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DATED GOVERNMENT SECURITIES

 
Dated G-Secs are securities issued for a tenor ranging from 5 years to 40 years. These borrowings form the crux of the Central Government’s borrowing programme aimed at financing the shortfalls in fiscal balances. Since these are sovereign issuances, they practically carry no risk and hence, are also referred to as risk-free gilt-edged instruments.

G-Secs carry a coupon rate which is paid half-yearly and are redeemed at maturity at par value on maturity date. They qualify as SLR instruments and can also be placed as collaterals for market repo borrowing as well as borrowing under RBI’s Liquidity Adjustment Facility (LAF). Most of the securities can also be placed as collaterals for CBLO borrowing and Securities Guarantee Fund (SGF). The minimum amount in which they can be traded is Rs 10,000.

The G-Secs issuances are managed by the RBI, who on behalf of the Centre, regularly conducts G-Sec auctions every Friday. The total auction size generally ranges between Rs 15,000 – Rs 18,000 Cr. Considering such large issuance size, they are underwritten by Primary Dealers. In the primary market, G-Secs are auctioned on an electronic platform, called the E-Kuber, the Core Banking Solution (CBS) platform of RBI. Commercial banks, Scheduled UCBs, Primary Dealers, Insurance Companies and Provident Funds, who maintain funds and securities account with RBI, are members of this electronic platform. In addition, with a view to provide retail participation, a separate scheme of Non-Competitive Bidding was introduced in 2002. In every G-Sec auction, a maximum of upto 5% of the notified amount is reserved for non-competitive bids. The size of such bids can range from Rs 10,000 – Rs 2 Cr for dated G-Secs.

Dated G-Secs have a very liquid and vibrant secondary market. They can be traded on NDS-OM, Over-the-counter, NDS-OM Web and Stock exchanges. Short selling too, subject to certain restrictions, is permitted.

STCI PD has been one of the most active players in the debt market. Our key functional areas of operation involve underwriting the Government of India bond auctions and aiding in efficient price discovery in Primary and Secondary market. Apart from participating in SDL auctions on proprietory basis, we also accept Competitive and Non-Competitive bids from clients, thereby benefitting them with wider access to debt market. We also, consistently provide two way quotes in all debt securities.

Clients interested in placing bids in Primary auctions and/or buying/selling Dated G-Sec securities may contact our Sales Personnel on 022-66202224/25/28. We endeavor to provide the best possible returns to our clients, keeping in line with their overall investment objectives.
 
 

Latest News

In its Fifth Bi-Monthly
In its Fifth Bi-Monthly Monetary Policy for FY19, the MPC-panel maintained ‘status quo’. Consequently, key policy rates remained unchanged - Repo rate at 6.50%, Reverse repo at 6.25% and MSF at 6.75%.
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Inflation projections for
Inflation projections for 2018-19 were revised downwards as food inflation has remained benign. It is projected at 2.7%-3.2%% in H2 FY19 (3.8%-4.5% previously) and 3.8%-4.2% in H1 FY20.
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Growth for FY19
Growth for FY19 is projected at 7.4% with 7.2%-7.3% in H2 FY19 (7.3%-7.4% previously). Growth in H1 FY20 is projected to stand at 7.5%.
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RBI in its February policy
RBI in its February policy cut the repo rate by 25 bps while also changing the stance to ‘neutral’ from ‘calibrated tightening’. Consequently, key policy rates are pegged as follows - Repo rate at 6.25%, Reverse Repo at 6.00% and Marginal Standing Facility (MSF) at 6.50%
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The inflation projections
The inflation projections have been revised downwards to 2.8% in Q4 FY19 (from 2.7-3.2% earlier), 3.2-3.4% in H1 FY20 (from 3.8-4.2% earlier) and 3.9% in Q3 FY20
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GDP growth for FY20
GDP growth for FY20 has been projected at 7.4% - in the range of 7.2-7.4% in H1 (from 7.5% earlier) and 7.5% in Q3.
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Spurring a positive surprise
Spurring a positive surprise, Jan CPI stood significantly lower than market expectations at 2.05% vis-à-vis the revised Dec-18 estimate of 2.11% (2.19% previously). Lack of inflationary pressures in the services components led core CPI to also moderate, clocking in at 5.38%, a sharp fall from 5.68% in Dec-18.
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Industrial production rose
Industrial production rose by 2.4% in Jan-19 as compared to 0.3% in Feb-18. Cumulatively, IIP for FY19 stood at 4.6%, lower than 3.7% in FY18. Significant sequential uptick was observed across sectors; Mining (3.4%), Electricity (2.1%) and Manufacturing (6.8%)
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Wholesale inflation for Jan-19
Wholesale inflation for Jan-19 came in at 2.76%, lower than 3.80% registered in Dec-18. Broad-based fall in commodity prices amid deflationary pressures from food and fuel items led to this downtick in inflation. Consequently, core WPI inched down to 2.91%, as compared to 4.22% in Dec-18.
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