India Corporate Bonds
Yields flat on dull activity in secondary mkt
This story was originally published at 21:17 IST on 30 August 2024
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By Vaishali Tyagi
MUMBAI – The dull activity in the secondary market kept the yields steady as investors refrained from taking large bets due to the absence of major domestic triggers, dealers said.
"It's just another day, barely any additional activity is being witnessed," a dealer at a mid-sized brokerage firm said. "No major activity, therefore no change in yields."
In the secondary market, corporate bond yields have become broadly static for some time now, dealers said. While there is some minor portfolio churning that takes place on a daily basis, it's not happening on a significant scale. There are no fresh cues in the market to drive it, yet investors remain cautious about taking cues on the interest rate trajectory in the US and India.
Today, buying and selling were seen by both mutual funds and banks, dealers said. However, the buying and selling were only in small quantities, which did not impact the yield.
Subdued activity kept trade volumes in the secondary market lacklustre. Today, deals aggregating to 74.31 bln rupees were recorded on the National Stock Exchange and BSE combined, as against 125.92 bln rupees on Thursday.
Papers issued by the Indian Railway Finance Corp, State Bank of India, Power Finance Corp, Uttar Pradesh Power Corp, LIC Housing Finance, HDFC Bank, Punjab National Bank, Cholamandalam Investment And Finance Co, Navi Finserv, Edelweiss Financial Services were traded the most on the exchanges.
The primary market also saw not much action today. THDC India raised 6 bln rupees through bonds maturing in 10 years at a fixed coupon of 7.72%. Next week, Small Industries Development Bank of India plans to raise up to 50 bln rupees through bonds maturing on Sep 5, 2029, on Tuesday.
Axis Bank may follow several other lenders and raise funds through infrastructure bonds, sources told informist. Merchant bankers said the private sector bank may announce its bond issue in September. According to reports, ICICI Bank may also announce a second such issue this financial year. In June, ICICI Bank raised 30 bln rupees through infrastructure bonds maturing in 10 years at a coupon of 7.53%.
UDAY BONDS
In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating 27.70 mln rupees were traded at a weighted average yield of 7.2476-7.2876%, data from the Reserve Bank of India's Negotiated Dealing System–Order Matching System showed.
* 17.50 mln rupees of Rajasthan's March 2026 bonds were traded at 7.2876%
* 9.20 mln rupees of Punjab's March 2031 were traded at 7.2856%
* 1.00 mln rupees of Uttar Pradesh's March 2027 were traded at 7.2476%
BENCHMARK LEVELS FOR CORPORATE BONDS:
TENURE | TODAY | THURSDAY |
Three-year | 7.59-7.60% | 7.58-7.59% |
Five-year | 7.49-7.51% | 7.49-7.52% |
10-year | 7.41-7.43% | 7.41-7.42% |
End
With inputs from Ashna Mariam George
Edited by Akul Akhoury and Deepshikha Bhardwaj
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