MFs receiving inflows but still cautious

Mutual funds received inflows into their liquid schemes but remained cautious before the corporate advance tax payments and invested only in non-convertible debentures, dealers said.

on Wednesday some companies were investing in CPs but mutual funds are cautious on their investments, as they will face redemptions within a fortnight for payments towards the corporate advance tax outflows.

on Wednesday, CBLOs were traded in the range of 5.90-5.95 per cent so banks prefer to keep their money with mutual funds for a few days. When CBLOs are traded below 6 per cent banks typically invest their money in liquid schemes.

On Tuesday, Axis Bank had placed Rs 3.5 billion of one-year certificates of deposit at 11.20 per cent.

on Wednesday, three-month CPs were quoted at 14-15 per cent, unchanged from Tuesday, while three-month CDs remained unchanged at 10-11 per cent. on Wednesday, overnight Mumbai Interbank Offered Rate was at 6.50 per cent compared with 6.71 per cent on Tuesday.

Secondary market
Mutual funds are continuing sale of papers in the secondary market at lower rates to book profits, dealers said.

December maturity CDs were dealt in the band of 8-8.5 per cent, compared with 8.5-9 per cent on Tuesday.

March maturity papers were dealt in the range of 9.5-10 per cent unchanged from Tuesday.

Allahabad Bank’s March maturity CDs were dealt at 9.60 per cent on Wednesday.