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Strategies & Market Trends : India Coffee House -- Ignore unavailable to you. Want to Upgrade?

To: Mohan Marette who wrote (5008)	7/8/1999 3:28:00 PM
From: Mohan Marette	Respond to of 12475

Corporates, banks rush for interest swap deals (Friday, July 9, 1999) Our Bureaus in Mumbai / New Delhi The Indian derivatives market exploded on Thursday with a slew of interest rate swaps (IRS) and forward rate agreements (FRAs) were concluded between banks, corporates, primary dealers and financial institutions, on the first day of introduction of these products in the domestic debt market. Foreign bank Standard Chartered Bank has done an IRS with GE Capital Services India for Rs 100 crore for a tenor of six months. GE Capital received a fixed rate and paid the bank a floating rate linked to the National Stock Exchange (NSE) Mibor, said Vikas Suri, chief dealer, debt and money markets, Stanchart. The bank has also done swaps with other banks such as Deutsche Bank, HongKong Bank and American Express on both sides, he added. One of the lessons learnt from yesterday's market is that the NSE Mibor and the Mibor put out by Reuters are emerging as anchor rates. For FRA there have been deals linked to the US Libor. Another trend noticed in the market is that most of the corporates went in for a floating rate option from fixed interest rate, reflecting the falling interest rate scenario. This charecteristic of the derivative markets will aid the Reserve Bank of understand the interest rate expectations of the market, especially the corporates who are the final users of funds. HSBC Markets has entered into an FRA for engineering and construction major Larsen & Toubro Ltd for a three month period starting August 23. "This 'two by five' FRA for an underlying of Rs 20 crore has been priced on basis of the primary 91-day commercial paper (CP) rate of L&T which will be issued on August 23," said Amit Gupta, head of treasury marketing, HSBC Markets. The term "two by five" means the contract will cover interest payments commencing two month hence but only upto five months from today. L&T has a larger underlying loan for a longer term on a floating rate basis. By entering into an FRA, it has locked in its interest rate for a three month period, explained Gupta. HSBC is also offering FRA quotes based on the 91-day treasury bills rate. Deutsche Bank entered into a one year IRS with ICICI for Rs 25 crore. The bank has done deals worth around Rs 155 crore yesterday, said Rajiv Baruah, co-head, global markets of the bank. A 'one by three' FRA was entered into between Vysya Bank and Credit Lyonnais for an amount of 10 crore with the reference rate being the US Libor plus the forward rate (July over September). Vysya Bank has received a fixed rate of 9.5 per cent, said Anindya Dutta, head of derivatives, Credit Lyonnais Bank. Private sector HDFC Bank entered into an IRS with KEC International for a tenure of six months, with the bank receiving a floating rate linked to NSE Mibor. Among other deals, ABN Amro did a one year IRS with Reliance for Rs 50 crore. Electrolux concluded an IRS with StanChart for a one-month tenor under which Electrolux will receive a fixed rate against the floating rate linked to the Reuters Mibor. Meanwhile, ICICI Securities and Finance Company Ltd (I-Sec) struck an IRS deal for Rs 10 crore with the bank for one month.

To: Mohan Marette who wrote (5008)	7/8/1999 3:34:00 PM
From: Mohan Marette	Read Replies (2) \| Respond to of 12475

Joint venture for business school Our Bureau CHENNAI, July 8 THE Melewar Academia group of Singapore, the Ceylinco group of Sri Lanka and the Shriram group ( youngindia.com of Chennai have forged a joint venture for launching the AEC Business School. The school would offer management courses and award international management degrees. Initially, it would offer MBA courses in a tie-up with Maastricht School of Management of the Netherlands. Addressing a press conference here, Mr. Tunku Iskandar, President of Melewar Academia Holding of Malaysia, said that Chennai would be an ideal location for promoting this school and was hopeful that the partnership would prove to be a big success. The Melewar group holds 51 per cent in the venture. The Shriram group would hold 40 per cent and the balance nine per cent would be with the Ceylinco group. The school would initially have a corpus of Rs. 1 crore. An MBA programme from the school would cost $10,000. (HBOL)