Mumbai, June 29 The lull in the corporate bond market seen in the first quarter of this fiscal is expected to change after the Budget.

Bankers and market participants expect more corporate bond issuances from the second quarter, given the Government thrust on the infrastructure sector and the likely tax sops. As infrastructure projects need more long-term capital, the debt market would be the preferred route for corporates, said analysts. Institutions such as India Infrastructure Finance Company and National Highway Authority of India are expected to tap the debt market soon.

“With the new government’s thrust on infrastructure, the market for corporate bonds will pick up as credit demand rises. LIC will invest over Rs 50,000 crore in the corporate bond market this year against the Rs 48,000 crore invested in 2008-09,” said Mr Thomas Mathew, Managing Director, LIC.

“Currently more corporates are raising funds through the short-term issuance route. So there are not many long-term issuances. Public sector issuances are also lower because they have access to bank loans and other funds. For instance, a one-year loan is cheaper than a five-year and 10-year bond”, said Mr B. Prasanna, Managing Director and CEO, ICICI Securities Primary Dealership.

Mr Munish Varma, Managing Director, Head of Global Markets, Deutsche Bank, India, said given the ample liquidity in the banking system and the low loan rates, corporates looking to raise funds found it much easier to borrow from banks. According to data from ICICI Securities, there were 130 bond issuances and Pass-through Certificates between January and June 2009, amounting to Rs 59,270 crore. In the same period last year, there were 296 issuances for Rs 52,256 crore.

At present, the returns in the corporate bond market are around 8.5 per cent against 11-14 per cent last year. However, this is only temporary and the situation may change after the Budget, said Mr Mathew. According to Mr Mukesh Agarwal, Director, CRISIL Ratings, the long-term infrastructure bonds could face a problem of finding investors.

“Banks may not be interested in investing as they would prefer to give loans. Mutual funds may not have funds to invest in such long-term papers and insurance companies would be bound by guidelines regarding exposure,” Mr Agarwal explained.

Mumbai, June 29 More non-core businesses will be sold in three to six months, the Wockhardt Chairman, Mr Habil Khorakiwala, told shareholders on Monday.

The debt-ridden drug-maker has in the last 10 days announced the divestment of its German and animal health businesses, as part of its restructuring exercise to raise funds. The company had a debt of Rs 3,400 crore on December 2008.

The corporate debt restructuring exercise undertaken by Wockhardt is on, with the lenders meeting last week, he said. Details are being worked out and will be with the company in a week, and the final legal shape will take another four to six weeks, he said.

Regarding Wockhardt’s FCCBs, he said, as part of its restructuring, the company was looking at alternatives including a buyback, if available at a discount. The FCCB of $108 million is to mature in October. Mr Khorakiwala also said that legal avenues such as arbitration will be looked at to settle some disputed bank transactions.

For the first time, Mr Khorakiwala went on record to say Fortis Healthcare was interested in picking up equity in Wockhardt Hospitals. “We are not going out of the hospital business,” he said, adding that Fortis is not the only interested company.

The government may reconstitute its empowered group of ministers (EGoM) on gas allocation as it looks to play an active role to safeguard its interests should the long-running bitter battle between the Ambani brothers over gas supplies escalate.

The Prime Ministers Office (PMO) and the cabinet secretariat are working on speedy reconstitution of the cabinet committee, which is likely to be headed by finance minister Pranab Mukherjee, highly-placed government officials told ET Now.

Petroleum minister Murli Deora, power minister Sushilkumar Shinde, chemicals & fertilisers minister M K Azhigiri and law minister Veerappa Moily are likely be part of the panel, they added. The officials spoke on condition of anonymity because of the sensitivities surrounding the case, which involves gas supplies from the Krishna Godavari (KG) basin. The government's move is significant since it comes after the recent Bombay high court order asking Mukesh Ambani-led Reliance Industries (RIL) to supply 28 million metric standard cubic metres a day (mmscmd) of KG gas to Reliance Natural Resources (RNRL), a company run by younger brother Anil Ambani.

The two brothers have been at loggerheads since the death of their father in 2002, and a 2005 settlement saw the Reliance group split into two. RIL gained control of the KG gas, but was obliged to supply gas to RNRL. The price fixed by the court for RIL to supply gas to RNRL was set at $2.34 per million British thermal units (mBtu), which is lower than the $4.2 per mmBtu fixed by an earlier EGoM, also headed by Mukherjee, before the elections.

Since the court order has implications for the government in terms of royalty and utilisation of gas by various sectors like fertiliser and power, the PMO feels the issue needs to be handled with utmost care. Hence the move to set up a cabinet panel to determine a coordinated government strategy for when and how to intervene. RIL is widely expected to lodge an appeal in the Supreme Court against the HC order, and the government may also join the litigation to protect its interests, the officials said.

According to rough calculations, the government could lose revenue to the extent of thousands of crores if gas is sold to RNRL at the price specified by the HC rather than the $4.2 per mmBtu price fixed by the EGoM. Concerned about the implications of the HC order, various central ministries have started to make their concerns known.

The department of chemicals and fertilisers has already raised an alarm over the court ruling, seeking an assurance from the petroleum ministry that supply of KG gas to the fertiliser industry should not be affected. ‘‘Our understanding is that any family settlement would not override the sovereign right of the government to formulate policies aimed at larger public interest,'' said a communication from fertiliser secretary Atul Chaturvedi to petroleum secretary R S Pandey.

The move also has implications for government-owned NTPC, which has gas supply agreements with RIL. Some state governments like Andhra Pradesh also have outstanding issues on gas allocation for units located in their state.

SINGAPORE: Oil prices jumped above $73 a barrel on Tuesday in Asia as a weakening US dollar and attacks on oil installations in Nigeria helped push prices to eight-month highs.

Benchmark crude for August delivery was up $1.06 to $72.55 a barrel by midday Singapore time in electronic trading on the New York Mercantile Exchange after trading as high as $73.38. On Monday, it gained $2.33 to settle at $71.49.

Oil has surged from below $35 in March in part on investor concern that massive U.S. fiscal stimulus spending will eventually spark high inflation. Investors often buy commodities such as crude as a hedge against a weakening dollar and inflation.

The euro gained to $1.4108 on Tuesday from $1.4078 on Monday. Prices were also bolstered by another round of attacks Monday by Nigerian militants, who this time partly damaged and shut down a Royal Dutch Shell offshore oil platform. Nigeria is Africa's largest oil producer.

Crude trading volume was about three times more than normal Tuesday in Asia, said Clarence Chu, a trader at market maker Hudson Capital Energy in Singapore. China boosted state-set gasoline and diesel prices Tuesday to reflect rising global crude costs, days after indicating plans to increase its strategic crude oil reserves by 60% over the next five years.

he government raised the retail price of gasoline by 8.6% and diesel by 9.6%, the fourth change in prices this year. Crude reached $73.23 a barrel in intraday trading earlier this month, the highest since October. In other Nymex trading, gasoline for July delivery rose 2.73 cents to $1.96 a gallon and heating oil gained 2.65 cents to $1.81. Natural gas for July delivery jumped 2.4 cents to $3.97 per 1,000 cubic feet. In London, Brent prices rose $1.31 to $72.30 a barrel on the ICE Futures exchange.