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| CDs issuance falls; MFs prefer to hold cash |
| Newswire18 / Mumbai Jan 13, 2009, 00:08 IST |
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Issuances of certificates of deposit (CDs) fell today as mutual fund houses — the major investors in such papers — avoided fresh buying and preferred to hold cash, dealers said.
Today, Punjab National Bank placed Rs 1,000 crore of one-year CDs at 7.60 per cent. According to dealers, some mutual funds were holding cash since a long time and were eager to invest the excess funds in CDs due to the recent rise in rates.
Hindustan Construction Co placed Rs 10 crore of three-month commercial papers at 10.35 per cent. Usha Martin issued Rs 25 crore of 89-day non-convertible debentures having a daily put/call option at 250 basis points above Mumbai Interbank Offered Rate. A private mutual fund invested in this paper.
Today, the overnight Mibor was at 4.26 per cent compared with 4.29 per cent on Saturday.
On Friday, L&T Infrastructure placed Rs 50 crore of three-month commercial papers at 9.50 per cent. State Bank of Mysore placed Rs 200 crore of June maturity CDs at 6.95 per cent.
Oriental Bank of Commerce’s December maturity CDs were dealt at 7.55 per cent today. Today, December maturity papers were dealt at 7.55-7.75 per cent unchanged from Friday.
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