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Informist, Thursday, Aug 29, 2024

By Vaishali Tyagi 

MUMBAI – Corporate bond yields in the secondary market remained steady today due to a lack of fresh domestic and global triggers, dealers said. Mutual funds were both on the buying and selling side in the secondary market today, while some banks sold bonds. A few insurance companies were also active in the longer-term segment, they said.

"The secondary market seems calm these days, and it will not show any movement until something out of the box happens," a dealer at a mid-sized brokerage firm said. "Currently, there are no clear cues from anywhere to give direction to the market and move yields." 

Merchant bankers believe that yields will remain in a narrow range and are expected to hover around the current levels unless there is some significant cue on the interest rate trajectory.

Dealers said whatever limited activity seen in the secondary market, is primarily driven by requirement-based trading by mutual funds, banks and insurance companies. Deals aggregating to 125.92 bln rupees were recorded on the National Stock Exchange and BSE combined today, as against 98.80 bln rupees on Tuesday.

Papers issued by the National Bank for Agriculture and Rural Development, Power Finance Corp, REC, LIC Housing Finance, Uttar Pradesh Power Corp, Kerala Infrastructure Investment Fund Board, Aditya Birla Finance, Hella Infra Market, Navi Finserv, AYE Finance were traded the most on the exchanges.

In the primary market today, India Infrastructure Finance Co raised 9.60 bln rupees through bonds maturing in 10 years at a fixed coupon of 7.37%. 

THDC India has invited bids on Friday to raise up to 6 bln rupees through bonds maturing in 10 years. Sadbhav Gadag Highway will also tap the market on Friday to raise 900 mln rupees through bonds maturing in 10 years. 

Market participants anticipate a rebound in primary market activity next week, although it's unlikely to match the intensity of this week's issuance spree. This week saw a surge in activity, with big-ticket issuers like State Bank of India, Canara Bank, and Bank of Baroda tapping the market with substantial amounts.

In addition to these large state-owned banks, public sector undertakings such as Indian Railway Finance Corp and Hindustan Petroleum Copr also borrowed funds from the market. "I think, we may see some issuances next week, likely from REC and NHAI (National Highway Authority of India), so we'll have to wait and see," a fund manager at a mid-sized mutual fund house said. 

UDAY BONDS

In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating 44.40 mln rupees were traded at a weighted average yield of 7.2391-9.9919%, data from the Reserve Bank of India's Negotiated Dealing System–Order Matching System showed.

* 25.00 mln rupees of Rajasthan's March 2025 bonds were traded at 7.2391-7.2608%

* 10.00 mln rupees of Tamil Nadu's February 2025 were traded at 8.3415%

* 8.40 mln rupees of Uttar Pradesh's March 2025 bonds were traded at 8.1672%

* 1.00 mln rupees of Haryana's March 2025 were traded at 9.9919%

BENCHMARK LEVELS FOR CORPORATE BONDS:

End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Saji George Titus

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