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Informist, Monday, Sep 16, 2024

By Richard Fargose

MUMBAI - Rates on short-term debt instruments remained flat, and only one deal was stuck in the primary segment today as mutual funds stayed on the sidelines amid lack of fund availability, dealers said.

"Today was like a non-working day for the market. There was hardly any activity in the market today as mutual funds don't have funds to take any fresh position," a dealer with a brokerage firm said. "Their (mutual funds) funds are stuck in TREPs(triparty repo), which they will get back on Tuesday only."

Money markets were scheduled to be closed today due to Id-e-Milad, but the holiday was shifted to Wednesday by the Maharashtra government. The Reserve Bank of India said on Saturday that transactions scheduled to be settled or reversed on Tuesday would continue to be so. 

Money market participants had borrowed or lent funds through triparty repo considering four-day maturity on Friday, as today was earlier notified as a money market holiday by the RBI. Dealers said over 3.5 trln rupees is already stuck in settlement in triparty repo. Mutual fund houses are the major lenders in triparty repo. 

Rates on three-month CPs issued by non-banking finance companies and manufacturing companies were flat at 7.60-7.80% and 7.25-7.45%, respectively. The rates on certificates of deposit maturing in three months were at 7.25-7.35%.

Only Kotak Securities Ltd raised 12 bln rupees through CPs maturing in three months at a rate of 7.79%. In the secondary market also, a few corporates and banks were active, dealers said. Activity was restricted to papers maturing in September. 

Trade volume in the secondary market nosedived due to subdued activity. Today, deals worth 8.05 bln rupees were reported.

--Secondary market
* State Bank of India's CD maturing on Dec 4 was dealt at a weighted average yield of 7.2598%.
* ICICI Securities' CP maturing on Sep 30 was dealt twice at a weighted average yield of 6.6478%.

At 1700 IST, following were the volumes, in bln rupees, in the secondary market for short-term debt, as detailed by the Clearing Corp of India's F-TRAC platform:

NOTE: Details of the deals have been received from market sources.

End

Edited by Aditya Sakorkar

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