February 19, 2015
Gold related shares seen rising after RBI eases norms
(Reuters) - An overnight move by the Reserve Bank of India to ease gold import and lending norms for banks is set to trigger gains in shares of jewellery makers, as well as shares of lenders which accept gold as collateral.
Traders said on Thursday that shares of Federal Bank, Muthoot Finance Ltd as well as Mannapuram Finance Ltd were being closely watched after the RBI late on Wednesday allowed banks to lend against gold, lifting a ban imposed in end-June 2013.
"Gold-related stocks would gain. It also shows RBI's comfort due to rising forex reserves," said Deven Choksey, managing director, K R Choksey Securities in Mumbai.
The central bank also clarified that so-called star or premier trading houses would be allowed to import gold without any end use restrictions, two months after it scrapped a rule on exporting 20 percent of total gold imports.
"All sale of gold domestically will, however, be against upfront payments. Banks are free to grant gold metal loans," the RBI said.
Reuters had earlier reported the central bank would tweak gold import rules for star trading houses through a circular.
India kept its current account deficit in check between July and September despite easing curbs on gold imports, thanks to a sharp increase in foreign investments and cheaper oil.