111th Day Of Lockdown

Maharashtra25442714032510289 Tamil Nadu138470895321966 Delhi112494899683371 Gujarat41906291982046 Karnataka3884215411686 Uttar Pradesh3647623334934 Telangana3467122482356 West Bengal3001318581938 Andhra Pradesh2916815412328 Rajasthan2334417634499 Haryana2038114912297 Madhya Pradesh1720112679644 Assam15537984936 Bihar1503910991118 Odisha11956797273 Jammu and Kashmir92615567149 Kerala7874409532 Punjab71404945183 Chhatisgarh3526283514 Uttarakhand3305267246 Jharkhand3192217022 Goa203912078 Tripura177313241 Manipur14357930 Puducherry120061916 Himachal Pradesh110182510 Nagaland6733030 Chandigarh5234037 Arunachal Pradesh2871092 Mizoram2031430 Sikkim134710 Meghalaya113451
Business Economy 04 Dec 2019 Govt to launch first ...

Govt to launch first debt exchange-traded fund

REUTERS
Published Dec 4, 2019, 7:30 pm IST
Updated Dec 4, 2019, 7:30 pm IST
The ETF, called Bharat Bond ETF, will have a fixed maturity of three and ten years .
Finance Minister Nirmala Sitharaman. (Photo: File)
 Finance Minister Nirmala Sitharaman. (Photo: File)

New Delhi: Govt will launch its first debt exchange-traded fund (EFT) comprising debt of state-run companies, Finance Minister Nirmala Sitharaman said on Wednesday, in a bid to allow retail investors to buy government debt.

“It will be the first corporate ETF, which will provide additional money for PSUs (public sector undertakings) as well as other government organisations,” Sitharaman told reporters, after the proposal was approved by the cabinet chaired by Prime Minister Narendra Modi.

 

The ETF, called Bharat Bond ETF, will have a fixed maturity of three and ten years and will trade on the local stock exchange. It will invest in a portfolio of bonds of state-run companies and other government entities, a government statement said.

Retail investors will be able to invest in the bonds with as little as 1,000 rupees (USD 14), it said.

The move reflects Modi’s push to ease rules for state companies to raise funds through debt instruments and further develop domestic capital markets.

“It is a positive development for retail investors,” said A Prasanna, head of fixed income research at ICICI Securities Primary Dealership in Mumbai.

 

“Compared to existing options, the new ETF will have a lower fees and better tax treatment,” he said, adding it was unlikely to have a big impact in the short term on corporate bond market.

India has so far allowed only equity ETFs, and the government raised nearly 144 billion rupees (USD 2 billion) through ETFs in the 2019-20 fiscal year beginning April.

In general, ETFs have become a popular investment vehicle for investors because they allow them to invest in a diverse collection of assets.

According to government estimates, India’s state-run social security fund, Employees Provident Fund (EPFO), has invested about 870 billion rupees in ETFs.

 

...
Location: India, Delhi, New Delhi




ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT