 7.61 percent central government security maturing on May 9, 2030, will be made available for trading from May 30 this year, BSE said in a circular.
Reserve Bank will buy government bonds worth Rs 15,000 crore through Open Market Operations (OMO) this week to infuse liquidity in the markets
Reserve Bank will conduct auction of eight state government bonds aggregating Rs 4,815 crore on Tuesday.
The lower cut-offs are likely to come as a relief for state governments, given the fear of higher costs of debt, as their market borrowing is seen up by around 20 percent compared with last year.
"Let me emphasise that Reserve Bank never sends out e-mails asking for payments. We have about USD 360 billion worth of foreign exchange reserves and we also have about Rs 8 lakh crore of government bonds. We really don't need your money," Rajan said at the launch of Unified Payments Interface (UPI) system.
Call money rates, however plunged due to subdued demand from borrowing banks and also adequate liquidity conditions in the banking system.
Marc Faber said central bank policies are essentially monetizing debt, particularly in Japan, where he claims the Bank of Japan (BOJ) is buying all the government bonds the treasury is issuing.
Government bonds (G-Secs) dropped on heavy selling pressure from banks and corporates, while the overnight call money rate maintained higher due to firm demand from borrowing banks amid tight liquidity in the banking system.
Globally, gold prices held ground above USD 1,230 an ounce, acting as foil against risk alongside top-rated government bonds as oil's fall rippled into global equity markets.
Last week, the Bank of Japan announced plans to increase purchases of exchange-traded funds(ETFs) to 300 billion yen (USD 2.45 billion) in firms that invest in physical and human capital in a surprising move to encourage investment.
The Reserve Bank of India (RBI) said foreign investors would also be allowed to buy into debt issued by the country's states for the first time, although only up to 2 percent of outstanding debt, or totalling 500 billion rupees by March 2018.
In earlier auctions too, government bonds were subscribed multiple times, given the huge interest among foreign investors, while the demand for corporate bonds remained weak.
The auction was held at BSE's ebidxchange platform for allocation of foreign institutional investors' investment limits in government debt securities worth Rs 561 crore. At the end of two-hour auction this evening, 29 bids were declared successful.
The auction will be conducted on BSE's ebidxchange platform from 1530 hours to 1730 hours after close of normal market hours on August 31, the exchange said in a circular.
The finance ministry engineered a rally in bonds and rupee, with sources saying the RBI wants to convert the USD 30 billion limit on FII investment in government bonds into a rupee limit.
JP Morgan feels net issuance should be 4.7 trillion rupees, based on the government's forecast of a 4.2 percent fiscal deficit for FY15 and 88 percent financing via government bonds.
An IRF is a contract between a buyer and a seller for future delivery of an interest-bearing security such as government bonds.
Bond investors took a beating in 2013 as foreign funds fled markets after the central bank in July unexpectedly raised short-term interest rates to prop up a rupee that was slumping to record lows.
Banks, stock exchanges and other market participants have been requesting for this product since a long time to deepen and broaden the derivatives market in the country.