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Express Tribune
a day ago
- Business
- Express Tribune
SBP injects Rs13tr into banking system via OMOs
Listen to article The State Bank of Pakistan (SBP) injected a total of Rs13 trillion into the banking system through conventional and Shariah-compliant Open Market Operations (OMOs) on July 4, 2025, in a move aimed at maintaining short-term liquidity. According to official data, the conventional OMO injection amounted to Rs12.647 trillion, accepted at a return rate of 11.03%, with most of the liquidity injected via 14-day tenor instruments. In parallel, the central bank conducted a Shariah-compliant Mudarabah-based OMO, injecting an additional Rs361.6 billion through 7-day and 14-day instruments at return rates of 11.11% and 11.10%, respectively. This large-scale liquidity operation reflects massive rupee circulation and an inflationary environment that erodes public buying power. Meanwhile, the Pakistani rupee posted a slight decline against the US dollar in the interbank market on Friday, slipping by 0.04%. By the day's close, the local currency was quoted at 283.97, down by 11 paisas from the previous session's closing rate of 283.86. Moreover, gold prices in Pakistan declined on Friday, primarily due to subdued local demand amid Ashura-related closures, even as international bullion markets witnessed a rebound driven by a softer US dollar and renewed safe-haven inflows ahead of potential trade policy moves by former US President Donald Trump. According to data released by the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA), the price of gold per tola dropped by Rs1,500, settling at Rs355,500. Similarly, the rate for 10 grams of gold fell by Rs1,286 to Rs304,783. The dip in domestic prices contrasts with gains earlier in the week. On Tuesday, gold had risen by Rs800 per tola, reaching Rs357,000. Adnan Agar, Director at Interactive Commodities, explained that global market activity remained subdued due to a bank holiday in the United States. 'The market is relatively inactive today, with gold trading between $3,325 and $3,344 per ounce. Current levels are hovering around $3,332,' he noted. Agar added that volatility is expected to return next week when markets reopen, particularly as attention turns to the US president's reinstatement of trade tariffs.
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Business Standard
27-06-2025
- Business
- Business Standard
Nuvama Wealth shares surge 78% from April low; what's driving the stock?
Nuvama Wealth Management share price today Shares of Nuvama Wealth Management (NWML) hit a new high of ₹8,121, gaining 3 per cent on the BSE in Friday's intraday trade. In the past one week, the market price of the stock broking and allied services company has outperformed the market by surging 18 per cent. In comparison, the BSE Sensex was up 2.7 per cent during the period. The stock price of NWML has bounced back 78 per cent from its 52-week low of ₹4,567.80, which it touched on April 7, 2025. NWML's FY25 performance Nuvama Wealth's client assets grew by about 24 per cent in the financial year 2024-25, while revenue for the year rose by about 41 per cent and profits by about 65 per cent. Nuvama Wealth closed FY25 with about ₹986 crore of profit after tax. The wealth management company's profit margins went up and the ROE substantially improved from about 23.6 per cent to 31.5 per cent. India wealth management industry outlook India's financial sector has performed well in fiscal 2025. Despite the slowdown and market correction in the second half, the sector ended the year on a solid ground. Looking ahead, the growth is expected to continue, though at a more measured pace as markets and investors adjust to evolving uncertainties. The Reserve Bank of India (RBI), essentially, started injecting liquidity through Open Market Operations (OMO) and let the rupee depreciate. It also announced a string of repo rate cuts. Reduction of risk weight was done towards non-banking finance companies (NBFC) and micro finance companies. Inflation target became more benign. CRISIL Ratings view on NWML According to CRISIL, the Nuvama group is a prominent player in the wealth management serving Ultra High Net Worth Individuals (UHNI), High Net Worth Individuals (HNI) and Affluent client segments. It offers wealth management solutions, covering investment advisory, estate planning, investment management, lending and broking services for individuals, institutions, CXOs, professional investors, and family offices. The group holds a competitive position in the majority of businesses and is expected to further strengthen its market position through growth and diversification, over the medium term. Most of the businesses are fee-based, with borrowings largely onward for working capital requirements and short-tenor lending to the wealth business clients for margin/ESOP financing and loan against shares (LAS). Apart from the growth in total income, cost optimization has been another key driver for improvement in profitability. Another driver for sustenance in earnings metrics has been the increased emphasis on, and thus share of, annual recurring revenue (ARR) in the wealth management business, growing scale and share from asset management business and improvement in market share for businesses such as clearing and custody. About Nuvama Group As one of India's leading integrated wealth management firms in India. Nuvama oversees ₹4.3 trillion of client assets and caters to a diverse set of clients, which includes over 1.2 million affluent HNIs and more than 4,250 of India's most prosperous families as of Q4FY25. Nuvama offers wealth management solutions, covering investment advisory, estate planning, investment management, lending and broking services for individuals, institutions, CXOs, professional investors, and family offices. It also offers a wide bouquet of alternative asset management products and is a leading player in capital markets.
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Business Standard
06-06-2025
- Business
- Business Standard
RBI unperturbed by $52.4 bn short position in dollar forward book
The Reserve Bank of India is not overly concerned about short dollar positions in the forwards book, said Sanjay Malhotra, Governor, the Reserve Bank of India, at the post-policy press conference on Friday. The central bank's net short dollar position in the forward book stood at $52.4 billion by the end of April, down from a peak of $78 billion in February, according to the latest data by the RBI. A majority of the central bank's forward positions — around 72 per cent of the total book — were concentrated in the three-month to one-year segment, amounting to $37.7 billion. In comparison, forward contracts maturing within three months stood at $14.7 billion. 'About the $40 billion short positions, we are not unduly concerned about that. Even if you were to… include the one after one year that is coming in, we are not unduly worried. It's a very, very comfortable level to be in. Yes, if there are opportunities and we can build reserves, that will happen, but that is not something which we will be unduly, be bothered about,' said Malhotra. Following a five-month streak of rising net short dollar positions in the forwards book of the RBI through February, the central bank trimmed some of its dollar exposure in March and April. The RBI was likely allowing the short positions to mature while sterilising the resulting liquidity impact through Open Market Operations (OMOs). This, it was suggested, explained why the central bank continued to conduct OMOs even in times of surplus liquidity. 'With the RBI's net short FX forward book outstanding at $72.6 billion (end-April, including $20 billion worth of short FX forwards with ~3Y tenors), we believe active USD purchases are likely to continue in coming months to keep FX reserves unchanged, at a minimum. Based on the RBI's data, it has another $14.7 billion worth of short FX forwards expiring over the next three months; we estimate $7.4 billion in May, $4.8 billion in June and $2.5 billion in July,' Nomura said in a note.
India Gazette
06-06-2025
- Business
- India Gazette
Economists hail RBI's 50 bps rate cut and CRR cut to give a strong push to growth
New Delhi [India], June 6 (ANI): Economists across the board have welcomed the Reserve Bank of India's (RBI) latest policy decision, terming the 50 basis points (bps) repo rate cut as a pro-growth move that is expected to significantly boost liquidity and economic activity in the country. On Friday, RBI Governor Sanjay Malhotra announced the decision of the Monetary Policy Committee (MPC), stating that the policy repo rate has been reduced from 6 per cent to 5.5 per cent. This larger-than-expected cut in the repo rate was accompanied by a 100 bps cut in the Cash Reserve Ratio (CRR), now reduced to 3 per cent, aimed at enhancing liquidity by Rs 2.5 lakh crore. Reacting to the development, Sonal Badhan, Economics Specialist at Bank of Baroda, told ANI that the policy is strongly pro-growth. 'RBI has announced a very pro-growth policy by announcing a 50bps repo rate cut. This along with 100 bps cut in CRR will provide significant boost to liquidity and lead to faster transmission of rate cuts,' she said. However, Badhan also noted a cautious tone in RBI's outlook. 'As the stance has been changed to neutral and the policy signals that there remains limited room for monetary policy to support growth, we expect status quo by RBI in the next 2-3 meetings. The decision will be data dependent. More rate cuts will be expected if there is significant downside seen to growth,' she added. Debopam Chaudhuri, Chief Economist at Piramal Group, said the RBI's move was in line with their expectations. 'While we were among the few institutions anticipating a 50 bps rate cut, it is highly encouraging to see MPC members aligning with this view, united by the objective of revitalizing India's domestic economic growth,' he told ANI. Chaudhuri pointed out that the February rate cut had limited impact due to tight liquidity. 'The additional 25 bps cut now helps offset that earlier lag in impact,' he said, adding that another 50 bps cut may follow in FY26, possibly bringing the terminal repo rate down to 5 per cent. He also expects a moderation in the RBI's liquidity operations via Variable Rate Repos (VRRs) and Open Market Operations (OMOs) as the CRR cut ensures sufficient liquidity. Sujan Hajra, Chief Economist and Executive Director at Anand Rathi, said the rate and CRR cuts exceeded both market and institutional expectations. 'This frontloading of monetary easing reflects a clear intent to support growth while inflation remains benign,' Hajra said. However, Hajra cautioned about the shift in policy stance. 'Although this change from 'accommodative' to 'neutral' might be read as a signal that the rate cut cycle is nearing its end, we believe it is aimed at tempering any potential 'irrational exuberance' in the financial markets,' he added. With inflation currently under control, the RBI's bold policy shift has boosted market confidence and underlined its commitment to supporting economic growth while maintaining macroeconomic stability. (ANI)
Express Tribune
24-05-2025
- Business
- Express Tribune
SBP injects record Rs12.82 trillion
Listen to article In an unprecedented move to help fund the government's fiscal deficit, the State Bank of Pakistan (SBP) injected a record-breaking Rs12.82 trillion into the banking system on Thursday through Open Market Operations (OMOs), marking one of the largest liquidity injections in recent history. Of the total injection, Rs12.42 trillion was provided via conventional reverse repo OMOs. This included Rs11.9 trillion through 21-day loans at an interest rate of 11.03%, and Rs521.1 billion through 7-day loans at 11.10%. An additional Rs396 billion was injected using Shariah-compliant Mudarabah-based OMOs, reflecting the SBP's strategy to cater to liquidity needs in both conventional and Islamic banking sectors. Since the International Monetary Fund (IMF) restricts the government from borrowing directly from the central bank, SBP injects liquidity into commercial banks, which then invest this capital into government treasury instruments, effectively financing the fiscal deficit indirectly, according to sources familiar with the matter. A revenue shortfall by the Federal Board of Revenue (FBR) is contributing to the funding gap, with actual collections hovering around Rs11.8 trillion against the FY2025 target of Rs12.3 trillion, said Sana Tawfik, Head of Research at Arif Habib Limited (AHL). She added that SBP profits of Rs2.5 trillion have already been transferred to the Ministry of Finance in the first nine months of FY2025 as non-tax revenue, while the petroleum levy brought in Rs833 billion during the same period. Meanwhile, the Pakistani rupee gained marginally against the US dollar on Friday, appreciating 0.03% to close at 281.97 in the inter-bank market, up from 282.06 a day earlier. Gold prices surged in domestic markets in line with global trends as geopolitical risks increased. According to the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA), gold per tola jumped Rs3,500 to Rs351,000, while the 10-gram rate increased by Rs3,000 to Rs300,925. Globally, gold prices rallied 2% on Friday, heading for their best weekly performance in six weeks. This rise was triggered by investor anxiety following US President Donald Trump's renewed threats of imposing steep tariffs, including a 50% levy on European goods, and warning Apple Inc. of further tariffs unless it shifted manufacturing to the US. "Gold is up today due to strong safe-haven demand," said Adnan Agar, Director at Interactive Commodities. He noted international gold prices hit a high of $3,364 and hovered around $3,361 per ounce during trading. The market opened at $3,300 and touched a low of $3,286 earlier in the session.
