Gold finance firms Manappuram Finance, Muthoot Finance shares surge
Reuters Posted online: Monday, Oct 28, 2013 at 0000 hrs
Shares of Indian finance companies like Manappuram Finance Ltd and Muthoot Finance Ltd which provide loans against gold rallied on Monday on speculation the RBI may allow them to lend 75 per cent of the value of jewellery compared with 60 per cent earlier, traders said.
However, a person familiar with the central bank's thinking said the loan-to-value ratio had not been increased. "It (LTV) wasn't changed," the person said.
Last month, the Reserve Bank of India had tightened rules for gold non-banking finance companies, and had kept the loan-to-value ratio at 60 per cent.
Shares of Manappuram Finance Ltd Ltd and Muthoot Finance Ltd were up 5 per cent and hit the day's upper trading limit.
Officials at the two companies declined to comment.