India Corporate Bonds
Yields steady ahead of RBI policy outcome Thu
This story was originally published at 21:24 IST on 7 August 2024
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By Vaishali Tyagi
MUMBAI – Yields on corporate bonds were steady in the secondary market today, ahead of the outcome of the Reserve Bank of India's monetary policy due Thursday, dealers said. Volumes were low today as market participants remained on the sidelines and refrained from placing significant bets ahead of RBI monetary policy, they said.
"Yields are more or less flat today as not much activity was seen in the market," a fund manager at a mid-sized mutual fund house said. "A day or two before any such event like the MPC, the market usually does not have high volume."
The RBI's Monetary Policy Committee is widely expected to maintain the status quo on interest rates and retain its policy stance of "withdrawal of accommodation", awaiting further progress on retail inflation aligning with the 4% target. However, any signs of the rate-setting panel inching closer to rate cuts may drive down yields.
While most market participants stayed on the sidelines, only mutual funds and banks were said to have been active in requirement-based trading, they said. The mutual fund activity was concentrated in the shorter-to-medium-term segments of the curve, dealers said.
Today, trade volumes in the secondary market remained low, with deals aggregating to 23.33 bln rupees recorded at 1530 IST on the National Stock Exchange and BSE combined, slightly lower than 28.44 bln rupees on Tuesday.
Papers issued by Vivriti Capital, Krazybee Services, Andhra Pradesh State Beverages Corp, Keertana Finserv, Cholamandalam Investment And Finance Co, Power Finance Corp, Hinduja Leyland Finance, National Bank For Agriculture And Rural Development, Navi Finserv, AYE Finance, Uttar Pradesh Power Corp, and Shriram Finance were the most traded on the bourses.
In the primary market, Bajaj Finance plans to raise up to 60 bln rupees through two bonds on Thursday. The company plans to raise up to 30 bln rupees through bonds maturing on Jul 31, 2029, and up to 30 bln rupees through Sep 10, 2027. REC has also invited bids to raise 30 bln rupees on Thursday through bonds maturing on Oct 31, 2026. Axis Finance has also invited bids to raise 6 bln rupees on Thursday through bonds maturing on Apr 25, 2028.
Several lenders and state-owned companies are likely to line up issuances after the monetary policy outcome, according to merchant bankers.
UDAY BONDS
In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating 10.00 mln rupees were traded at a weighted average yield of 7.1678%, data from the Reserve Bank of India's Negotiated Dealing System–Order Matching System showed.
* 10.00 mln rupees of Tamil Nadu's February 2029 bonds were traded at 7.1678%
BENCHMARK LEVELS FOR CORPORATE BONDS:
TENURE | TODAY | TUESDAY |
Three-year | 7.59-7.61% | 7.58-7.60% |
Five-year | 7.50-7.52% | 7.51-7.53% |
10-year | 7.41-7.43% | 7.40-7.42% |
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Saji George Titus and Aditya Sakorkar
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