New Delhi: Leading stock exchange BSE will auction Friday 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 USD 20 billion to USD 25 billion.
In a circular BSE had 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 was conducted yesterday 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 percent of permitted limit of USD 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 per cent 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 USD 20 billion to USD 25 billion.
At the same time, the sub-limit for longer time overseas investors such as sovereign funds has been reduced by USD 5 billion as there was less demand in this category. The overall cap remains unchanged at USD 30 billion.
The previous cap of USD 10 billion had been utilised by only about 20 percent in this category. The USD 20 billion limit for general FPIs has been always fully exhausted.
