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Informist, Thursday, Aug 22, 2024

By Vaishali Tyagi

MUMBAI – Yields on corporate bonds ended steady in the secondary market today as traders avoided aggressive bets ahead of the minutes of the Monetary Policy Committee's meeting held from Aug 6-8, dealers said. The minutes were released after 1700 IST.

Market participants expected minimal impact from the minutes on the fixed-income market, but they still remained cautious until the minutes were out, dealers said.

"We are expecting no surprise from the RBI's MPC minutes, yet the market will remain on the sidelines," a fund manager at a mid-sized mutual fund house said.

The meeting of the Reserve Bank of India's rate-setting panel this month was the last one to be attended by the three external members Jayanth Varma, Ashima Goyal, and Shashanka Bhide. The government will nominate fresh external members before the next policy review in October.

Varma and Goyal have been the only members of the panel to vote for cuts during the panel's current extended rate pause that has stretched to nine consecutive policy meetings. In its recent meeting, the MPC held the repo rate unchanged at 6.50% and the policy stance at "withdrawal of accommodation" with a 4-2 vote.

"Also, investors are waiting for (US Federal Reserve chair) Powell's comments for cues which may decide the direction of the market as he might hint at rate cuts in his speech," a fund manager at a mid-sized mutual fund house said. Powell is scheduled to speak at the annual central banking conference at Jackson Hole in Wyoming on Friday. Investors expect Powell to hint at a rate cut in September or a softening of policy stance.

Only a few insurance companies and pension funds were said to have been active in the market today. A few mutual funds were also active, but their activity was concentrated in the shorter-to-medium-term segments of the curve, dealers said. Today, deals aggregating to 119.06 bln rupees were recorded on the National Stock Exchange and BSE combined, against 115.54 bln rupees on Wednesday.

Participants shifted their focus to the primary market, where several public sector undertakings and non-banking finance companies lined up to raise funds through bond issuances. "People are especially waiting for REC which is tomorrow and others are also due next week like Canara Bank and Bank of Baroda," a fund manager at a mid-sized mutual fund house said. "I think REC will be well received."

REC has invited bids on Friday to raise up to 60 bln rupees through two bonds. Canara Bank and Bank of Baroda have announced plans to raise funds through tier-I and infrastructure bonds, respectively, next week. Aditya Birla Digital Fashion Ventures and 360 ONE Portfolio Managers are also in line to raise funds through bond offerings on Friday.

Papers issued by National Bank for Agriculture and Rural Development, REC, Bank of Baroda, Indian Railway Finance Corp, Andhra Pradesh State Beverages Corp, LIC Housing Finance, Power Finance Corp, Navi Finserv, Edelweiss Financial Services, HDFC Credila Financial Services, Spandana Sphoorty Financial, and HDB Financial Services were traded the most on the exchanges.

Today, LIC Housing Finance raised 10.50 bln rupees through bonds maturing in five years at a fixed coupon of 7.75%.

UDAY BONDS

In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating 257 mln rupees were traded at a weighted average yield of 7.0800-7.3282%, data from the Reserve Bank of India's Negotiated Dealing System–Order Matching System showed.

* 102 mln rupees of Haryana's June 2026 and March 2025 bonds were traded at 7.0801-7.2576%

* 100 mln rupees of Telangana's March 2030 bonds were traded at 7.2598%

* 53 mln rupees of Uttar Pradesh's March 2026 and March 2029 bonds were traded at 7.0800-7.1400%

* 2 mln rupees of Tamil Nadu's February 2028 bonds were traded at 7.3282%

BENCHMARK LEVELS FOR CORPORATE BONDS:

End

With inputs from Ashna Mariam George

Edited by Ashish Shirke

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