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| CD issues at a low |
| Newswire18 / Mumbai Dec 03, 2008, 00:36 IST |
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Primary issuance fell On Tuesday as mutual funds refrained from purchasing certificates of deposit (CDs) On Tuesday due to limited inflows in their fixed maturity plans, dealers said. Banks placed just over Rs 850 crore On Tuesday compared with Rs 1,400 crore on Monday.
Third instalment towards advance tax payments will be around mid-December. Mutual funds had faced huge redemption pressures from banks and companies during October due to tight liquidity in banking system.
Rates eased by 25 basis points Monday as most fund managers expected a reverse repo and repo rate cut by Reserve Bank of India.
However, expectation of rate cuts were dashed and mutual funds restrained from further investment in short-term papers On Tuesday.
Three-month CPs were quoted at 12-13 per cent, unchanged from Monday, while three-month CDs were at 8.10-8.30 per cent versus 8.30-8.75 per cent.
Secondary market
Rates in secondary market have fallen 200-250 basis points since November.
CDs maturing in December were dealt in the band of 6.75-7.25 per cent, compared with 7.25-7.75 per cent on Monday. March maturity papers were dealt in the range of 8.25-8.75 per cent, compared with 8.75-9.25 per cent.
Punjab National Bank’s March maturity CDs were dealt at 8.00 per cent On Tuesday.
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