Wednesday, June 12, 2024
Home News Lure of gold drives SGBs past 100-tonne mark for first time

Lure of gold drives SGBs past 100-tonne mark for first time


Mumbai : Fearful of the impact of the banking crisis in the West, Indian investors flocked to their final tranche of sovereign gold bonds (SGBs) issued by the Reserve Bank of India (RBI) for FY23, taking outstanding bonds above the 100 tonne mark Were staying For the first time since the launch of the scheme in November 2015.

Personal finance experts said incremental inflows into SGBs from gold exchange-traded funds (ETFs) after tax and indexation benefits from debt funds were removed from April 1, will add to the attractiveness of bonds.

Graphic: Mint

View Full Image

Graphic: o2help

The latest sovereign gold bond issue which ran from March 6 to 10 received investor subscription to the tune of 3.53 tonnes, which is a 22-month high, taking the outstanding bond volume to 101.57 tonnes. at the outstanding value of SGBs Assets under management by MF gold ETF schemes exceed Rs 44,937 crore as of mid-March 21,400 crores by 28 February 2023.

In terms of units subscribed, March’s 3.53 tonnes was the highest since May 2021, when investors subscribed 5.3 tonnes.

The removal of benefits applicable to gold ETFs, among other specified debt schemes, from April 1 could lead to incremental inflows into SGBs, which are exempt from capital gains tax on redemption, though the interest on the bonds is taxable, said Amol Joshi, founder Services as per planned investment.

“Existing loan schemes will not be affected and there is no grandfathering as the new rules are effective from the new financial year (FY24),” Joshi said.

Bankers said since the amendments to the Finance Bill became public only on Friday, investor enthusiasm for gold bonds was driven by the bank crisis in the US and the European Union earlier this month. The metal’s prospects look bright for at least two quarters, he said.

“Given the current interest rate scenario, macroeconomic environment and political uncertainty overseas, gold is one of the best asset classes to invest in, and SGB is the best vehicle to invest in gold if you are in India.” said Shekhar Bhandari, President, Global Transaction Banking, Kotak Mahindra Bank. “The above reasons will keep the prices supported for the next few quarters with a correction likely in 2024.”

To reduce the current account deficit and reduce the pressure on the rupee, the government introduced the revised SGB scheme.

The 2.5% annual coupon, payable half-yearly, is on the issue price and the tenor is 8 years, although early redemption is permitted after the fifth year from the date of issue on coupon payment dates.

Resident Indians are eligible investors as defined under FEMA, 1999. RBI issues bonds on behalf of the government. The minimum investment for individuals is one gram and the maximum is 4 kg in each financial year.


Markets end FY23 in style; Sensex Nifty rally nearly 2% on firm global trends

Market, The final day of the fiscal year 2022-23 saw gains for benchmark indices, with a gain of nearly 2% on Friday, extending gains for...

Day trading guide for today: 6 stocks to buy or sell on Friday — 31st March

Trading, Day trading guide for today: Indian shares gained on Wednesday as global markets' increased risk appetite was aided by easing in the banking industry....

Financial, IT stocks aid Indian shares snap three-month losing streak

Financial, By Bharat Rajeshwaran BENGALURU (Reuters) - Indian shares rose on Friday, supported by a higher weighting of financial stocks and information technology (IT) stocks,...


Please enter your comment!
Please enter your name here


Most Popular

Trading the Inside Bar Pattern on Pocket Option Platform

Inside Bar Pattern Introduction Price movement on a chart is examined in price action trading. You may use candlesticks to predict where prices will move...

“Unlocking the Secrets: 4 Tricks of Successful Traders on Pocket Option Platform”

For a year, I have been trading on the Pocket Option platform. I sometimes succeed and sometimes fail. However, I was confident that if...

Identifying Mistakes That Lead to Losses on Pocket Option

Why do people lose their money when trading binary options New traders frequently take a significant financial risk while trading binary options. As a result,...

Weekly Income Plan on Pocket Option Platform”

Get weekly returns on Pocket Option It turned out that October was a terrific month for me. I am still able to generate money every...

Recent Comments