JP Morgan boost: PNB Gilts zooms 20%, hits 52-week high on heavy volumes

Shares of PNB Gilts were locked in upper circuit of 20 per cent at Rs 81.55 on the BSE on Friday at 12:14 PM on the back of heavy volumes. The stock surpassed its previous 52-week high of Rs 71.60 touched on July 21, 2023.

A combined 27.85 million shares, representing nearly 60 per cent of free-float equity of PNB Gilts, have so far changed hands on the NSE and BSE. There are pending buy orders for around 1.9 million shares on these exchanges, data shows.

PNB Gilts is a primary dealer engaged in underwriting and trading of government securities, treasury bills, corporate bonds and interest rate swaps. Punjab National Bank, the promoter holds 74.07 stakes in PNB Gilts as on June 30, 2023. Public shareholders held the remaining 25.93 per cent or 46.68 million shares in the company.

According to a Bloomberg report, JPMorgan Chase & Co. will add Indian government bonds to its benchmark emerging-market index, a keenly awaited event that could drive billions of foreign inflows to the nation's debt market.

The index provider will add Indian securities to the JPMorgan Government Bond Index-Emerging Markets starting June 28, 2024. The South Asian nation will have a maximum weight of 10 per cent on the index, according to a statement Thursday. CLICK HERE FOR FULL REPORT

Meanwhile, going ahead, PNB Gilts' management aims is to generate healthy profits from the company's core business. In addition, the endeavour will be to employ smart derivatives strategies to hedge against rising interest rates, and explore non-core business opportunities, such as the foreign exchange market, equity market, and other fee-generating business segments to create revenue diversification.

"With the grant of license as an 'Authorized Dealer category III', the company will seek new opportunities in the area of Foreign Exchange markets, which will further strengthen its non-core business," PNB Gilts said in its FY23 annual report.

Though much of the pain is behind us, the macroeconomic and policy environment is expected to remain uncertain in the ensuing period. The expected slowing of economic growth and inflation may provide opportunities for the bond markets to stabilise in the current year. This augurs well for company's performance, the company said.

PNB Gilts further said it will also explore opportunities in the non-core business, especially foreign exchange market (post granting of foreign exchange license by the regulator), and other segments such as equity market as well as fee generating business segments in order to bring in diversity in income.