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Informist, Monday, Sep 16, 2024

By Vaishali Tyagi

MUMBAI – A dull day for the secondary market, with several traders on leave, kept yields steady today, dealers said. Markets were previously scheduled to be shut today, dealers said, but on Saturday the Reserve Bank of India notified a change in holiday to Wednesday.

"Earlier, leave was scheduled for today, so people went for a long weekend... therefore very few traders were there in the market today," a dealer at a mid-sized brokerage said. "If you look at the volumes, it will tell you, barely any trade happened today."

Apart from the confusion around the holiday, the outcome of the US Federal Open Market Committee meeting due Wednesday also kept traders on the sidelines. The traders await comments by US Federal Reserve officials, dealers said. A statement of economic projections will be released along with the policy outcome on Wednesday, in which the officials will anonymously provide their views on key US indicators such as interest rates, growth, and inflation. All these data points are also on the radar of market participants, dealers said.

In the secondary market, corporate bond yields have been moving in a narrow range for some time now, dealers said. While minor portfolio adjustments take place daily, they are not happening on a significant scale. "The market needs fresh cues to make noteworthy moves, but currently there is nothing to drive it, so people are focused on the FOMC for clarity on rate cuts," a dealer at a mid-sized brokerage said.

At 1700 IST, the CME FedWatch tool showed 59% probability of a rate cut of 50 basis points, and 41% probability of a 25 bps rate cut. "Now, traders are seeing more chances of a 50 bps rate cut in this FOMC meeting," a broker at a mid-sized brokerage said. 

Today, overall volumes remained low. Deals aggregating to 27.32 bln rupees were recorded on the National Stock Exchange and BSE combined, compared with 91.58 bln rupees on Friday.

Papers issued by the Indian Railway Finance Corp, Andhra Pradesh State Beverages Corp, Kerala Infrastructure Investment Fund Board, Hinduja Leyland Finance, Adani Enterprises, Muthoot Fincorp, Navi Finserv, Spandana Sphoorty Financial, and Hella Infra Market were traded the most on the exchanges.

On Tuesday, Cholamandalam Investment and Finance Co has invited bids to raise 15 bln rupees through bonds maturing in three years. DLF Cyber City Developers will also tap the market on Tuesday to raise 6 bln rupees through bonds maturing on Aug 31, 2034. InCred Financial Services, Aptus Value Housing Finance, and Godrej Housing Finance are also in line to tap the market on Tuesday.

Merchant bankers believe that most participants are focused on primary market supply, which is also contributing to keeping activity down in the secondary market. "Fresh supply on the primary side is also attractive these days, fresh issuances are happening, and state-owned companies and banks are coming, which attracts most participants to that (primary) market," a dealer at a mid-sized broking firm said.

UDAY BONDS

In the secondary market, 1.6 bln rupees of Haryana's Ujwal DISCOM Assurance Yojana bond, maturing in 2026, was traded at a weighted average yield of 7.09%, data from the Reserve Bank of India's Negotiated Dealing System–Order Matching System showed.

BENCHMARK LEVELS FOR CORPORATE BONDS: 

End

Edited by Rajeev Pai

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