LIC to buy $27bln debt, $10bln stocks in FY09

Thu, Jun 19 01:29 PM

MUMBAI (Reuters) - India's Life Insurance Corp (LIC) aims to buy up to 1.15 trillion rupees ($27 billion) of bonds in the fiscal year to March 2009, its managing director said, nearly as much as the government's annual borrowing.

State-owned LIC is India's biggest investor in bonds and one of the leading buyers of stocks, with total assets of $175 billion under management.

"Our total investment income would go up this year as we are buying more of debt, which is giving reasonably good returns now," Managing Director Thomas Mathew told Reuters in an interview.

It plans to buy 450 billion rupees of stocks in 2008/09, compared with 340 billion rupees in 2007/08, and 1.1 trillion to 1.15 trillion rupees of bonds, up 10-15 percent, he said late on Wednesday.

"Ten-year yields at around 8.3 percent are good levels to enter and they are likely to remain around these levels for some time," Mathew said.

The 10-year benchmark bond yield rose 15 basis points last week after a surprise lending rate increase by the central bank. It has gained nearly a percentage point since late January.

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