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Informist, Friday, Aug 16, 2024

By Vaishali Tyagi

MUMBAI – Yields on corporate bonds remained steady today amid a lack of fresh cues and as investors awaited a fresh round of primary market supply lined up for next week, dealers said. 

Currently, the market lacks triggers, and there isn't much happening that could influence yields," said a dealer at a mid-sized brokerage. "Until... there's some major announcement in the market, no major action is expected (on yields)."

Owing to an absence of significant triggers on the domestic and global fronts, yields will likely remain confined to a narrow range in the near term, dealers said. "Since last few weeks, nothing much is happening in corporate bonds. It (corporate bond yield) is expected to remain stable, as I see, for some more time," another dealer said.

Participation in the secondary market remained subdued today, with just a few insurance companies buying corporate bonds, while mutual funds and banks were said to have been on both buying and selling sides, dealers said. Most of the trading activity was concentrated at the shorter end of the curve, while long-tenure papers were barely in demand, dealers said. The modest activity was mostly due to trading based on requirements to manage portfolios, they said. 

Deals aggregating to 73.72 bln rupees were recorded today on the National Stock Exchange and BSE combined, compared with 79.11 bln rupees on Wednesday. Papers issued by REC, Hella Infra Market, Krazybee Services, IFCI, Keertana Finserv, LIC Housing Finance, Power Finance Corp, Sammaan Capital, National Bank for Agriculture and Rural Development, Bajaj Finance, Navi Finserv, Uttar Pradesh Power Corp, Muthoot Fincorp, Small Industries Development Bank of India, Spandana Sphoorty Financial, UGRO Capital, Tata Motors, Kerala Infrastructure Investment Fund Board, Shriram Finance, and HDB Financial Services, were traded the most on the bourses.

On Monday, five different issuers are selling bonds. While Tata Capital has invited bids to raise up to 15 bln rupees through bonds maturing on Aug 20, 2027, Shriram Housing Finance has sought bids to raise up to 4 bln rupees through bonds maturing on Dec 26, 2025. NeoGrowth Credit, Incred Financial Services and Hinduja Leyland Finance have also invited bids to raise 1 bln rupees each through bonds. 

In the primary market, dealers anticipate an increase in tier-I bond issuances in the near term. Canara Bank and State Bank of India are expected to be the first to tap the market and other large public-sector banks are also likely to follow suit, taking a cue from these. 

On Aug 5, SEBI issued new guidelines allowing mutual funds to value their additional tier-I bond holdings as per the bond's call option date, or yield-to-call, instead of the earlier requirement of valuing these as 100-year securities. 

UDAY BONDS

None of the Ujjwal DISCOM Assurance Yojana bonds were traded in the secondary market today, according to the Reserve Bank of India's Negotiated Dealing System–Order Matching System.

BENCHMARK LEVELS FOR CORPORATE BONDS:

End

Edited by Saji George Titus

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