India Corporate Bonds
Requirement-based trading keeps yields steady
This story was originally published at 20:24 IST on 9 September 2024
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By Vaishali Tyagi
MUMBAI – Yields on corporate bonds ended steady from last week's closing in the secondary market today because most market participants limited their activity to meeting basic portfolio requirements, dealers said.
"There's not much happening in the market today as most people are still on 'vacation mode', and majorly need-based trading is happening," a dealer at a mid-sized brokerage firm said. "We are seeing very low liquidity in the bond market, and that's keeping the overall activity subdued and not moving yields."
The market witnessed some selling pressure which was mostly limited to three- and five-year tenures, with market participation from mutual funds and a handful of insurance companies, dealers said.
Meanwhile, banks remained on the sidelines in the absence of fresh cues on interest rates. Dealers said the market might continue to trade on a cautious note in the near term, at least till the US Federal Reserve's two-day monetary policy meeting starting Sep 17.
Deals aggregating to 88.50 bln rupees were recorded today on the National Stock Exchange and BSE combined, compared with 88.03 bln rupees on Friday.
Papers issued by National Bank for Agriculture and Rural Development, Small Industries Development Bank of India, Uttar Pradesh Power Corp, Kerala Infrastructure Investment Fund Board, Muthoot Fincorp, Cholamandalam Investment and Finance Co, Keertana Finserv, Hella Infra Market, Navi Finserv, and Spandana Sphoorty Financial were traded the most on exchanges.
"Mostly banks, which were active buyers last Friday, largely stayed on the sidelines today. However, a few state-owned companies also seemed to be in action today, along with some corporates who also showed interest in buying of papers in shorter tenures but nothing significant to note," a dealer at a mid-sized brokerage firm said.
Activity in the primary market also remained subdued today. On Tuesday, Shriram Finance plans to raise up to 15 bln rupees through bonds maturing in 10 years, and Aditya Birla Housing Finance plans to raise up to 5 bln rupees through bonds maturing in five years. SMFG India Home Finance Co has invited bids to raise 2 bln rupees through bonds maturing on Sep 10, 2027.
UDAY BONDS
In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating to 138.00 mln rupees were traded at a weighted average yield of 7.2465-7.3204%, data from the Reserve Bank of India's Negotiated Dealing System–Order Matching System showed.
* 135.00 mln rupees of Uttar Pradesh's March 2025, March 2028, and June 2026 bonds were traded at 7.2504-7.3204%
* 3.00 mln rupees of Tamil Nadu's February 2027 bond was traded at 7.2465%
BENCHMARK LEVELS FOR CORPORATE BONDS:
TENURE | TODAY | FRIDAY |
Three-year | 7.58-7.60% | 7.59-7.60% |
Five-year | 7.51-7.53% | 7.50-7.52% |
10-year | 7.40-7.41% | 7.40-7.42% |
End
With inputs from Ashna Mariam George
Edited by Avishek Dutta
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