BSE to auction govt bonds worth Rs 3,208 crore tomorrow

Total overseas investments in govt debt securities has reached Rs 1,21,224 crore

Leading stock exchange BSE will auction tomorrow government debt securities worth Rs 3,208 crore for overseas investors.

This would be the first auction after Sebi tweaked the investment limits for overseas investors in government securities by increasing the threshold for general investors from $20 billion to $25 billion.

In a circular BSE today said: "Live bidding session for allocation of debt investment limits for FII (Foreign Institutional Investors) and sub-accounts shall be conducted on Friday, August 22, 2014 on exchange's 'ebidxchange' platform."

The auction will begin at 1530 hours and close at 1730 hours. A mock bidding session would be conducted today to check the system performance.

The total overseas investments in government debt securities (through auction route) has reached Rs 1,21,224 crore.

Separately, exchanges have asked foreign investors not to take any fresh investment position in the interest rate futures (IRF) market as the foreign investors' exposure to government debt reached 97.2% of permitted limit of $25 billion (Rs 1,24,432 crore).

Overseas investors are advised not to increase their long position in IRF till the time the overall long position of such investors in cash and IRF comes below 85% of existing permissible limit.

Foreign investors have invested a net amount of over Rs 83,000 crore in debt market so far in 2014. Equity market has also seen similar trends with overseas fund inflow of nearly Rs 76,000 crore since the beginning of the year.

Last month, Sebi had tweaked the investment limits for foreign investors in government securities by increasing the threshold for general investors from $20 billion to $25 billion.

At the same time, the sub-limit for longer time overseas investors such as sovereign funds has been reduced by $5 billion as there was less demand in this category. The overall cap remains unchanged at $30 billion.

The previous cap of $10 billion had been utilised by only about 20% in this category. The $20 billion limit for general FPIs has been always fully exhausted.