India Corporate Bonds
Ylds in range; lack of cues in govt borrow plan
This story was originally published at 20:26 IST on 27 September 2024
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By Ashna Mariam George
MUMBAI – Yields on corporate bonds across tenures in the secondary market were confined to a narrow range today, as the Central government's borrowing calendar for Oct-Mar failed to lend any significant cues to the market, dealers said.
"Yesterday (Thursday) there was a fair bit of optimism regarding the borrowing calendar, and some sections of the market believed that the borrowing calendar might throw a surprise which obviously it didn't," a dealer at a mid-sized private sector bank said. "Today was just a plain retracement move."
Before the release of the calendar, some sections of the market expected a cut of 100-300 bln rupees in the gross borrowing aim of 14.01 trln rupees this financial year, with the Oct-Mar calendar showing a gross supply of 6.3-6.5 trln rupees. However, in a release after market hours on Thursday, the government kept the gross borrowing target at 6.61 trln rupees for Oct-Mar.
In the secondary market, mutual funds were on the buying side, while banks were on the selling side, dealing in shorter-tenure papers today. "Levels moved 1-2 bps here and there as some mutual funds were actively buying towards the quarter end," a fund manager at a mid-sized mutual fund house said.
Today, deals aggregating to 124.38 bln rupees were recorded on the National Stock Exchange and BSE combined, compared with 160.56 bln rupees on Thursday.
Papers issued by the National Bank For Agriculture And Rural Development, Power Finance Corp, REC, Housing And Urban Development Corp, HDFC Bank, LIC Housing Finance, Hella Infra Market, Shrem Ajanta Infrastructure, Shriram Finance, and Trust Investment Advisors were traded the most on the exchanges today.
Primary market activity, however, remained dull today, owing to subdued participation ahead of the quarter-end, market participants said. "Most issuers will have closed their books for the quarter, and the activity will be picked up in the first week of October," the dealer quoted above said.
On Monday, REC has invited bids to raise up to 50 bln rupees through a zero-coupon bond maturing on Nov 3, 2034. Sadbhav Gadag Highway will also tap the market on Monday to raise 900 mln rupees through its bond maturing on Oct 31, 2028.
UDAY BONDS
In the secondary market, 2.00 mln rupees of Uttar Pradesh's Ujwal DISCOM Assurance Yojana bond, maturing in March 2026, was traded at a weighted average yield of 7.1853%, data from the Reserve Bank of India's Negotiated Dealing System–Order Matching System showed.
BENCHMARK LEVELS FOR CORPORATE BONDS:
TENURE | TODAY | THURSDAY |
Three-year | 7.51-7.53% | 7.49-7.51% |
Five-year | 7.35-7.37% | 7.35-7.38% |
10-year | 7.27-7.29% | 7.25-7.27% |
End
Edited by Akul Nishant Akhoury
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